Medium-Term Renewable Energy Market Report 2016.

282 Pages·2016·5.734 MB·English

by  OECD

RENEWABLE ENERGY
2016
Medium-Term
Market Report
Market Analysis and Forecasts to 2021
RENEWABLE ENERGY
2016
Medium-Term
Market Report
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Market Analysis and Forecasts to 2021
INTERNATIONAL ENERGY AGENCY
The International Energy Agency (IEA), an autonomous agency, was established in November 1974.
Its primary mandate was – and is – two-fold: to promote energy security amongst its member
countries through collective response to physical disruptions in oil supply, and provide authoritative
research and analysis on ways to ensure reliable, affordable and clean energy for its 29 member
countries and beyond. The IEA carries out a comprehensive programme of energy co-operation among
its member countries, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports.
The Agency’s aims include the following objectives:
n Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular,
through maintaining effective emergency response capabilities in case of oil supply disruptions.
n Promote sustainable energy policies that spur economic growth and environmental protection
in a global context – particularly in terms of reducing greenhouse-gas emissions that contribute
to climate change.
n Improve transparency of international markets through collection and analysis of
energy data.
n Support global collaboration on energy technology to secure future energy supplies
and mitigate their environmental impact, including through improved energy
efficiency and development and deployment of low-carbon technologies.
n Find solutions to global energy challenges through engagement and
dialogue with non-member countries, industry, international
organisations and other stakeholders.
IEA member countries:
Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Estonia
Finland
France
Germany
Secure
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Sustainable
Hungary Together
Ireland
Italy
Japan
Korea
Luxembourg
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
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Please note that this publication
is subject to specific restrictions
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that limit its use and distribution.
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available online at www.iea.org/t&c/ the work of the IEA.
FOREWORD
FOREWORD
One year ago, immediately after starting my new role as the Executive Director of the International
Energy Agency (IEA), I presented a new vision for the Agency founded on three pillars: opening the
doors of the IEA to emerging economies, strengthening and broadening our commitment to energy
security, and bolstering the role of the IEA as an international hub for clean energy technology and
energy efficiency. We made important steps supporting all three pillars and our work on renewable
energy is at the heart of all three of them.
Renewable energy, together with energy efficiency, is essential to delivering the low-carbon energy
future that the international community agreed upon at the United Nations’ 21st Conference of the
Parties (COP21) last year. Despite low energy prices, 2015 was a year full of records for renewables.
For example, cumulative installed renewable power capacity now exceeds that of coal. Deployment
is driven by supportive policies that aim not just at decarbonisation, but also – and sometimes even
more importantly – at improving energy security and reducing harmful local air pollution. Recent cost
reductions for onshore wind and solar PV are impressive and were unthinkable just five years ago.
This cost reduction trend, which is expected to continue, will be a key factor in driving renewable
deployment. Growth is anticipated to be increasingly concentrated in emerging and developing
economies, with Asia taking the centre stage. In the next five years, the People’s Republic of China
and India alone will account for almost half of global renewable capacity additions.
But much more remains to be done. Even though the forecast for renewable electricity in the IEA
Medium-Term Renewable Energy Market Report (MTRMR) 2016 is in line with the commitments
submitted within the Intended Nationally Determined Contributions (INDCs) ahead of COP21, this
trajectory still falls short of the levels needed to meet more ambitious climate change objectives. This
does not mean that these objectives cannot be reached. The MTRMR 2016 presents examples of
strengthened policy support and favourable market conditions in key countries that can help to
accelerate growth in the next five years. In this context, addressing system integration of variable
renewables will play a central role in tomorrow’s energy systems and is a key area of focus at the IEA.
Of course electricity alone does not provide the whole picture. Progress in renewable penetration in
the heat and transport sectors remains slow, and significantly stronger policy efforts in both sectors
