Contribution of Renewables to Energy Security · Reduced import bills and lower fossil fuel price...
22
© OECD/IEA 2014 © OECD/IEA 2014 Cédric PHILIBERT Renewable Energy Division EUFORES Parliamentary Dinner Debate , Brussels, 9 September, 2014 Contribution of Renewables to Energy Security
Transcript of Contribution of Renewables to Energy Security · Reduced import bills and lower fossil fuel price...
copy OECDIEA 2014 copy OECDIEA 2014
Ceacutedric PHILIBERT Renewable Energy Division
EUFORES Parliamentary Dinner
Debate Brussels 9 September 2014
Contribution of Renewables to Energy Security
copy OECDIEA 2014
What Energy Security is about
IEA defines energy security as the uninterrupted availability of energy sources at an affordable price
short-term energy security focuses on the ability of the energy system to react promptly to sudden changes in the supply-demand balance
long-term energy security mainly deals with timely investments to supply energy in line with economic developments and environmental needs
Improved security reducing risks amp increasing resilience
Fossil fuels notably oil and gas availability accessibility (political risks) affordability acceptability
Renewables electricity availability and system failure risks
Reducing market concentration diversifying suppliers
copy OECDIEA 2014
Energy Efficiency comes first
For most IEA countries the energy savings from efficiency measures over the longer term exceed the output from any other fuel source
In emerging economies today rapid demand growth leading to energy security concerns
EU also a leader
Range of measures over past decade
Now longer-term commitments to 20202030
Current added geopolitical impetus
Published today
copy OECDIEA 2014
lo lower fossil fuel price risk wer fossil fuel price risk Benefits
bull Diversification Balanced RE Portfolio key element for diversified mix in electricity transport and heating sector
bull Domestic supply
Reduced import bills and lower fossil fuel price risk
bull Long-term security
Climate change mitigation and local pollution reduction
Risks
bull Exposure to weather and climate variability and uncertainty
System flexibility
bull System-wide approach to renewables integration bull Smarter and stronger grids bull Improved demand side response bull Increased storage capacity bull More flexible (RE) generation
More secure and resilient system
Energy security ndash key drivers and challenges for renewables
copy OECDIEA 2014 Medium-Term Renewable Energy Market Report 2014
Renewable electricity projected to scale up by 45 from 2013 to 2020
Strong momentum for renewable electricity
Global renewable electricity generation
0
5
10
15
20
25
30
5001 0001 5002 0002 5003 0003 5004 0004 5005 0005 5006 0006 5007 0007 500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
TWh
Hydropower Bioenergy Onshore wind
Offshore wind Solar PV Geothermal
STECSP Ocean total generation (right axis)
Historical data and estimates Forecast
Natural gas 2013
Nuclear 2013
copy OECDIEA 2014
Renewables are predominant source of new power generation in Europe
Driven by ambitious de-carbonisation aims diversification and conventional plant retirements renewable growth to exceed total power growth over 2013-20
Rapid renewable deployment has in some cases been associated with high support costs
In the face of weak demand rapid renewable growth may require scaling down part of existing system which can put incumbent utilities under severe pressure
These concerns are increasing policy and regulatory uncertainty in Europe
OECD Europe historical amp projected
shares of power generation mix
Source Medium Term Renewable
Energy Market Report 2014
copy OECDIEA 2014
Role of renewable use in heat also increasing but policy uncertainties growing
EU 2020 targets and country support policies driving increased uptake of modern renewables use in heat
Buildings renewable heat to grow 22year provide 18 of total heat by 2020
Industry sectorrsquos use of renewable heat more limited due to lack of policy incentives
Uncertainty over post-2020 EU policy framework for renewable heat
OECD Europe modern renewable energy use for heat in buildings and industry 2007-20
copy OECDIEA 2014
Russian gas imports remain important component
Even with anemic demand Europe gas imports increase due to production drop
Russia remains a large supply source even contribution is lower than 2013 peak
No significant upside expected from North African or Middle East (Iran) gas
A major uncertainty remains the quantity of LNG coming back to Europe which acts as the residual market
Higher Asian demand could prompt higher Russian exports to Europe
European gas imports 2000-19
copy OECDIEA 2014
Additional production of 617 TWhe electricity and 361TWh th of renewable heat between 2005 and 2020
