IRENA REthinking Energy 2nd Report 2015
IRENA REthinking Energy 2nd Report 2015
IRENA REthinking Energy 2nd Report 2015
Energy
2015
About IRENA
The International Renewable Energy Agency (IRENA) is an intergovernmental
organisation that supports countries in their transition to a sustainable energy future,
and serves as the principal platform for international co-operation, a centre of
excellence, and a repository of policy, technology, resource and financial knowledge on
renewable energy. IRENA promotes the widespread adoption and sustainable use of all
forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar
and wind energy, in the pursuit of sustainable development, energy access, energy
security and low-carbon economic growth and prosperity.
www.irena.org
Acknowledgements
Principal authors: Henning Wuester, Rabia Ferroukhi, Laura El-Katiri, Deger Saygin,
Tobias Rinke and Divyam Nagpal
Reviewers: Elizabeth Press, Dolf Gielen, Michael Taylor, Nicolas Fichaux, Aleksi
Lumijarvi, Christian Kjaer, Ahmed Abdel-Latif, Dane McQueen, Giacomo Luciani, Kelly
Rigg, Martin Schpe, Martine Kubler-Mamlouk, Paul Komor, Steve Sawyer, Riccardo
Toxiri and Daniel Magallon
For further information please contact IRENA: [email protected]
This report is available for download from www.irena.org/publications
Disclaimer
The designations employed and the presentation of materials featured herein are provided
on an as is basis, for informational purposes only, without any conditions, warranties or
undertakings, either express or implied, from IRENA, its officials and agents, including but not
limited to warranties of accuracy, completeness and fitness for a particular purpose or use of
such content.
The information contained herein does not necessarily represent the views of the Members of
IRENA, nor is it an endorsement of any project, product or service provider. The designations
employed and the presentation of material herein do not imply the expression of any opinion
on the part of IRENA concerning the legal status of any region, country, territory, city or area
or of its authorities, or concerning the delimitation of frontiers or boundaries.
REthinking Energy
RENEWABLE ENERGY AND CLIMATE CHANGE
2015
CONTENTS
Executive Summary 5
Appendix 36
References 38
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Figures
Figure 1
Figure 4
Figure 5
Figure 6
Figure 7
Figure 8
Figure 9
Figure 10
Figure 11
Figure 12
Boxes
Box 1 Falling Costs, Increasing Competitiveness 12
Box 2 Five Actions to Increase the Deployment of
Renewable Energy 25
Box 3 Renewable Energy and Job Creation 30
Box 4 Selected IRENA Initiatives33
Tables
Table 1
RETHINKING ENERGY |3
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EXECUTIVE SUMMARY
RETHINKING ENERGY |5
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RETHINKING ENERGY |7
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RETHINKING ENERGY |9
Manufacturing/
Construction
Transport
Electricity/
Heat
Other Fuel
Combustion
Fugitive
Emissions
3
IRENA calculations based on the Intergovernmental Panel on Climate Change (IPCC,
2012) and World Bank (2015a) World Development Indicators, available online at:
www.tsp-data-portal.org/Historical-Electricity-Generation-Statistics#tspQvChart
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changed over the past 20 years (Figure 4). Under current policies and
national plans, it is expected to fall from 575 grams per kilowatt hour
(g/kWh) in 2010 to 488 g/kWh by 2030. A further reduction of the emissions
intensity to 362 g/kWh equivalent to a 40% intensity reduction from 1990
levels could be achieved by scaling-up renewable energy deployment.
Additional opportunities for emissions reductions lie in other end-use sectors
(heating/cooling and transport), thus building the case for accelerating the
energy transition.
Coal
Oil
CO2
Business as Usual
Natural Gas
REmap 2030
Coal
Oil
CO2
Natural Gas
This estimate excludes any life cycle emissions of fossil fuels and renewables.
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Business as Usual
6
For IRENA estimations, investment in 2014 includes asset finance, small distributed capacity and
biofuels (data from UNEP, BNEF and FS, 2015) as well as large-hydro investments (data from IRENA).
It does not include public or private RD&D, public markets and venture capital/private equity.