will be needed. This edition of MTRMR offers an extended analysis of renewable heat, highlighting
policy and market options to accelerate deployment.
The analysis from the MTRMR 2016, based on robust data and with close co-operation and insights
from policy-makers and energy industry worldwide, tracks progress and identifies future trends in
renewable energy technology deployment. It is my hope that, alongside findings from the wider
range of IEA medium-term market reports, it will present a clear picture of developments in the
global energy system and provide possible pathways to enable policy makers and other stakeholders
to accelerate our advance towards a more secure, sustainable energy future for all.
Dr. Fatih Birol
Executive Director
International Energy Agency
MEDIUM-TERM RENEWABLE ENERGY MARKET REPORT 2016 3
ACKNOWLEDGEMENTS
ACKNOWLEDGEMENTS
The Medium-Term Renewable Energy Market Report (MTRMR) 2016 was prepared by the Renewable
Energy Division of the International Energy Agency (IEA). The lead authors of the report were
Yasmina Abdelilah, Ute Collier, Karolina Daszkiewicz, Pharoah Le Feuvre, Megan Mercer, Yasuhiro
Sakuma, and Heymi Bahar, who led and co-ordinated the analysis. Cédric Philibert, Emanuele Bianco
and Adam Brown also contributed to drafting of this report.
Paolo Frankl, Head of the Renewable Energy Division, provided strategic guidance and valuable input
to this work. Keisuke Sadamori, Director of Energy Markets and Security reviewed the report and
provided expert advice. This report also benefited from the valuable administrative support provided
by Michelle Adonis and Jane Berrington.
Other IEA colleagues who have made important contributions to this work include:
Marco Baroni, Elie Bellevrat, David Bénazéraf, Stéphanie Bouckaert, Amos Bromhead, Pierpaolo
Cazzola, Laura Cozzi, Aang Darmawan, Kate Dourian, Marc-Antoine Eyl-Mazzega, Duarte Figueira,
Marine Gorner, Dagmar Graczyk, Timur Guel, Joerg Husar, Jessica Isaacs, Constanza Jacazio,
Alexander Keeley, Florian Kitt, Tomi Motoi, Matthew Parry, Valerio Pilia, Uwe Remme, Laszlo Varro,
Michael Waldron, Brent Wanner, David Wilkinson, Matthew Wittenstein and Takuro Yamamoto.
Pierpaolo Cazzola and Marine Gorner authored the feature box on electric vehicles. OECD colleagues
Geraldine Ang, Richard Baron and Céline Giner also provided important comments.
Timely data from the IEA Energy Data Centre were fundamental to the report, with particular
assistance owed to Duncan Millard, Chief Statistician, and Emmanouil Christinakis, Loïc Coent, Aidan
Kennedy, Markus Fager-Pintila, Vladimir Kubecek, Roberta Quadrelli, Rémi Gigoux, Dae Yong Kwon,
Beatriz Martinez and Céline Roquett.
This work benefited from extensive review and comments from the IEA Standing Group on Long-
Term Co-operation, IEA Renewable Energy Working Party, members of the Renewable Industry
Advisory Board (RIAB) and experts from IEA partner countries and other international institutions.
The work also benefited from feedback by the IEA Committee on Energy Research and Technology,
IEA Technology Collaboration Programmes (IEA TCPs) including Task 42 of the IEA Bioenergy TCP who
authored the feature box on biorefinery market developments.
Many experts from outside of the IEA provided valuable input, commented and reviewed this report.
They include:
Countries
Australia (Department of Industry, Innovation and Science), Austria (Austria Energy Agency), Belgium
(Federal Public Service Economy, Permanent Delegation of Belgium to the OECD), Brazil (Centro de
Pasquisas de Energia Eletrica, Empresa de Pesquisa Energética, Ministry of Mines and Energy),
Canada (Natural Resources Canada), Chile (Ministry of Energy, Permanent Delegation of Chile to the
OECD), China (China National Renewable Energy Centre, Energy Research Institute/National
4 MEDIUM-TERM RENEWABLE ENERGY MARKET REPORT 2016
ACKNOWLEDGEMENTS
Development and Reform Commission), Estonia (Ministry of Economic Affairs and Communications),
France (Ministry of Ecology, Sustainable Development and Energy), Germany (Federal Ministry of
Economic Affairs), India (Indian Administrative Service, National Institution for Transforming India),
Ireland (Sustainable Energy Authority of Ireland), Japan (Ministry of Economy, Trade and Industry,
Ministry of Foreign Affairs, New Energy and Industrial Technology Development Organization, The
Institute of Energy Economics, Japan), Korea (Korea Energy Economics Institute, Korea Energy
Agency), Mexico (Secretaría de Energía), Netherlands (Ministry of Energy and Mines, Netherlands
Enterprise Agency), Norway (Ministry of Petroleum and Energy), Poland (Ministry of Energy),
Portugal (Ministry of Environment Spatial Planning and Energy), South Africa (Department of Energy),
Turkey (Ministry of Energy and Natural Resources, Ministry of Foreign Affairs, Permanent Delegation
of Turkey to the OECD), United Kingdom (Committee on Climate Change, Department of Energy,
Business and Industrial Strategy) and the United States (Department of Energy, Department of State,
Lawrence Berkeley National Laboratory, National Renewable Energy Laboratory).

