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