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ADVANCING THE GLOBAL RENEWABLE ENERGY TRANSITION

ADVANCING THE GLOBAL RENEWABLE ENERGY TRANSITION

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REN21 is the global renewable energy policy multi-stakeholder network that connects a wide range of key actors. REN21’s goal is to facilitate knowledge exchange, policy development and joint action towards a rapid global transition to renewable energy.
REN21 brings together governments, non-governmental organisations, research and academic institutions,
international organisations and industry to learn from one another and build on successes that advance renewable energy. To assist policy decision making, REN21 provides high-quality information, catalyses discussion and debate, and supports the development of thematic networks.
REN21 facilitates the collection of comprehensive and timely information on renewable energy. This information reflects diverse viewpoints from both private and public sector actors, serving to dispel myths about renewable energy and to catalyse policy change. It does this through six product lines:
REN21 PRODUCTS
RENEWABLES GLOBAL STATUS REPORT (GSR)
First released in 2005, REN21’s Renewables Global Status Report
(GSR) has grown to become a truly collaborative effort, drawing
on an international network of over 800 authors, contributors and
reviewers. Today it is the most frequently referenced report on
renewable energy market, industry and policy trends.
REGIONAL REPORTS
These reports detail the renewable energy developments of a
particular region; their production also supports regional data
collection processes and informed decision making.
RENEWABLES INTERACTIVE MAP
The Renewables Interactive Map is a research tool for tracking
the development of renewable energy worldwide. It complements
the perspectives and findings of REN21’s Global and Regional
Status Reports by providing infographics from the reports as well
as offering detailed, exportable data packs.
GLOBAL FUTURES REPORTS (GFR)
REN21 produces reports that illustrate the credible possibilities
for the future of renewables within particular thematic areas.
RENEWABLES ACADEMY
The REN21 Renewables Academy provides an opportunity
for lively exchange among the growing community of REN21
contributors. It offers a venue to brainstorm on future-orientated
policy solutions and allows participants to actively contribute on
issues central to a renewable energy transition.
INTERNATIONAL RENEWABLE ENERGY CONFERENCES
(IREC)
The International Renewable Energy Conference (IREC) is a
high-level political conference series. Dedicated exclusively to
the renewable energy sector, the biennial IREC is hosted by a
national government and convened by REN21.
REN21 COMMUNITY
REN21 is a multi-stakeholder network that spans the private
and public sectors. Collectively this network of renewable
energy, energy access and energy efficiency experts shares its
insight and knowledge, helping the REN21 Secretariat produce
its annual Renewables Global Status Report as well as regional
reports. Today the network has over 800 active contributors and
reviewers.
These experts engage in the GSR process, giving their time,
contributing data and providing comment in the peer review
process. The result of this collaboration is an annual publication
that has established itself as the world’s most frequently
referenced report on the global renewable energy market,
industry and policy landscape
A GLOBAL ENERGY TRANSITION IS WELL UNDER WAY
T he 2017 edition of the REN21 Renewables Global Status
Report (GSR) reveals a global energy transition well under
way, with record new additions of installed renewable energy
capacity, rapidly falling costs, particularly for solar PV and wind
power, and the decoupling of economic growth and energyrelated
carbon dioxide (CO2) emissions for the third year running.
Innovative and more sustainable ways of meeting our energy
needs – through better-integrated sectoral planning, the adoption
of exciting new business models and the more creative use of
enabling technologies – are accelerating the paradigm shift away
from a world run on fossil fuels.
HIGHLIGHTS 2017
n Newly installed renewable power capacity set new
records in 2016, with 161 gigawatts (GW) added, increasing
the global total by almost 9% relative to 2015. Solar PV was the
star performer in 2016, accounting for around 47% of the total
additions, followed by wind power at 34% and hydropower
at 15.5%. For the fifth consecutive year, investment in new
renewable power capacity (including all hydropower) was roughly
double the investment in fossil fuel generating capacity, reaching
USD 249.8 billion. The world now adds more renewable power
capacity annually than it adds in net new capacity from all fossil
fuels combined.
n Cost for electricity from solar PV and wind is rapidly
falling. Record-breaking tenders for solar PV occurred in
Argentina, Chile, India, Jordan, Saudi Arabia and the United
Arab Emirates, with bids in some markets below USD 0.03 per
kilowatt-hour (kWh). Parallel developments in the wind power
sector saw record low bids in several countries, including Chile,
India, Mexico and Morocco. Record lows in offshore wind power
tenders in Denmark and the Netherlands brought Europe’s
industry closer to its goal to produce offshore wind power more
cheaply than coal by 2025.
n 2016 was the third year in a row where global energyrelated
CO2 emissions from fossil fuels and industry
remained stable despite a 3% growth in the global economy
and an increased demand for energy. This can be attributed
primarily to the decline in coal consumption, but also to the
growth in renewable energy capacity and to improvements in
energy efficiency. The decoupling of economic growth and CO2
emissions is an important first step towards achieving the steep
decline in emissions necessary for holding global temperature
rise well below 2 degrees Celsius (°C).
n The myth that fossil and nuclear power are needed to
provide “baseload” electricity supply when the sun isn’t
shining or the wind isn’t blowing has been shown to be false.