Real impact on fossil fuel needs complex and requires more intensive study
Notional savings in gas imports for EU could exceed 40 Billion euroyr by 2020
Assumes 50 gas to electricity conversion efficiency Gas price 10$MBTU 13 $Euro
IEA Analysis
copy OECDIEA 2014
Power mixes with same per-kWh CO2 emissions Renewables offer the
possibility to use some more coal and less gas for same CO2 emissions
Even if not materialised this possibility limits the market power of gas suppliers adding to energy security
Even if some more coal is temporarily used climate change mitigation requires early deployment of renewables as it unlocks their long term potential
An additional indirect energy security benefit
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
What Energy Security is about
IEA defines energy security as the uninterrupted availability of energy sources at an affordable price
short-term energy security focuses on the ability of the energy system to react promptly to sudden changes in the supply-demand balance
long-term energy security mainly deals with timely investments to supply energy in line with economic developments and environmental needs
Improved security reducing risks amp increasing resilience
Fossil fuels notably oil and gas availability accessibility (political risks) affordability acceptability
Renewables electricity availability and system failure risks
Reducing market concentration diversifying suppliers
copy OECDIEA 2014
Energy Efficiency comes first
For most IEA countries the energy savings from efficiency measures over the longer term exceed the output from any other fuel source
In emerging economies today rapid demand growth leading to energy security concerns
EU also a leader
Range of measures over past decade
Now longer-term commitments to 20202030
Current added geopolitical impetus
Published today
copy OECDIEA 2014
lo lower fossil fuel price risk wer fossil fuel price risk Benefits
bull Diversification Balanced RE Portfolio key element for diversified mix in electricity transport and heating sector
bull Domestic supply
Reduced import bills and lower fossil fuel price risk
bull Long-term security
Climate change mitigation and local pollution reduction
Risks
bull Exposure to weather and climate variability and uncertainty
System flexibility
bull System-wide approach to renewables integration bull Smarter and stronger grids bull Improved demand side response bull Increased storage capacity bull More flexible (RE) generation
More secure and resilient system
Energy security ndash key drivers and challenges for renewables
copy OECDIEA 2014 Medium-Term Renewable Energy Market Report 2014
Renewable electricity projected to scale up by 45 from 2013 to 2020
Strong momentum for renewable electricity
Global renewable electricity generation
0
5
10
15
20
25
30
5001 0001 5002 0002 5003 0003 5004 0004 5005 0005 5006 0006 5007 0007 500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
TWh
Hydropower Bioenergy Onshore wind
Offshore wind Solar PV Geothermal
STECSP Ocean total generation (right axis)
Historical data and estimates Forecast
Natural gas 2013
Nuclear 2013
copy OECDIEA 2014
Renewables are predominant source of new power generation in Europe
Driven by ambitious de-carbonisation aims diversification and conventional plant retirements renewable growth to exceed total power growth over 2013-20
Rapid renewable deployment has in some cases been associated with high support costs
In the face of weak demand rapid renewable growth may require scaling down part of existing system which can put incumbent utilities under severe pressure
These concerns are increasing policy and regulatory uncertainty in Europe
OECD Europe historical amp projected
shares of power generation mix
Source Medium Term Renewable
Energy Market Report 2014
copy OECDIEA 2014
Role of renewable use in heat also increasing but policy uncertainties growing
EU 2020 targets and country support policies driving increased uptake of modern renewables use in heat
Buildings renewable heat to grow 22year provide 18 of total heat by 2020
Industry sectorrsquos use of renewable heat more limited due to lack of policy incentives
Uncertainty over post-2020 EU policy framework for renewable heat
OECD Europe modern renewable energy use for heat in buildings and industry 2007-20
copy OECDIEA 2014
Russian gas imports remain important component
Even with anemic demand Europe gas imports increase due to production drop
Russia remains a large supply source even contribution is lower than 2013 peak
No significant upside expected from North African or Middle East (Iran) gas
A major uncertainty remains the quantity of LNG coming back to Europe which acts as the residual market
Higher Asian demand could prompt higher Russian exports to Europe
European gas imports 2000-19
