Medium-Term Renewable Energy                  Market Report 2012                                           Michael Waldron...
Objective and scope With the increasing role of a portfolio of maturing  renewable technologies in the power mix… The IE...
Global Overview                  © OECD/IEA 2012
Key trends As a portfolio of renewable technologies matures, global  renewable power generation is forecast to rise 40%  ...
Growth in renewable power is forecastto accelerate Hydropower remains the main renewable power source (+3.1% p.a.) Non-h...
Growth is led by non-OECD countries Non-OECD accounts for two-thirds of the overall growth     China, Brazil, India lead...
Non-hydro technology deploymentspreads out Number of countries with cumulative capacity larger than 100MW  (can cover con...
Annual growth patterns for non-hydrotechnologies vary significantly China becomes deployment leader OECD Europe deployme...
Generation additions over 2011-17 differacross regions and technology portfolios    OECD Americas (+179 TWh)            OE...
Investment in renewable electricity Annual investment topped USD 250 billion in 2011    Most recent quarterly data sugge...
Renewable technologies compete better in awider range of circumstances Renewable generation in general still more expensi...
Country and Regional Outlooks                                © OECD/IEA 2012
US renewable generation to grow steadily Average renewable growth of 2.4% annually over 2011-17 Non-hydropower growth at...
State mandates drive the US picture Main US deployment drivers: state RPSs, federal financial   incentive levels, ample g...
But other challenges remain in the US Main US deployment challenges:    Duration of federal incentives          Wind pr...
China accounts for 40% of global growth         Drivers:                                                             Cha...
India sees strong hydropower, wind and solar growth Drivers:                                                         Cha...
Brazil’s hydropower and wind grow strongly Drivers:                                                          Challenges:...
Thank You    &Questions            © OECD/IEA 2012
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Medium-Term Renewable Energy Market Report 2012

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Medium-Term Renewable Energy Market Report 2012

  1. 1. Medium-Term Renewable Energy Market Report 2012 Michael Waldron Senior Renewable Energy Market Analyst© OECD/IEA 2012
  2. 2. Objective and scope With the increasing role of a portfolio of maturing renewable technologies in the power mix… The IEA is publishing its first medium-term report focused on renewable energy  Bottom-up, global renewable forecast of renewable electricity capacity and generation over 2011-17  Detailed analysis of 12 OECD countries (Austria, Denmark, France, Germany, Italy, Japan, Norway, Spain, Sweden, Turkey, UK, US) and China, India, Brazil (~80% of world renewable electricity) For 2012 edition, focus on 8 technologies in power sector with some analysis on solar thermal heating Completes slate of IEA MT forecasts: oil, gas, coal Methodology consistent with other MT reports © OECD/IEA 2012
  3. 3. Global Overview © OECD/IEA 2012
  4. 4. Key trends As a portfolio of renewable technologies matures, global renewable power generation is forecast to rise 40%  Supported by policy/market frameworks and economic attractiveness in increasing range of countries and circumstances  Technology cost developments, grid/system integration, cost/availability of financing also weigh as key variables  High level of economic/policy uncertainty in some countries This projected growth is an acceleration vs previous period  Growth is 60% higher over 2011-17 versus 2005-11 Renewable deployment is projected to spread out geographically, with increased activity in emerging markets  Deployment spurring economies of scale in some technologies - virtuous cycle of improved competition and cost reductions © OECD/IEA 2012
  5. 5. Growth in renewable power is forecastto accelerate Hydropower remains the main renewable power source (+3.1% p.a.) Non-hydro renewable sources grow at double-digit annual percentage rates (+14.3% p.a.) TWh Global renewable electricity production and forecast 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Hydropower Wind onshore Bioenergy Solar PV Geothermal Wind offshore CSP Ocean © OECD/IEA 2012
  6. 6. Growth is led by non-OECD countries Non-OECD accounts for two-thirds of the overall growth  China, Brazil, India lead; others grow significantly as well OECD growth still largely driven by Europe but Americas and Asia-Oceania make significant contributions TWh Global renewable electricity production and forecast7 0006 0005 0004 0003 0002 0001 000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 OECD Americas OECD Asia-Oceania OECD Europe China Brazil India Rest of non-OECD © OECD/IEA 2012
  7. 7. Non-hydro technology deploymentspreads out Number of countries with cumulative capacity larger than 100MW (can cover consumption of 100k households) increases significantly Growth areas include Asia, Africa, Latin America and the Middle East Number of countries with installed capacity above 100 MW 80 Non-OECD OECD 60 40 20 0 2011 2005 2017 2011 2017 2011 2005 2017 2011 2005 2011 2005 2017 2011 2005 2005 2017 2011 2005 2017 2017 Onshore Offshore Bioenergy Solar PV CSP Geothermal Ocean wind wind © OECD/IEA 2012