In 2016, Denmark and Germany successfully managed peaks
of 140% and 86.3%, respectively, of electricity generation from
renewable sources, and in several countries (Portugal, Ireland
and Cyprus, for example), achieving annual shares of 20-30%
electricity from variable renewables without additional storage is
becoming feasible. The key lesson for integrating large shares of
variable renewable generation is to ensure maximum flexibility in
the power system.
n There has been an upsurge in cities, states, countries and
major corporations committing to 100% renewable energy
targets because it makes economic and business sense, quite
apart from climate, environment and public health benefits. In
2016, 34 additional businesses joined RE100, a global initiative
of businesses committed to sourcing their operations with 100%
renewable electricity. Throughout 2016, the number of cities across
the globe committed to transitioning to 100% renewable energy –
in total energy use or in the electricity sector – continued to grow,
and some cities and communities already have succeeded in this
goal (for example, in more than 100 communities in Japan). Under
the Covenant of Mayors for Climate & Energy, more than 7,200
communities with a combined population of 225 million people
are committed to reducing emissions 40% by 2030, by increasing
energy efficiency and renewable energy deployment. And it is
not only corporations and sub-national actors that are looking
to go 100% renewable. At the climate conference in Marrakesh,
Morocco in November 2016, the leaders of 48 developing nations
committed to work towards achieving 100% renewable energy
supply in their respective nations.
n A paradigm shift is under way in the developing world,
where billions of people still live without access to electricity
(around 1.2 billion) and/or clean cooking facilities (around
2.7 billion). The cumbersome process of providing electricity
access through grid extension alone is becoming obsolete as
new business models and technologies enable the development
of off-grid markets. Markets for both mini-grids and stand-alone
systems are evolving rapidly. Bangladesh, with 4 million units
installed, has the largest solar home system market using mainly
microcredit schemes. Pay-As-You-Go (PAYG) business models,
supported by mobile technology (for example, the use of mobile
phones for bill paying), are exploding. In 2012, investments in
PAYG solar companies amounted to only USD 3 million; by 2016
that figure had risen to USD 223 million (up from USD 158 million
just one year before). This trend started in East Africa and is
quickly spreading to West Africa, as well as to South Asia. The
mini-grid market now exceeds USD 200 billion annually. In 2016,
more than 23 MW of solar PV and wind power based mini-grid
projects were announced.
n The notion that renewable energy is something that only
rich countries can afford is not valid. Most new renewable
energy capacity is being installed in developing countries, mainly
in China, which has been the single largest developer of new
renewable power and heat for the past eight years. With a solar
revolution taking off in India, and with 48 developing countries
now committed to 100% renewable energy goals, the developing
country share of total global renewable energy capacity is likely
to increase further. Moreover, in 2015 developing and emerging
economies overtook industrialised countries in renewable energy
investment for the first time (although industrialised countries
retook the lead in 2016, despite the fact that China remained the
single largest investor). The myth that renewable energy is too
expensive, or that only a handful of rich countries continue to lead
the way, has been discredited. In many cases, renewable power is
now the least-cost option.
n Even in the transport sector, which arguably faces the
greatest challenges in transitioning to a renewable energy
future, major changes are under way. Although policy support
for renewable energy use in the transport sector continues
to focus primarily on biofuel blends, policies to encourage the
purchase of electric vehicles (EVs) are emerging. This is starting
to pay off: global deployment of EVs for road transport, and
particularly passenger vehicles, has grown rapidly in recent
years. In 2016, global passenger EV sales reached an estimated
775,000 vehicles, and more than 2 million of the vehicles were on
the world’s roads by year’s end.
Direct links between renewable energy and EVs, however, remain
limited; many, if not most, EVs are still powered by nuclear and
fossil fuel-generated electricity, with the exception of Norway
where EVs run on hydropower. There are promising signs
nonetheless. Car sharing companies in the United Kingdom and
the Netherlands, for example, have begun offering provisions
to charge vehicles with renewable electricity. And as the share
of renewables in grid power increases, so will the share of
renewables in electrified transport, illustrating that systemic
planning and policy design is needed to link the power and
transport sectors.
