IEEJ：December 2016 © IEEJ2016

MediumM
Medium‐di ‐ Term
T
RenewableRblEnergy Market Report 2016
Dr. Paolo Frankl
Head, Renewable Energy DivisionInternational Energy Agency© OECD/IEA 2016

Tokyo, 14 December 2016

© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Renewable power capacity
surpassed coal
Cumulative grid connected power capacity (2014-15)

2000
2000
1500
1500
1000
1000
500
500002014
2015
2014
2015
oal ■GGas
as ■OilOil ■NuNuclear
clear ■
Renewables■ CCoalRenewables

180180160160
AnnualAnnual aaadditions(GWdditions (GWW))

CuCummulative
ulative insinsta
talleealledd capcapacity
acity (GGy(GW)W)

2500
2500

140140120120100
1008080606040402020002014
2015
2014
2015
ind ■Solar PV■ Hydropower
Hydropower ■Other renrenewables
ewables■WWindSolar
Other

Record‐level new renewable capacity of 153 GW was connected to the grid in 2015
© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

New policies underpin a more bullish
fforecastt forf renewables
blRenewable electricity
y capacitypyg
growth (GW)() in MTRMR’s main case

90013%

800Net additionns (GW)

700

OthersBrazil

600

India

500

China

400
300

Japan200

United States

1000
MTRMR 2015 Forecast 2014-2020

MTRMR 2016 Forecast 2015-21

EU28

Chi remains
Chinai keyk growthh marketk ffor renewable
bl capacity,i while
hil theh U
Unitedi d SStatessurpasses the EU for the first time
© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Renewables to remain fastest growing
source off electricity
l t i it generationti

2
2001=100

Indexed electricity
yggeneration byy fuel ((2001-21))

280
260
240
220
200
180160
140
120
100
2001

2003

2005

2007

Global power generation

20092011

2013

Coal

Natural gas

2015

2017

2019

2021

Renewable electricity generation

Generation from renewables to rise by almost two‐fifths over 2015‐2021, pushing
their share of total electricity generation from 23% to 28%© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Renewables fastest source of electricity
generation growth
Global renewable electricity generation

9000
9 000

Ocean
Ocean

TTWh
TWh

8000
8 000
7000
7 000

STE
S
TE

6000
6 000

GeothermalG
eothermal

5000
5 000

PVPV

4000
4 000

Offshore
Offshore wwind
ind

3000
3 000
2000
2 000

Onsho
OnshoreiddO
hhre wwind
iind

1000
1 000

Bioenergy
Bioenergy

00

2008
2008 20092009 20102010 2011
2011 20122012 20132013 20142014 2015
2015 20162016 20172017 20182018 20192019 2020
2020 2021
2021

Hydropower
Hydropower

Between 2015‐21 wind generation doubles and solar PV almost triples,with renewables reaching almost 28% of total electricity by 2021
© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

A two‐speed world for renewableelectricity
l t i itElectricity and renewable generation growth by country/region

1 400
1 200TWh

1 000
800
600
400
2000
China

India

ASEAN

Electricity generation growth (2015-21)

AfricaEU28

United StatesJapan

Renewable generation growth (2015-21)

Source: Total electricity generation from World Energy Outlook 2016, forthcoming.

The increase in generation from renewables in 2015‐2021 represents 60% of the
global increase in electricity output, but prospects vary across regionally© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Renewable costs reductions to remain
an important
it t driverdiffor ffuturetgrowthth
Weightedgaverageg generation
gcosts for solar PV and wind

400350
USD 20015/MWh300
250
200
1501005002011
Onshore wind

2016
Offshore wind

2021
Solar PV - utility scale

Utility‐scale
Uilil solarl PV generationi costs to fall
f ll bby anotherh quarter andd onshorehwindi dby 15% over 2015‐21, largest absolute cost reduction expected from offshore wind
© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Policy transition from government‐settariffs to policy‐driven
policy driven auctions/tenders
Recent announced long-term contract prices for new renewable power to becommissioned over 2016-2019

