The document discusses the growing importance and competitiveness of renewable energy sources globally, highlighting significant trends, costs, and benefits. It emphasizes the need for supportive policies, particularly in Chile, which has a rich potential for diverse renewable resources. The report concludes that renewables will play a crucial role in achieving energy security and sustainability.

1. Renewable Energy
An IEA Perspective
Amb. Richard H. Jones
Deputy Executive Director
International Energy Agency
VI Encuentro Internacional de Energías Renovables
Santiago, Chile, 10-11 May 2012 © OECD/IEA 2010

2. Contents
 Recent trends
 Costs and Benefits
 Outlook for renewables in IEA scenarios
 Opportunities for Chile
 Principles and examples for effective policies
© OECD/IEA 2010

3. Strong Growth in Electricity …
Wind Bioenergy Solar PV Hydro other
Generation
338 296 31 3503 74
2010 [TWh]
CAGR 2005-
26.5% 8.8% 50.8% 3.1% 4.6%
2010 [%]
© OECD/IEA 2010

4. …and in Heat and Transport
60
50 • 3% share of road
Mtoe 40 transport
30 • Grew at 26% per
20
year in average
10
0
• Growth focused
in Brazil, US, EU
2001
2000
2002
2003
2004
2005
2006
2007
2008
2009
Brazil bioethanol US bioethanol
EU-27 biodiesel RoW biofuels
200
Rest of world China
• Rapid growth in 150
solar water heating GWth 100
• Focused mainly 50
in China 0
© OECD/IEA 2010

5. Costs are Reducing
 Growing deployment has led 100
PV Module Price (USD 2010/Wp)
< 1976
to cost reductions in key
technologies < 1980
 Hydro and some
10
geothermal already < 1990
cost-competitive < 2000
 New technologies such as wind < 2010
Learning Rate: 19.3%
onshore and biomass are
1
competitive in a broader set of 1 10 100 1 000 10 000 100 000
circumstances Cumulative capacity (MW)
Data from Breyer and Gerlach, 2010
 PV still expensive but 19% cost reduction for each
capacity doubling; parity with retail prices in the next five
years in countries with high insolation and electricity prices
© OECD/IEA 2010

6. Renewable Electricity Generating Costs
400
350
300
250
LCOE ($/MWh)
200
150
100
50
0
 Large ranges depending on technology and resource
 Competitiveness with new fossil power plants depending on local
© OECD/IEA 2010
conditions, but getting competitive in more circumstances

7. Why Renewables?
•CO2 savings
Climate Protection •Air quality
•Using natural
resource
•Import savings
Economic •Green jobs
•Impact on rural
Development
employment
•Stimulus for
innovation and
Energy Access development
and Security
•Improved diversity
•Reduced exposure to
volatile world energy prices
© OECD/IEA 2010

8. Market Expansion Opportunities
New opportunities Leading countries
New opportunities
© OECD/IEA 2010

9. Policy Trends
 Many more countries putting policies in place,
particularly outside OECD than in 2005
 45 of the 56 focus countries in Deploying
Renewables 2011 now have RE Electricity
targets, including 20 non-OECD members
 53 of the 56 focus countries have electricity
support policies in place, compared to 35 in
2005
© OECD/IEA 2010

10. Low-carbon power technologies
come of age
Global installed power generation capacity
in the New Policies Scenario
10 000
GW
Fossil-fuel additions
8 000 Nuclear additions
Renewable additions
6 000 Existing 2010 capacity
4 000
2 000
0
2010 2015 2020 2025 2030 2035
Renewables account for about half
of all the new capacity added worldwide through to 2035
© OECD/IEA 2011

11. Growing shares of renewables
50.00%
15000 TWh
45.00%
40.00%
11100 TWh
35.00%
30.00%
25.00%
20.00%
3900 TWh
15.00%
10.00%
5.00%
0.00%
2008
2009 CPS scenario 2035 NPS scenario 2035 450 scenario 2035
Electricity Heat Transport
All scenarios point out a large growth of renewables
© OECD/IEA 2011

12. Continuing Policy Support: Necessary
and Justified
 Policies need to continue to deliver energy security,
environmental and economic benefits
 Need for economic incentives
 RE technologies not yet generally cost competitive under
current pricing mechanisms (e.g. lack of global carbon pricing)
 Transitional support needed to stimulate learning and cost
reduction and bring a larger portfolio of RET to
competitiveness
 Address non-economic barriers that hamper
deployment
 Access to market and administrative hurdles
 Access to finance
 Infrastructure barriers
 Lack of awareness and skilled personnel
 Public acceptance and environmental barriers
© OECD/IEA 2010
 Policies need to have highest impact at lowest costs

13. Many opportunities for Chile
A large and well diversified RE potential!
Not only the best solar resource in
the continent but also:
• Hydro
• Geothermal
• Wind
• Biomass
• And even Marine
energy
Source; NREL
© OECD/IEA 2010

14. Overarching Best-Practice
Policy Principles
1. Predictable RE policy framework, integrated
into overall energy strategy
2. Portfolio of incentives based on technology
and market maturity
3. Dynamic policy approach based on monitoring
of national and global market trends
4. Tackle non-economic barriers
5. Address system integration issues
© OECD/IEA 2010

15. Many Good Market Based Policy
Examples…
 US States – quotas and fiscal incentives
 Brazil – tendering scheme
 Europe – emerging flexible and market-
oriented premium systems
•Opportunity to benefit from many years of
policy experience and emerging best practice
•Policy portfolio needs to be tailored to national
priorities and conditions
© OECD/IEA 2010

16. Conclusions
 RE is an important component of any secure
and sustainable energy economy
 Renewables are cost competitive in an
increasingly wider set of circumstances
 Chile has a large and diverse resource base
 Policy experience is available to help develop
portfolio of policies suited to Chile’s priorities
and conditions
© OECD/IEA 2010