copy OECDIEA 2014
Additional production of 617 TWhe electricity and 361TWh th of renewable heat between 2005 and 2020
Real impact on fossil fuel needs complex and requires more intensive study
Notional savings in gas imports for EU could exceed 40 Billion euroyr by 2020
Assumes 50 gas to electricity conversion efficiency Gas price 10$MBTU 13 $Euro
IEA Analysis
copy OECDIEA 2014
Power mixes with same per-kWh CO2 emissions Renewables offer the
possibility to use some more coal and less gas for same CO2 emissions
Even if not materialised this possibility limits the market power of gas suppliers adding to energy security
Even if some more coal is temporarily used climate change mitigation requires early deployment of renewables as it unlocks their long term potential
An additional indirect energy security benefit
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Energy Efficiency comes first
For most IEA countries the energy savings from efficiency measures over the longer term exceed the output from any other fuel source
In emerging economies today rapid demand growth leading to energy security concerns
EU also a leader
Range of measures over past decade
Now longer-term commitments to 20202030
Current added geopolitical impetus
Published today
copy OECDIEA 2014
lo lower fossil fuel price risk wer fossil fuel price risk Benefits
bull Diversification Balanced RE Portfolio key element for diversified mix in electricity transport and heating sector
bull Domestic supply
Reduced import bills and lower fossil fuel price risk
bull Long-term security
Climate change mitigation and local pollution reduction
Risks
bull Exposure to weather and climate variability and uncertainty
System flexibility
bull System-wide approach to renewables integration bull Smarter and stronger grids bull Improved demand side response bull Increased storage capacity bull More flexible (RE) generation
More secure and resilient system
Energy security ndash key drivers and challenges for renewables
copy OECDIEA 2014 Medium-Term Renewable Energy Market Report 2014
Renewable electricity projected to scale up by 45 from 2013 to 2020
Strong momentum for renewable electricity
Global renewable electricity generation
0
5
10
15
20
25
30
5001 0001 5002 0002 5003 0003 5004 0004 5005 0005 5006 0006 5007 0007 500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
TWh
Hydropower Bioenergy Onshore wind
Offshore wind Solar PV Geothermal
STECSP Ocean total generation (right axis)
Historical data and estimates Forecast
Natural gas 2013
Nuclear 2013
copy OECDIEA 2014
Renewables are predominant source of new power generation in Europe
Driven by ambitious de-carbonisation aims diversification and conventional plant retirements renewable growth to exceed total power growth over 2013-20
Rapid renewable deployment has in some cases been associated with high support costs
In the face of weak demand rapid renewable growth may require scaling down part of existing system which can put incumbent utilities under severe pressure
These concerns are increasing policy and regulatory uncertainty in Europe
OECD Europe historical amp projected
shares of power generation mix
Source Medium Term Renewable
Energy Market Report 2014
copy OECDIEA 2014
Role of renewable use in heat also increasing but policy uncertainties growing
EU 2020 targets and country support policies driving increased uptake of modern renewables use in heat
Buildings renewable heat to grow 22year provide 18 of total heat by 2020
Industry sectorrsquos use of renewable heat more limited due to lack of policy incentives
Uncertainty over post-2020 EU policy framework for renewable heat
OECD Europe modern renewable energy use for heat in buildings and industry 2007-20
copy OECDIEA 2014
Russian gas imports remain important component
Even with anemic demand Europe gas imports increase due to production drop
Russia remains a large supply source even contribution is lower than 2013 peak
No significant upside expected from North African or Middle East (Iran) gas
A major uncertainty remains the quantity of LNG coming back to Europe which acts as the residual market
Higher Asian demand could prompt higher Russian exports to Europe
European gas imports 2000-19
copy OECDIEA 2014
Additional production of 617 TWhe electricity and 361TWh th of renewable heat between 2005 and 2020
Real impact on fossil fuel needs complex and requires more intensive study
Notional savings in gas imports for EU could exceed 40 Billion euroyr by 2020
Assumes 50 gas to electricity conversion efficiency Gas price 10$MBTU 13 $Euro
IEA Analysis
copy OECDIEA 2014
Power mixes with same per-kWh CO2 emissions Renewables offer the
possibility to use some more coal and less gas for same CO2 emissions