RIAB members

Acciona S.A., Abengoa Solar, Citigroup, E.ON Climate and Renewables, Électricité de France (EDF),
Eneco, Enel Green Power, Enercon GmbH, Electric Power Research Institute (EPRI), Environmental
Research and Education Foundation (EREF), European Solar Thermal Electricity Association (ESTELA),
First Solar, Gamesa, General Electric (GE), Global Wind Energy Council (GWEC), Iberdrola,
International Energy Agency (IEA), J-POWER, Mainstream RE Power, Meyer Burger Technology AG,
National Renewable Energy Laboratory (NREL), OCI Energy, ORMAT Technologies, Public Power
Corporation S.A., PWC Advisors, Renewable Energy Policy Network for the 21st Century (REN21), RWE
Innogy GmbH, Schott Solar, Sharp, SolarPower Europe, Total, Vattenfall, Verbund AG, Vestas Wind
Systems and WindEurope.

Technology Collaboration Programmes (TCPs)

IEA Bioenergy Technology Collaboration Programme (Bioenergy TCP), IEA Hydrogen Technology
Collaboration Programme (Hydrogen TCP), IEA Hydropower Technology Collaboration Programme
(Hydropower TCP), IEA Technology Collaboration Programme on Concentrated Solar Power
(SolarPACES TCP), IEA Technology Collaboration Programme on Geothermal Energy (Geothermal
TCP), IEA Technology Collaboration Programme on Ocean Energy Systems (OES TCP), IEA Technology
Collaboration Programme on Photovoltaic Power Systems (PVPS TCP), IEA Technology Collaboration
Programme on Renewable Energy Technology Deployment (RETD TCP), IEA Technology Collaboration
Programme on Solar Heating and Cooling (SHC TCP), IEA Technology Collaboration Programme on
Wind Energy (Wind TCP),

Other organisations

AEE – Institute for Sustainable Technologies (AEE INTEC), Althesys, Association of the European
Heating Industry, Australian Renewable Energy Agency (AREA), Australian Photovoltaic Institute
(APVI) Berkeley Energy, Becquerel Institute, Bridge to India, China Academy of Building Research,
Dong Energy, Energy Research Partnership (ERP), Euroheat and Power, European Commission
(Directorate-General for Energy, Joint Research Centre), European Heat Pump Association (EHPA),
European Solar Thermal Industry Federation (ESTIF), Fachhochschule Technikum Wien (Vienna
MEDIUM-TERM RENEWABLE ENERGY MARKET REPORT 2016 5
ACKNOWLEDGEMENTS
University of Applied Sciences), ForWind, Forschungszentrum Jülich (Jülich Research Centre), Gestore
dei Servizi Energetici (GSE), Hawkins Wright Ltd., International Council on Clean Transportation
(ICCT), International Finance Corporation (IFC), International Renewable Energy Agency (IRENA),
Leibniz Institute for Applied Geophysics, Missouri University, Morse Associates, Neste Oy, Nova
Energie GmbH, Novozymes, Observatoire Méditerranéen de l'Energie (OME), Organization of
Economic Cooperation and Development (OECD), ORE Catapult, Portugal Laboratório Nacional de
Energia e Geologia (LNEG), Pro Pellets, Procede Biomass BV, Providence Policy Ltd, Renewable
Energy Institute, RES4MED, RTS Corporation, Shakti Sustainable Energy Foundation, SkyNRG, Solrico,
South Africa PV Industry AssociationSouth African National Energy Development Institute (SANEDI), ,
SPV Market Research, Swedish Bioenergy Association (SVEBIO), The European Biomass Association
(AEBIOM), The German Aerospace Center, The Research Council of Norway, The University of Tokyo,
Wood Pellet Association of Canada.

The authors would also like to thank Erin Crum for skilfully editing the manuscript and the IEA
Communication and Information Office, in particular, Muriel Custodio, Astrid Dumond, Rebecca
Gaghen, Christopher Gully, Jad Mouawad, Katie Russell, Bertrand Sadin, Robert Stone, and Therese
Walsh for their assistance.