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Solar and wind power will remain the leading technologies for renewable
energy investment up until 2020, with roughly USD 140 billion investment
each per year (Figure 8). Investment in less mature technologies biomass,
geothermal and tidal, wave and ocean energy is expected to increase more
rapidly, albeit starting from much lower levels.
41
(10%)
5
19
(1%)
(4%)
143
(35%)
65
(16%)
140
(34%)
Asia, Europe and North America will continue to drive the renewables
market. In the coming years, the largest share of global renewable power
investment would be required in Asia (USD 178 billion per year until 2020),
followed by the European Union (EU) (USD 77 billion), and North America and
the Caribbean (USD 55 billion) (Figure 9). The fastest increase would take place
in Sub-Saharan Africa (around six-fold compared to 2014) and in the Middle
East and North Africa (around three-fold).
55
(13%)
6
21
(2%) (5%)
12
(3%)
35
(9%)
178
(43%)
Non-EU Europe
77
(19%)
27 (6%)
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can be targeted towards mobilising private sector investment, along the lines
of the strategies outlined above, and complement other international efforts.
There is ample experience of public finance being utilised to de-risk investments
and leveraging considerable funding from private sources, both domestic
and international. Increased focus of public sector financing on the risks and
barriers of renewable energy investment, and options for enhanced action
can be identified at different levels building on proposed initiatives. These
could use climate climate finance (e.g. a renewable energy risk mitigation
facility funded by the Private Sector Facility of the Green Climate Fund) at the
global level (such as a global risk mitigation facility initiated by the G20) or at
a regional level (such as the guarantee fund of the European Juncker Plan).
Closing the investment gap is possible, but will require a combination of
strategies to mobilise different investors. Recommendations on strategies and
the mix of instruments would differ between regions and technologies. None
of the strategies would be a solution in isolation but each would contribute to
a broader action plan to accelerate renewable energy deployment.
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NO
POVERTY
AFFORDABLE
& CLEAN ENERGY
CLIMATE
ACTION
SUSTAINABLE CITIES
& COMMUNITIES
GENDER
EQUALITY
ZERO
HUNGER
RENEWABLE
ENERGY
QUALITY
EDUCATION
GOOD HEALTH
& WELL-BEING
LIFE
ON LAND
CLEAN WATER
& SANITATION
INDUSTRY, INNOVATION
& INFRASTRUCTURE
well documented. Off-grid renewable energy solutions, including standalone and mini-grid systems, are now among the most economic options
to expand access to many rural areas (IRENA, 2014d). These solutions
can be deployed rapidly and customised to local needs, and offer an
attractive option for electrifying areas where grid extension is technically or
financially unviable. In Africa, where about 600 million people are without
access, more than 28.5 million people benefit from solar lighting products
(Lighting Africa, 2015). Off-grid solutions are also being deployed for
productive uses, such as solar-powered irrigation on farms, thus increasing
yields and incomes, reducing vulnerability to erratic rainfalls and hardship
especially among women. In this way, renewables not only help societies
access modern and sustainable energy, but also in building climate-resilient
infrastructure, protecting and restoring ecosystems in rural areas.10
Renewable energy can improve energy and water security. The energy
sector relies heavily on water for energy extraction and production,
accounting for 15% of water withdrawals globally. In a water-constrained
world, conflicts with other end-uses, such as agriculture, are intensifying
and further impacted by climate change. With access to water increasingly
recognised as a risk for energy security, it is becoming necessary to
10
For a background to the Sustainable Development Goals passed in September 2015, see
https://sustainabledevelopment.un.org/?menu=1300
decouple energy sector expansion from water use. Solar PV and wind, the
most rapidly growing technologies, consume up to 200 times less water
than conventional options including coal, natural gas and nuclear (IRENA,
2015d). Substantial water savings are already being realised. In the
drought-prone states of Texas and California, for instance, water savings
from wind are estimated to be 50 billion and 9.5 billion litres respectively
in 2014, (AWEA, 2015). Renewable energy can also meet energy needs
across the water supply chain, including for pumping, desalination and
heating, thus directly contributing towards water and energy SDGs.
