Medium Term RenewableMedium‐Term Renewable Energy Market Report 2013gy p
Maria van der Hoeven
E ti Di t I t ti l E A
© OECD/IEA 2013
Executive Director, International Energy Agency
Report Launch, 10th Renewable Energy Finance Forum Wall Street, New York City, 26 June 2013
Positive outlook for renewable electricity
30%
7 000
8 000TWh IEA 2° C
Scenario
Global renewable electricity production, by technology (TWh)
20%
25%
5 000
6 000
7 000
5%
10%
15%
2 000
3 000
4 000
0%
5%
0
1 000
2006 2008 2010 2012 2014 2016 2018 2020Hydropower Bioenergy Onshore windHydropower Bioenergy Onshore windOffshore wind Solar PV CSPGeothermal Ocean % Total generationGas-fired generation 2016
Nuclear generation 2016
© OECD/IEA 2013
Renewable electricity projected to scale up by 40% from 2012 to 2018
Renewable power spreading out everywhereTotal Renewable Annual Capacity Additions, by region (GW)
This map is without prejudice to the status of or sovereignty over any territory to the delimitation of international frontiers and boundaries and to the name of any
© OECD/IEA 2013
Emerging markets more than compensate for slowing growth and volatility in markets such as Europe and the US
This map is without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
Policy uncertainty is the number one risk
2.5
3
3.5
D fi i l
Spain solar PV + CSP annual additions (GW)
1
1.5
2
2.5
Assumed moratorium on new projects under Special Regime from Jan 2012 onwards
Deep financial incentive cuts and cap for solar PV
Abrupt, retroactive policy changes
0
0.5
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Annual additions Projected additions
10
12
14
Assumed expiration of PTC at end-2013
Uncertainty over PTC renewal at end-2012
US onshore wind annual additions (GW)
4
6
8 Expiration of federal PTC
Stop & go policies
© OECD/IEA 2013
0
2
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018Annual additions Projected additions
Main messages to policy makers
Many renewables no longer require high economic incentives
But they do need long‐term policies that continue to provide a predictable and reliable market and regulatory framework compatible with societal goals
© OECD/IEA 2013
Part Two SnapshotsPart Two – Snapshots
Technology Regional Country BreakdownsTechnology, Regional, Country Breakdowns
Paolo FranklPaolo FranklHead, Renewable Energy DivisionIEA
© OECD/IEA 2013
Methodology and Scope A l i f d i d h ll
Y-o-YTWh Power demand vs GDP Analysis of drivers and challenges for RE deployment at country level Regulatory framework, power
4%
0%
4%
8%
950
1 000
1 050
1 100ChgTWh Power demand vs GDP
demand, competition with other fuels, grid integration, etc.
B tt RE it d
-8%
-4%
900
950
2005 2008 2011 2014 2017Demand Demand, Y-o-Y (RHS)GDP, Y-o-Y (RHS)
Bottom‐up RE power capacity and generation forecast USA, Canada, Chile, Mexico 400
800
1 200
TWh Power generation
Japan, Korea, Australia
Denmark, France, Germany, Ireland, Italy, Spain, Turkey, UK
02005 2006 2007 2008 2009 2010 2011
Coal Oil Natural gasNuclear Hydro BioenergyWind Solar PV Geothermal
ta y, Spa , u ey, U
China, Brazil, India, Thailand, Morocco, South Africa
© OECD/IEA 2013
Global biofuels production by country
Regional breakdown RE for heat
Despite Challenges, strong Renewable Drivers in 2012Global renewable electricity capacity, by region
1 000
1 250
1 500
1 750GW
y p y, y g Total renewable capacity and
generation grew strongly in 2012 (+8%)
0
250
500
750
1 000
Strength partly due to China hydropower
Global non‐hydro capacity grew by 02010 2011 2012
OECD Americas OECD Asia Oceania OECD Europe Africa Non-OECD Asia ChinaNon-OECD Europe Non-OECD Americas
Global renewable new investment, by regionSource: IEA MTRMR 2013
21% year‐on‐year