Questions or comments?

Please write to us at [email protected].
6 MEDIUM-TERM RENEWABLE ENERGY MARKET REPORT 2016
TABLE OF CONTENTS
TABLE OF CONTENTS

Foreword ..................................................................................................................................... 3
Acknowledgements ...................................................................................................................... 4
Executive summary .................................................................................................................... 15
Analytical framework ................................................................................................................. 19
Renewable energy data present unique challenges ............................................................................. 19
Country-level approach underpins the renewable electricity analysis ................................................. 20
Outlooks for technology and investment guide the global picture ...................................................... 22
Biofuels for transport and renewable heat round out the analysis ...................................................... 22
References ............................................................................................................................................. 24
1. Renewable electricity: Regional forecast ................................................................................. 25
Highlights ............................................................................................................................................... 25
Regional forecast overview ................................................................................................................... 26
Medium-term forecast and long-term climate goals ............................................................................ 30
Asia and Pacific ...................................................................................................................................... 31
China ...................................................................................................................................................... 48
North America ....................................................................................................................................... 54
Europe ................................................................................................................................................... 66
Latin America ......................................................................................................................................... 80
Middle East and North Africa ................................................................................................................ 87
Sub-Saharan Africa ................................................................................................................................ 96
Eurasia ................................................................................................................................................. 103
References ........................................................................................................................................... 107
2. Renewable electricity: Technology forecast ............................................................................ 111
Highlights ............................................................................................................................................. 111
Technology deployment overview ...................................................................................................... 112
Renewables costs and comparison with fossil fuels ........................................................................... 114
Renewable power investment and financing trends .......................................................................... 118
Hydropower......................................................................................................................................... 119
Onshore wind ...................................................................................................................................... 127
Solar PV ............................................................................................................................................... 134
Bioenergy for power ............................................................................................................................ 147
Offshore wind ...................................................................................................................................... 160
Geothermal ......................................................................................................................................... 166
Concentrating solar thermal power (CSP/STE) ................................................................................... 169
MEDIUM-TERM RENEWABLE ENERGY MARKET REPORT 2016 7
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Ocean................................................................................................................................................... 174
References ........................................................................................................................................... 176
3. Renewable transport .............................................................................................................1 82
Highlights ............................................................................................................................................. 182
Conventional biofuels global overview ............................................................................................... 183
Conventional biofuels regional outlook .............................................................................................. 187
Advanced biofuels market developments........................................................................................... 197
Impacts of low oil prices on conventional and advanced biofuels markets ....................................... 204
References ........................................................................................................................................... 209
4. Renewable heat.....................................................................................................................2 14
Highlights ............................................................................................................................................. 214
Renewable energy use for heat: Market trends and outlook ............................................................. 215
Outlook for renewable heat technologies .......................................................................................... 224
Special focus: Renewable heat policies ............................................................................................... 245
References ........................................................................................................................................... 261
5. Renewable electricity policy tables ........................................................................................ 267
6. Data tables ............................................................................................................................2 72
Glossary ....................................................................................................................................2 75
Regional and country groupings .......................................................................................................... 275
Abbreviations and acronyms ............................................................................................................... 276
Currency codes .................................................................................................................................... 278
Units of measure ................................................................................................................................. 278