With regard to rail transport, which accounts for about 2% of the
total energy used in the transport sector, renewables also are
starting to enter the game. A number of railways implemented
new projects in 2016 to generate their own electricity from
renewables (e.g., wind turbines on railway land and solar panels
on railway stations), notably in India and Morocco.
n Despite slow progress in the heating and cooling sector,
there have been some positive developments. The use
of solar process heat continued to increase in the food and
beverage industry as well as in the mining industries, and has
expanded into other industries as well. Solar thermal is being
incorporated into district heating systems at significant scales,
with several large projects in some European countries, with
Denmark currently in the lead. Several European Union (EU)
countries also have expanded use of geothermal district heating
plants, and interest is growing in the use of district heating to
provide flexibility to power systems, by converting renewable
electricity into heat.
n Finally, enabling technologies are facilitating and
advancing the deployment of renewable energy (and
are discussed in the GSR for the first time in 2017 given their
increasingly important role). ICT (information and communication
technology), storage systems, EVs and heat pumps – to name a
few – are facilitating and advancing the deployment of renewable
energy. Even though these technologies were not developed for
this purpose originally, they are showing tremendous capacity to
facilitate greater system integration and more effective demand
response.
Storage, in particular, is starting to receive a lot of attention,
given its potential for providing additional flexibility to the power
system. It is taking off in a limited number of markets, but it is
still small in scale. In 2016, approximately 0.8 GW of new nonpumped
energy storage capacity became operational – mostly
consisting of battery (electrochemical) storage but also some
CSP thermal storage capacity – bringing the year-end total to
an estimated 6.4 GW. This amount complements an estimated
150 GW of pumped storage capacity in operation worldwide.
Most of the growth took place in battery (electro-chemical)
storage, with innovations being driven largely by the EV
industry. Storage systems increasingly are being integrated into
large-scale utility projects, and are being used by homeowners
to store electricity generated by rooftop solar PV systems.
DRIVERS FOR RENEWABLE
ENERGY DEPLOYMENT
Mitigation of climate change has been the primary
rationale behind calls for a 100% renewable energy
future. But the CO2 reduction benefit of renewables is by
no means the only driver for their deployment.
In many countries, reducing local air pollution – and
the health problems that it causes – is a key driver. China,
for example, announced in early 2017 that it would invest
CNY 2.5 trillion (USD 360 billion) in renewables by 2020,
due largely to the massive air pollution problems in major
Chinese cities caused by coal-fired power plants.
Energy security is another important driver. Senior
officials in the US military, for example, have called for
increased use of renewable power and fuels as a matter
of national security, and for the security of the military’s
own operations. Energy security also is being considered
more widely in the context of increasing energy system
resilience in the face of anticipated climate change
impacts.
Costs of some renewable technologies are coming down
quickly, particularly in the power sector. Innovations in
solar PV manufacturing and installation, improvements
in wind turbine materials and designs, and advances in
thermal energy storage for CSP – to name a few – have
contributed to overall cost reductions. In many countries,
renewables are now cost-competitive with new fossil
fuel and nuclear sources, and even more so if distorting
subsidies are taken into account (renewables receive
only one-quarter of the subsidies given to fossil fuels).
Finally deployment of renewables creates local value
and jobs. With economies around the world facing low
growth, the renewable energy sector offers a way to
increase income, improve trade balances, contribute to
industrial development and create jobs. Analysis shows
that countries with stable renewable energy policy
frameworks benefit most from the local value that this
sector generates.
BUT THE TRANSITION IS NOT HAPPENING FAST ENOUGH
Despite these positive trends, the pace of the transition is not on
track to achieve the goals established in the ground-breaking
Paris Agreement adopted in December 2015. The Paris
Agreement commits governments collectively to keep global
temperature rise well below 2°C compared with pre-industrial
levels, with the aim of holding it to a safer limit of 1.5°C. To this
end, during 2016, 117 countries adopted Nationally Determined
Contributions (NDCs), 55 of which featured renewable energy
targets and 107 of which featured energy efficiency targets. Yet
the sum total of national pledges would take us well over the
2°C threshold, with best estimates ranging between 2.3°C and
3.5°C.
With the right policies in place, the power sector could be
emissions-free by mid-century. But the distinction between
“electricity” and “energy” often is confused in the public
discourse; the energy market actually comprises three major
segments: electricity, transport, and heating and cooling. And
progress in the transport and heating and cooling sectors lags well
behind the tremendous growth of renewables in the power sector.
The Sustainable Energy for All (SEforALL) initiative aims at
providing sustainable energy access for all people, doubling the
share of renewables (from 18% in 2010 to 36% by 2030) and
doubling the global rate of improvement in energy efficiency by
2030 (over 2010 levels). Put simply, a renewable energy future
will not be achievable in the absence of dramatic improvements
in energy efficiency. Fortunately, energy efficiency measures
implemented over the last 25 years have saved an amount of
energy equivalent to the total current demand of China, India
and Europe combined. From 1990 to 2014, global primary energy
intensity declined at an average annual rate of 1.5%, and by 2015
energy intensity was more than 30% lower than it was in 1990.