140Jordan

USD/MWh (noominal)

DenmarkGGermanySouth Africa

10080India

India

120UruguaySouth Africa

Chile

FranceJordan

BrazilNetherlands

Germany
US South Africa India

Chile

UAE Australia

60
BrazilCanadaPeru

Brazil40

USSouth Africa Brazil
B ilEgypt

Morocco Peru

20

MexicoUAE

Chile02013

2014

2015
Solar PV

Onshore wind

2016
Offshore windBest results occur where price competition, long‐term contracts and good resource
availability are combined© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Investment flows signal a reorientation of theglobal energy system
Global Energy Investment, 2015
USD 1
1.8
8 ttrillionilliThermalEnergy
gy Power
Efficiency 7% Power
12%
Renewables
Generation17%
Electricity
23%
Networks
14%
Coal 4%

Biofuels and Solar
Heat1%

Oil & Gas
46%
Source: IEA World Energy Investment Report 2016

An 8% reduction in 2015 global energy investment results from a $200 billion decline
in fossil fuels, while the share of renewables, networks and efficiency expands© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Solar PV and wind to represent almost¾ off allll renewable
bl iinvestment
tt
Cumulative renewable electricity investment over 2016-21

USD 1450 billionOther renewables
3%

SolarPVPV
Solar35%
35%

Offshore wind
7%

Hydropower
17%
Bioenergy
8%
Onshore wind
30%

Annual investment in renewable electricty to be around USD 240 billion on
average over 2016‐21, lower than USD 290 billion in 2015
© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Investment to shift from Europe toemerging
i countries
t i andd North
N th A
Americai
Cumulative renewable electricity investment (2010-21)

1200
2016-21

USD 2015 billion

1000

2010-15

800
600
400
200
0EU28

ChinaUSAJapan

India

BrazilAfricaMiddle East

Investment in renewables in the EU to decline by half over 2016‐21 compared toprevious five years while it increases everywhere despite cost reductions© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Wind and solar PV compensate forslowerlhhydropower
dgrowthth
Renewable electricity capacity additions by technology (2001-21)

70

China FiTreduction boom

Annual addditions (GW)60
US PTCboom

50
40

Japan PV bust30
20

Italy PV boom

100
2001

2003

2005

2007

Hydropower

2009

2011

WindSolar2013

2015

2017

2019

2021

Other renewables

Predicting policy‐driven boom and bust cycles remains a challenge, which isexpected to continue over the medium‐term.
© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Solar PV deployment acceleratingin Asia
Solar PV net annual additions by region (GW)30
Annual aadditions (GW))

2520
1510502006

2008
North America

2010

2012

Asia (ex China)

China

2014
Europe2016
Latin America

2018

2020

Eurasia, Middle East and Africa

Pending EU legislations concerning 2030 renewable targets,targets incentive reductions
reductions,policy uncertainties at country level and overcapacity remain challenges© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

EU onshore wind growth to slow downb t it remains
buti llargestt offshore
ff hmarket
k tCapacity growth onshore wind

Annual additions offshore wind

350
350
300
300
200200150
150100100

GW
GW

GGW
W

250
250

50
5000

1997-2003
1997-2003
OtherO
therASEAN
ASEAN
E
U28
EU28

2003-09
2003-09

2009-15
2009-15 2015-21
2015-21
Sub-SaharanAfricaSub-Saharan A
frica MENA
MENA
India
BrazilIndia
BrazilChina
United SStates
tates
China
United98765432102014
2014 2015
2015 20162016 20172017 20182018 20192019 2020
2020 2021
2021
EU28
EU28 China
China North
North AmericaAmerica Asia(excludingAsia ((excludinggCChina)
hina)

US tops the EU to become second largest onshore wind market behind China while
offshore wind annual market will be more regionally diversified© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Global bioenergy capacity additions toremain stable

GW

Bioenergy power annual additions (2009-21)

87654
3
2
10
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
EuropeNorth America