LIST OF FIGURES

Figure AF.1 The renewable policy journey and changing policy priorities .......................................... 21
Figure 1.1 Global renewable electricity net additions to power capacity ........................................... 26
Figure 1.2 Number of countries with non-hydro renewable capacity above 500 MW ....................... 27
Figure 1.3 Renewable capacity additions by key countries (left) and net forecast revision from
MTRMR 2015 (right) ............................................................................................................ 27
Figure 1.4 Electricity and renewable generation growth (2015-21) .................................................... 29
Figure 1.5 Renewable power net additions to capacity under accelerated and main cases ............... 30
Figure 1.6 Renewable electricity generation by country indexed to modelled INDC target in 2030 .. 31
Figure 1.7 Asia and Pacific net renewable capacity additions by technology and country (2015-21) 34
Figure 1.8 Korea’s cumulative renewable capacity and generation, (2013-21) (excluding
hydropower) ........................................................................................................................ 35
Figure 1.9 Asia and Pacific electricity generation by source and share of renewables in 2015 and 2021 .. 36
Figure 1.10 Asia and Pacific renewable capacity additions (2015-21), main versus accelerated case 38
Figure 1.11 China net capacity additions to power capacity (2009-15) ............................................... 48
Figure 1.12 China’s electricity demand growth (2000-15) ................................................................... 50
8 MEDIUM-TERM RENEWABLE ENERGY MARKET REPORT 2016
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Figure 1.13 China net renewable power capacity additions and renewable energy surcharge .......... 51
Figure 1.14 China net renewable capacity additions and generation (2014-21) ................................. 53
Figure 1.15 North America net renewable capacity additions by technology and country (2015-21) 56
Figure 1.16 North America electricity generation by source and share of renewables in 2015 and
2021 .................................................................................................................................. 56
Figure 1.17 North America renewable capacity additions (2015-21), main versus accelerated case . 59
Figure 1.18 Europe net renewable capacity additions by technology and country (2015-21) ............ 69
Figure 1.19 Selected countries electricity generation by fuel and share of renewables in 2015 and
2021 .................................................................................................................................. 73
Figure 1.20 Europe and selected countries renewable capacity additions (2015-21), main versus
accelerated case ............................................................................................................... 74
Figure 1.21 Latin America net renewable capacity additions by technology and country (2015-21) . 81
Figure 1.22 Brazil renewable capacity additions and generation (2015-21) ....................................... 82
Figure 1.23 Latin America electricity generation by source and share of renewables in 2015 and
2021 .................................................................................................................................. 83
Figure 1.24 Latin America renewable capacity additions (2015-21), main versus accelerated case ... 87
Figure 1.25 MENA net renewable capacity additions by technology and country (2015-21) ............. 89
Figure 1.26 MENA renewable electricity generation by source in 2015 and 2021 .............................. 91
Figure 1.27 MENA renewable capacity additions (2015-21), main versus accelerated case............... 95
Figure 1.28 SSA net renewable capacity additions by technology and country (2015-21) ................. 98
Figure 1.29 SSA renewable electricity generation in 2015 and 2021 .................................................. 99
Figure 1.30 SSA renewable capacity additions (2015-21), main versus accelerated case ................. 102
Figure 1.31 Eurasia net renewable capacity additions by technology and country (2015-21) .......... 105
Figure 2.1 Indexed electricity generation by source (2001-21) ......................................................... 112
Figure 2.2 Renewable net additions to capacity by technology (2001-21) ........................................ 113
Figure 2.3 Renewable electricity generation by technology, (2008-21) ............................................ 113
Figure 2.4 Global weighted average LCOEs for new grid-connected projects ................................... 115
Figure 2.5 Recent announced long-term remuneration contract prices for renewable power by date
of announcement and to be commissioned over 2016-21 ................................................................. 116
Figure 2.6 LCOE of gas-fired generation at January 2016 gas prices versus onshore wind benchmark
costs ................................................................................................................................... 117
Figure 2.7 Renewable power capacity asset financing (2009-16) ...................................................... 118
Figure 2.8 Hydropower annual change in generation by region (TWh) ............................................. 123
Figure 2.9 Hydropower annual net additions (left) and cumulative additions to capacity (right) .... 124
Figure 2.10 Global wind turbine manufacturing capacity by company ............................................. 128
Figure 2.11 Onshore wind generation cost variables and LCOE ranges............................................. 129
Figure 2.12 US onshore wind capacity factor, wind resource and turbine swept area by year ........ 130
Figure 2.13 Historical and forecast LCOEs for typical onshore systems, beginning year................... 131
Figure 2.14 Onshore wind cumulative net capacity additions and generation (1997-2021) ............ 132
Figure 2.15 Onshore wind annual additions by region under accelerated and main cases .............. 134
Figure 2.16 Solar PV total manufacturing capacity and shipments (left) and manufacturing capacity
by country/region (2010-15) .......................................................................................... 135
Figure 2.17 Typical solar PV average system prices for commissioned projects (2014-15) .............. 135
Figure 2.18 Historical and forecast typical solar PV investment costs, average for new capacity .... 137
Figure 2.19 Historical and forecast LCOE range for typical utility-scale solar PV plants .................... 137
MEDIUM-TERM RENEWABLE ENERGY MARKET REPORT 2016 9