In 2015 – the latest year for which data were available at the time
of GSR publication – global primary energy intensity improved
2.6% over the previous year, bringing the average annual rate
of improvement between 2010 and 2015 to 2.1%. This was an
important achievement, but energy intensity will need to be
improved by 2.6% annually (on average) starting in 2017 if the
SEforALL energy efficiency goal is to be met. For every year we
lag behind this average rate, we will need to compensate with
even higher rates of improvement in future years.
AND NOT AS FAST AS IS POSSIBLE
Investments Were Down
Although global investment in new renewable power and fuel
capacity was roughly double that in fossil fuels, investments in
new renewable energy installations (not including hydropower
larger than 50 MW) were down 23% compared to 2015.
Among developing and emerging countries, renewable energy
investment fell 30%, to USD 116.6 billion, while that of developed
countries fell 14% to USD 125 billion. The overall lower level of
investment in 2016 was due largely to the slowdowns in the
Chinese and Japanese markets and in other emerging economies,
notably India and South Africa (the latter due mainly to a delay in
renewable energy auctions).
China is still responsible for the largest level of investment
(32% of all financing of renewable energy worldwide, excluding
hydropower projects larger than 50 MW). But following a record
level of investment in 2015, investments in 2016 were diverted in
part to grid improvements and to reforms in the power market
in order to better utilise existing renewable energy resources. In
January 2017 the Chinese government announced that it would
spend USD 360 billion through 2020, reinforcing its position as
the world leader in renewable energy investments.
In Japan, there was a push to develop renewable power in
the wake of the 2011 Fukushima nuclear disaster. In practice,
however, utilities showed resistance to this transition, and in the
case of wind power, procedural delays were put into place which
prevented the market from developing. A shift in policy from a
generous feed-in tariff to tendering led to a nearly 70% decline
in investment in small-scale, renewable power capacity in 2016.
Slow Progress in Heating and Cooling
As noted earlier, the heating and cooling sector lags far behind
the power sector in the renewable energy transition. Energy
used for heat (water and space heating, cooking and industrial
processes) accounted for more than one-half of total world final
energy consumption in 2016, of which renewables comprised
around 25%. But more than two-thirds of the renewable
share consists of traditional biomass (used predominantly in
the developing world for cooking and heating), which often is
harvested unsustainably and is highly polluting and damaging
to health when burned inefficiently. More than 4 million
people die prematurely from illness attributable to household
air pollution from cooking with solid fuels. Heat supplied by
modern renewable energy sources is used largely for industrial
purposes (56%).
Space cooling, most of which is supplied by electrical
appliances, accounts for only about 2% of total world final energy
consumption. The demand for thermal renewable energy-based
cooling technologies generally has not kept pace with the rising
demand for cooling.
The deployment of renewable technologies in the heating and
cooling sector remains a challenge in light of the unique and
distributed nature of this market. High up-front investment costs
and competition with low-cost (subsidised) fossil fuels continue
to impede the deployment of renewable heat. Lack of effective
policies and political will contribute to slow renewable energy
uptake.
Progress also is constrained by additional factors which could be
overcome with effective policy support and political will, including
limited awareness of the technologies, and fossil fuel subsidies
which keep fossil fuel prices artificially low. In developing
countries in particular, despite significant potential for the use of
renewables in heating, the lack of installation know-how remains
an important barrier, particularly for industrial-scale heat.
Transport – Especially Aviation and Shipping – Lags
Behind in the Renewable Energy Transition
The scaling-up of renewables in the transport sector is slow.
Despite some progress – in particular rapid development of the
EV market – oil products still account for around 93% of final
energy consumption in transport. The international community
focused increased attention on decarbonisation of the transport
sector following the adoption of the Paris Agreement, but only
22 of the NDCs refer specifically to renewable energy in the
transport sector, and only 2 of these (Niue and New Zealand)
reference the need for EVs to be powered by renewable energy.
Efficiency, optimisation and switching modes of transport
– i.e., from individual cars to mass transit – are key levers
for decarbonising the transport sector. Renewables-based
decarbonisation of the transport sector, however, is not yet
being seriously considered, or seen as a priority.
Barriers to electrification in the road transport sector continue
to include relatively high EV vehicle costs, perceived limits to
range and battery life, and a lack of charging infrastructure. In the
developing world, additional barriers relate to the lack of a robust
electricity supply. Moreover, the focus in developing countries
often is to establish basic transport infrastructure. While this
is clearly a genuine need, renewable energy-based solutions
should be integrated in planning processes (which often is not
the case currently).