Even if not materialised this possibility limits the market power of gas suppliers adding to energy security
Even if some more coal is temporarily used climate change mitigation requires early deployment of renewables as it unlocks their long term potential
An additional indirect energy security benefit
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
lo lower fossil fuel price risk wer fossil fuel price risk Benefits
bull Diversification Balanced RE Portfolio key element for diversified mix in electricity transport and heating sector
bull Domestic supply
Reduced import bills and lower fossil fuel price risk
bull Long-term security
Climate change mitigation and local pollution reduction
Risks
bull Exposure to weather and climate variability and uncertainty
System flexibility
bull System-wide approach to renewables integration bull Smarter and stronger grids bull Improved demand side response bull Increased storage capacity bull More flexible (RE) generation
More secure and resilient system
Energy security ndash key drivers and challenges for renewables
copy OECDIEA 2014 Medium-Term Renewable Energy Market Report 2014
Renewable electricity projected to scale up by 45 from 2013 to 2020
Strong momentum for renewable electricity
Global renewable electricity generation
0
5
10
15
20
25
30
5001 0001 5002 0002 5003 0003 5004 0004 5005 0005 5006 0006 5007 0007 500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
TWh
Hydropower Bioenergy Onshore wind
Offshore wind Solar PV Geothermal
STECSP Ocean total generation (right axis)
Historical data and estimates Forecast
Natural gas 2013
Nuclear 2013
copy OECDIEA 2014
Renewables are predominant source of new power generation in Europe
Driven by ambitious de-carbonisation aims diversification and conventional plant retirements renewable growth to exceed total power growth over 2013-20
Rapid renewable deployment has in some cases been associated with high support costs
In the face of weak demand rapid renewable growth may require scaling down part of existing system which can put incumbent utilities under severe pressure
These concerns are increasing policy and regulatory uncertainty in Europe
OECD Europe historical amp projected
shares of power generation mix
Source Medium Term Renewable
Energy Market Report 2014
copy OECDIEA 2014
Role of renewable use in heat also increasing but policy uncertainties growing
EU 2020 targets and country support policies driving increased uptake of modern renewables use in heat
Buildings renewable heat to grow 22year provide 18 of total heat by 2020
Industry sectorrsquos use of renewable heat more limited due to lack of policy incentives
Uncertainty over post-2020 EU policy framework for renewable heat
OECD Europe modern renewable energy use for heat in buildings and industry 2007-20
copy OECDIEA 2014
Russian gas imports remain important component
Even with anemic demand Europe gas imports increase due to production drop
Russia remains a large supply source even contribution is lower than 2013 peak
No significant upside expected from North African or Middle East (Iran) gas
A major uncertainty remains the quantity of LNG coming back to Europe which acts as the residual market
Higher Asian demand could prompt higher Russian exports to Europe
European gas imports 2000-19
copy OECDIEA 2014
Additional production of 617 TWhe electricity and 361TWh th of renewable heat between 2005 and 2020
Real impact on fossil fuel needs complex and requires more intensive study
Notional savings in gas imports for EU could exceed 40 Billion euroyr by 2020
Assumes 50 gas to electricity conversion efficiency Gas price 10$MBTU 13 $Euro
IEA Analysis
copy OECDIEA 2014
Power mixes with same per-kWh CO2 emissions Renewables offer the
possibility to use some more coal and less gas for same CO2 emissions
Even if not materialised this possibility limits the market power of gas suppliers adding to energy security
Even if some more coal is temporarily used climate change mitigation requires early deployment of renewables as it unlocks their long term potential
An additional indirect energy security benefit
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014 Medium-Term Renewable Energy Market Report 2014
Renewable electricity projected to scale up by 45 from 2013 to 2020
Strong momentum for renewable electricity
Global renewable electricity generation
0
5
10
15
20
25
30
5001 0001 5002 0002 5003 0003 5004 0004 5005 0005 5006 0006 5007 0007 500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
TWh
Hydropower Bioenergy Onshore wind
Offshore wind Solar PV Geothermal
STECSP Ocean total generation (right axis)
Historical data and estimates Forecast
Natural gas 2013
Nuclear 2013
copy OECDIEA 2014
Renewables are predominant source of new power generation in Europe
