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Jul 9, 2012

IEA says renewable energy set to boom

The IEA says renewable energy deployment to accelerate despite economic downturn. And it notes solar PV is increasingly competitive, even for miners. Giles Parkinson of RenewEconomy reports.


The International Energy Agency has delivered a bullish outlook for renewable technologies, saying its deployment would accelerate even beyond the rapid growth of recent years — despite the winding back of incentives and subsidies in some countries.

IEA executive director Maria van der Hoeven said more than 710GW of renewable energy capacity is expected to be installed in the next five years, a 45% jump over the previous five years. But it is still well short of what is needed to meet emission abatement and climate change targets.

Her predictions were made in the IEA’s “Medium-Term Renewable Energy Market Report”, the first the conservative IEA organisation has completed for non-fossil energy sources. As van der Hoeven said during a media event with international journalists last night, that in itself is a reflection of the deep changes in the global energy market.

“It show how far we have come in four decades since 1974,” van der Hoeven said. Initially the IEA was focused only on monitoring oil supply disruption risk, and predicting the state of fossil fuel markets in the short, medium and long term.

Now, she says, the IEA recognises that the addiction to fossil fuels has pushed the world “to the brink”, the result of a “collective policy failure” to bring greenhouse gases under control. “Renewables have come of age,” she said.

The latest report comes to some interesting conclusions about the deployment of renewables. The first is that in Europe, despite the deep economic crisis and negative growth, renewables continued to grow and no country had wound back their renewables targets, even if they had lowered subsidies as costs came down and budgets came under pressure. In some countries such as Italy, the targets had increased even as the subsidies were wound back, reflecting the rapid cost declines.

But while Europe continued to be a key centre for renewable deployment, most (60%) will occur in non-OECD countries, with China emerging as the powerhouse, accounting for 40% of renewable deployment over the next five years. The other key markets are the US, India, Germany, Brazil, Italy and Japan.

“Renewable energy is one of the only real success stories at the moment,” van der Hoeven said. Solar PV panels in households and business had average 42% annual growth over last decade, wind had averaged 27% per annum growth.

“Renewables offer more than just a positive for the environment,” she said. “It offered also a diversity of energy supplies and enhances energy security.”

Didier Houssin, IEA’s head of energy markets, made some interesting points from the 200-page report. Deployment of renewables is not slowing down despite the lack of economic growth, it is accelerating and will spread out geographically. This in turn is creating a “virtuous circle of increased competition and cost reduction”.

China is the leader in renewable deployment, and despite starting at a high base, remains a leader even in growth terms, despite the lack of market signals in that country. The amount of renewable deployment in non-OECD countries (not including China) will exceed that of north America by 2017.

The IEA also recognised that renewables were causing wholesale prices to fall markedly in some markets. In Germany, because of high gas prices, this was having an impact on gasfired plants, the numbers of hours they produce and their profits. Markets needed reform to address these issues.

In the US, because of tighter EPA standards and the low cost of gas, coal was being displaced in large quantities.

Solar was also offering the most cost effective option for offgrid areas in non-OECD countries, Houssin added. “The good news is that solar PV is competitive in many markets around the world,” he said. Solar was also cheaper than oil-fired generation, and oil-fired generation currently accounted for 1,000 terrawatt hours around the world — around 20 times more than solar PV.

That was a big opportunity for solar. “It can be an option for mining in Chile and South Africa,” Houssin said. And non OECD countries had the opportunity to avoid the mistakes of OECD countries which had locked in fossil-fuel dominated grids.

Solar PV, thanks to its rapid cost reductions, is having great appeal. “We can see that. Everyone can put solar panels on his or her own roof,” van der Hoeven said.

And here are a couple of graphics that help illustrate some of the points made by the IEA. The first is the number of countries where sizeable deployments of individual renewable technologies were being made. By 2017, there were expected to be 55 countries with more than 100MW of solar capacity (up from 5 in 2005), and more than 70 with 100MW of wind energy.

This graph below illustrates how each region will play to their strengths. Note the large share of solar in OECD Asia-Oceania (essentially Japan and Australia), massive wind in US, and hydro in non-OECD countries.

This shows how much the current deployment of renewables is dominated by hydro. But taking a line from 2012 to 2017, the share of hydro falls significantly, with non-hydro growing at an annual rate of 14.3%, compared to hydro’s 3.1%.

This graph below highlights the prospects in Japan, the world’s third largest economy, which is going to have one of the more interesting transformations as it focuses on solar, as well as wind and geothermal, to substitute for the nuclear energy that no longer has the confidence of the community. Japan is introducing the world’s largest feed-in tariffs (52c/kWh) to kick-start the solar deployment, which it aims to build to 28GW by 2020 (It has around 4.6GW now).