  8. 8. Annual growth patterns for non-hydrotechnologies vary significantly China becomes deployment leader OECD Europe deployment growth slows OECD Americas growth reflects US policy uncertainties GW Annual capacity additions , non-hydro technologies 40 35 30 25 20 15 10 5 0 2010 2011 2012 2013 2014 2015 2016 2017 OECD AO OECD AM OECD EUR China Rest of non-OECD © OECD/IEA 2012
  9. 9. Generation additions over 2011-17 differacross regions and technology portfolios OECD Americas (+179 TWh) OECD Asia-Oceania (+77 TWh) Wind onshore Wind onshore Bioenergy Bioenergy Solar PV Solar PV Other technologies Other technologies OECD Europe (+365 TWh) Non-OECD (+1 220 TWh) Hydropower Hydropower Wind onshore Wind onshore Bioenergy Bioenergy Solar PV Solar PV Other Other technologies technologies © OECD/IEA 2012
  10. 10. Investment in renewable electricity Annual investment topped USD 250 billion in 2011  Most recent quarterly data suggest some slowing Economic and credit risks weigh on medium-term picture  European bank project finance and utility finance more strained Other sources/structures of finance play increasing role  Development banks  New institutional and non-traditional corporate investors  Smaller scale financial innovation for small distributed capacity Ultimately, cost and availability of financing to depend most on prevailing policy and technology environments © OECD/IEA 2012
  11. 11. Renewable technologies compete better in awider range of circumstances Renewable generation in general still more expensive than bulk power but…  Hydropower and geothermal mostly competitive  Onshore wind competes well in good resource areas  Solar PV approaches peak gen. costs in places with summer peak  Residential PV can be cheaper than average retail power prices USD/MWh Levelised costs of power generation Utility scale Small scale 500 400 300 200 100 0 © OECD/IEA 2012
  12. 12. Country and Regional Outlooks © OECD/IEA 2012
  13. 13. US renewable generation to grow steadily Average renewable growth of 2.4% annually over 2011-17 Non-hydropower growth at stronger rate, + 8.4% annually  Onshore wind, solar PV and bioenergy grow strongest  CSP and geothermal growth are large in global terms % of total power gen: 9% (2005), 13% (2011), 14-15% (2017) TWh United States renewable generation and forecast 700 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Hydropower Wind onshore Bioenergy Solar PV Geothermal CSP Wind offshore © OECD/IEA 2012
  14. 14. State mandates drive the US picture Main US deployment drivers: state RPSs, federal financial incentive levels, ample grid capacity, innovative financing Source: DSIRE (March 2012). © OECD/IEA 2012
  15. 15. But other challenges remain in the US Main US deployment challenges:  Duration of federal incentives  Wind production tax credit (PTC) expires at end-2012; but investment tax credit for solar goes through 2016  Competition with natural gas  Cost and availability of tax equity finance GW US wind capacity growth 10 Forecast based on expiration of PTC at end-2012 8 6 Expiration of federal PTC 4 2 0 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 © OECD/IEA 2012
  16. 16. China accounts for 40% of global growth  Drivers:  Challenges:  Growing energy needs  Pricing framework  Diversification  Priority dispatch  Government targets  Grid upgrades  Ample low-cost finance  Prohibitive licensing for  Robust manufacturing small-scale systems TWh1 800  Challenges: generation China forecast renewable TWh 8 000 China power demand vs GDP growth Y-o-Y Chg 18%1 500  Pricing framework 16%  14%1 200 Priority dispatch 6 000 12% 900  Grid upgrades 4 000 10% 8% 600  Prohibitive licensing for 6% 300 small-scale systems 2 000 4% 2% 0 0 0% 2011 2012 2013 2014 2015 2016 2017 2005 2008 2011 2014 2017 Hydropower Wind onshore Bioenergy Solar PV Wind offshore CSP Demand Demand, Y-o-Y (RHS) GDP, Y-o-Y (RHS) Source: © OECD/IEA 2012
  17. 17. India sees strong hydropower, wind and solar growth Drivers:  Challenges:  Supportive policy  High distribution losses and environment: Five-Year Plan regulated prices targets, diverse financial  Grid strengthening and incentives expansion needed  Low-cost financing from dev.  Complex administrative banks and private sector requirements for projects  Rural electrification needs – distributed generationTWh India forecast renewable generation TWh India domestic electricity supply and250 1 000 distribution losses 100%200 800 80%150 600 60%100 400 40% 50 200 20% 0 0 0% 2011 2012 2013 2014 2015 2016 2017 2000 2002 2004 2006 2008 2010 Hydropower Wind onshore Bioenergy Solar PV CSP Ocean Domestic electricity supply Percentage losses (RHS) © OECD/IEA 2012
  18. 18. Brazil’s hydropower and wind grow strongly Drivers:  Challenges:  Government sponsored power  Adequate margins for wind auctions projects (?)  Cost reductions – wind recently  Environmental licensing outbid natural gas  Economic attractiveness of  Pipeline of hydropower projects solar PV (?)  Low-cost financing from dev. banks and private sector TWh Brazil forecast renewable generation Brazil average auction price for new wind 600 160 500 140 120 400 100 300 80 200 60 100 40 BRL per megawatt-hour 20 0 USD per megawatt-hour 2011 2012 2013 2014 2015 2016 2017 0 Hydropower Wind onshore Bioenergy Solar PV 2009 2010 2010 2011 2011 2011 Reserve A-3 Reserve A-3 Reserve A-5 © OECD/IEA 2012
  19. 19. Thank You &Questions © OECD/IEA 2012
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