REN21 ‒ the Renewable Energy Policy Network for the 21st Century ‒ has released 'Renewables 2016: Global Status Report', the latest edition of a report produced annually since 2005.1
REN21 comprises a range of governments, non-governmental organisations, research and academic institutions, international organisations and industry. It is an international non-profit association based at the United Nations Environment Programme in Paris. The latest Global Status Report involved over 500 authors, contributors and reviewers.
The report notes that 2015 was an "extraordinary" year for renewable energy:
"Renewables are now established around the world as mainstream sources of energy. Rapid growth, particularly in the power sector, is driven by several factors, including the improving cost-competiveness of renewable technologies, dedicated policy initiatives, better access to financing, energy security and environmental concerns, growing demand for energy in developing and emerging economies, and the need for access to modern energy. Consequently, new markets for both centralised and distributed renewable energy are emerging in all regions."
On the economics of power sources, the report states:
"Electricity from hydro, geothermal and some biomass power sources has been broadly competitive with power from fossil fuels for some time; in favourable circumstances (i.e., with good resources and a secure regulatory framework), onshore wind and solar PV also are cost-competitive with new fossil capacity, even without accounting for externalities. In 2015 and early 2016, expectations of further cost improvements were made evident by record-low winning bids in power auctions in places ranging from Latin America, to the Middle East and North Africa region, to India."
Facts and figures
According to the REN21 report, an estimated net 147 gigawatts (GW) of renewable power capacity was added in 2015, up 9.7% from the 134 GW added in 2014. That 147 GW net growth is the largest annual increase in capacity ever.
By the end of 2015, renewables produced an estimated 23.7% of global electricity generation (5633 / 23,741 Terrawatt-hours). The 23.7% figure is up from 22.8% the previous year. Hydropower provided about 16.6% (3,940 TWh) of total global electricity generation in 2015 (70% of renewable generation), followed by wind 3.7%, bio-power 2.0%, solar 1.2%, with geothermal, concentrating solar power and ocean power accounting for a combined 0.4%.
Renewable electricity generating capacity (including hydro) increased from 1,701 GW to 1,849 GW in 2015, an increase of 8.7%. Renewable capacity (excluding hydro) increased from 665 GW to 785 GW, an increase of 18%.
Renewables accounted for an estimated 62.5% of net additions to electricity supply in 2015 (renewables 147 GW; coal and gas 82 GW; nuclear 6.5 GW).
Wind and solar PV saw record additions for the second consecutive year, accounting for about 77% of new renewable installations, with hydro accounting for most of the remainder.
The REN21 report doesn't predict future growth of renewables, but the International Energy Agency in an October 2015 report projected 700 GW of new renewable power capacity from 2015−2020, with renewables projected to account for almost two-thirds of new power generation capacity over that period.2
Investment: Global investment in renewables also reached a new record level in 2015 in spite of obstacles such as the plunge in fossil fuel prices and the strength of the US dollar (which reduced the dollar value of non-dollar investments). Investments in renewables in 2015 were US$285.9 billion (not including >50 MW hydropower projects), a 5% increase on the previous year. Including investments in > 50 MW hydropower projects, total new investment during 2015 in renewable power and fuels (not including renewable heating and cooling) was at least US$329 billion.
For the first time in history, total investment in renewable power and fuels in developing countries in 2015 exceeded that in developed economies. The developing world, including China, India and Brazil, committed a total of US$156 billion (up 19% compared to 2014). China increased its investment by 17% to US$103 billion in 2015.
Christine Lins, executive secretary of REN21, said: "It clearly shows that the costs have come down so much that the emerging economies are now really focussing on renewables."3
By contrast, renewable energy investment in developed countries declined by 8% in 2015, to US$130 billion. The most significant decrease was in Europe (down 21%) while in contrast, renewable energy investment in the U.S. increased by 19% to US$44.1 billion.
Solar accounted for 56% of total new investment in renewable power and fuels, followed by wind 38.3%. All technologies except solar and wind power saw investment decline relative to 2014: biomass and waste-to-energy, small-scale hydropower, biofuels, geothermal energy and ocean energy.
Jobs: Employment in the renewable energy sector (not including large-scale hydropower) increased in 2015 to an estimated 8.1 million jobs (direct and indirect), up from 7.7 million in 2014. Solar PV and biofuels provided the largest numbers of renewable energy jobs. Large-scale hydropower accounted for an additional 1.3 million direct jobs.
Policies: As of December 2015, at least 173 countries had renewable energy targets and an estimated 146 countries had renewable energy support policies, at the national or state/provincial level. And 110 jurisdictions at the national or state/provincial level had enacted feed-in policies, making this the most widely adopted regulatory mechanism to promote renewable power.
