Renewables to surpass gas by 2016 in
the global power mix
IEA report sees renewable power increasingly cost-competitive with
new fossil-fuel generation, but agency warns against complacency
26 June 2013 -
Power generation from hydro, wind, solar and other renewable sources
worldwide will exceed that from gas and be twice that from nuclear
by 2016, the International Energy Agency (IEA) said in its
second annual Medium-Term Renewable Energy Market Report (MTRMR).
According to the MTRMR, despite a difficult economic context,
renewable power is expected to increase by 40% in the next five
Renewables are now the fastest-growing power generation
sector and will make up almost a quarter of the global power mix by
2018, up from an estimated 20% in 2011.
The share of non-hydro
sources such as wind, solar, bioenergy and geothermal in total power
generation will double, reaching 8% by 2018, up from 4% in 2011 and
just 2% in 2006.
“As their costs continue to fall, renewable power sources are
increasingly standing on their own merits versus new fossil-fuel
generation,” said IEA Executive Director Maria van der Hoeven as she
presented the report at the Renewable Energy Finance Forum in New
“This is good news for a global energy system that needs to
become cleaner and more diversified, but it should not be an excuse
for government complacency, especially among OECD countries.”
Even as the role of renewables increases across all sectors, the
MTRMR cautions that renewable development is becoming more complex
and faces challenges – especially in the policy arena.
European countries with stagnating economies and energy demand,
debate about the costs of renewable support policies is mounting.
addressing these issues, Ms. Van der Hoeven warned that “policy
uncertainty is public enemy number one” for investors: “Many
renewables no longer require high economic incentives.
But they do
still need long-term policies that provide a predictable and
reliable market and regulatory framework compatible with societal
goals,” she stated.
“And worldwide subsidies for fossil fuels remain
six times higher than economic incentives for renewables.”
The forecasts in the report build on the impressive growth
registered in 2012, when global renewable generation rose by over 8%
despite a challenging investment, policy and industry context in
In absolute terms, global renewable generation in 2012 –
at 4 860 TWh – exceeded the total estimated electricity consumption
Two main factors are driving the positive outlook for renewable
First, investment and deployment are accelerating
in emerging markets, where renewables help to address fast-rising
electricity demand, energy diversification needs and local pollution
concerns while contributing to climate change mitigation.
China, non-OECD countries are expected to account for two-thirds of
the global increase in renewable power generation between now and
Such rapid deployment is expected to more than compensate for
slower growth and smooth out volatility in other areas, notably
Europe and the US.
Second, in addition to the well-established competitiveness of
hydropower, geothermal and bioenergy, renewables are becoming
cost-competitive in a wider set of circumstances.
For example, wind
competes well with new fossil-fuel power plants in several markets,
including Brazil, Turkey and New Zealand.
Solar is attractive in
markets with high peak prices for electricity, for instance, those
resulting from oil-fired generation. Decentralised solar
photovoltaic generation costs can be lower than retail electricity
prices in a number of countries.
The MTRMR also sees gains for biofuels in transport and for
renewable sources for heat, though at somewhat slower growth rates
than renewable electricity.
Biofuels output, adjusted for energy
content, should account for nearly 4% of global oil demand for road
transport in 2018, up from 3% in 2012. But advanced biofuels growth
is proceeding only slowly.
As a portion of final energy consumption for heat, renewable
sources, excluding traditional biomass, should rise to almost 10% in
2018, from over 8% in 2011. But the potential of renewable heat
remains largely unexploited.
About the IEA
The International Energy Agency is an autonomous organisation which works to
ensure reliable, affordable and clean energy for its 28 member countries and
Founded in response to the 1973/4 oil
crisis, the IEA’s initial role was to help countries co-ordinate a collective
response to major disruptions in oil supply through the release of emergency oil
stocks to the markets.
While this continues to be a key aspect of
its work, the IEA has evolved and expanded. It is at the heart of global
dialogue on energy, providing reliable and unbiased research, statistics,
analysis and recommendations.
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