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© OECD/IEA 2013
Medium-‐Term Outlook for Renewable Energy – What’s next for bioenergy?
Anselm Eisentraut InternaBonal Energy Agency
© OECD/IEA 2013
n Total renewable capacity and generaBon grew strongly in 2012 (+8%) l Strength partly due to China hydropower
l Global non-‐hydro capacity grew by 21%
l Onshore wind and solar PV capacity grew faster than expected
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USD billion
United States EuropeBrazil Other AmericasChina IndiaOther Asia Middle East and Africa
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GW
OECD Americas OECD Asia Oceania OECD Europe Africa Non-OECD Asia ChinaNon-OECD Europe Non-OECD Americas
Despite challenges, strong renewable energy drivers in 2012
Global renewable new investment, by region Global renewable electricity capacity, by region
Source: Bloomberg New Energy Finance
n SBll, some emerging challenges l Global investment fell (-‐12%)
l Policy uncertainty in some key countries
l Grid integraBon issues emerging
l Biofuels producBon growth stalled
Source: IEA MTRMR 2013
© OECD/IEA 2013
Renewable power spreading out everywhere
n Emerging markets more than compensate for slowing growth and volaBlity in markets such as Europe and the US
Total Renewable Annual Capacity Additions, by region (GW)
This map is without prejudice to the status of or sovereignty over any territory, to the delimitaEon of internaEonal fronEers and boundaries and to the name of any territory, city or area.
© OECD/IEA 2013
Deployment transiBoning to more markets
n Non-‐hydro renewable electricity development becoming increasingly widespread – more op'mis'c than MTRMR 2012
Number of countries with non-hydro renewable capacity above 100 MW
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Onshore wind
Offshore wind
Bioenergy Solar PV CSP Geothermal Ocean
Num
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s (>
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)
Non-OECD
OECD
© OECD/IEA 2013
Growth of renewable power acceleraBng
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2012 2013 2014 2015 2016 2017 2018
Geothermal Solar Bioenergy Wind Hydro
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Geothermal Solar Bioenergy Wind Hydro
n Hydropower remains the largest increasing single renewable technology in electricity generaBon
n But for the first Bme addiBonal generaBon expected from all non-‐hydro sources exceeds that from hydropower; and addiBonal capacity led by wind
Historical cumulative additions (TWh) Forecast cumulative additions (TWh)
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n Renewable electricity projected to scale up by 40% from 2012 to 2018
PosiBve outlook for renewable electricity
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2006 2008 2010 2012 2014 2016 2018 2020
TWh
Hydropower Bioenergy Onshore windOffshore wind Solar PV CSPGeothermal Ocean % Total generation
IEA 2° C Scenario
Global renewable electricity production, by technology (TWh)
Gas-fired generation 2016
Nuclear generation 2016
© OECD/IEA 2013
RE largest contributor to total electricity increase in OECD
n Renewables expected to grow almost like fossil fuels in OECD Americas, and more than total demand in Europe
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Total OECD OECD Americas OECD Asia Oceania OECD Europe
TWh
Renewables Nuclear Fossil fuels Others
Changes in power generation by source and region, OECD, 2012-18
© OECD/IEA 2013
Non-‐OECD accounts for two-‐thirds of renewable power growth
n In 2018, non-‐OECD comprises 58% of total renewable generaBon, up from 54% in 2012 and 51% in 2006
n China alone accounts for 40% of growth n Other key markets:
l Brazil (wind, bioenergy), India (wind, solar, bioenergy), South Africa and Morocco (wind, solar), Thailand (bioenergy), Middle East (solar, wind)
Non-OECD renewable generation by source (TWh)
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Hydro Bioenergy Wind onshoreWind offshore Solar PV CSPGeothermal Ocean % total generation
(right axis)
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Renewable power and natural gas
n Gas generaBon to crowd out renewables? Or vice-‐versa? n Renewables and gas can both grow strongly…
n Globally: coal-‐to-‐gas switching can lead to large reducBons in CO2 emissions, but gas is not enough to meet 2DS
n USA: some compeBBon, but strong RE drivers even with low power prices; RE enhances diversificaBon, gas helps balance variable RE; large scope for coal replacement
