renewable energy market report 2017 summary of first findingseneken.ieej.or.jp/data/7596.pdf ·...

Renewables 2017

Heymi Bahar

IEEJ, Tokyo – 31 October 2017

IEEJ：October 2017 © IEEJ2017

© IEA 2017

Context

Three numbers and three core global energy challenges:

6.5 million premature deaths each year can be attributed to air

pollution

2.7 degrees is the temperature increase under current climate pledges

1.2 billion people don’t have access to electricity and universal access

to modern energy remains a distant goal

Renewables contribute to meeting all these challenges


© IEA 2017

2016 – Renewables hitting new records driven by solar PV

Renewables breaking an all-time record accounting for two thirds of global net capacity additions;

For the first time solar PV becoming the global leader in net capacity growth

Power capacity additions by fuel 2016

Retirements

0 50 100 150 200

Renewables

Gas

Wind

Solar PV

Coal

Additions (GW)


© IEA 2017

Renewable policies spurring more competition

Competitive tenders with long-term contracts will drive almost half of new capacity growth globally;

the timing of policy transition in China may accelerate further this trend

Renewable capacity growth by type of policy defining remuneration levels

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2016 2017-22 2017-22 (excluding China)

Competitively set

Administratively set


© IEA 2017

Price discovery through competitive auctions effectively reduces costs along the entire value chain

Wind and solar PV average LCOEs and auction results by commissioning date

Competition driving costs down

0

50

100

150

200

250

300

350

400

2008 2010 2012 2014 2016 2018 2020 2022

USD 2016/MWh

Onshore wind averageauction price

Solar PV average auctionprice

Solar PV - utility scale LCOE

Onshore wind LCOE

Japan FIT - PV-utility


© IEA 2017

Offshore wind generation costs to decline by a third on average in just five years

Offshore wind average turbine size and

foundation per MW installed

Offshore wind: bigger turbines, fewer foundations = lower generation costs

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0.10

0.20

0.30

0.40

0.50

0.60

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2002 2006 2010 2014 2018 2022

MW

Turbine size Foundation per MW installed (right axis)

0

20

40

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100

120

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180

2013 2015 2017 2019 2021 2023 2025

EUR 2016/MWhDenmark(contract price)

Netherlands(contract price)

Germany(contract price)

UnitedKingdom(contract price)

Offshore wind auction results


© IEA 2017

Renewables growth more and more dependent on wind and solar

PV enters a new era, becoming the undisputed leader in renewable power capacity growth; growth could be

27% higher led by PV (60%) with enhanced policies addressing regulatory uncertainties and grid integration

Renewable electricity capacity growth by technology

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

200

400

600

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1 000

1 200

1999-2004 2005-10 2011-16 2017-22

Capacity growth (GW)

Additional -accelearated case

Other renewables

Hydropower

Solar PV

Wind

% from wind andsolar PV (right axis)


© IEA 2017

China continues to lead growth while India overtakes the EU

The forecast is 12% more optimistic vs. last year mainly due to solar PV revisions in China and India

Renewable capacity growth by country/region

0

50

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350

400

China United States EU India Japan Brazil Africa & Middle East

Capacity growth (GW)

2011-16 2017-22 main case


© IEA 2017

China holds the key to the new solar PV era

China influences the global market volumes and prices of solar PV

China’s share in global solar PV manufacturing and demand

0%

10%

20%

30%

40%

50%

60%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

% of China in total manufacturing % of China in global annual additions


© IEA 2017

Solar PV to lead China’s renewable expansion

Hydropower growth slows due to social and environmental concerns; wind expansion is stable despite

integration challenges while solar PV growth slowly shifts to distributed generation

China cumulative renewable capacity by technology in 2016 and 2022

0

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100

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350

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450

2016 2022 2016 2022 2016 2022 2016 2022

Hydropower Wind Solar PV Other renewables

GW

Main case Additional in accelerated case


© IEA 2017

India: Policy improvements drive more optimistic outlook

UDAY scheme improving financial health of distribution companies and auctions lead to competitive

prices; grid integration, further implementation of RPOs and distributed generation remain challenges

0

5

10

15

20

25

30

2016 2017 2018 2019 2020 2021 2022

GW

Hydropower Bioenergy Onshore wind Solar PV - utility

Solar PV - commercial Solar PV - residential Accelerated case

India annual renewable capacity additions


© IEA 2017

Japan’s FIT revision: an important forecast uncertainty for PV

More than half of all previously approved but non-operational PV projects to be cancelled after METI’s

review while the pace of new approvals remain a forecast uncertainty

0

25

50

75

100

Certificated Operational Possible cancellation;Grid agreement

Possible cancellation;Project plan

Possible installation

GWAC

Japan’s FIT revision impact on solar PV installations


© IEA 2017

Solar PV and bioenergy lead Japan’s new renewable additions

PV accounts for 80% of renewable growth with 21 GW expected in the next five years to reach 63 GW

by 2022 but if FIT cancellations remain minimal PV capacity could be 16 GW higher

Japan renewable capacity additions

0

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25

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35

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45

50

2011-16 2017-22

GW

Hydropower Bioenergy WindPV - utility PV - commercial PV - residentialOther renewables Additional in accelerated case


© IEA 2017

ASEAN’s non-hydro renewable capacity to double by 2022

Energy diversification needs and growing power demand drive renewable capacity growth in ASEAN

but grid integration, policy and regulatory uncertainties remain important challenges

Cumulative renewable capacity in selected countries in ASEAN in 2016 and 2022

0

5

10

15

20

25

2016 2022 2016 2022 2016 2022 2016 2022

Indonesia Thailand Viet Nam Philippines

GW

Hydropower Bioenergy Wind Solar PV Geothermal


© IEA 2017

Annual additions trend for solar and wind affected by tax phase-out schedules but announced policies

on trade and tax reform remain important forecast uncertainties.

