IEEJ：October 2017 © IEEJ2017

Renewables 2017
Keisuke Sadamori, Director Energy Markets and Security Directorate

IEEJ：October 2017 © IEEJ2017

Context
 Policy support & technology progress continue to drive robust growth inrenewables
 Solar PV broke new records in 2016, led by China
Solar PV grew faster than any other form of generating capacity

 Competitive auctions are seeing record-low prices for wind & solar Prospects for renewables underpinned by need to address core energychallenges
Air pollution still a major problem

Universal access to modern energy remains a distant goalCurrent climate pledges fall short of meeting mitigation goals© IEA 2017

IEEJ：October 2017 © IEEJ2017

2016 – Renewables hitting new records driven by solar PV
Power capacity additions by fuel 2016
Coal
Solar PVRetirements

WindGasRenewables
050

100
Additions (GW)

150

200

Renewables breaking an all-time record accounting for two thirds of global net capacity additions;
For the first time solar PV becoming the global leader in net capacity growth© IEA 2017

IEEJ：October 2017 © IEEJ2017

Competition driving costs down
Announced wind and solar PV average auction prices by commissioning date
USD/MWh180160

Onshore windaverage auction
price140120
1008060

Solar PV average
auction price40
2002012

2013

2014

2015

2016

20172018

20192020

Price discovery through competitive auctions effectively reduces costs along the entire value chain;
Auctions with long-term contracts will drive almost half of new capacity growth over 2017-22© IEA 2017

IEEJ：October 2017 © IEEJ2017

Renewables growth more and more dependent on wind and solar
Renewable electricity capacity growth by technology
Capacity growth (GW)
1 20090%

1 00080070%Others

60%

50%

600

40%

400

30%
20%

200
080%

Additional accelerated case

Hydropower
Solar PV
Wind10%1999-2004

2005-10

2011-162017-220%% from wind andsolar PV (right axis)

Solar PV enters a new era, becoming the undisputed leader in renewable power capacity growth;
PV also accounts for 60% of the upside potential in the accelerated case
© IEA 2017

IEEJ：October 2017 © IEEJ2017

China continues to lead growth while India overtakes the EU
Renewable capacity growth by country/region
Capacity growth (GW)

500450400
350300250
200
150
100500ChinaUnited States

2011-16

EUIndia

2017-22 main case

JapanBrazilAfrica&ME

Additional accelerated case

The forecast is 12% more optimistic vs. last year mainly due to solar PV revisions in China and India;
Growth could be 27% higher with enhanced policies addressing regulatory uncertainties and grid integration© IEA 2017

IEEJ：October 2017 © IEEJ2017

Solar PV enabling electrification in India, Bangladesh and sub-Saharan Africa
Cumulative growth of off-grid solar PV applications in developing Asia and sub-Saharan Africa
MWmillions

2 500802 0006050

1 500401 0003020500
0Additional SHSs

70102017

2018

2019

2020

2021

2022

Additional industrial

Additional mini-grids

Initial electricity accessfrom SHS (right axis)

0With government policies and innovative business models, off-grid PV capacity triples in Africa anddeveloping Asia. Small home systems bring initial electricity access to almost 70 million by 2022
© IEA 2017

IEEJ：October 2017 © IEEJ2017

Renewables closing the gap with coal
Electricity generation by fuelGeneration (TWh)
12 000

10 000
Coal

8 000
6 000

Natural gas

4 000

Renewables

2 00002002

20062010

2014

20182022

Renewable generation to expand by over a third with its share increasing from 24% in 2016 to 30% in2022, rapidly closing the gap with coal
© IEA 2017

IEEJ：October 2017 © IEEJ2017

Wind and solar transforming power sector - system integration becomes key
VRE share in annual electricity generation 2016-22
Denmark
IrelandSpain
Germany
United Kingdom
Italy
Australia
United States
China
India
BrazilJapan

PV share in 2016

Wind share in 2016

Additional PV sharein 2022
Additional wind sharein 2022
0%

10%

20%

30%

40%

50%

60%

70%

80%% of total generation

More flexible power systems, adapted market design and policies will have to play a key rolein integrating larger shares of wind and solar in a secure and cost-effective way© IEA 2017

IEEJ：October 2017 © IEEJ2017

Surging EVs to complement biofuels in renewable transport
Biofuels and electric vehicles contribution to renewable energy consumption in road transport
2022

2016

Biofuels
4%7%
2/3 wheelers
Electric cars andbuses

Share of renewables in road transport increases from 4% in 2016 to almost 5% in 2022, with biofuels representing 80% ofthe growth led by Asia & Brazil; EV electricity consumption doubles by 2022, with renewables providing 30% of demand© IEA 2017

IEEJ：October 2017 © IEEJ2017

Progress in renewable heat depends on strong policies
Share of renewables in heat consumption by selected countries% of renewables

25%
European Union

20%

USA

15%
10%

India

5%

China0%

2010

2012

2014

2016

2018

2020

2022

Renewables share in heat consumption rises from 9% in 2016 to 11% in 2022. China leads absolute growth with newtargets; EU remains the largest renewable heat consumer while total heat demand outpaces renewables growth in India© IEA 2017

IEEJ：October 2017 © IEEJ2017

Concluding remarks
 Renewables rise by 1,000 GW to 2022, equal to half of current total coal capacity Renewables generation exceeds 8,000 TWh by 2022, equal to total electricity
consumption of China, India & Germany combined
 Solar PV enters a new era leading the growth in renewables, driven by a rapid
expansion in deployment & manufacturing capacity in China
 Despite rapid growth in EVs, decarbonisation of transport is a long way offOnly 30% of electricity used by EVs is sourced from renewables

Advanced biofuels require specific incentives to bolster deployment

 Policymakers have to turn their focus to system integration & expanding the use ofContact :report@tky.ieej.or.jp
renewables for heating & cooling© IEA 2017