n Europe: slow demand growth, high gas prices, overcapacity in some markets; RE crowding out gas; sBll, gas provides important balancing for rising variable RE
n Asia: poraolio of low-‐carbon soluBons needed to meet rapid demand growth; high LNG prices make RE acracBve
© OECD/IEA 2013
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TWh
OECD Americas OECD Asia Oceania OECD Europe Africa Asia ChinaNon-OECD Europe Non-OECD Americas Middle East MTRMR 2012
Bioenergy scales up with increased use of agricultural residues, renewable waste and co-‐firing
n China grows fast, with ambiBous targets and increasing renewable waste-‐to-‐energy plants n Other non-‐OECD countries – Brazil, India and Thailand – also expected to add significant
new generaBon n OECD growth dominated by Europe, driven by 2020 targets
Bioenergy generation and projection by region
© OECD/IEA 2013
Policy uncertainty is the number one risk
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1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018Annual additions Projected additions
Expiration of federal PTC
Assumed expiration of PTC at end-2013
Uncertainty over PTC renewal at end-2012
US onshore wind annual additions (GW)
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Annual additions Projected additions
Assumed moratorium on new projects under Special Regime from Jan 2012 onwards
Deep financial incentive cuts and cap for solar PV
Spain solar PV + CSP annual additions (GW)
Abrupt, retroactive policy changes
Stop & go policies
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Biofuels producBon to grow 25% to 2018
n Global biofuels output to grow 3.5% per year on average from 110 billion litres in 2012 to 135 billion litres in 2018
n On an energy adjusted basis versus oil, biofuels provide 4% of global road transport fuel demand in 2018
n Growing poliBcal uncertainty in the EU and US provides an important downside risk, and might undermine the long-‐term growth prospects
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billion litres/yr mb/d World biofuels supply (2006-‐18)
Rest of global biofuels OECD EUR biofuels Brazil biofuels US biofuels
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mboe/d Biofuels share in global road transport (2006-18)
Biofuels supply (adj. for energy content) As % of global transport demand
© OECD/IEA 2013
OECD Americas producBon faces challenges
n OECD Americas producBon to reach 974 kb/d in 2013, as drought-‐affected US ethanol producBon recovers, and US biodiesel output increases
n Total OECD Americas biofuel output could reach 1.1 mb/d in 2018, driven by US output
n “Blend wall” in the US proves challenging to overcome, and might limit domesBc ethanol demand and potenBal producBon
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mb/d OECD Americas biofuel supply (2006-‐18)
US ethanol US biodiesel Canada ethanol Rest of OECD Americas
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mb/d US gasoline demand vs. ethanol producBon and mandated ethanol use (2009-‐18)
MTRMR ethanol supply Net gasoline demand RFS2 mandate (conv. and cellulosic ethanol) Ethanol "blend wall" (10% volumetric)
© OECD/IEA 2013
Non-‐OECD Americas producBon driven by Brazilian ethanol
n Non-‐OECD Americas producBon to reach 560 kb/d in 2013, amid Brazil preparing for banner sugarcane harvest
n ProducBon could grow to 720 kb/d in 2018, driven mainly by Brazilian ethanol output
n ArgenBne biodiesel output depressed, as introducBon of anB-‐subsidy duBes in the EU reduce export opportuniBes for biodiesel
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USct/Ib Brazil: Sugar price vs. hydrous ethanol
price (2010-‐12)
Sugar Hydrous ethanol*
© OECD/IEA 2013
EU policies to determine the future of the European biofuel sector
n Growth in biofuel output to stall in 2013 due to a slight drop in Germany and UK biodiesel output
n Medium-‐term growth of 70 kb/d driven by EU mandate for renewable energy in transport à supported by introducEon of import duEes for US ethanol, ArgenEne and Indonesian biodiesel
n EU dran legislaBon to limit share of convenBonal biofuels to 5% in 2020, provides considerable downside risk to medium-‐term outlook
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mb/d European biofuel production (2006-18)
OECD Europe biodiesel OECD Europe ethanol non-OECD Europe biofuels
© OECD/IEA 2013
Asian biofuel producBon to grow 50% 2012-‐18
n Asian producBon to grow from 130 kb/d in 2012 to 200 kb/d in 2018, driven by South-‐East Asian producBon
n China remains important producer, but growth prospects limited amid lack of policy drivers and limitaBons to feedstock use