Renewable energy helps create employment. Project level data indicates
that, on average, renewable energy technologies create more jobs than
fossil fuel technologies. For instance, solar PV creates twice the number of
jobs per unit of electricity generation compared with coal or natural gas.
Globally, IRENA estimates that the renewable energy sector (excluding
large hydro) created around 7.7 million direct and indirect jobs in 2014, an
18% increase over last years count (IRENA, 2015a) (Box 3). China employs
BOX 3: RENEWABLE ENERGY AND JOB CREATION
China, Brazil, the US, India, Germany, Indonesia and Japan are leading
renewable energy employers (Figure 11). The rise in employment spreads
across the spectrum with solar, wind, bioenergy and small hydropower all
seeing increases in 2014. The solar PV industry was the largest employer
worldwide with 2.5 million jobs, followed by liquid biofuels with 1.8 million
jobs, and wind power, which surpassed one million jobs for the first time in
2014 (IRENA, 2015a). Jobs in large-hydro rose to 1.5 million according to the
first-ever global estimate conducted by IRENA.
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more than 3.4 million people in its renewable energy sector, which represents
around 20% of the total workforce in the countrys energy sector, and is
significantly more than the number of job in the oil and gas sectors combined
(2.6 million). Looking forward, with 164 countries having adopted
renewable energy targets, the employment in the sector is bound to
experience substantial growth.
Under existing government plans, the deployment of renewable energy
would lead to 13.5 million jobs in 2030. If deployment follows the trends
outlined by REmap 2030, IRENA estimates that global direct and indirect
employment in renewable energy could reach up to 24.4 million11 by 2030
(Figure 12) (IRENA, 2016c). Most of these jobs will be concentrated in
bioenergy, hydropower, wind and solar.
Reference Case
REmap 2030
11
IRENAs forthcoming publication Renewable Energy Benefits: Measuring the economics provides
more details on this figure (e.g. its distribution across technologies and sectors) and complements it
with estimations of the impacts on global GDP, welfare, trade, and other variables.
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Conclusion
Renewable energy offers an immediate means to decarbonise the global
energy mix. Doubling the share of renewables by 2030 could deliver around
half of the emissions reductions needed and, in combination with energy
efficiency, keep the rise in average global temperatures within 2oC and prevent
catastrophic climate change.
As this report shows, renewables are a viable, affordable and scalable solution.
They are at the core of any strategy to meet climate goals while supporting
economic growth, welfare, domestic value creation and employment
generation. The potential of renewables is there for every country to harness.
For effective action against climate change, the share of renewables needs to
grow not only in power generation but also in transport, heating and cooling,
and more investment is urgently needed. Given the increasing competitiveness
of renewables and the dynamism of the market, it is possible to dramatically
scale-up investments in renewables. To avoid a lock-in with unsustainable
energy systems, investments must grow immediately and must almost double
to USD 500 billion annually between now and 2020.
To turn the prospect of a sustainable energy future into a reality, five clear
actions are needed: strengthening policy commitment, enabling investments,
building capacity, facilitating regional and international cooperation, and
harnessing the cross-cutting impact of renewable energy on sustainable
development.
The prize for taking the right steps, today, is immense. We have an
unprecedented opportunity to limit temperature increase and propel the
world into a sustainable, stable, prosperous and climate-resilient future
through renewables.
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APPENDIX
IRENAs REmap 2030 Methodology
REmap 2030 is a roadmap of technology options to increase the global
share of renewables. It is based on national sources of 40 countries, which
account for 80% of the expected total global energy demand in 2030. This
plan is one of realistic potential one that can be accomplished with existing
technologies, is economically practical, and achievable by 2030.
The REmap analysis starts with national-level data covering power, district
heat and end-use sectors. Countries have provided their current national
plans starting with the year 2010, forming the base year for the analysis.
These were collated to produce business-as-usual Reference Cases, including
each countrys targets for renewables.
The Reference Cases represent policies in place or under consideration,
including energy efficiency improvements. The Reference Case includes the
final energy consumption for each end-use sector and the total generation
of the power and district heat sectors, with a breakdown by energy type for
the period 20102030.
