The International Energy Agency (IEA) released a medium-term market report for renewable energy today. Despite what you may have heard from clueless, arse-backward deniers about renewable power production losing ground/support, the forecast's executive summary detailed some pretty impressive recent gains.
In 2013, renewable power capacity expanded at its fastest pace to date. Renewable power generation continued to grow strongly, reaching almost 22% of the global mix, compared with 21% in 2012 and 18% in 2007. Globally, renewable electricity generation is now on par with that of natural gas, which remained relatively stable in 2013. Investment in new renewable power capacity topped USD 250 billion globally in 2013 and is likely to remain at high levels.
Hydropower deployment reached 41 GW in 2013, partly due to the early commissioning of new capacity in China. But the return of hydro availability to more normal levels in China and the effects of drought in Brazil caused global hydropower generation to expand by less than 2% year-on-year compared to over 4% in 2012. Non-hydropower reewable generation grew rapidly by almost 16% year-on-year, similar to the rate in 2012. New solar photovoltaic (PV) capacity (+39 GW) surged in 2013, led by China and Japan, where deployment is incentivised through attractive feed-in tariffs (FITs).
Though smaller, solar thermal electricity (STE) additions were equivalent to the record level achieved in 2012, and offshore wind was deployed at its highest level to date, with the start of several large projects long under development.
Global biofuels production rose by almost 7% in 2013 to reach over 115 billion litres (L), 3 billion L higher compared with that predicted by MTRMR 2013. In Brazil, ethanol output was boosted by a higher-than-expected sugar cane harvest that led to a 2 billion L additional ethanol production compared to th eprevious forecast. In the United States, ethanol production rose marginally in 2013, as the effect of elevated corn prices resulting from an extensive drought in the previous year was mitigated after the 2013 corn harvest. Biofuels output, adjusted for energy content, accounted for 3.5% of global oil demand for road transport in 2013, versus 3.4% in 2012 and 2.0% in 2007.
However, the IEA analysis warns that unhelpful policy choices will threaten further progress.
Onshore wind additions (+34 GW) were their lowest since 2008, largely due to a drop in new capacity in the United States stemming from policy uncertainty over the renewal of federal tax incentives at the end of 2012.
Meanwhile, the geography of biofuels policy support is shifting; while backing for increased biofuels volumes is waning in several key markets–the United States, the European Union and Brazil–it is expanding in newer non-OECD markets, such as Southeast Asia.
Among renewable power technologies, solar PV is the only source expected to exceed global 2DS targets in 2020, boosted by cost declines and an increasingly rapid scale-up in non-OECD markets. Meanwhile, notable shortfalls may occur in bioenergy for power, onshore wind and hydropower, which are all mature and relatively cost-effective technologies. Policy support for bioenergy has waned in some OECD countries, and developments face the challenge of establishing sustainable feedstock supply chains. Onshore wind can face challenges related to local acceptance, as in some European markets, and requirements for the build-out of the grid and further integration measures to reach higher levels of penetration, as in China and Europe.
It goes on to make the following recommendations.
Nevertheless, this conservative outlook is not inevitable–with certain market and policy enhancements, the most dynamic renewable technologies could grow faster through 2020 than in this report’s baseline case (see "Enhanced Case" below).
Overall, policies will remain vital to stimulating investment in capital-intensive renewables and stimulating greater development.
Broadly speaking, achieving enhanced renewable deployment would require alleviating some of the challenges enumerated above and repeated through this report. These include, but are not limited to, the rapid clarification of policy uncertainties in some markets; the implementation of stable and sustainable policy frameworks that give greater certainty about the long-term revenue streams of renewable projects; greater measures to ensure the grid and system integration of variable renewables; the implementation of fair rules and appropriate electricity rate design for allocating the costs and benefits from fast-growing distributed solar PV; improved reductions in non-economic barriers; and faster-than-expected decreases in renewable technology and generation costs.
And IEA Executive Director Maria van der Hoeven had this to say.
"Renewables are a necessary part of energy security. However, just when they are becoming a cost-competitive option in an increasing number of cases, policy and regulatory uncertainty is rising in some key markets. This stems from concerns about the costs of deploying renewables. Governments must distinguish more clearly between the past, present and future, as costs are falling over time. Many renewables no longer need high incentive levels. Rather, given their capital-intensive nature, renewables require a market context that assures a reasonable and predictable return for investors. This calls for a serious reflection on market design needed to achieve a more sustainable world energy mix."
In other words, if policymakers remove their craniums from their posteriors, the growth over the past few years can continue and even improve for some forms of renewable power generation.
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