Solar PV installations increased 25% in 2015 to reach a record 50 GW, lifting the global total to 227 GW. Solar PV installations in 2015 alone were nearly 10 times the world's cumulative solar PV capacity of a decade earlier. An estimated 22 countries had enough capacity as of December 2015 to meet more than 1% of their electricity demand, with far higher shares in some countries (e.g., Italy 7.8%, Greece 6.5% and Germany 6.4%).
Concentrating solar thermal power (CSP) grew by 10% to reach a total of 4.8 GW installed capacity. Large facilities (greater than 100 MW) are increasingly the norm, as is the incorporation of thermal energy storage and dry cooling technologies.
Wind power: Globally, a record 63 GW of wind power capacity was added in 2015 for a total of about 433 GW. Non-OECD countries were responsible for the majority of installations, led by China, and new markets emerged across Africa, Asia and Latin America. Off-shore wind power grew by an estimated 3.4 GW for a world total exceeding 12 GW. Wind power is playing a major role in meeting electricity demand in an increasing number of countries, including Denmark (42% of demand in 2015), Germany (more than 60% in four states) and Uruguay (15.5%).
Energy efficiency: By the end of 2015, at least 146 countries had enacted some kind of energy efficiency policy, and at least 128 countries had one or more energy efficiency targets. Although global primary energy intensity declined by more than 30% between 1990 and 2014, energy demand has risen steadily.
Fossil fuel subsidies: The REN21 report comments on preferential subsidies for fossil fuels:
"Fossil fuel subsidies have to be phased out, as they distort the true costs of energy and encourage wasteful spending and increased emissions. Fossil fuel subsidies also present a barrier to scaling up clean energy by: decreasing the costs of fossil fuel-powered electricity generation, thereby blunting the cost-competitiveness of renewables; creating an incumbent advantage that strengthens the position of fossil fuels in the electricity system; and creating conditions that favour investments in fossil fuel-based technologies over renewables. Fossil fuel subsidies were estimated to be over US$490 billion in 2014, compared with subsidies of only US$135 billion for renewables."
Nuclear power: REN21 includes representatives from the governments of several countries with nuclear power programs (including Brazil, India, South Africa, UAE, USA). But the balance of forces is anti-nuclear, hence this commentary in the report:
"Policy design should financially discourage investments in fossil fuels and nuclear, while also removing risk from investments in renewable energy. This is crucial for scaling up renewables, which can help close the energy access gap. Although there has been some divestment from fossil fuels and advances in renewable energy investment, fossil fuel and nuclear investments continue to be favoured over clean energy in many instances, particularly when short-term gains are the primary consideration and long-term thinking is discounted. This can occur when politicians think only in terms of the next election cycle, or when companies attempt to provide shareholders with quick returns. Furthermore, fossil fuels are more institutionalised and have long-standing, well-financed lobbies."
Heating and cooling: The REN21 report states:
"Modern renewable energy supplies approximately 8% of final energy for heating and cooling services worldwide in buildings and industry, the vast majority of which is provided by biomass, with smaller contributions from solar thermal and geothermal energy. However, approximately three-quarters of global energy use for heat is fossil fuel-based. Although the total capacity and generation of renewable heating and cooling technologies continued to rise, 2015 saw global growth rates decline, due in part to low global oil prices. Policy support for renewable heating and cooling remained far below support in other sectors."
Transport: The REN21 report states:
"Renewable energy accounted for an estimated 4% of global fuel for road transport in 2015. Liquid biofuels continued to represent the vast majority of the renewable energy contribution to the transport sector. ... Policies to promote the integration of renewable energy and electric vehicles, as well as the use of renewables in aviation, rail or shipping, have been slow to develop."
The report further states:
"More emphasis needs to be placed on strengthening the role of renewable energy in the heating and cooling and transport sectors, as well as on sector coupling. Policy support for the use of renewables in these sectors has advanced at a much slower pace over the past 10 years than it has in the power sector; currently renewable heat obligations exist in only 21 countries and biofuel mandates exist in only 66 countries, compared to 114 countries with renewable energy regulatory policies in the power sector."
IRENA report
A March 2016 report by the International Renewable Energy Agency (IRENA) proposes a doubling of renewable energy generation by 2030. The annual rate of renewable energy deployment would need to increase six-fold and would require an average annual investment of US$770 billion up to 2030.
The IRENA report outlines key benefits of a doubling of renewable power generation by 2030:
- When coupled with energy efficiency, it would limit average global temperature rise to 2°C above pre-industrial levels;
- It would avoid up to 12 gigatonnes of energy-related CO2 emissions in 2030;
- It would result in 24.4 million jobs in the renewable energy sector by 2030, compared to 9.2 million in 2014;
- It would reduce air pollution enough to save up to 4 million lives per year in 2030;
- It would boost the global GDP by up to US$1.3 trillion.