Onshore wind and solar PV capacity grew faster than
200
250
300
USD billion
y gexpected
Still, some emerging challenges
50
100
150 Global investment fell (‐12%)
Policy uncertainty in some key countries
© OECD/IEA 2013
02010 2011 2012
United States EuropeBrazil Other AmericasChina IndiaOther Asia Middle East and Africa
Source: Bloomberg New Energy Finance
Grid integration issues emerging
Biofuels production growth stalled
Biofuels production to grow by 25%Gl b l bi f l l dj t d fBiofuels supply by region Global biofuels supply adjusted for energy
content vs road transport oil demand
1.5
2.0
2.5mb/d
3.0%
4.0%
5.0%
1.4
1.6
1.8mboe/d
0.0
0.5
1.0
2012 2013 2014 2015 2016 2017 20180.0%
1.0%
2.0%
0.8
1.0
1.2
2012 2013 2014 2015 2016 2017 20182012 2013 2014 2015 2016 2017 2018
Rest of Global Biofuels OECD EUR Biofuels
Brazil Biofuels US Biofuels
2012 2013 2014 2015 2016 2017 2018
Biofuels Supply (adj. for energy content)As % of Global Road Transport Demand
Biofuels to cover 3.9% of global road transport by 2018,
But downside risk from growing policy uncertainty in the
© OECD/IEA 2013
EU and US; and advanced biofuels not making enough progress
Final energy use of renewables for heat rises by 24% As % of final energy consumption for heat, renewables rise to
almost 10% in 2018, up from just over 8% in 2012 and 8% in 2006
China accounts for 39% of global growth
OECD Europe drives 22% of growth, with EU 2020 targets and rising p g , g gbioenergy (direct use and commercial heat) and solar thermal use
Final energy use of renewable sources for heat (including commercial heat) by regiongy ( g ) y g
1 2 3 4 5 6 7 8 9 10 11 12 13
10%
12%
14
16
18
20
% RES-HEJ
4%
6%
8%
6
8
10
12
14
0%
2%
0
2
4
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018OECD Americas OECD Asia Oceania
© OECD/IEA 2013
Note: excludes traditional biomass
OECD Europe ChinaBrazil IndiaRest of non-OECD % total heat, World (right axis)
Improving competitiveness Most dynamic technologies – onshore wind and solar PV – Most dynamic technologies – onshore wind and solar PV –
increasingly competitive in a number of markets
But market framework matters Deployment with little support occurring in some areas with rising
energy needs, good resources, and predictable long‐term revenues
Global levelised costs of power generation ranges (USD per MWh)Global levelised costs of power generation ranges (USD per MWh)
MRMR 2012 400
500Small scaleUtility scale
MRMR 2012
200
300
0
100
© OECD/IEA 2013 Note: costs reflect differences in resource, local conditions, and the choice of sub‐technology.
Growth of the whole RE power accelerating
25002500
Historical cumulative additions (TWh) Forecast cumulative additions (TWh)
1000
1500
2000
1000
1500
2000
0
500
1000
2012 2013 2014 2015 2016 2017 20180
500
1000
2006 2007 2008 2009 2010 2011 2012 2012 2013 2014 2015 2016 2017 2018
Geothermal Solar Bioenergy Wind Hydro
2006 2007 2008 2009 2010 2011 2012
Geothermal Solar Bioenergy Wind Hydro
Hydro remains the largest increasing single renewable technology
But for the first time additional generation from all non‐hydro
© OECD/IEA 2013
g ysources exceeds that from hydro
Global RE capacity additions led by wind Onshore outlook more optimistic than in MRMR 2012
Policy uncertainties make additions volatile in some areas
Offshore wind outlook more pessimistic than MRMR 2012, with financing and integration challengesg g g
25
Total wind (onshore + offshore) annual capacity additions by region (GW)
10
15
20
0
5
10
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
GW 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
OECD Americas OECD Asia Oceania OECD Europe
China Rest of Non‐OECD
© OECD/IEA 2013
World Onshore 19.5 26.0 38.4 36.9 38.9 44.0 36.5 43.8 42.6 42.4 44.2 45.4