Driven by ambitious de-carbonisation aims diversification and conventional plant retirements renewable growth to exceed total power growth over 2013-20
Rapid renewable deployment has in some cases been associated with high support costs
In the face of weak demand rapid renewable growth may require scaling down part of existing system which can put incumbent utilities under severe pressure
These concerns are increasing policy and regulatory uncertainty in Europe
OECD Europe historical amp projected
shares of power generation mix
Source Medium Term Renewable
Energy Market Report 2014
copy OECDIEA 2014
Role of renewable use in heat also increasing but policy uncertainties growing
EU 2020 targets and country support policies driving increased uptake of modern renewables use in heat
Buildings renewable heat to grow 22year provide 18 of total heat by 2020
Industry sectorrsquos use of renewable heat more limited due to lack of policy incentives
Uncertainty over post-2020 EU policy framework for renewable heat
OECD Europe modern renewable energy use for heat in buildings and industry 2007-20
copy OECDIEA 2014
Russian gas imports remain important component
Even with anemic demand Europe gas imports increase due to production drop
Russia remains a large supply source even contribution is lower than 2013 peak
No significant upside expected from North African or Middle East (Iran) gas
A major uncertainty remains the quantity of LNG coming back to Europe which acts as the residual market
Higher Asian demand could prompt higher Russian exports to Europe
European gas imports 2000-19
copy OECDIEA 2014
Additional production of 617 TWhe electricity and 361TWh th of renewable heat between 2005 and 2020
Real impact on fossil fuel needs complex and requires more intensive study
Notional savings in gas imports for EU could exceed 40 Billion euroyr by 2020
Assumes 50 gas to electricity conversion efficiency Gas price 10$MBTU 13 $Euro
IEA Analysis
copy OECDIEA 2014
Power mixes with same per-kWh CO2 emissions Renewables offer the
possibility to use some more coal and less gas for same CO2 emissions
Even if not materialised this possibility limits the market power of gas suppliers adding to energy security
Even if some more coal is temporarily used climate change mitigation requires early deployment of renewables as it unlocks their long term potential
An additional indirect energy security benefit
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Renewables are predominant source of new power generation in Europe
Driven by ambitious de-carbonisation aims diversification and conventional plant retirements renewable growth to exceed total power growth over 2013-20
Rapid renewable deployment has in some cases been associated with high support costs
In the face of weak demand rapid renewable growth may require scaling down part of existing system which can put incumbent utilities under severe pressure
These concerns are increasing policy and regulatory uncertainty in Europe
OECD Europe historical amp projected
shares of power generation mix
Source Medium Term Renewable
Energy Market Report 2014
copy OECDIEA 2014
Role of renewable use in heat also increasing but policy uncertainties growing
EU 2020 targets and country support policies driving increased uptake of modern renewables use in heat
Buildings renewable heat to grow 22year provide 18 of total heat by 2020
Industry sectorrsquos use of renewable heat more limited due to lack of policy incentives
Uncertainty over post-2020 EU policy framework for renewable heat
OECD Europe modern renewable energy use for heat in buildings and industry 2007-20
copy OECDIEA 2014
Russian gas imports remain important component
Even with anemic demand Europe gas imports increase due to production drop
Russia remains a large supply source even contribution is lower than 2013 peak
No significant upside expected from North African or Middle East (Iran) gas
A major uncertainty remains the quantity of LNG coming back to Europe which acts as the residual market
Higher Asian demand could prompt higher Russian exports to Europe
European gas imports 2000-19
copy OECDIEA 2014
Additional production of 617 TWhe electricity and 361TWh th of renewable heat between 2005 and 2020
Real impact on fossil fuel needs complex and requires more intensive study
Notional savings in gas imports for EU could exceed 40 Billion euroyr by 2020
Assumes 50 gas to electricity conversion efficiency Gas price 10$MBTU 13 $Euro
IEA Analysis
copy OECDIEA 2014
Power mixes with same per-kWh CO2 emissions Renewables offer the
possibility to use some more coal and less gas for same CO2 emissions
Even if not materialised this possibility limits the market power of gas suppliers adding to energy security
Even if some more coal is temporarily used climate change mitigation requires early deployment of renewables as it unlocks their long term potential