The potential of technology options beyond the Reference Case was
subsequently investigated. This realistic potential of technologies are
described as REmap Options. The resulting roadmap essentially illustrates
what a doubling of the share of renewables would look like. For each REmap
Option, the analysis also considers the costs to substitute a conventional
energy technology to deliver the same amount of heat or electricity.
REmap 2030 is an exploratory study, not a target-setting exercise, and
countries can make informed choices as to how to use the options identified.
The aim is to be practical and to co-operate directly with countries in order
to analyse and discuss their specific cases in detail. Such an approach also
creates an opportunity to discuss implementation of the options identified
with each country, and to improve the analysis continuously over the years.
IRENA has developed a spread-sheet tool that allows national experts to
evaluate and create their countrys REmap 2030 analysis and assess the
potential, cost and benefits of REmap Options. The tool provides a simplified
but dynamic accounting framework to evaluate and verify Reference Case
developments and REmap Options within each country.
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The tool consists of two parts. In the first part, national experts can evaluate
and adjust the countrys Reference Case for REmap Options between 2010
and 2030. In the second part, they can substitute conventional technologies
assumed to be in place in 2020 and 2030 with REmap Options based on the
Reference Case. For ease of use, the tool offers a range of technology options
to choose from in the power, district heat and end-use sectors.
The tool allows the national expert to choose REmap Options, assess the
options impacts on the countrys renewable energy share and evaluate
their position within the countrys cost-supply curve. At any time, the user
can increase or decrease the size of REmap Options and choose a different
substitute. Furthermore, the tool allows for a consistent analysis and
comparison of results among countries.
REFERENCES
AWEA (American Wind Energy Association) (2015), State fact sheets,
www.awea.org/resources/statefactsheets.aspx?itemnumber=890
Bain & Company (2012), Insights: A world awash with money, www.bain.
com/publications/articles/a-world-awash-in-money.aspx
Climate Action Tracker (2015), Effect of current pledges and policies on
global temperature, http://climateactiontracker.org/global.html
IEA (International Energy Agency) (2010), CO2 emissions from fuel
combustion, IEA Statistics, www.oecd-ilibrary.org/energy/co2-emissionsfrom-fuel-combustion-2010_9789264096134-en
IPCC (Intergovernmental Panel on Climate Change) (2012), Renewable
Energy Sources and Climate Change Mitigation: Special Report of the
Intergovernmental Panel on Climate Change, Cambridge University Press,
Cambridge, http://srren.ipcc-wg3.de/report/IPCC_SRREN_Full_Report.pdf.
IRENA (International Renewable Energy Agency) (2014a), REmap 2030: A
Renewable Energy Roadmap, IRENA, Abu Dhabi.
IRENA (2014b), Rethinking Energy, IRENA, Abu Dhabi.
IRENA (2014c), REmap 2030 Renewable Energy Prospects: China, IRENA,
Abu Dhabi.
IRENA (2014d), Accelerating Off-grid Renewable Energy Deployment: Key
Findings and Recommendations from IOREC 2014, IRENA, Abu Dhabi.
IRENA (2015a), Renewable Energy and Jobs Annual Review 2015, IRENA,
Abu Dhabi.
IRENA (2015b), REmap 2030 Renewable Energy Prospects: United Arab
Emirates, IRENA, Abu Dhabi.
IRENA (2015c), Renewable Energy Generation Costs in 2014, IRENA, Abu
Dhabi.
IRENA (2015d), Renewable Energy and the Water, Energy and Food Nexus,
IRENA, Abu Dhabi.
IRENA (2016a), Renewable Energy Market Analysis: Gulf Cooperation
Council, IRENA, Abu Dhabi, forthcoming.
IRENA (2016 b), Financing the Scale-up of Renewable Energy Investment in
2015-2020, IRENA, Abu Dhabi, forthcoming.
IRENA. (2016c), Renewable Energy Benefits: Measuring the Economics,
IRENA, Abu Dhabi, forthcoming.
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2015,
Global
Status
Report.
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