In its first-ever renewable energy market report, the International Energy Agency (IEA) accuses the world's major governments of a "collective policy failure", but still forecasts a 40% increase in global renewable power generation in the next five years, largely due to growth in deployment in non-OECD countries.
The renewable energy sector has finally "come of age", said IEA Executive Director Maria van der Hoeven during the launch of the report, acknowledging "the dynamic and increasing role of renewable energy in the global power mix". But achieving a more secure, sustainable energy system requires "urgent action" by the world's major governments, "who until now have failed to put us on the path toward a clean-energy transformation", she said.
"If this collective policy failure continues and nothing is done to bring greenhouse-gas emissions under control, we face potentially disastrous environmental and economic consequences."
Despite the current state of play and economic uncertainties in many countries, global power generation from hydropower, solar, wind and other renewable sources will increase by more than 40% to almost 6400 terawatthours (TWh) however, suggests the IEA in its Medium-Term Renewable Energy Market Report 2012. It forecasts renewable electricity generation to expand by 1840TWh between 2011 and 2017, which is almost 60% above the 1160TWh growth registered between 2005 and 2011. Significantly there will be a shift from the OECD to new markets, with non-OECD countries accounting for two-thirds of the growth predicted.
"Renewable energy is expanding rapidly as technologies mature, with deployment transitioning from support-driven markets to new and potentially more competitive segments in many countries," said van der Hoeven.
Supportive policy and market frameworks in OECD countries have played a significant role in, but rapidly increasing electricity demand and energy security needs in recent years have also been spurring deployment in many emerging markets, both large and small. These new deployment opportunities are "creating a virtuous cycle of improved global competition and cost reductions", notes the report.
Indeed, renewable deployment is projected to spread out geographically, with increased activity in emerging markets, led by China, Brazil and India, said Didier Houssin, the IEA's Director of Energy Markets and Security. Of the 710GW of new global renewable electricity capacity expected, China accounts for almost 40%. There will though also be "significant deployment" in the US and Germany. "This growth is underpinned by the maturing of a portfolio of renewable energy technologies."
Hydropower continues to account for the majority of renewable generation and registers the largest absolute growth (up 730 TWh) of any single renewable technology over 2011-17, largely driven by non-OECD countries. However, non-hydro technologies continue to scale up quickly with generation from these increasing by over 1100 TWh for the same period, with growth equally split between OECD and non-OECD countries. Onshore wind, bioenergy and solar PV see the largest increases, respectively, after hydropower. Meantime, offshore wind and Concentrated Solar Power (CSP) grow quickly from low bases, while geothermal continues to develop in areas with good resources and ocean technologies "take important steps towards commercialisation".
The report's release comes "amid profound changes and the uncertainties associated with a cautious macroeconomic outlook", notes the IEA. These include debates in several key markets that could lead to significant changes in renewable policies and deeper electricity market reforms as renewable deployment scales up. "The cost and availability of renewable financing remains a persistent question mark," noted van der Hoeven, saying there is a need for more investment sources and structures.
