IEEJ  October 2017 © IEEJ 2017
Dolf Gielen Director Innovation and Technology Institute of Energy Economics, Japan 6 October 2017 Structure of the Presentation • IRENA overview Status and trend for renewable energy • Costing and high RE cost in Japan . Grid integration of renewables in the Japanese context . . Renewable energy support schemes
» Established in 2011 »  Headquartered in Abu Dhabi, UAE » First global intergovernmental organisation headquartered in Middle East »  IRENA Innovation and Technology Centre  in Bonn, Germany »  Permanent Observer to the United Nations – New York 》》 Global Membership 152 Members 28 States in Mandate To promote the widespread adoption and sustainable use of all forms of renewable energy worldwide
Objective
To serve as a network hub, an advisory resource and an authoritative, unified, global voice for renewable energy
Scope
All renewable energy sources produced in a sustainable manner

Thematic Areas Work Programme 2016-2017
: Yl. 77 Planning for the renewable energy transition •  Global transition roadmap and macroeconomic impact analysis ▪ Power sector transformation • Technology status and outlook X fil. Is Enabling investment and growth ▪ Project development support, auctions and other policy tools • Standards and quality control ▪  Marked design and policy • VIII. Renewable energy access for sustainable livelihoods • IOREC conference, RE for refugee camps • IV.  Regional action agenda ▪ Clean Energy Corridors •  V.    Islands: lighthouses for renewable energy deployment ▪ SIDS Lighthouses •  VI.   Gateway to knowledge on renewable energy ▪  Energy statistics, costing data
. Various ministries METI, MAFF, MOFA, MOE Some recent topics: . Electricity storage study (released yesterday at ICEF) • Standards for renewable technologies in harsh environments (ongoing) . Fukushima related events (next WFES January 2018) • REmap energy transition roadmaps . Bioenergy potential assessments, conversion technologies development, environmental impact assessment – Africa, South East Asia .
 Pacific Island State workshops, capacity building, training 7
IEEJ  October 2017 © IEEJ 2017

◎ Around 25% renewable power generation share worldwide ● Growing by 0.7 percentage per year 99
Renewable energy share in TFEC ■■ Solid biofuels traditional ■■ Liquid biofuels
■■ Solar During 2010-2015, renewable energy share grew from 17.8% to 18.8% in total final energy consumption – 0.17%/yr growth.
→ IRENA’s Global Renewable Energy Roadmap » Shows feasible, cost-effective ways to increase renewable energy deployment in world’s energy mix by 2030 in line with SDG7 » Support the G20 in determining pathways for operationalising Paris Agreement with decarbonisation scenarios analysis to 2050, report released in March 2017 » Next Update April 2018 »> Identifies concrete technology options for countries and sectors »» Assesses policy and investment implications »» Outlines benefits (economic, social, environmental) »» In cooperation with 70 countries »» 30 publications to date and datasets »» 12 individual country reports for major economies – Japan is still missing
To meet 2 °C climate target set at COP 23 in Paris 2015 ● Carbon intensity of energy: needs to fall by 85% in 2015-2050 ● Energy-emission budget: 790 Gt CO2 from 2015 till 2100 Total energy CO₂ emissions from all sectors (Gt CO₂/yr) ■ Energy efficiency     ■ Electrification with RE power      ■ Renewable energy      ■ Others © G20 has formulated energy and climate action agenda © Global energy in transition towards decarbonisation IRENA/IEA, 2017 12
Renewable energy and energy efficiency can account for more than 90% of emission mitigation ● Renewables acceleration: needs an 8-fold increase compared to recent years © Renewables in 2050: represent 2/3 of the energy supply ● Efficiency gains: need to rise to 2.5% per year in 2015- 2050 (from 1.8%/yr in 2015) Total primary energy supply (EJ/yr) #REmap
● around 0.8% by 2050 compared to the Reference Case ● That is the equivalent of almost 19 trillion USD in increased economic activity between today and 2050. 114 ● Policy benefits exceed the cost by a factor 2-6.