With regard to rail transport, the renewable electricity share in
the total energy mix of the world’s railways increased from 3.4%
in 1990 to around 9% in 2013, with some countries reaching
much higher penetrations. While urban rail infrastructure and
service are already largely electrified, the electrification of longdistance
rail requires major infrastructure change and related
financing.
Biofuels will be needed increasingly not only for road transport,
but also for shipping and aviation, as these sectors are
difficult to electrify. Fuels need to be adapted for each of
these applications and for different types of engines. Despite
continued strong interest in the development of aviation
biofuels, the quantities produced in 2016 remained relatively
small and mostly for demonstration use. Likewise, biofuel
production for maritime use is in its infancy.
At the international level, the International Civil Aviation
Organization agreed in 2016 to establish a global market-based
measure to reduce CO2 emissions from aviation, including
specifications for advances in the production and use of
sustainable aviation fuel; however, progress in decarbonising
the aviation sector is moving very slowly. The shipping
sector also has yet to address its emissions. Even with lower
carbon intensity of individual ships, global emissions will keep
increasing with growing global trade and transport services.
Nonetheless, a number of significant developments emerged
in 2016. Some governments, mostly in Europe, began looking
at medium- to long-term strategies to decarbonise the
transport sector, often involving long-term structural changes;
many also considered or developed strategies to more closely
link the transport and electricity sectors. Germany’s climate
action plan, developed in 2016, aims to reduce emissions in
transport 40-42% by 2030, with a longer-term objective of fully
decarbonising the sector.
Fossil Fuel Subsidies Continue to Impede Progress
Overall
Finally, a major barrier to the rapid uptake of renewables
more generally is the continued subsidising of fossil fuels (and
nuclear power), despite many international commitments to
phase them out. By the end of 2016 more than 50 countries
had committed to phasing out fossil fuel subsidies, and some
reforms have occurred, but not enough. In 2014 the ratio of fossil
fuel subsidies to renewable energy subsidies was 4:1. In other
words, for every USD 1 spent on renewables, governments
spent USD 4 perpetuating our dependence on fossil fuels. This
is distorting the market in very unproductive ways.
HOW TO SPEED THE TRANSITION
1) Fossil fuels must be left in the ground if the world is
serious about meeting its climate commitments.
China announced in January 2017 that it was cancelling more
than 100 coal-fired power plants currently in development, and
then announced in May that it was suspending the construction
of new coal plants in 29 out of 32 provinces. These measures
demonstrate how quickly change can happen when there is the
political will to do so. Phasing out coal in favour of renewables
(combined with increasing energy efficiency) would be the single
most cost-effective way to reduce CO2 emissions, with added
benefits for health.
As governments get serious about addressing climate change,
the risk that coal and other fossil fuel investments could become
stranded assets is increasing.
2) Rather than investing in fossil or nuclear “baseload”
power, efforts should focus on developing dispatchable
renewable energy and mobilising flexibility options to
manage higher shares of variable renewables.
How to do this varies depending on local circumstances: whether
demand for power is stable and the grid is well-developed (and
inter-connected); whether demand is increasing and supply is
being augmented with greater shares of wind and solar power;
whether there is already a surplus of supply so that on cloudy
or windless days the system can continue to operate normally;
whether demand is increasing rapidly (as in many developing
countries) but the basic system is not yet well developed; and
so forth.
In developing countries, with effective planning, a package
of complementary measures can be designed for maximum
flexibility at the outset. For existing systems, flexibility measures
can include: managing shorter trading times; matching demand
more carefully with supply; establishing grid interconnections;
investing in storage solutions; utilising automation technologies;
and planning for sectoral integration (for example, by charging
EVs during the day to take advantage of power produced from
solar PV and wind power plants that exceeds electricity demand).
In general, policies should be developed that support and
integrate coupling among the power, transport, and heating and
cooling sectors. This requires that planning be conducted across
sectors and across government departments and ministries.
Policy design should be done in close dialogue with the public
and private sectors, and policies at different levels of government
should be complementary and mutually reinforcing.
3) As efforts intensify to provide modern energy
services to the billions of people who lack access,
it is crucial that renewable energy and enabling
technologies aimed at maximum system flexibility
are prioritised, and that the most energy-efficient
technologies are utilised.
There should be increased support for distributed renewable
energy technologies as well as more attention to developing
national policies that serve to strengthen local capacity,
particularly in the heating and cooling sector given its large
reliance on local resources. In 2015, financing for energy
access and distributed renewable energy programmes
accounted for less than 16% of all energy investments
(USD 3.1 billion out of USD 17.4 billion of total investment).
Given the urgency of achieving energy access for all,
investment in these areas should be increased dramatically.