And this highlights the countries — and regions — with the biggest deployment of solar PV anticipated in the coming years, along with the compound average growth rates (CAGR).

*This article was originally published at RenewEconomy


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29 thoughts on “IEA says renewable energy set to boom

  1. Hamis Hill

    Perhaps renewables facilitate economic expansion outside the present constraints of the grid.
    This might follow the effect of Henry Ford’s affordable car which delivered North Americans out of their overpriced, central city slum accommodation and into the American Dream of sustainable suburbia. In that free market, unlike Australia, farmers set the lowest land prices by competing with each other to simply put pegs into the ground for their car -delivered new customers. No water, sewer or electricity grids and only rudimentary roads. With former high rents freed up for investment in purchasing the products of mass production, and by expanding Ford’s “Five Dollar Day” method of creating a market for his goods.
    (Adam Smith’s “returning capital” which describes how manufacturers’ wages costs are returned when the goods are sold, which is were the manufacturing nations’ trade surpluses at the expense of US consumers comes from).
    To reiterate; renewables may be enabling technologies which liberate spending from a high cost sector like the grid with its expensive, monopoly-like housing options and services.
    Just a thought which focusses on unaffordable housing as the major economic problem today and
    renewables as a liberating solution. Pity the Liberals aren’t interested in anything besides “conserving” the status quo.

  2. Mark Duffett

    Note in all the, ahem, sunny figures and forecasts about renewables deployment, not one word about how emissions have or will reduce as a result. Rather, despite Europe being “a key centre for renewable deployment”, and “the deep economic crisis and negative growth”, it has just burned its most coal since 2006 (businessweek.com/news/2012-07-02/europe-burns-coal-fastest-since-2006-in-boost-for-u-dot-s-dot-energy)

    Join the dots – renewables, by themselves, will not do the job required.

  3. Andybob

    My daughter is in Germany for the year and says there are solar panels everywhere. When people ask her about solar energy in Australia, she feels slightly embarrassed.

  4. Hamis Hill

    One supposes that the Japanese Daibatsu, who have read Adam Smith, will be manufacturing their own renewables and keeping the wages in the country.
    This tends to marginalise deabate about price because the increased employment facilitates the market.
    As with Japanese Cars, a large domestic economy creates the economies of scale and profits are enhanced by exports.
    We are talking about markets are we not? “OECD countries had locked in fossil fuel dominated grids”.
    Australia should regard itself as a developing country and just get on with regional development.
    It is a bloody “Continent” after all. Not a clutch of capital city mortgage slaves who are kept in captivity lest the banking sector fail. Renewables! you have noyhing to lose but your chains!

  5. Frank Campbell

    Andybob: your daughter should not be even slightly embarrassed.

    The German craze for solar is a case study in self-defeating absurdity: $130 billion to cover the cost of PV installed between 2000-2011 (over 20 years), and $370 billion after the recent changes in the EEG, up to 2030.

    And all for what (so far)? barely 3% of total power production. And it’s unreliable power of course. Not a single nuclear or FF power station can be retired- leading to expensive redundancy.

    Here’s some detail from DS:

    “Der Speigel” 12 april 2012:

    “Solar subsidies cost German consumers billions of dollars a year and are widely regarded as inefficient. Even environmentalists are concerned that Berlin’s focus on solar comes at the detriment of other renewables. But the solar industry has a powerful lobby, and politicians have proven powerless to resist.
    Next year, a three-person family will likely have to pay up to an additional €175 ($220) to finance the construction of renewable energy infrastructure…. Erdmann has calculated the effects that the latest changes to the EEG will have between now and 2030. He believes that subsidies for renewable energy, including an expansion of the power grid, will saddle energy consumers with costs well over €300 billion ($377 billion).

    Photovoltaics are threatening to become the costliest mistake in the history of German energy policy. Photovoltaic power plant operators and homeowners with solar panels on their rooftops are expected to pocket around €9 billion ($11.3 billion) this year, yet they contribute barely 4 percent of the country’s power supply, and only erratically at that…
    the German Physical Society writes in an expert opinion, stating, “Photovoltaics are fundamentally incapable of replacing any other type of power plant.” Essentially, every solar array must be backed up with a conventional power plant as a reserve, creating an expensive double infrastructure…
    To save one ton of CO2, Weimann explains, we could either spend €5 on insulating an old building, €20 as investment in a new gas-fired power plant, or around €500 on photovoltaic arrays.”