Job creation can potentially increase to 26 million in 2050 Jobs in 2016 Source: IRENA (2017), Perspectives for the energy transition: investment needs for a low-carbon energy system. 15
Including Large Hydropower ↑1.1% Source: IRENA (2017), Renewable Energy and Jobs – Annual Review 2017
IRENA Innovation Week 2nd edition Q2 2018 Innovation Landscape Report – Q1 2018 . •  Innovation Outlook Series •  Forthcoming studies in Electric Vehicles & Thermal Storage • Technology Briefs: Over 25 studies on RE technologies and its functionalities In cooperation with others such as IEA-ETSAP
projects
IEEJ  October 2017 © IEEJ 2017
International Renewable Energy Agency COSTING AND HIGH RE COST IN IRENA’s project cost information databa Scope and coverage Power: 15 000 utility-scale projects, ¾ million small-scale solar PV 7000 utility-scale PPAs Smaller dataset on biofuels/EVs Stationary applications being added Power: database concentrated in non-OECD as more publicly available information (e.g. multi-lateral financing, development projects, etc)
0.50 overview ■ Onshore Wind ■ PV iational Renewable Energ Intern 0.40 IEEJ  October 2017 © IEEJ 2017 Wind power costs are falling…. International Renewable Onshore Wind: Rotor Diameters & Nameplate Capacity Rotor Diameters & Nameplate Capacity in Key Markets Rotor diameters have increased markedly between 2000 and 2014 while nameplate capacity is expected to increase further in key markets up to 2025 Factors Global Weighted Average Capacity Factors – 1983 - 2015 Global average capacity factors grew by 35% between 1983 and 2014, rising from an estimated 20% in 1983 to 27% in 2014 (a 35% increase) 30% 15% 2001 2004 2007 2010 2013 2016 1989 1992 1995 1998 1983 1986 Global Onshore Wind Learning Curve Levelised cost of electricity 1983-2016 International Renewable Ene IEEJ  October 2017 © IEEJ 2017
Global weighted average LCOE 2010-16 -68% Residential solar PV: Cost differentials persist
Wholesale module prices 2010-2015 Utility scale Balance of systems 2015 IEEJ  October 2017 © IEEJ 2017
. Optimize installation work . . . Mounting system design Training of installers Reduce installation time (better trained installers, other foundations) . Lowering cost of Japanese PV manufacturers, which is also important for overseas markets such as Middle East, US, and South America. . Improve PV system design to reduce cost, and learn from the German experience. . . Utility-scale projects have been the main driver of the Japanese market. The residential market has not grown so much, so there is still room for market growth. A change to a market driven system and self-consumption will lower PV system costs. Reductions in incentive scheme will result in consolidation and cost reductions. .
IEEJ  October 2017 © IEEJ 2017
RENEWABLE ENERGY SUPPORT SCHEMES International Renewable Energy Agency Renewable energy investment requirements and challenges The energy transition requires scaling up current investments to 500 billion USD per year up to 2020 and to USD 900 billion per year up to 2030 Public funding is unlikely to increase above its current level of 15% and private finance will have to supply the lion's share of new investments
Key challenges in unlocking renewable energy investment from the private sector International Renewabl
173 countries have at least one type of renewable energy target – up from 43 in 2005 199 IRENA Renewable Energy Target Setting JANE 2015
Types of renewable energy policies and measures

Number of countries with renewable energy policies, by type 100 Implemented auctions and a feed-in tariff simultaneously Used feed-in tariffs to set price cap for auctions Used auctions to set feed-in tariffs
rapidly decreasing costs
Auctions
Flexibility in the design according to conditions and objectives rength Permit real price discovery Provide greater certainty regarding prices and quantities Enable commitments and transparency Are associated with relatively high transaction costs for both developer and auctioneer Risk of underbuilding and delays Based on REN21 Global Status Report (2005 to 2016) Number of countries that have adopted auctions /eakness
The move from FIT to FIP to Auctions in Germany ♦ USD 117.5/MWh support paid under the FIT in 2014. ♦ The support level is the sum of the average monthly wholesale price at the energy exchange (EPEX) and a floating premium. ♦  What is paid to the auction winner is the difference between the monthly average market value of the generated electricity from PV installations and the auction price.
