IEA sees renewable power growth accelerating

6 July 2012

IEA sees renewable power growth accelerating

Renewable power generation is expected to continue its rapid growth over the next five years, according to a new report from the International Energy Agency (IEA). Power generation should expand almost 60 percent above the growth registered between 2005 and 2011.

The study, released on Thursday, marks the first time the IEA has devoted a medium-term report to renewable power sources, a recognition of the dynamic and increasing role of renewable energy in the global power mix.

UN Photo/Kibae Park

The report says that despite economic uncertainties in many countries, global power generation from hydropower, solar, wind and other renewable sources is projected to increase by more than 40 percent to almost 6 400 terawatt hours (TWh) - or roughly one-and-a-half times current electricity production in the United States.

The study examines in detail 15 key markets for renewable energy, which currently represent about 80 percent of renewable generation, while identifying and characterising developments that may emerge in other important markets.

According to the Medium-Term Renewable Energy Market Report 2012, renewable electricity generation should expand by 1 840 TWh between 2011 and 2017, almost 60 percent above the 1 160 TWh growth registered between 2005 and 2011.

Deployment shifts to new markets

Renewable generation will increasingly shift from the OECD to new markets, with non-OECD countries accounting for two-thirds of this growth.

Of the 710 GW of new global renewable electricity capacity expected, China accounts for almost 40 percent. Significant deployment is also expected in the United States, India, Germany and Brazil, among others.

This growth is underpinned by the maturing of a portfolio of renewable energy technologies, in large part due to supportive policy and market frameworks in OECD countries.

However, rapidly increasing electricity demand and energy security needs in recent years have been spurring deployment in many emerging markets - both large and small. These new deployment opportunities are creating a virtuous cycle of improved global competition and cost reductions.

"Renewable energy is expanding rapidly as technologies mature, with deployment transitioning from support-driven markets to new and potentially more competitive segments in many countries," IEA Executive Director Maria van der Hoeven said during the launch.

"Given the emergence of a portfolio of renewable sources as a crucial pillar of the global energy mix, market stakeholders need a clear understanding of the major drivers and barriers to renewable deployment. Based on these factors, this report forecasts global renewable development and, in so doing, provides a key benchmark for both public and private decision makers."

Toward more mature and robust sector

The report's release comes amid profound changes and the uncertainties associated with a cautious macroeconomic outlook.

First, governments in several key markets are deliberating significant changes to renewable policies and deeper electricity market reforms as renewable deployment scales up.

Second, the cost and availability of financing will act as a key variable, with a need for more investment sources and structures.

Finally, some parts of the renewable industry are going through a period of dramatic upheaval, with supply chains restructuring and shifting geographically while delivering cost reductions. Ultimately, such a consolidation should lead to a more mature and robust renewable sector.

Key findings

The report focuses on renewable energy in the electricity sector, though it also examines solar thermal heating.

It presents detailed forecasts for renewable energy generation and capacity for eight technologies - hydropower, bioenergy for power, onshore wind, offshore wind, solar photovoltaics (PV), concentrating solar power (CSP), geothermal and ocean power.

Key findings include:

* Hydropower continues to account for the majority of renewable generation and it registers the largest absolute growth (+730 TWh) of any single renewable technology over 2011-17, largely driven by non-OECD countries.

* Non-hydropower renewable technologies continue to scale up quickly. Between 2011 and 2017, generation from these technologies increases by over 1 100 TWh, with growth equally split between OECD and non-OECD countries.

* Onshore wind, bioenergy and solar PV see the largest increases, respectively, in generation after hydropower.

* Offshore wind and CSP grow quickly from low bases. Geothermal continues to develop in areas with good resources.

* Ocean technologies take important steps towards commercialization.