  6. Lord Barry Bonkton

    Lucky i jumped in with solar panels before CanLie axed the solar price paid to solar power generators (44 c + 6 c (Origin ) ) to 8 cents a kw and then sell it to my neighbor for 22+ cents + GST. That’s theft ! It goes on your Inverter size and not the panels fitted , so i can still add on 6 x 190watt panels to make 3 kw. 3.5 yrs to pay off and then its free power to add to my free Solar hot water (15+ yrs old )Long term with 3kw system, will get a small cheque every quarter and one less monkey on my back . Water runs past my house , so cannot get out of paying for water CONnection Fees ? The COALalition must get Coal donations and shares?

  7. T.Williams

    Nice takedown here of Frank Campbell’s “Der Spiegel” reference. Try quoting figures from an unbiased source next time, Frank.
    Meanwhile, the UK forges ahead registering a 1st quarter record for renewable generation of 11% . Stupid stupid Australia.

  8. GeeWizz

    Lord Bonkers,

    The price of electricity takes many things into account not just energy production. Maintanence of power poles and power lines, administration costs, building NEW power connections, building NEW power plants, etc etc etc.

    Therefore your power isn’t worth 22 cents.

    BTW CanDo is doing what all other states are doing and thats dropping huge solar subsidies. There are three main reasons for this.

    1. The high costs of solar FIT’s are pushing up the price of other things to fund them, including power prices.

    2. Gillards Miracle Carbon Tax is meant to solve all the worlds global warming problems, so why should the QLD government pay for solar panels? Abbotts direct action plan would actually fund programs such as solar but the lefties told us we needed a great big tax

    3. Solar Panels have become so cheap that the FIT means that panel installs are now paid off within 3 years, versus about 10 years only a few years ago.

    CanDo is doing what he can to repair QLD’s finances after the usual spendathon by incompetent Labor governments.

  9. jeebus

    @Frank, expensive and inefficient? Actually, German solar has saved consumers (especially those who have never even invested in solar panels themselves), many a Euro off their electricity bills.

    “Afternoon peaks used to be when German utilities could charge more for electricity supplied to the grid. But solar has changed all that – by having the lowest marginal costs (zero) at a time that coincides with its peak production.

    The result is that solar has lowered the peak prices of electricity to lower than off-peak prices in the dead of night.
    Deutsche Bank solar analyst Vishal Shah noted in a report last Friday that German utilities are being significantly impacted due to excess solar generation – a result of the merit order impact. This is true not just of the German market, but Italy as well, which actually exceeded Germany last year for the amount of solar PV installed in 2011.”

    So there you have it. Solar power provides the energy equivalent of liquidity to the power market during critical peak times, which leads to a much more efficient, and much more competitive energy market.

    This benefits consumers who do not own solar panels just as much as those who do.

  10. Hamis Hill

    “IEA Says Renewable Energy Set To Boom”, but reading the above posts you’d get the impression that Photo Voltaics is the only renewable energy source.
    Or that the mature sector of mechanical batteries will have no impact on the intermittent supply of some renewables.
    The call from other posters to broaden the debate is routinely ignored.
    PV is expensive but reliable and will always need back up by batteries, generators or the Grid.
    We all know this, move on!

  11. Nico

    “Rather, despite Europe being “a key centre for renewable deployment”, and “the deep economic crisis and negative growth”, it has just burned its most coal since 2006”

    You’re absolutely right! It has nothing to do with the economic structural issues with the EU, bank de-regulation and fiscal management culture of participant countries. It’s renewables!!! Well done!

    “The call from other posters to broaden the debate is routinely ignored.”

    As a power station engineer, I can confidently say that you’re ignored because you’re an idiot.

  12. Mark Duffett

    Nico, I take it that’s sarcasm directed at my comments. You reckon I’m drawing a long bow – would you care to explain exactly how “economic structural issues with the EU, bank de-regulation and fiscal management culture of participant countries” leads to the burning of more coal in the context of a stagnant or shrinking economy? In any case, you have the onus of proof reversed – it’s renewables that need to demonstrate reductions in coal combustion.

    And T. Williams, are you seriously suggesting that a publication called Renewables International is an unbiased source on this subject? Riiiiight.

    The point remains – how long do renewables get to have their fantastic growth figures (from infinitesimally small bases) and cherry-picked peak generation data received uncritically, before we start seeing the results we need in the only place it counts – the atmosphere?