IEEJ  October 2017 © IEEJ 2017
International Renewable Energy Agency
Three VRE integration challenges » Surplus VRE generation due to mismatch demand and supply » Flexibility due to fast change in the VRE output » Transmission capacity due to rapid increase in the VRE generation and location specificity
. • . • . Planning for the power system of the future: from capacity expansion to operations Flexibility toolkit for RE integration Electricity storage: technology, market outlook, business case The role of electric vehicles and heatpumps in the power sector transformation Advisory service and workshops: Flexibility System operation practice and market design can activate flexibility potentials No lack of innovations – but what is relevant for the local context? We need to map and understand the implications of these innovations for the power sector E-mobility Storage and Electric Vehicles Smart Charging (mobile storage) Grid to Vehicle (G2V): Grid Services: Primary and secondary reserves: •   Load management: peak shifting . . Enhanced Frequency Response •    Frequency Containment Reserve Vehicle to Grid (V2G): •   Frequency Restoration Reserve Energy Shifting Primary and secondary reserves . Other ancillary services . . Energy shifting Behind-the-meter: Solar self consumption . Vehicle to Home (V2H): Solar self consumption . Community Storage . Increased Power Quality Increased Power Quality . . . Peak shaving . Peak shaving
.
Detailed descriptions of 13 storage technologies including their required balance of system Strengths and weaknesses of each technology are highlighted, possible development paths including opportunities and threats are discussed Comprehensive technology overviews for stationary storage systems available on the market today Typical system designs for 12 typical storage applications Excel Tool to calculate the Cost of Service of all storage technologies in different applications
Note: Horizontal bar shows median offer price, grey range 10th and 90th percentile. roughly 60%  Q4 2014 to Q1 2017
Asia Interconnections Asia Super Grid - International project to send electricity from wind firms in Mongolia all the way to Japan Japan – Korea 220 km Netherlands – Norway 320 km existing HVDC subsea cable since 1990’s Payback 6 months
• Typical positive load gradients • Germany: 2-3%/min (hard coal fired PP) •  Denmark: 3-4%/min (hard coal fired PP) • Denmark: 8-10%/min (gas fired PP) • CCGT commissioned 2011: 3%/min • Typical minimum stable generation (minimum load) •  Germany: 45-55% (hard coal fired PP) • Denmark: 10-20% (hard coal fired PPs commissioned between 1985 and 1997) • CCGT commissioned 2011: 50-52% This superior flexibility have been achieved due to ongoing improvements for decades! Source: Dong Energy IEEJ  October 2017 © IEEJ 2017 www.irena.org www.twitter.com/irena f www.facebook.com/irena.org
Historically higher prices in India compared with Peru, the United States and South Africa ♦ Developers account for inflation risks ♦ Guarantees to hedge against off-taker risks in some states ♦ Increasingly affordable finance ♦ Government fund to hedge against currency exchange risks ♦ Domestic content requirements in some state auctions India’s actual and adjusted solar prices The trends of solar auction prices. 2010-2017 Sources: Based on BNEF (2016); Bridge to India (2017); Elizondo-Azuela et al. (2014); MNRE (2010) and MNRE (2012).
OBSERVATIONS
Japan still shows significantly higher installation cost than Germany in all three analysed sectors. Installation times are still higher in Japan than Germany Japan mainly uses earth screws, while Germany mainly used • pile driven foundations. . . Higher module cost in Japan, because a large percentage of modules is by Japanese Producers. According to REI the cost disparity has shrunk in the last 2-3 . years. Design standards are higher in Japan than Germany due to differences in the natural environment. . . Japan has higher solar irradiance, which gives lower LCOE despite higher CAPEX of PV systems. .