An additional indirect energy security benefit
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Role of renewable use in heat also increasing but policy uncertainties growing
EU 2020 targets and country support policies driving increased uptake of modern renewables use in heat
Buildings renewable heat to grow 22year provide 18 of total heat by 2020
Industry sectorrsquos use of renewable heat more limited due to lack of policy incentives
Uncertainty over post-2020 EU policy framework for renewable heat
OECD Europe modern renewable energy use for heat in buildings and industry 2007-20
copy OECDIEA 2014
Russian gas imports remain important component
Even with anemic demand Europe gas imports increase due to production drop
Russia remains a large supply source even contribution is lower than 2013 peak
No significant upside expected from North African or Middle East (Iran) gas
A major uncertainty remains the quantity of LNG coming back to Europe which acts as the residual market
Higher Asian demand could prompt higher Russian exports to Europe
European gas imports 2000-19
copy OECDIEA 2014
Additional production of 617 TWhe electricity and 361TWh th of renewable heat between 2005 and 2020
Real impact on fossil fuel needs complex and requires more intensive study
Notional savings in gas imports for EU could exceed 40 Billion euroyr by 2020
Assumes 50 gas to electricity conversion efficiency Gas price 10$MBTU 13 $Euro
IEA Analysis
copy OECDIEA 2014
Power mixes with same per-kWh CO2 emissions Renewables offer the
possibility to use some more coal and less gas for same CO2 emissions
Even if not materialised this possibility limits the market power of gas suppliers adding to energy security
Even if some more coal is temporarily used climate change mitigation requires early deployment of renewables as it unlocks their long term potential
An additional indirect energy security benefit
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Russian gas imports remain important component
Even with anemic demand Europe gas imports increase due to production drop
Russia remains a large supply source even contribution is lower than 2013 peak
No significant upside expected from North African or Middle East (Iran) gas
A major uncertainty remains the quantity of LNG coming back to Europe which acts as the residual market
Higher Asian demand could prompt higher Russian exports to Europe
European gas imports 2000-19
copy OECDIEA 2014
Additional production of 617 TWhe electricity and 361TWh th of renewable heat between 2005 and 2020
Real impact on fossil fuel needs complex and requires more intensive study
Notional savings in gas imports for EU could exceed 40 Billion euroyr by 2020
Assumes 50 gas to electricity conversion efficiency Gas price 10$MBTU 13 $Euro
IEA Analysis
copy OECDIEA 2014
Power mixes with same per-kWh CO2 emissions Renewables offer the
possibility to use some more coal and less gas for same CO2 emissions
Even if not materialised this possibility limits the market power of gas suppliers adding to energy security
Even if some more coal is temporarily used climate change mitigation requires early deployment of renewables as it unlocks their long term potential
An additional indirect energy security benefit
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Additional production of 617 TWhe electricity and 361TWh th of renewable heat between 2005 and 2020
Real impact on fossil fuel needs complex and requires more intensive study
Notional savings in gas imports for EU could exceed 40 Billion euroyr by 2020
Assumes 50 gas to electricity conversion efficiency Gas price 10$MBTU 13 $Euro
IEA Analysis
copy OECDIEA 2014
Power mixes with same per-kWh CO2 emissions Renewables offer the
possibility to use some more coal and less gas for same CO2 emissions
Even if not materialised this possibility limits the market power of gas suppliers adding to energy security
Even if some more coal is temporarily used climate change mitigation requires early deployment of renewables as it unlocks their long term potential
An additional indirect energy security benefit
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Power mixes with same per-kWh CO2 emissions Renewables offer the
possibility to use some more coal and less gas for same CO2 emissions
Even if not materialised this possibility limits the market power of gas suppliers adding to energy security
Even if some more coal is temporarily used climate change mitigation requires early deployment of renewables as it unlocks their long term potential
An additional indirect energy security benefit
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Unlocking the mitigation potential of renewables
