Download Arent 62478_Renewables AOSIS_Final

Renewable Energy Technologies – Status and Prospects
for Mitigating Climate Change
Douglas Arent
National Renewable Energy Laboratory, US
Key Messages:

Renewable energy technologies continue to advance, and some continue to experience
significant cost reductions with increasing market growth.

Renewable electricity accounted for more than 50% of all new power capacity worldwide
in 2013, and is cost competitive in many locations around the world.

Power systems continue to evolve to accommodate more renewables, and some systems
now generate more than 50% renewable electricity annually. Many power systems will
need upgrades and replacements over the next few decades, and renewable energy offers
an increasingly cost competitive, technically viable option in many countries.

Renewable energy can contribute to climate mitigation goals in nearly all countries;
substantially in those with abundant renewable resources.

More than 100 countries have renewable energy support policies offering a rich set of
approaches from which to learn.

The technical and economic potential of renewable energy is more than adequate to
supply a substantial amount of the world’s energy while significantly reducing
greenhouse gas emissions.
1 Introduction
U.N. Secretary General Ban Ki-moon’s recent Sustainable Energy for All (SE4ALL) initiative
has explicitly recognized energy efficiency and renewable energy as critical components for
climate change mitigation and energy access. In many economies, clean energy solutions have
been particularly effective for inclusive growth for those at the bottom of the economic pyramid
(World Bank 2012; GEA 2011). Energy access, and in particular clean energy options, offers an
initial step for improving education, providing clean water, reducing health impacts (e.g.,
reducing indoor air pollution), and increasing economic activity of small and medium enterprises
(UNDP 2013; UNEP 2011; World Bank 2012).
For countries of all income levels, clean energy mutually supports economic growth,
environmental policy goals, and energy security goals. The continued growth of renewable
energies into the global energy mix exemplifies effective synergistic approaches in technology
progress, policy development, and financial innovation. While most renewable energy
technologies (including thermal, biomass and other renewable resource-based solutions) continue
to advance and gain market share, the continued growth in wind and solar energy in combination
with more recent rapid expansion of distributed generation (e.g., solar photovoltaics), numerous
policy instruments, and business and finance innovations represent a material shift in the
opportunities for achieving the SE4ALL goals.
Additionally, renewable energies offer a means for climate mitigation in nearly all countries, and
deep decarbonization in those with rich resource endowments. Feasible, affordable, and reliable
solutions will depend on the portfolio of resources, energy demands, and overall approach to
energy and climate. For example, renewables are shown to contribute significantly to climate
mitigation and Millennium Development Goals (MDGs) (IPCC 2014; GEA 2012).
2 Technology Progress and Market Growth
Renewable energy provided an estimated 19% of global final energy consumption in 2012 and
renewables’ share of energy consumption continues to grow. In 2012, wind, solar, geothermal,
modern biomass, and hydropower renewables accounted for approximately 10%, and 9% was
provided by traditional biomass. Renewable power contributed more than 50% of all new power
generation capacity worldwide in 2013. Renewable heat sources accounted for an estimated 4%
of total final energy use; hydropower contributed approximately 3.8%, and an estimated 2% was
provided by power from wind, solar, geothermal, and biomass, as well as by biofuels (REN21
2014).
Global renewable electricity capacity now exceeds 1,560 gigawatts (GW), an increase of 8%
over 2012 (REN21). Hydropower capacity is approximately 1,000 GW, and other renewables
together grew nearly 17% to more than 560 GW in 2013. For the first time (also in 2013), more
solar photovoltaics (PV) were added (39 GW) than wind power capacity. Solar PV continues to
expand at a rapid rate; growth in global production capacity has averaged almost 55% annually
over the past five years (REN21).
Renewable energy technology costs have decreased drastically over the last decade, particularly
in European countries that have significantly reduced the ‘soft costs.’ For instance, solar
photovoltaic modules now cost between $0.50 -$1/W. In nearly all regions of the world, most
renewable options are less expensive than distributed diesel, and in many locations, renewables
are price-competitive with retail and wholesale power prices (REN21 2014; IRENA 2012).
In many developing countries, the early establishment of small and medium enterprises focused
on clean energy solutions, such as using solar panels with batteries to provide a few hours of
nighttime power for lights, radio, and television. Economic reform lessons were learned in these
cases (Sovacool 2012). Over the past decade, clean energy technologies have advanced
considerably, and companies now offer a wide range of products and financing options,
including village-level minigrid systems or opportunities to leverage other infrastructure, such as
cell phone communications (Bazilian 2012).
In many European countries, Australia, and parts of the United States, clean energy and
particularly clean power solutions are at the center of a major transformation of the power sector
(Bazilian 2013; REN21 2014; Kind 2013). A few studies have indicated the technical potential
of renewable energy to provide a majority (e.g., 80%) of power (NREL 2012; Cochran 2014;
Miller 2013), and stakeholders have begun to explore the implications for sector reform and for
climate mitigation, water resources, and economic productivity. The anticipated transitional
challenges of incorporating greater amounts of clean energy, particularly variable renewable
energy such as wind and solar photovoltaics, while maintaining high reliability, present many
challenges for traditional utility structures and operations (Kind 2013; NREL 2012; EPRI 2014).
As renewable energy markets and industries mature, they increasingly face new and different
challenges, as well as a wide range of opportunities. In 2013, renewables faced increased policy
scrutiny (e.g., feed in tariff reforms, limits to net metering) and uncertainty in many European
countries and the United States. Electric utilities concerned about rising competition and eroding
revenues continue to raise concerns to policymakers.
3 Policy Approaches and Lessons Learned
Renewables deployment competes with, and also may benefit from, the development of other
supply and system options. For example, in the electricity system, integration of renewables
requires balancing of load and supply; and the system operators carefully manage a portfolio of
generation assets and loads. In many cases, geospatial diversity, large interconnected power
grids, and fast ramping (natural gas) generators have proven viable strategies for increasing the
amount of renewables and lowering overall greenhouse gas emissions from the sector. Flexible
demand (e.g., controllable loads such as refrigerators, air conditioners) and plug-in hybrid and
electric vehicles could offer grid services that would complement intermittent renewables
through intelligent electric networks.
The strategies and policy lessons for employing clean energy as part of a drive for inclusive,
sustainable economic development have progressed considerably in the last decades. More than
100 countries have policies or goals in place (REN21 2014) that address development, establish
sector-specific energy-related goals, or are economy wide. These policies and goals span rural
electrification programs; specific deployment targets; finance mechanisms such as feed in tariffs;
carbon legislation or the establishment of regional taxes; cap and trade systems; and many
combinations of these and other options. Additionally, the development and enforcement of
technical standards, training certification, and education campaigns have proven to be critical
elements of sustained impact (Doris 2012).
The implications for 21st century power systems that Cochran et al. (2012) assessed in case
studies point to recommended regulatory approaches for effectively integrating renewable
energy, including:

Engaging the public early, particularly for new transmission

Coordinating and integrating planning across supply and demand resources, and across
centralized and distributed resources

Developing market rules that encourage system flexibility

Expanding access to diverse resources via expanded balancing areas.
Countries with aging infrastructure and slow capital stock turnover will likely need to address the
issue of retiring aging capacity that no longer meets modern standards for flexibility, resource
utilization (e.g., water), green house gas emissions, or other pollution (e.g., particulates, SOx,
NOx). Structural reforms that include independent regulators, system operators, and grid services
that permit multiple revenue streams other than just energy, as well as increasing use of
segmented retail rate structures have proven effective to date (Cochran 2012, Miller 2013).
Electricity market rules play an increasingly central role in delivering sufficiently attractive
returns for investors and might need to be reformed as the sector moves to technologies with
higher capital costs and lower operating costs.1 As power systems around the world integrate
new levels of variable renewables, continuing to share lessons learned can assist the
identification of best practices and exemplary policies.
1
For example, see Sàenz de Miera et al. (2008), Sensfuß et al. (2008), Poyry (2009), Obersteiner et al. (2010), Green
and Vasilakos (2010), and Blyth and Bunn (2012).
Early lessons from policy formulation indicate that durable, adaptable policies that minimize
policy-related risks are important to sustaining transformation and attracting the necessary
capital through public or private channels (America’s Climate Choices 2011; REN21 2014; GEA
2011). Further, well-formulated policy portfolios are likely more effective at enabling broader,
sustained change (NRC 2011; GEA 2011; Doris 2012; Flues 2014; UNEP 2012; World Bank
2012).
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