The Role of Renewables in the Energy Mix - Roberto Vigotti e Paolo Frankl, IEA
Role of Electricity and Renewables in IEA Scenarios...Role of Electricity and Renewables in IEA...
Transcript of Role of Electricity and Renewables in IEA Scenarios...Role of Electricity and Renewables in IEA...
© OECD/IEA 2014
Role of Electricity and Renewables in IEA Scenarios
Dr. Paolo Frankl,
Head, Renewable Energy Division International Energy Agency
IEA-SGCC Dialogue on Global Energy Interconnections, Beijing 22 July 2015
© OECD/IEA 2015
Contents
Towards COP21 - Climate pledges: a first step in the right direction
Renewables deployment: drivers, recent trends and medium-term forecast
The role of electricity in long-term scenarios
Flexible power systems to integrate large shares of wind and solar
The importance of transmission and interconnections
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Climate pledges shift the energy sector
One-quarter of the world’s energy supply is low carbon in 2030; energy intensity improves three-times faster than the last decade
Renewables reach nearly 60% of new capacity additions in the power sector; two-thirds of additions are in China, EU, US & India
Natural gas is the only fossil-fuel that increases its share of the global energy mix
Total coal demand in the US, Europe & Japan contracts by 45%, while the growth in India’s coal use slows by one-quarter
Climate pledges for COP21 are the right first step towards meeting the climate goal
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1. Peak in emissions: IEA strategy to raise climate ambition
Global energy-related GHG emissions
Five measures – shown in a “Bridge Scenario” – achieve a peak in emissions around 2020, using only proven technologies & without harming economic growth
20
25
30
35
40
2000 2014 2020 2025 2030
Gt
CO
2-e
q
Bridge Scenario
INDC Scenario
Energy efficiency
49%
Reducing inefficient coal
Renewables investment
Upstream methane reductions
Fossil-fuel subsidy reform
17%
15%
10%
Savings by measure, 2030
9%
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Renewable electricity projected to scale up by 45% from 2013 to 2020
Around 26% of world electricity from RE in 2020
Strong momentum for renewable electricity
Global renewable electricity production, historical and projected
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
STE/CSP Ocean % total generation (right axis)
Historical data and estimates Forecast
Natural gas 2013
Nuclear 2013
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Different Drivers and Growth Trends
Renewables account for 80% of new generation in OECD
Decarbonisation main driver
Limited upside in stable markets with slow demand and growing policy risks
Cumulative change in gross power generation by source and region, 2013-20
Renewables are largest new generation source in non-OECD, but meet only 35% of growth
Main drivers:
Fast-growing demand
Energy security and diversification
Local pollution
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
2013 2014 2015 2016 2017 2018 2019 2020
TWh
OECD
Renewable generation Conventional generation
2013 2014 2015 2016 2017 2018 2019 2020
Non-OECD
Renewable generation Conventional generation
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Renewable investment costs falling
With scale up of deployment and learning, investment costs of most dynamic technologies (e.g. solar PV and onshore wind) continue to fall
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, historical and projected
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 residential/commercial Solar PV utility
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• Combination of technology cost reduction, better resources, appropriate regulatory framework attracting financing
• Long-term PPAs and price competition effective drivers for reducing costs
Recent progress in RE electricity generation costs
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Utility PV
Recent long-term remuneration contract prices (e.g. auctions and FITs)
STE
India 88 $/MWh
Chile 87 $/MWh
USA 75 $/MWh
South Africa 65 $/MWh
Brazil 81 $/MWh
Dubai 60 $/MWh
Morocco 160 $/MWh
South Africa Base 124 $/MWh Peak 335 $/MWh
South Africa 51 $/MWh
USA 48 $/MWh China
80 - 100 $/MWh
Brazil 54 $/MWh
Turkey 73 $/MWh
Germany 67-100 $/MWh
Ireland 69
$/MWh
Australia 65 $/MWh
Egypt 41 $/MWh
Germany 96 – 106 $/MWh
Wind onshore
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An Energy Revolution is needed
2011 6DS 2DS hi-Ren
Generation today: Fossil fuels: 68%
Renewables: 20%
Generation 2DS 2050: Renewables: 65 - 79%
Fossil fuels: 20 - 12%
Source: ETP 2014
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Different optimal power mixes in different regions by 2050
Sou
rce:
En
erg
y Te
chn
olo
gy
Per
spec
tive
s 2
01
4
Source: ETP 2014
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Electricity Penetration increases everywhere in 2DS
Differences in growth of electricity demand and sectoral distribution require targeted systems development plans
Source: ETP 2014
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Spillover effect of decarbonising electricity in the 2DS
Electricity decarbonisation reduces emissions from sectors already electrified, without the need for further end-use investments.
Source: ETP 2014
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Systems thinking and integration
Today’s energy system paradigm is based on a unidirectional energy delivery philosophy
A sustainable electricity system is a smarter, multidirectional and integrated energy system that requires long-term planning for services delivery
Source: ETP 2014
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3) Increase flexibility of other power system
components
Grids Generation
Storage Demand Side
1) Foster System-friendly
RE
Increasing variable RE will need more System Flexibility
2) Better market design & operation
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Importance of grids
4 000 km 4 000 km 4 000 km
Continental Dimension
BRAZIL EUROPE
Interconnected continental-scale balancing areas smoothen out variability and allow to exploit seasonal complementarities
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Future possible interconnections – Solar Thermal Electricity
Source: Adapted from STE Roadmap 2014
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Policy implications: Enabling environment is crucial
Providing financial
support
Cost reduction through
• Technology
development
• Scale up
• Learning
before 2013
Enabling policy and
market framework which
allows low cost financing
and generation
• Competition
• Predictable long-term
income streams
• Short-term market value
signals
• Portfolio development
• System Integration
Cost reduction through
• Technology innovation
• Financial innovation
• New markets with best resources
2014-2020
Main Policy
Key Characteristics
Cost reduction
• Electrification of end-use
• Interconnections
• Demand side response
• Storage
• System-friendly RE design
• Market design
• Smart grids
Areas for innovation
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For more info on Smart Grids and RE
“The Power of Transformation: Wind, Sun
and the Economics of Flexible Power
Systems” (2014)
“Medium-Term
Renewable Energy
Market Report” (2014)
“Energy Technology Perspectives
2015”
“Technology Roadmap How2Guide for Smart Grids in Distribution
Networks: Roadmap Development and Implementation” (2015)
“Smart Grids, IEA Technology Roadmaps” (2011)
Thank you for your
attention!