RECENT TRENDS IN RENEWABLE ENERGY

AND CARBON MARKETSAryanie Amellina

Institute for Global Environmental Strategies (IGES)

Seminar on Renewable Energy Development in Mongolia,October 2018

The future is powered by renewable energies

Source: data from IPCC Special Report 1.5 (2018)Source: UNEP Emissions Gap Report 2017

Renewables83%

Gas with CCS7%

Coal with CCS1%

Oil0%

Nuclear9%

Electricity generation in 1.5°C pathways

The good news…Energy transformation is underway

◦ Wind energy has grown approx. 20x within 15 years.

◦ Solar energy has grownapprox. 300x within 15 years.

◦ Contribution from wind and solar energies to global electricity generation has increased 17x.

…but it needs to be faster and diversified

0%

4%

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1%

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100

200

300

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2001 2016

Wind and solar capacity growth for global electricity generation

Share of solar and wind powerWind power (MW)Solar power (MW)

Because economic barriers are disappearing…

Global levelised cost of electricity from utility-scale renewable power generation technologies

Electricity from renewables will soon be consistently cheaper than from fossil fuels

Technology R&D continue… (1/2)

Solar power with storage Colored solar PV glass on walls

Battery costs are declining –solar and wind power will benefit

As well as energy systems innovation…

Technology R&D continue… (2/2)

◦ Smart micro grids with innovative technology, on- and off- national grid◦ Reduces burden of central grid and helps scheduling of entire grid◦ Solar power “prosumers” and energy storage will play a key part:

generation from residential buildings, commercial buildings, etc.

Photo: FernandoAH/Getty

Brooklyn Microgrid project

Distributed power generation

Efficiency improvement

New technologies

Electric heating

Decarbonising heating system

• Compared with for electricity, technologies are less disseminated

• Clean electricity will only be efficient if combined with optimal energy

conservation

• R&D and finance need incentives for new technology and pilot

application. Policy incentives and international cooperation can help.

Integrated development of electricity and heating increases cost-efficiency

◦ Gas power plants equipped with Carbon Capture and Storage

◦ Clean electricity efficient combined with energy conservation◦ Building insulation, grid

efficiency, efficiency standard for equipment

◦ Diversification of renewable electricity ◦ Power with battery storage,

distributed grid

Electricity

Heating

Efficiency

Gas

Policy incentives: certainty and long-term strategies are important for RE development

Source: IRENA and CPI, Global Landscape of Renewable Energy Finance, 2018

Number of countries adopting renewable energy policies, by policy type, 2004, 2010 and 2016

International support from carbon markets will continue

• UNFCCC- and country-operated market mechanisms (such as the JCM) will co-exist in Paris era.

• International negotiations prioritize avoiding double counting of issued units between participating countries.

• Clarity in domestic policy on carbon markets is important.• Countries will benefit from formulation of policies on carbon markets

usage and technology priority.

Example: The Joint Crediting Mechanism

International support from carbon markets will continue: support from the JCM

20% 44%

32%34%

58%

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FY2013 FY2014 FY2015 FY2016 FY2017

% of renew

ab

le energies project

Num

ber

of p

roje

cts

Type of activity under selected JCM Model Project

Energy efficiency Renewable energies Co-generation

Transportation Waste gas/heat utilization Biomass energy

Others Linear (% Renewable energies)

Source: IGES JCM Database (October 2018)

Renewable energies are attractive for carbon markets, and innovation is important for funders.

Selected JCM Model Projects receives support of up to 50% of initial investment cost.

Projects supported by JCM are being implemented

15 MW Solar Power Plant in Khushigt

21MW Solar Power Plant in Bayanchandmani, Tuv

Province

20MW Solar Power Plant in Darkhan

City

10MW Solar Power Plant in Darkhan City

Centralized Control System of High-efficiency Heat

Only Boiler, Ulaanbaatar

Upgrading and Installation of High-efficiency Heat

Only Boiler, Bornuur soum

10 MW Solar Power Plant in Ulaanbaatar

High efficiency and low loss powertransmission and distribution system

New project selected under ADB JF JCM scheme: Solar power generationsystem with advanced storage battery and energy management system (EMS)

Integrated energy system development

Sustainable energy system development

and policy

Climate policy with increasing ambition

Incentives for

investments: infrastructur

e & new technologie

s

Optimal and stable supply

of clean electricity

Optimal and stable of heating

Clean industries

Public TransportationIndustry

Residential

Commercial use

Private Transportation

Towards a decarbonised future

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