Moreover, governments should create an enabling
environment that allows businesses to seize opportunities,
particularly in serving people who otherwise might not gain
access. It is essential that governments eliminate a range of
barriers that hinder further development, including (among
other things): policy and energy planning uncertainty; lack
of access to finance for both companies and consumers;
subsidies for kerosene and diesel, which disadvantage
renewable alternatives; fiscal and import barriers, which
serve to increase prices (for example, import tariffs and
value-added tax); scarcity of information and assurance for
investors; and the lack of product standards to ensure the
quality and reliability of products.
KEY PLAYERS DRIVING THE
RENEWABLE ENERGY TRANSITION
While many renewable energy pioneers – including the United
States and several countries in Europe – continue to play an
important role in the renewable energy transition, new key
players have emerged:
Emerging economies: China is the world’s renewable
energy heavyweight champion, having been the single largest
developer of renewable power and heat for the past eight
years. In 2016, an ever-growing number of developing countries
continued to expand their renewable energy capacities, and
some are rapidly becoming important markets. Emerging
economies are quickly transforming their energy industries
by benefiting from lower-cost, more efficient renewable
technologies and more reliable resource forecasting, making
countries such as Argentina, Chile, China, India and Mexico
attractive markets for investment.
Corporations: A growing number of corporations is
committing to powering their operations with 100%
renewable electricity. The significance of the commitment of
companies such as Google and Facebook, which use massive
quantities of electricity to power their data centres, should
not be underestimated. By negotiating advance purchase
agreements and direct investments, their renewable energy
commitments have spurred billions of dollars in investments
in new renewable power projects.
Cities: Cities are playing an increasingly important role in
driving the renewable energy transition, whether they are
doing it to meet climate change mitigation goals or to reduce
local sources of air pollution or to create jobs. In 2014, cities
accounted for 65% of global energy demand, and each city
is faced with its own unique challenges and opportunities.
Some cities consume much of their energy in the buildings
and transport sectors, while in others, large industrial sectors
account for the majority of energy use. Municipal policy makers
can use purchasing and regulatory authority to, for example,
transition public transportation fleets to renewable fuel or
renewably powered EVs, install solar panels on municipal
buildings, set local building codes, mandate the use of solar
water heaters and enact energy efficiency standards.
MARKET AND INDUSTRY DEVELOPMENTS
Biomass energy
Global production of biodiesel recovered after a decline in 2015.
There was continuing growth in bio-power production, notably
in the EU and in Asia, particularly in the Republic of Korea.
Use of hydrotreated vegetable oil (HVO) and biomethane in
transport grew over the course of 2016. Both global bio-power
capacity and generation increased by an estimated 6% in
2016, while growth in the use of modern bioenergy for heating
has slowed in recent years, to around 1% per year.
Geothermal
Globally, geothermal power produced an estimated
78 terawatt-hours over the course of 2016. However, the
industry continues to be burdened by the inherent high
risk of exploration and project development as well as the
associated lack of risk mitigation. The year ended with
Indonesia and Turkey adding the bulk of new geothermal
power capacity, and several countries in Europe completed
new or expanded geothermal district heat systems.
Hydropower
Improved hydrological conditions in the Americas and Asia
improved hydropower production. New capacity was added
in a number of countries, including China, Brazil, Ecuador,
Ethiopia, and Vietnam. Although China’s domestic market
continued to contract, it added far more capacity in 2016
than did any other country. Climate risk continues to remain
a pressing concern.
Ocean energy
While more companies around the world advanced ocean
energy technologies and deployed new and improved
devices, the industry continues to face perennial challenges.
Chief among these is financing due to relatively high risk
and high upfront costs and the need for improved planning,
consenting and licensing procedures.
Solar photovoltaics (PV)
Solar PV was the world’s leading source of net additions to
power generating capacity in 2016, with the equivalent of
more than 31,000 solar panels installed hourly. At least 17
countries had enough solar PV capacity by year’s end to meet
2% or more of their electricity demand, and several countries
saw far higher shares. The year also saw unprecedented
price reductions, particularly for modules.
Concentrating solar thermal power (CSP)
All three new CSP facilities that came online in 2016
incorporated thermal energy storage (TES), which allows
them to provide dispatchable power, meaning that they can
provide power at periods of peak demand. While CSP saw
the lowest annual growth rate in total global capacity in 10
years, the sector is on a strong growth trajectory with as
much as 900 MW expected to enter operation in 2017. CSP
also is receiving increased policy support in countries with
limited oil and gas reserves, constrained power networks, a
need for energy storage, or strong industrialisation and job
creation agendas.