Latin America

Asia and Pacific

China

Other regions

An acceleration of bioenergy deployment over the medium term is not anticipated. While
Europe has led deployment historically, Asia is forecast to drive growth moving forward.
© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

China is the undisputed leader ofrenewable
bl capacity
it growthth
Share of China in global renewable capacity growth(2015-21)

Hydropower

Wind36%

40%

China
China
Rest of ofthethe
worldworld
Rest

China
China

Rest
Rest ofofththee woworld
rld
60%

64%

Solar PV

36%

China
China
R
est of ofthethe
worldworld
Rest64%

Despite strong growth, grid integration remains an important challenge along withovercapacity in the power sector© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

US multi‐year tax credit extension todrive 60% more growth
United States annual renewable capacity additions

25.0

Annual addditions (GW)

20.0
15.0
10.0
50
5.00.02016
Hydropower
Solar PV

2017

2018
Bioenergy
Geothermal

2019
2020
Onshore wind
CSP

2021
Offshore wind
MTRMR 2015

ITC and PTC extension to give more policy visibility to wind and solar developers
but uncertainty remains for other renewables© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Slower growth in Europe as policytransition continues
Annual renewable additions for France, Germany, Italy and UK

AnnualAn
nual aaadditions(GWdditions (GW)W)

121210108866
442200
2001
2001

2003
2003

2005
2009
2005 2007
2007 2009
FranceGermany
FranceGermany

2011
2011
Italyly
Ita20132015 201720172013 2015
UnitedU
nitedKingdom
Kingdom

2019
2019

2021
2021

Pendingdi EU legislations
l il iconcerningi 2030 renewable
bl targets, incentiveii reductions,d ipolicy uncertainties at country level and overcapacity remain challenges© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Solar PV to drive India’s forecast but
meeting the target remains a challenge
India renewable capacity by technology

HydropowerWindSolar PV
Bioenergy
01020200930
4050
Cumulative capacity (GW)
2015

6070802021

Financial health of utilities, better state‐level implementation of RPOs, faster grid
infrastructure expansion and reducing land acquisition barriers remain challenges© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Latin America to take advantage of more
affordable solar PV and onshore wind
Latin America renewable capacity growth (GW)

6060ggrowth(GW)
CCapacityapacity grrowth (GW))

504030302020101000

Hydropower
Hydropower

2009
2009-1515
2009-15200915
Bioenergy
Bioenergy

Onshorewind
Onshore w
ind

Offshorewind
Offshore w
ind

2015
2015-2121
2015-21201521
Solar
Solar PVPV Geothermal
Geothermal

CSP
CSP

Diversificationiifi i needs,
d energy security
i concerns andd decreasing
di prices,
idrived i solarl anddwind expansion in Latin America while large‐scale hydropower growth will continue.
© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Demand and diversification drive growth inMiddl EastMiddle
E t & Africa
Af i
Net additions to capacitypy (GW)
()

80
7060

+60 %

GW504030x320
100

2009-152015-21
Hydropower

Solar PVAcceleratedWindOthers

Non‐hydro pace dictated by auction schedules and grid integration; faster growth
possible with quicker implementation and more access to low‐cost financing© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

ASEAN to increase diversification inthe energy mix

Generattion(TWh)Generatiion (TWh)ASEAN renewable generation growth and share of renewables in totalgenerationi (2015-21)(201 21)90908080
7007060605050404030302020101000

2015
2021
2015
2021
Indonesia
Indonesia
Hydropower
Hydropower

2015
2021
2015
2021
ThailandThailand

Bioenergy
Bioenergy

Onshorewind
Onshore w
ind

2015
2021
2015
2021
VietViet Nam
Nam
Offshorewind
Offshore w
ind

2015
2021
2015
2021
Rest
Rest ofofregion
regionPVPV Geothermal
Geothermal

CSP
CSP

Hydropower generation growth will slow in most ASEAN countries (except Viet Nam) whileenergy diversification needs will help non‐hydro renewables to pick up gradually© OECD/IEA 2016IEEJ：December 2016 © IEEJ2016

