The week of October 2 marked an important milestone for global champions of renewable energy. Istanbul, Turkey hosted the first-ever G20 Energy Ministers Meeting, where high-ranking energy officers and heads of international energy organizations affirmed their commitment to renewable energy development and integration into existing power generation schemes. In partnership with the meeting, the International Energy Agency also released its Medium-Term Renewable Energy Market Report 2015 (MTRMR), and the International Renewable Energy Agency (IRENA) released its renewables Toolkit, which highlights some exciting data, trends and opportunities for renewable resources in the near- and long-terms.
Renewable energy use made up more than 18 percent of global total final energy consumption (TFEC) in 2012, and G20 countries accounted for the bulk of this number. Currently, 80 percent of existing renewable power capacity around the world is based within G20 countries. The MTRMR notes that renewable electricity additions over the next five years will top 700 gigawatts, which is more than twice Japan’s current installed power capacity. These power additions will also account for “almost two-thirds of net additions to global power capacity – that is, the amount of new capacity that is added, minus scheduled retirements of existing power plants. Non-hydro sources such as wind and solar photovoltaic panels (solar PV) will represent nearly half of the total global power capacity increase.”
The report also forecasts that the share of renewable energy in global power generation will rise from 22% in 2013 to over 26% by 2020. To put that number in perspective, the amount of global electricity generation derived from renewable resources in 2020 will be higher than the current combined electricity demand of China, India and Brazil.
Declining Costs, New Opportunities
Renewable energy will represent the single largest source of electricity growth over the next five years. Electricity generation costs from renewables have declined in many parts of the world due to continued technological progress, improved financing conditions and expansion into markets with abundant resources. The IEA notes that, “Announced prices for long-term generation contracts at reduced levels are emerging in areas as diverse as Brazil, India, the Middle East, South Africa and the United States. As such, some countries and regions now have the potential to leapfrog to a development paradigm mainly based on increasingly affordable renewable power. This is especially true in Sub-Saharan Africa.”
The concentration of growth will increasingly shift to emerging markets, which will make up two-thirds of the renewable electricity expansion by 2020; China alone will account for nearly 40% of total renewable power capacity growth. While geographical limitations and access to renewable resources can pose challenges to implementing such technologies, there are practical solutions already at work within the markets. As we have noted, European energy producers continue to rely on biomass processed in the US South. Addressing the potential in other emerging markets, IEA Executive Director Fatih Birol stated that, “Affordable renewables are set to dominate the emerging power systems of the world. With excellent hydro, solar and wind resources, improving cost-effectiveness and policy momentum, renewables can play a critical role in supporting economic growth and energy access in Sub-Saharan Africa, meeting almost two-thirds of the region’s new demand needs over the next five years.”
Case Study: Africa - 2030
A separate IRENA report titled “Africa – 2030,” posits that modern renewable technology could meet 22 percent of Africa’s energy needs by 2030, versus the mere five percent that was generated in 2013. Africa’s existing infrastructure is limited in certain areas and the report notes that the capacity for implementing and scaling up new renewables technologies will affordably help to meet the continent’s growing energy demand while increasing energy access and achieving sustainability goals. The report adds that clean energy capacity additions could boost the share of renewables in the power sector to 50 percent by 2030, reducing carbon dioxide emissions by more than 310 million metric tons.
Amin also added that, “The G20 countries hold 75 percent of total global deployment potential and 70 percent of total global investment potential for renewable energy between now and 2030. With this tremendous market opportunity before them, concerted and coordinated action undertaken by G20 countries to advance renewable energy can really move the needle on global deployment as we transition to a clean energy future.”
However, the report also highlights potential risks for growth within the sector. Clear conduits for financing are imperative to achieving sustained investment and regulatory obstacles, grid constraints, and geopolitical and economic conditions pose challenges in many emerging markets. Within many industrialized nations, vacillating policy commitments have the potential to undermine investor confidence. Consequently, global growth in the report’s forecast is not as fast as it could be.
Roadmap for Renewables
While the Istanbul meeting sought to cover the global state of renewables and therefore provided a very high-level analysis, a summary of the MTRMR report takes a more focused view when breaking down the current application of various renewable technologies. It states that onshore wind and solar PV development currently lead in global renewables growth, accounting for roughly two-thirds of the renewable capacity and generation increases. It continues, “Hydropower accounts for one-fifth of new renewable additions, and over a quarter of generation growth. Meanwhile, other renewable technologies grow slower on an absolute basis, but still scale up significantly. For example, bioenergy is supported by coal-to-biomass conversions in Europe and a significant scale-up in non-OECD Asia using domestic resources. Offshore wind should more than triple by 2020, with expected decreases in generation costs and additions from a large project pipeline in Europe.”
Noting that Europe successfully utilizes biomass as it continues to transition away from coal, the implication is one that we have made repeatedly: woody biomass is a reliable feedstock and renewable source of energy that has served as an energy bridge for thousands of years.
Emphasizing that there is not a single, wholesale solution for individual nations to embrace clean energy technologies, the report adds that policy frameworks should be customized to work with domestic resources, sustainability criteria and development priorities. While the actionable steps included in the IEA’s Toolkit are voluntary, they do provide general guidelines to help individual countries foster long-term development and implementation of clean-energy sources. The Toolkit adopted by the G20 has five primary areas of focus:
Driving down technology costs
Exchanging best practices concerning policy frameworks and power system integration
Mobilizing finance through risk mitigation
Technological potentials and roadmaps
Accelerating the deployment of modern bioenergy
“Renewable energy has made incredible progress in recent years and there is no doubt of its potential for long-term growth and ability to contribute to a path of sustainable development,” noted H.E. Ali Rıza Alaboyun, Minister of Energy and Natural Resources of Turkey. “We welcome the adoption of the renewable energy toolkit as it is in line with the Turkish G20 Presidency’s ‘three I’ priorities of Inclusiveness, Investment for growth and Implementation.”
While the Obama Administration has used the Environmental Protection Agency (EPA) to put forth a comprehensive set of new regulations via the Clean Power Plan (CPP), which is focused on cutting power plant emissions, many questions remain for the renewables sector—both at the state and federal levels. Such uncertainty creates an atmosphere of apprehension and undermines progress. The IEA framework outlined in the Toolkit is a good starting point, but implementation on global level will come very slowly without constant advocacy and pressure from industry sponsors and citizens alike.
As Director Birol added, “Renewables are poised to seize the crucial top spot in global power supply growth, but this is hardly time for complacency. Governments must remove the question marks over renewables if these technologies are to achieve their full potential, and put our energy system on a more secure, sustainable path.”