World Offshore 0.3 0.4 0.4 1.1 1.1 1.4 2.3 3.3 2.6 3.8 5.1 5.7
PV A l C it Additi (GW)3
Solar PV growing out of EuropePV Annual Capacity Additions (GW)
0
1
2
2012 2015 2018
5
10
15
20
10
15
20
02012 2015 2018
0
5
10
2012 2015 2018
6
8
10
45
0
1
2
3
2012 2015 2018
0
2
4
6
2012 2015 20180123
2012 2015 2018
0
1
22012 2015 2018
0
1
2
3
4
5
2012 2015 2018246810
© OECD/IEA 2013
2012 2015 2018
Strong growth seen in China, Africa, Middle East, and Latin America
2012 2015 2018 02012 2015 2018
But other technologies lagging behind
70
80
90TWh
Wind offshore Concentrated Solar Power
35
40TWh
20
30
40
50
60
70
10
15
20
25
30
0
10
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018OECD Americas OECD Asia Oceania OECD Europe Africa Asia ChinaNon-OECD Europe Non-OECD Americas Middle East MTRMR 2012
0
5
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018OECD Americas OECD Asia Oceania OECD Europe Africa Asia ChinaNon-OECD Europe Non-OECD Americas Middle East MTRMR 2012
Potential of offshore power remains high, but technical, fi i l d id ti i h llfinancial and grid connection issues pose challenges
Storage adds value to CSP, but deployment hampered by relatively high costs
© OECD/IEA 2013
y g
Deployment transitioning to more markets
Non‐hydro renewable electricity development becoming increasingly widespread – more optimistic than MTRMR 2012
Number of countries with non-hydro renewable capacity above 100 MW
80
60
00 M
W)
Non-OECD
OECD
20
40
ount
ries
(>10
0
20
06 12 18 06 12 18 06 12 18 06 12 18 06 12 18 06 12 18 06 12 18Num
ber o
f co
© OECD/IEA 2013
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Onshore wind
Offshore wind
Bioenergy Solar PV CSP Geothermal Ocean
RE largest contributor to total electricity increase in OECDelectricity increase in OECD
Changes in power generation by source and region, OECD, 2012-18
900
1 100TWh
Renewables Nuclear Fossil fuels Others
500
700
100
300
R bl t d t l t lik f il i
- 100Total OECD OECD Americas OECD Asia Oceania OECD Europe
© OECD/IEA 2013
Renewables expected to grow almost like fossils in America, and more than total demand in Europe
Progress tracked on different scales
Incremental TWh(2012-18)
1 Chi + 750
Avg annual growth(2012-18)
1 M 24 9%1. China + 750
2. USA + 150
3 Brazil + 130
1. Morocco + 24.9%
2. South Africa + 20.1%
3. Brazil + 130
4. India + 95
5 Germany + 70
3. Korea + 14.1%
4. Australia + 14.0%
5 UK + 13 0%5. Germany + 70 5. UK + 13.0%
Detailed reporting only on 21 focus countriesDetailed reporting only on 21 focus countries
Other countries also show very significant progress
© OECD/IEA 2013
(e.g. Saudia Arabia, UAE, Cambodia, Tunisia, Ethiopia, Kenya)
Country exampleChina accounts for 40% of global growthg g
Challenges: Lack of pricing frame ork
Drivers: Strong gov’t backing with FYPs Lack of pricing framework
Priority dispatch
Grid upgrades
Strong gov t backing with FYPs
Eased rules for grid connection
Announced generation incentives
Supply chain bottlenecks
Deployment historyY-o-Y
hTWh25%5 250
TWh
Ample low‐cost finance
Robust manufacturing
8%
12%
16%
20%
4 000
5 000
6 000
7 000
chg
10%
15%
20%
2 250
3 000
3 750
4 500
-8%
-4%
0%
4%
1 000
2 000
3 000
2006 2008 2010 2012 2014 2016 20180%
5%
10%
0
750
1 500
2 250
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
© OECD/IEA 2013
Demand Demand, Y-o-Y (RHS)GDP, Y-o-Y (RHS)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Coal Oil Natural gasNuclear Hydro BioenergyWind Solar PV CSPGeothermal Other Ocean% Renewables (right axis)
For further insights and analysis…
The Medium‐Term Renewable Energy
kMarket Report 2013 can be purchased online at:online at:
www iea orgwww.iea.org
Th k f Thank you for your attention!
© OECD/IEA 2013