More ambitious policies could furtherenhance the outlook in line 2°C target
Renewable electricity capacity additions in Accelerated Case vs. Main Case

200GGW

150
1005002007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Main caseAccelerated caseRenewables
bl are ini line
li withi h NDC pledges
l db 2030 butbyb reducing
d i policy
li uncertainty
ianddovercoming financing & grid integration challenges remain key to achieve 2°C target© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Renewables to dominate electricity growth,
but less progress in heat and transport
Sharee of renewables in sector demand

Share of renewables in electricity, heat and transport sectors

30%
25%
20%
15%
10%
5%0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Renewable electricity

Renewable heat

Biofuels in road transport

The share of renewables rises in all sectors, despite persistent challenges in heat &transport; interactions between energy efficiency & renewables become critical© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Use of renewables for heating isincreasing but slower than for electricity
Final renewable heat consumption
p(2009-21)()

Renewab
Renewabble
le hheat(EJ)
eat (EJ)

2020
151510105500

20092010 2011
2011 20122012 20132013 20142014 2015
2015 20162016 20172017 20182018 20192019 2020
2020 2021
2021
2009 2010
Modernbioenergy
Modern b
ioenergy

SolarthermalSolar thermal

Geothermal
Geothermal

Renewable
Renewable ccommercial
ommercial hheateat

Heatt accounts
Ht ffor 54% off fi
finall energy consumption
ti andd 38% off CO2 emissions
i i
Bioenergy continue to dominate heat production over the medium term© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Accelerated renewable heat needs
targeted polices to overcome barriers
Summary of economic and non-economic barriers for renewable heat
Economic BarriersHigher capitalalternatives.

costs

than

Non-economic Barriers
fossilfuel Renewable heat options may not be suitable incertain buildings

Split incentives in the rented building sector

Specific requirements of industrial heat loads

No level playing field with fossil heating fuels

Distressed purchase and consumer inertia

Current low and cyclical fossil fuel prices

Disruption and “hassle” factors for retro-fit
solutions

Lack of economies of scale resulting in higher Need for trained workforce to undertake
system costs
specification, installation and O&M.

Renewable heat faces economic and non‐economic
non economic barriers requiring policy
solutions; carbon taxation, fiscal incentives & including renewables in building
standards have proved effective.
© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Biofuel production shifts to Asia, as EUandd US slowslBiofuels pproduction growthg(billion(litres))

Production growth (billion L)

2015
1050
United States
EU28
P d ti growth
Productionth 2009-15
2009 15

BrazilAsia
P d ti growth
Productionth 2015-21
2015 21

SStructurall challenges
h llini theh US & policy
li uncertainty
ipost‐2020
2020 ini theh EU slow
lgrowth; Thailand, India & Indonesia have strengthened policies despite low oil prices© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Conclusions
 Prospects for renewables electricity revised upwards
upwards, driven by policy

improvements, cost reductions & efforts to improve air quality
 TheTh impactit off lower
lfossilf il fuelf l prices
ion renewables
bl varies
i bby sector.
t WindWi d(onshore) & solar PV are the only technologies on track for a 2oC scenario
 Competition in Asia between renewables & coal/gas will be critical to meeting

global decarbonisation targets
 Attracting investment in renewables hinges on appropriate market rules &regulations, particularly in markets with slow electricity demand growth
 IEA is working to accelerate energy transition with its analysis on policy &technology and system integration of renewables.

© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Focus on Japan© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Solar PV still dominates RE market,
while cancellation slow the growth
Japan annual net additions to renewable capacity (2014-21):
Accelerated case versus Main case1414(GW)
AAnnualnnual aadd
dditditions
tions (GW)

121210108866442200

2014
2015
2016
2014
2015
2016
HydropowerH
ydropower
Offshorewind
Offshore wind
Main
Main casecase

2017
2018
2017
2018
Bioenergy
Bioenergy
SolarSolar PPVV2019
2019

2020
2020 2021
2021OnshorewindOnshore w
ind
Geothermal
Geothermal

Japan’s auction scheme in 2017 will bring cost reduction of solar PV,
which could create new PV opportunities without supports after 2020

© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Solar PV and Bioenergy contributeto Japan’s national target 2030
Japan annual electricity generations from renewables (2013-21)300
250
250(TWh)
(TWh)

200
200
150
150
100
100
50
5000

2013
2014
2013
2014
Hydropower
HdH
ydropower
Offshore
Offshore wwindind2015
2015

NationalTarget2030 HighNational Target 2030
High casecase2016
2017
2016
2017
Bioenergy
Bi energy
ioSolarSolar PPV
V2018
2018

2019
2020
2019
2020
OnshoreOnshoh re win
iwinddGeothermal
Geothermal

2021
2021

NationalNational Target
Target 2030
2030 LowLowcase
case

Renewables spurred by FIT would achieve its national target (22-24 % of
total electricity generation in 2030), with 10 years earlier than expectation© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Price competitions lead PV systemcost reduction
Historical and forecast typicalypsolar PV investment costs,,
average for new capacity

USD2020015/kW
USD015/kW

Utility
Utility ground-mounted
ground-mounted

8000
8000
Forecast
Forecast
7000
7000
6000
6000
5000
5000
4000
4000
3000
3000
2000
2000
1000
1000002011 20132011
2013 2015
2015 20172017 20192019 2021
2021
AustraliaA
ustralia

China
C
hina

8000
8000
7000
7000
6000
6000
5000
5000
4000
4000
3000
3000
2000
2000
1000
1000
00

Commercial
top
Commercial roof
rooftop
Forecast
Forecast

8000
8 000
7000
7 000
6000
6 000
5 000
5000
4 000
4000
3 000
3000
2 000
2000
1 000
1000002011 20132013 2015
2015 2017
2011
2017 20192019 2021
2021

Germany
Germany

India
India

Residential
top
Residential roof
rooftop
Forecast
Forecast2011 20132019 2021
2011
2013 2015
2015 20172017 2019
2021

Japan
Japan

UnitedStates
United States

Increasing competitioncompetition, access to low
low-cost
cost financing,financing and regulation
to reduce permitting costs contribute to system cost reductions© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Japan’s promising flexible capacity
Pumping Hydro capacity by IEA member counties in 2014

UnitedU
nited States
States
28%

28%

Japan
Japan
Italyly
ItaFranceF
rance

6%

25%

6%
7%

Germany
GermanyRestR
est ooff IEA
IEAcountries
countries

There is no reason not to make the most of existing more than 27 GW ofpumping
iandd turbine
t bi capacity
it (hydropower),(h d) whichhi h increases
iflexibility
fl ibilitin the networks© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Priorities for Japan
 Reduce renewable energy costs also through competitive

procurement schemes Facilitate the rapid uptake of a balanced portfolio of renewable energy
through a measures to expedite local consents for geothermal thatJapan has rich resources and onshore wind EnsureE
user‐friendly
f i dl energy ddata iinfrastructurefbby creating
i one‐stop
website to publish generation and consumption data to the public Make the most of value of existing pumped hydropower throughinter‐regional grids to bridge VRE rich areas and hydro rich areas
 Continue renewable R&DD projects to integrate over sectors, such as
Demand Response to balance PV generation; PV connecting EV andcharger systems; or P2G (Hydrogen from VRE’s electricity excess)© OECD/IEA 2016

IEEJ：December 2016 © IEEJ2016

Thank you. Any questions?
Whole report with dataset of capacities
and generations by countries can bepurchased online at:p
http://www.iea.org/bookshop/734‐
MediumMedium‐Term_Renewable_Energy_Market_Rep
ort_2016

Explore the data behind
MTRMR 2016

エグゼクティブサマリーの日本語訳
http://www.iea.org/publications/freep
ublications/publication/medium‐term‐
bli ti / bli ti / ditrenewable‐energy‐market‐report‐2016‐‐‐market‐analysis‐and‐forecasts‐to‐2020‐‐‐japanese‐version.html© OECD/IEA 2016

Contact :report@tky.ieej.or.jp