Solar thermal heating and cooling
Deployment of solar thermal heating and cooling
technologies continued its global expansion in 2016, with
sales picking up in several new emerging markets, including
Argentina, the Middle East, and parts of Eastern and Central
Africa. For larger, established markets, however, 2016 was
challenging for several reasons, most notably low oil and gas
prices. China kept its lead, accounting for approximately 75%
of global additions.
Wind power
Top turbine manufacturers had a good year in 2016, and
technology innovation continued in the face of competition
from low-cost natural gas and, increasingly, from solar PV.
New markets continued to open around the world. By year’s
end, more than 90 countries were active in developing wind
power projects. Offshore wind saw the first commercial
projects come online in the Republic of Korea and the
United States, and substantial new capacity was added in
Germany, the Netherlands and China. At least 24 countries
met 5% or more of their annual electricity demand with
wind power in 2016, and at least 13 met more than 10%.
4) Policy matters: A system approach is needed across all
sectors.
Policy support for renewables in 2016, as in past years, focused
mostly on power generation, whereas policies for the heating and
cooling and transport sectors has remained virtually stagnant.
This has to change: strong policy support for all three pillars of
the sustainable energy transition is needed if we are to achieve
the goals set out in the Paris Agreement. Policy support can take
many forms, at both the national and sub-national levels: targets;
feed-in policies; auctions (also called competitive bidding or
tenders); regulatory mandates; changes in building codes; fuel
efficiency standards; and grants, loans and subsidies. Regardless
of the chosen policy framework, transparency and stability are
essential.
Several specific policy recommendations should be emphasised:
n A systemic approach: First and foremost, as the share of
renewable energy grows to significant levels in a country or
region, a systemic approach will be needed. Conversations about
how to integrate high shares of variable renewable energy into
the power system clearly benefit from looking beyond the narrow
confines of a single grid, a single country, a single city or a single
sector – as many have begun to do. In a systemic approach, what
constitutes a renewables-based energy system moves beyond
the traditional, narrow construct of renewable energy sources
(wind, solar, hydropower, etc.) to a broader definition which
includes supporting infrastructure such as transmission and
distribution networks; supply and demand balancing measures,
including through efficiency measures and sector coupling (for
example the integration of power and transport networks); and
a wide range of enabling technologies. The systemic approach
should become the norm in energy and infrastructure planning,
financing and policy development.
n Power: Many countries are shifting away from feed-in policies
and replacing them with auctions aimed at deploying large-scale
renewable energy projects. This approach has greatly reduced
prices of renewable power, although in some cases, due to
scheduling delays, it has had negative consequences, such as
reducing market continuity and increasing market insecurity.
The continuously delayed energy auctions in South Africa, for
example, caused serious problems for the national renewables
industry. It is crucial to link energy planning, policy design/
formulation and industry development if such consequences are
to be avoided. By taking a more strategic approach to energy
planning, and ensuring the long-term predictability of auction
schedules, continuous market opportunities can be created. This
will help in developing a strong renewable power industry around
which skills can be built and local value can be created. It also is
important to support the deployment of distributed and locally
owned renewable energy projects.
n Transport: Policy support for improving the sustainability of
transport traditionally has focused on increasing energy efficiency
and expanding the use of biofuels (including advanced biofuels
for aviation and maritime transport). Governments should set
clear policies to: facilitate research and market opportunities for
advancing the development of sustainable biofuels; ensure that
the rapid expansion of the EV fleet is powered by renewable
sources of electricity (including by integrating EVs into the suite
of flexible options for incorporating higher shares of variable
renewable energy into the grid); expand mandates and financial
support for sustainable biofuels; and incorporate the use of
advanced biofuels for aviation, rail and maritime transport
in broader strategies to advance the use of bioenergy in the
transport sector.
n Heating and cooling: In 2016, policy makers continued to
focus on financial incentives in the form of grants, loans or tax
incentives as well as mandates and building codes to increase
deployment of renewable heating and cooling technologies. Some
countries enacted policies designed to advance technological
development. In addition, some governments have used FITs
and tendering mechanisms, mainly focused on the buildings
sector and in many cases including links to energy efficiency.
Despite positive developments in a number of countries, the
renewable heating and cooling sector faced a great deal of policy
uncertainty. The single most important thing that governments
can do for this sector is to establish long-term policy certainty to
facilitate increased investment.
n Energy access:
As in the power sector,
an integrated process
that links energy planning, policy
formulation and industrial development
is essential for ensuring that a range
of needs can be met in the most efficient and
sustainable way. Developments around distributed
renewable energy show that the old paradigm of energy
access through grid extension alone is becoming obsolete. To
accelerate energy access, it is important that policy makers look
to the future so that a stable, off-grid, decentralised market can
form and the industry can develop.