  13. Hamis Hill

    The call for comment on renewables other than PV is idiotic and should be ignored?
    I would have thought that power stations would be fairly well automated so NICO you could manage to study a bit of logic then?
    Power Station Engineer? Got all the Right stuff then? My take is that you are ham in the can and your “space” station manages itself.
    I think that engineering standards have fallen, do they still have to study physics, or is it just Tonka trucks?
    Nico you ain’t got what it takes to sustain a debate, not at all like the engineers I know.
    Deplorably low standards, but once upon a time engineering required the same intelligence as medicine.

  14. Captain Planet

    Well Hamis, you gave me quite a laugh.

    As a former Power Station Manager, now running a Power Systems Consultancy, I think your assertion that “Mechanical Batteries” (Mmmmppphhhhwahahahaha!) are a “Mature Technology” is bloody hilarious

    Why don’t you put your much vaunted high school education in physics to work, and calculate how much weight you need to lift, how high, to store a kWh of Energy.

    Then calculate how much steel and other parts go into the apparatus to hold it up, and wind it up and down.

    Then factor in maintenance for the phenomenal assembly of moving parts needed to store the Hundreds of Millions of kWh needed each DAY.

    Then allow for all the mechanical losses in your “Mature Technology”.

    When the size of your mythical “Mechanical Battery” monstrosity exceeds all of the Land Area in Victoria, and the cost blows out to somewhere around Global GDP for the next decade or two, call me for an opinion.

    Oh, since it is a “Mature Technology” you can no doubt list half a dozen manufacturers who are selling and integrating this “Mature Technology” into power systems on a cost competitive basis.

    Pffffft. Don’t comment if you don’t know what you are talking about.

  15. sanders josh

    PV will drop in price to a point where installation becomes a no-brainer.
    As with the personal computer and mobile phones, it’s inevitable.
    Anyone remember when these devices first took off and many people questioned why anyone would want one? It took less than two decades to go from novelty to an essential part of life.
    There’s even a paint being developed that acts as a photovoltaic cell.
    You can deny climate change, but you can’t stop the march of technology.

  16. Hamis Hill

    Now Captain Pretentious just look up Beacon Energy, their power storage units are in place at the end of the grid supporting voltages from degradation. Storage Units, Storage, Storage Storage!
    As I have pointed out to your colleague, power station engineer, NICO, on an other thread, engineering standard have dropped.
    Look it up on the internet, look it up on the internet, look it up on the internet.
    And stop making the engineering profession an object of derision. You might get booted out, you are a member of the institute, are you?

  17. Hamis Hill

    And Captain Pretentious, read, (you can read cant you?) Scientific American Dec 1973 Flywheels
    article by physicist Richard Post from the prestigious Lawrence Livermore Laboratory.
    And this one which always seems to be moderated, the Darwin remote area energy supply company.
    whose flywheel energystorage unit,( Yes it stores energy! amazing!) was the subject of an Australian Greenhouse Office grant and is now installed overseas. 1 MWHr, fits in a shed. Look it up Clown!
    Captain, you and others like you are worse than useless to other posters with your petty arrogance.
    Pfft Don’t comment if you don’t know what you are talking about indeed!
    If it wasn’t so serious your degraded engineering capabilties would be very laughable.
    Clowns to tend to have that effect. Take it up with John Bennetts another expert who doesn’t need to use the internet.
    What was the size of your mechanical battery Captain, The size of Australia! Just like your head then.
    Ha Ha.

  18. Hamis Hill

    No, seriously, Captain Planet, if you are running a Power Systems Consultancy you had better keep your true identity secret, you wouldn’t have much credibility left after your Captain Planet posts.
    You place yourself in the same exalted ranks as economist Terry McCrann, who with his vast knowledge of Physics, constantly croaks that energy storage just “Carn’t be done mate”.
    Painted right into a corner and unable to admit your errors even if you wanted to.
    Posters should not expect anything even remotely reliable fron you on the subject of mechanical batteries.
    So why don’t you just Pffft off altogether on this subject?

  19. wattle-bee

    this is worse than watching Question Time!

    The reality is that we are huge per capita energy users and (a) we need to find sustainable energy sources, and (b) we need to use energy more wisely (note: I am not suggesting returning to the dark ages).
    Australians with good ideas should get funding to explore them so we can come up with technology to export to developing countries to stop them from their wholesale destruction of the environment (something we, as consumers of their goods, inadvertently support). This will be good for our economy (if the article about renewables growth is remotely correct) and a sustainable environment.

    We need solutions.

  20. Hamis Hill

    Those posters who are interested, who have visited the Internet sites on energy storage, will no doubt be wondering just where these self proclaimed Ayatollahs of Technology come from, delivering their Fatwas on energy storage from on high and demanding the equivalent of your fifteen year old daughters in mute compliance with their dictates.
    Energy storage will be used, is being used and is a mature technology already in place, end of story.
    But probably not the end of the Ayatollahs of Electricity. If they don’t know, nobody does.
    Don’t buy their self-serving crap!