Bloomberg New Energy Finance report
In its annual New Energy Outlook report, Bloomberg New Energy Finance (BNEF) anticipates further sharp reductions in the cost of solar and wind power accompanied by strong growth.5 The report does not assume any further policy measures post-2020 to speed up decarbonisation; i.e. the strong growth of renewables will be driven primarily by economics.
BNEF says solar energy costs, which have already fallen by 80% since 2008, will fall another 60% by 2040. Solar's "precipitous" cost decline sees it emerge as the least-cost generation technology in most countries by 2030. It will account for 3,700 GW, or 43%, of new power generating capacity added from 2016‒40 according to BNEF. Small-scale solar makes up a bit more than a third of this new capacity; the bulk of solar PV will be utility-scale. Overall, solar PV supplies 15% of world electricity by 2040.
The cost of onshore wind power will fall a further 41% by 2040. It will account for more than 20% of new power generating capacity added from 2016‒40.
Onshore wind and solar will be the cheapest ways of producing electricity in many countries during the 2020s and in most of the world in the 2030s, the report states.
Wind and solar will account for 64% of the 8,600 GW of new power generating capacity added worldwide over the next 25 years.
By 2040, zero-emission energy sources will make up 60% of installed capacity.
Electricity generation from wind and solar will rise ninefold to 10,591 TWh by 2040, and to 30% of total global electricity generation, from 5% in 2015.
Prices will remain low for coal and gas, because of falling demand, but wind and solar will still be cheaper than these fossil fuels by 2027 in most parts of the world. "This is a tipping point that results in rapid and widespread renewables development," the BNEF report says.
"With the increase in renewable generation comes a fall in the run-hours of coal and gas plants, contributing to the retirement of 819 GW of coal and 691 GW of gas worldwide over the next 25 years," the report states.
The fossil fuel plants remaining on-line will increasingly be needed, along with new flexible capacity, to help meet peak demand, as well as to ramp up when solar comes offline in the evening. The report states: "As natural gas and coal plants are increasingly idled in favor of renewables, their capacity factors will take a big hit, and lifetime cost of those plants goes up. Think of them as the expensive back-up power for cheap renewables."
On top of the US$7.8 trillion forecast in the report, BNEF says the world would need to invest another US$5.3 trillion ‒ or US$212 billion per year ‒ in zero-carbon power by 2040 to prevent CO2 rising above 450 parts per million.
The BNEF report has little to say about nuclear power and it anticipates negligible nuclear growth to 2040.6 It states that nuclear retirements in Europe to 2025 will slow the decline of fossil fuel generation, but still anticipates renewables generating 70% of Europe's electricity in 2040, up from 32% in 2015.
Once again it's worth noting that the BNEF report does not assume any further policy measures post-2020 to speed the growth of renewables; it isn't underpinned by ideology or wishful thinking. Likewise, the report's projection of long-term nuclear stagnation doesn't reflect any ideological disdain. On the contrary, the Bloomberg Editorial Board published a pro-nuclear editorial on June 9.7
References:
1. REN21, 2016, 'Renewables 2016 Global Status Report', www.ren21.net/status-of-renewables/global-status-report/
Key findings: www.ren21.net/wp-content/uploads/2016/06/GSR_2016_KeyFindings1.pdf
Full report: www.ren21.net/wp-content/uploads/2016/06/GSR_2016_Full_Report_REN21.pdf
2. International Energy Agency, Oct 2015, 'Renewable Energy Medium-Term Market Report', www.iea.org/Textbase/npsum/MTrenew2015sum.pdf
3. Matt McGrath, 1 June 2016, 'Renewable energy surges to record levels around the world', www.bbc.com/news/science-environment-36420750
4. IRENA, 2016, 'REmap: Roadmap for a Renewable Energy Future', www.irena.org/News/Description.aspx?NType=A&mnu=cat&PriMenuID=16&CatID=8...
Full report: www.irena.org/DocumentDownloads/Publications/IRENA_REmap_2016_edition_re...
5. Bloomberg New Energy Finance, June 2016, 'New Energy Outlook', www.bloomberg.com/company/new-energy-outlook/
6. See graph: http://about.bnef.com/press-releases/coal-and-gas-to-stay-cheap-but-rene...
7. Bloomberg Editorial Board, 9 June 2016, '(Nuclear) Power to the People', www.bloomberg.com/view/articles/2016-06-09/-nuclear-power-to-the-people