n South-‐East Asian biofuel output driven by domesBc blending mandates, as export to the US and EU market more restricted
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mb/d China and non-‐OECD Asia biofuel producBon (2006-‐18)
China ethanol China biodiesel Southeast Asia biodiesel Southeast Asia ethanol Rest of non-OECD Asia
© OECD/IEA 2013
Advanced biofuels industry expands
n Industry currently enters large-‐scale producBon with first commercial plants coming online
n OperaBng capacity at 4.5 billion litres in 2012 could grow to 9 billion litres in 2018
n Perceived investment risk is most important barrier to more rapid deployment
Note: HVO=hydrotreated vegetable oil. No plants have yet been announced beyond 2016
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billion litres/yr kb/d Current and future advanced biofuel capacity
Planned Under construcEon OperaEng (other technologies) OperaEng (HVO)
© OECD/IEA 2013
Renewable energy use for heat rises by 24%
n As % of final energy consumpBon for heat, renewables rise to almost 10% in 2018, up from just over 8% in 2012 and 8% in 2006
n China accounts for 39% of global growth n OECD Europe drives 22% of growth, with EU 2020 targets and rising bioenergy (direct use
and commercial heat) and solar thermal use
Final energy use of renewable sources for heat (including commercial heat) by region
Note: excludes traditional biomass
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% RES-HEJ
OECD Americas OECD Asia OceaniaOECD Europe ChinaBrazil IndiaRest of non-OECD % total heat, World (right axis)
© OECD/IEA 2013
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Renewables in commercial heat consumption
Solar thermal
Geothermal
Gas biomass
Liquid biomass
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Renewables in commercial heat consumption
Solar thermal
Geothermal
Gas biomass
Liquid biomass
Solid biomass
Renewables in commercial heat consumption
Solar thermal
Geothermal
Gas biomass
Liquid biomass
Solid biomass
Renewables play significant role in OECD heaBng use…though shares vary by country
n So far most extensive policy drivers for renewable heat have emerged in OECD Europe, though comprehensive frameworks are generally sBll lacking
n Bioenergy provides largest porBon of renewable heat across the OECD and accounts for most district heat (e.g. in Scandinavian countries and Austria)
n Geothermal and solar thermal play significant roles in a range of markets.
Share of renewable sources in final consumption of energy for heat in selected OECD countries, 2011
© OECD/IEA 2013
Modern biomass to lead growth of RE sources used for heat
Drivers § mature technology with good compeEEveness versus alternaEves;
§ increasing comm. heat use from cogeneraEon plants and co-‐firing w/coal
§ generally good suitability for providing low-‐emissions process heat in industry
Challenges § good resource availability and targets for a porZolio of renewable technologies
§ strong demand growth and diversificaEon needs
§ a[racEve financial incenEves and market framework
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OECD Americas OECD Europe OECD Asia Oceania ChinaBrazil India Rest of non-OECD
Modern bioenergy use for heat and projection
© OECD/IEA 2013
Conclusions for policy-‐making
n Many renewables no longer require high economic incenBves
n But they do need long-‐term policies that conBnue to provide a predictable and reliable market and regulatory framework compaBble with societal goals
n Consistent policy framework more important than specific RE incenBve type
n CompeBBveness of renewables depends on market design l Fair rules for up-‐front capital intensive technologies and distributed
generaBon will be key
© OECD/IEA 2013
Thank you for your acenBon!
n Medium-‐Term Renewable Energy Market Report 2013 www.iea.org/topics/renewables
n Contact: [email protected]
© OECD/IEA 2013
Disclaimer
This presentaBon is derived from the analysis published in the IEA's Medium Term Renewable Energy Market Report 2013 which is available for download at hcp://www.iea.org/w/bookshop/add.aspx?id=453. For more informaBon on renewable energy at the IEA please visit: hcp://www.iea.org/topics/renewables/medium-‐termrenewableenergymarketreport/. Should you have any quesBons or comments about this workbook, please write to IEA-‐[email protected] Please note that the IEA’s Medium Term Renewable Energy Market Report 2013 is subject to restricBons that limit its use and distribuBon. These terms and condiBons are available online at hcp://www.iea.org/termsandcondiBonsuseandcopyright/. © 2013 OECD/IEA