A variety of policies can be used to accelerate the paradigm
shift: establishing specific distributed renewable energy targets
alongside electrification and renewable energy targets to be
implemented within a certain time frame; integrating stand-alone
solutions, in particular mini-grids, into national electrification
plans; establishing a clear policy framework for accessing finance
that reflects this newer approach; and measures for upholding
quality standards.
POLICY DEVELOPMENT IN 2016
Nearly all countries adopted or had existing policies in 2016
to support the development and deployment of renewable
energy technology. These included energy efficiency
and renewable energy targets, direct (financial) support
policies, and policies to facilitate the integration of variable
renewable generation into national energy systems.
Power: Renewable energy auctions were held in
34 countries in 2016 – more than double the year
before – with Malawi and Zambia holding their first auctions.
Auctions are the most rapidly expanding form of support for
renewable energy project deployment and are becoming
the preferred policy tool for supporting deployment of largescale
projects.
Transport: As of the end of 2016, biofuel blend
mandates existed in 68 countries at the national/
sub-national level, with Argentina, India, Malaysia, Panama
and Zimbabwe having added or revised mandates, and
Denmark adopting an advanced biofuels mandate.
Heating and cooling: Several countries enacted
new financial support mechanisms for renewable
heating and cooling or revised existing ones, including
Bulgaria, Chile, Hungary, Italy, the Netherlands, Portugal,
Romania, the Slovak Republic and the United States.
Energy efficiency: By the end of 2016, at least 137 countries
had enacted some kind of energy efficiency policy, including
48 countries that adopted new or revised policies during the
year. New or revised energy efficiency targets also have been
adopted in all regions of the globe: 149 countries have one or
more energy efficiency targets in place; 56 of these countries
adopted new targets since 2015.
Jobs: In some major markets, job losses followed policy
changes, a decrease in investment and rising automation.
Even so, global employment numbers rose due to record
deployment of renewables (particularly solar PV) in 2016. The
global total number of jobs in renewable energy – including
large-scale hydropower – has now reached 9.8 million. Jobs
in renewables excluding large-scale hydropower increased
by 2.8% in 2016.
PERSISTENT CHALLENGES
Policy remains focused primarily on the power sector. At
the national/sub-national level, regulatory policies in the
power sector exist in nearly twice as many countries as in
the transport sector, and in six times as many countries as in
the heating and cooling sector.
Transport: The number of countries with biofuel blending
mandates has remained basically flat, with the total number
of countries implementing this policy having increased by
only two since 2015. Additionally, comprehensive transport
policies linking renewables and EVs are not progressing
rapidly.
Heating and cooling: The number of countries with
renewable heating obligations remains at 21, making 2016
the third year in a row that not a single new country adopted
this policy.
Energy efficiency: Although many countries have adopted
energy efficiency targets, several still lack policies to achieve
them, particularly in developing countries. Furthermore,
policies that support energy efficiency and renewables are
not sufficiently integrated globally.
MAKING THE CONNECTIONS
Good decisions require up-to-date information. The Renewables
Global Status Report (GSR) tracks the annual development of
renewables, using the most up-to-date information and data
available. Its neutral, fact-based approach documents in detail
the annual developments in market, industry and policy. The
report is a collaborative effort, drawing on an international
network of more than 800 authors, contributors, and reviewers
from over 155 countries. Now in its twelfth year the GSR is the
most frequently referenced report on renewable energy market,
industry, and policy trends.
Advancing the Global Renewable Energy Transition:
Highlights of the REN21’s Renewables 2017 Global Status
Report in Perspective is a complementary publication to help
decision makers understand the evolution of the renewable
energy sector in the context of the overall energy transition.
It looks at positive developments that occurred over the
past year, notes areas where progress is lagging and offers
recommendations for how to speed up the energy transition
with renewables.
While the Renewables Global Status Report series provides a
real-time snapshot of what is happening, REN21’s Renewables
Global Futures Report series presents thinking about how
a renewable energy future will evolve. This series presents a
range of credible possibilities for the future of renewable energy.
It does not present just one vision of the future, but rather a
full and objective range of visions, based on the collective and
contemporary thinking of many.
Collectively these reports illustrate the distance between where
we are now and what needs to happen if an energy transition
with renewables is to be achieved.
The Renewables Global Futures Report: Great debates
towards 100% renewable energy was released in
April 2017. The report documents global views about the
feasibility of achieving a 100% renewable energy future
by mid-century. While there may be agreement that we
need to decarbonise our energy system, there is no one
way to achieve this; what works in one country does not
necessarily work in another. The report analyses the views
of over 110 renowned energy experts from around the world
who were interviewed over the course of 2016. It does not
predict the future. The report is meant to spur debate about
the opportunities and challenges of a 100% renewable
energy future and, in turn, to support good decision making.

Source: REN21
Anand Gupta Editor - EQ Int'l Media Network

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