  21. Filth Dimension

    There is no economy in a system that is based on perpetual growth and reliant on finite resources. case closed naysayers.

  22. Nico


    I went a bit over the top.

    Good will and renewables love won’t lead to coal reduction yes. ALthough a sound national (or EU) strategy built on the right metrics would e.g., % targets with the right economic penalties/incentives.

    I thought you were saying europe is struggling wholly because their renewables programs.

    That is not a true statement.
    – the existence of an economy doesn’t require perpetual growth
    – our economy is not wholly reliant on material resources, you can value add for information, re-configuration/recycling
    – it’s not truly a closed system (solar + geothermal energy)

  23. Filth Dimension

    Nico. I think you need to read my statement more carefully before you deem it as not true.

    Your 3 points do not contradict my statement.
    1. Our current Economy needs to become an economy in the true sense of the word i.e sustainable.
    2. Yes we can do more than just consume and should focus on those things.
    3. Thank Ali Babar there are alternatives and we can break the loop.

  24. Harris Evan

    Could we please have a moderation of these posts to ensure constructive and non abusive comments are the only ones to appear? There is an alternative, a respect for the subject matter.

  25. Captain Planet

    Ye Gods Hamis, take a chill pill.

    Since I was involved in the project to install a 1 MW flywheel energy storage device on a remote minesite around 2004, I feel more than qualified to refute your claims that they are some kind of magical solution to the storage of energy.

    Do you know what the mechanical losses of such flywheels are?

    Do you know how long they continue spinning, if you stop pouring wasted power into them to keep them at speed?

    The fact is that they lose at least 10 % of all energy poured into them. Thus, just to keep a 1 MW flywheel humming along at speed, requires at least 100 kW of energy. Rather wasteful wouldn’t you say?

    They are useless 1 hour after the power has stopped being fed into them. 1 hour is a pretty crappy storage capacity for your mechanical energy storage saviour technology. That’s right, they grind to a stop. Not much good at storing solar power for 16 hours of darkness then, are they?

    They are also hideously expensive. Go to one of your vaunted internet sites (I would like to point out that your mantra of “look it up on the internet” pretty much tells me all I need to know about your expertise in this area) and do a cost benefit analysis on storing the Eastern Seaboard’s overnight winter electricity requirements (you will only get 20 minutes to 30 minutes of usable power no matter how much money you spend, and you would bankrupt the whole world trying to install such a monstrosity).

    Flywheel energy storage has a niche market. Where remote power generation is by diesel or gas turbine, or other relatively high cost fuel source, AND there is a large, predictably fluctuating demand, e.g. a minesite with a large piece of machinery such as a rail car dumper, a shaft ore hoist or similar, which happens to have a duty cycle under 20 minutes, then Flywheel energy storage allows less spinning reserve (“look it up on the internet”) to be operational to cater for the intermittent load, and saves fuel and maintenance costs.

    In almost any other circumstances, they are worse than useless.

    But what would I know? I didn’t get my information by “looking it up on the internet”.

    Like I said, Pfffft.

  26. Hamis Hill

    All of which Crapped On could have written in the first place, but that would have required some respect for the intelligence of other posters, wouldn’t it? The latest versions overcome your internal loss difficulties to an extent, but Crapped On, you’d have to go to the internet to find that out.
    Any bets you haven’t read the seminal Scientific American article, or considered how the purely mechanical Rocketdyne unit developed for the US department of the Army suffers from your, essentially, eddy current loses? Tell us how windpower in integrated inot the storage unitwith your direct experience ?
    No don’t bother Crapped ON you’re the “Expert”. Pffft.

  27. Hamis Hill

    100 KW of power, Crapped On. That which is crapped on is your credibility, and you did it all by yourself. Try laughing at that.

  28. Andrew

    There seems to be a great opportunity for businesses to get involved with renewables. It sure would be nice if people stopped bitching about it and just got involved. Australia is going to miss out of being a world player if we continue to waste time arguing. Lets make it happen! No wonder the coal industry is digging it out as fast as they can. They see that the writting is on the wall. However, there are other uses for coal. The East Germans made margarine and ice cream out of coal.

  29. Captain Planet

    Brown Coal also makes extremely good fertiliser – considerable amounts of otherwise marginal farmland could be made quite productive by ploughing in brown coal. It’s an infinitely superior solution to burning the stuff 🙂


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