With scale up of deployment and learning investment costs of most dynamic technologies (solar PV and land-based wind) continue to fall
New deployment can be done at much lower costs than in the past
Notes Average unit investment costs are based on gross additions which include capacity refurbishments that are typically lower cost than new capacity Costs
vary over time due to technology changes as well as where deployment occurs in a given year
Weighted average annual renewable investment costs
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
Other non-OECD
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
China
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2012 2014 2016 2018 2020
USD
2013
kW
OECD
Hydro Bioenergy Onshore wind Offshore wind Solar PV residentialcommercial Solar PV utility
Source Medium Term Renewable Energy Market Report 2014
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
The price of PV systems fell rapidlyhellip
PV system prices in Italy divided by 3 in 6 years
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Socket parity emerging as potential deployment driver for distributed PV
Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential in particular for households
Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs in
particular depending on allocation of fixed network costs
0
200
400
600
800
1 000
1 200
2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013
Australia France Germany Italy Korea Mexico Netherlands United Kingdom
USD
MWh
LCOE
Variable
Portion of
Residential
Rate
LCOE of residential PV vs variable portion of electricity tariff
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2013
Decarbonising the electricity mix
Renewables generate 65 to 80 of global electricity by 2050 in climate-friendly scenarios
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Energy security relative to oil
Is still a very important issue
Energy efficiency in transport system is one key
(renewable) electrification of transports another
Even low shares of biofuels contribute
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Higher uncertainty
Larger and more pronounced changes
Energy security risks of renewables balancing
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1 8
15
22
29
36
43
50
57
64
71
78
85
92
99
10
6
11
3
12
0
12
7
13
4
14
1
14
8
Load
leve
l [M
W]
Hours
20 10 5 250 0
Largerrampsat high shares
More frequent up and down at high
shares
Smoothing effect at low shares
Note Load data and wind data from Germany 10 to 16 November 2010 wind generation scaled actual share 73 Scaling may overestimate the impact of variability combined effect of wind and solar may be lower illustration only
Net-load at different annual VRE shares
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
The Grid Integration of Variable Renewables Project - GIVAR
Third project phase
7 case studies covering 15 countries gt50 in-depth interviews
Technical flexibility assessment with revised IEA FAST tool 20
Detailed economic modelling at hourly resolution
copy OECDIEA 2014 17
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
2 Make better use of
what you have
Op
eratio
ns
1 Let wind and solar play their
part
3 Take a system wide-strategic
approach to investments
System friendly
VRE
Technology spread
Geographic spread
Design of power
plants
Three pillars of system transformation In
vestmen
ts
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Technology evolution
Growth in size height and capacity Greater capacity factors
Using sites with lower-speed winds
More regular output easing grid integration
Turbine size Capacity Factors
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012
VRE share of total annual electricity output
Source IEA statistics note ERCOT = Electricity Reliability Council of Texas United States
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 20
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
0 5 10 15 20 25 30 35 40 45
Japan
Brazil
India
France
Sweden
ERCOT
NW Europe
Italy
Great Britain
Germany
Iberia
Ireland
Denmark
Wind 2012 PV 2012 Additional Wind 2012-18 Additional PV 2012-18
VRE share of total annual electricity output
Current VRE shares and mid-term forecasts
Instantaneous shares reaching 60 and above
copy OECDIEA 2014 21 Source IEA estimates derived in part from IEA Medium-Term Renewable Energy Market Report 2013
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
copy OECDIEA 2014
Main messages to policy makers
Energy efficiency and renewables important for energy security
Policy uncertainty main challenge for investors
Given their capital intensive nature efficiency and renewable investments as well as supportive environment (grids flexible generation storagehellip) require market context that assures reasonable and predictable returns