US tax incentives, RPSs and other state-level incentives remain strong drivers

United States annual capacity additions for solar and wind by technology

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2015 2016 2017 2018 2019 2020 2021 2022

Annual additions (GW)

Wind

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2015 2016 2017 2018 2019 2020 2021 2022

PV - utility PV - commercial PV - residential


© IEA 2017

Europe’s deployment reflects policy transition

Europe’s renewable capacity is forecast to increase by over one-fifth in 2022, led by Germany, France

and the UK, with the pace of growth gradually dictated by auction schedules with fixed volumes.

Europe renewable capacity growth 2017-22

0

10

20

30

40

50

60

2011-16 2017-22 2011-16 2017-22 2011-16 2017-22

Germany France United Kingdom

GW

Hydropower Wind Solar PV Other renewables


© IEA 2017

SSA and MENA to benefit from wind and PV cost reductions

Demand and diversification drive renewable growth in MENA and sub-Saharan Africa; expansion could

be faster with policy and regulatory clarifications, access to low-cost financing and faster grid upgrades

SSA and MENA renewable energy capacity

0

20

40

60

80

2016 2017-22 additionsmain case

Accelerated case

GW SSA

Otherrenewables

Solar PV

Wind

Hydropower

0

20

40

60

80

2016 2017-22 additionsmain case

Accelerated case

GW MENA


© IEA 2017

Renewables closing the gap with coal

Renewable generation to expand by over a third with its share increasing from 24% in 2016 to 30% in

2022, rapidly closing the gap with coal

Electricity generation by fuel

0

2 000

4 000

6 000

8 000

10 000

12 000

2002 2006 2010 2014 2018 2022

Generation (TWh)

Coal

Natural gas

Nuclear

Renewables


© IEA 2017

Wind and solar transforming power sector - system integration becomes key

More flexible power systems, adapted market design and policies will have to play a key role

in integrating larger shares of wind and solar in a secure and cost-effective way

VRE share in annual electricity generation 2016-22

0% 10% 20% 30% 40% 50% 60% 70% 80%

Japan

Brazil

India

China

United States

Australia

Italy

United Kingdom

Germany

Spain

Ireland

Denmark

% of total generation

PV share in 2016

Wind share in 2016

Additional PV sharein 2022

Additional wind sharein 2022


© IEA 2017

Global conventional biofuel production is forecast to grow for 136 billion L to 159 billion L by 2022;

advanced biofuels output to increase sevenfold but represent only 1% of total biofuel production

Forecast conventional biofuel production growth 2017-22 in key countries and regions

Asia and Brazil drive biofuels production growth

0

1

2

3

4

5

6

7

Ethanol Biodiesel Ethanol Biodiesel Ethanol Biodiesel Ethanol Biodiesel

United States Europe Brazil Asia

Billion L


© IEA 2017

Renewables to supply almost a third of EV demand in 2022

China accounts for almost 90% of global EV electricity consumption in 2022, mostly from 2/3 wheelers,

and remains the largest electric car market, followed by Europe and the United States.

0%

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25%

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40%

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2016 2022

TWh

EV-2/3 wheels EV-cars EV-buses Renewableshare of consumption

Global electricity consumption by EVs and share of renewable consumption in 2016 and forecast for 2022


© IEA 2017

Surging EVs to complement biofuels in renewable transport

Share of renewables in road transport increases from 4% in 2016 to almost 5% in 2022, with biofuels representing 80% of the growth led by Asia & Brazil; EV electricity consumption doubles by 2022, with renewables providing 30% of demand

2016 2022

7%

Biofuels and electric vehicles contribution to renewable energy consumption in road transport

4%

Biofuels

EV 2/3wheelers

Electrc carsand buses


© IEA 2017

Bioenergy will dominate growth in absolute terms; electricity accounts for 6% of heat consumption and

renewable electricity used for heat is expected to almost double.

Renewable heat – slower but steady growth

Global final renewable heat consumption 2015 and 2022

0

5

10

15

20

25

2015 2022

EJ

Modern bioenergy Solar thermal Geothermal Renewable district heat Renewable electricity

+24%


© IEA 2017

Progress in renewable heat depends on strong policies

Renewables share in heat consumption rises from 9% in 2016 to 11% in 2022. China leads absolute growth with new targets; EU remains the largest renewable heat consumer while total heat demand outpaces renewables growth in India

Share of renewables in heat consumption by selected countries

0%

5%

10%

15%

20%

25%

2010 2012 2014 2016 2018 2020 2022

% of renewables

European Union

USA

India

China


© IEA 2017

Concluding remarks

Renewables rise by 1,000 GW to 2022, equal to half of current total coal capacity

Renewables generation exceeds 8,000 TWh by 2022, equal to total electricity

consumption of China, India & Germany combined

Solar PV enters a new era leading the growth in renewables, driven by a rapid

expansion in deployment & manufacturing capacity in China

Despite rapid growth in EVs, decarbonisation of transport is a long way off

Only 30% of electricity used by EVs is sourced from renewables

Advanced biofuels require specific incentives to bolster deployment

Policymakers have to turn their focus to system integration & expanding the use of

renewables for heating & cooling


© IEA 2017

Thank you

Renewables 2017 Team

Yasmina Abdelilah

Heymi Bahar

Emanuele Bianco

Ute Collier

Karolina Daszkiewicz

Pharoah Le Feuvre

Megan Mercer

Yasuhiro Sakuma

Questions and comments: [email protected]


Contact :[email protected]

renewable energy market report 2017 summary of first findingseneken.ieej.or.jp/data/7596.pdf ·...

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