10th June 2017
Record-breaking year for renewable energy
As the price of installation continues to fall, renewable power has set another new record, with 161 gigawatts (GW) being added in 2016 – increasing total global capacity to more than 2 terawatts (TW).
Renewable Energy Policy Network for the 21st Century (REN21) this week published its Renewables 2017 Global Status Report (GSR), the most comprehensive annual overview of the state of renewable energy.
The report finds that additions of installed renewable power capacity set new records in 2016, with 161 gigawatts (GW) added, increasing total global capacity by almost 9% over 2015, to nearly 2,017 GW. Solar PV accounted for about 47% of capacity added, followed by wind power at 34% and hydropower at 16%.
In a growing number of countries, renewables are becoming the least cost option. Recent deals in Denmark, Egypt, India, Mexico, Peru and the UAE saw renewable electricity being supplied at $0.05 per kilowatt-hour or less. This is well below equivalent costs for fossil fuel and nuclear generating capacity in each of these countries. Auctions are increasingly able to rely only on the wholesale price of power, without the need for government subsidies.
The inherent need for "baseload" is a myth, according to the report. Integrating large shares of variable renewable generation can be done without fossil fuel and nuclear baseload with sufficient flexibility in the power system – through grid interconnections, sector coupling and enabling technologies such as ICT, storage systems, electric vehicles and heat pumps. This sort of flexibility not only balances variable generation, it also optimises the system and reduces generation costs overall. It should come as no surprise, therefore, that the number of countries successfully managing peaks approaching or exceeding 100% electricity generation from renewable sources is on the rise. In 2016, Denmark and Germany, for example, successfully managed peaks of renewables-based electricity of 140% and 86.3%, respectively.
Global CO2 emissions from fossil fuels and industry remained stable for a third year in a row, despite 3% growth in the global economy and an increased demand for energy. This can be attributed mainly to the decline of coal, but also to the rapid growth in renewable energy capacity and improvements in energy efficiency.
Other positive trends include:
• Innovations and breakthroughs in storage technology, which increasingly provide additional flexibility to the power system. In 2016, around 0.8 GW of new advanced energy storage became operational, bringing the year-end total to 6.4 GW. As shown in the graph below, grid-connected battery storage grew by 50% to over 1.7 GW.
• Markets for mini-grids and stand-alone systems are evolving rapidly, and Pay-As-You-Go (PAYG) business models, supported by mobile technology, are now exploding. In 2012, investments in PAYG solar companies amounted to only $3 million; by 2016 that figure had risen to over $223 million (up from $158 million during 2015).
"The world is now adding more renewable power capacity each year than it adds in new capacity from all fossil fuels combined," says Arthouros Zervos, Chair of the REN21. "One of the most important findings of this year's GSR, is that holistic, systemic approaches are key and should become the rule rather than the exception. As the share of renewables grows, we will need investment in infrastructure as well as a comprehensive set of tools: integrated and interconnected transmission and distribution networks, measures to balance supply and demand, sector coupling (for example the integration of power and transport networks); and deployment of a wide range of enabling technologies."
Despite these encouraging trends, however, the energy transition is not happening fast enough. To achieve the goals of the Paris Agreement, an even greater acceleration of clean tech will be required. Investment continues to be heavily focused on wind and solar PV – however, all renewable energy technologies need to be deployed in order to keep global warming below 2°C.
Transport, heating and cooling sectors continue to lag behind the power sector. 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. Renewables-based decarbonisation of the transport sector is not yet being seriously considered, or seen as a priority. Despite a significant expansion in the sales of electric vehicles, primarily due to the declining cost of battery technology, much more needs to be done to ensure that sufficient infrastructure is in place and that they are powered by renewable electricity. While the shipping and aviation sectors present the greatest challenges, government policies or commercial disruption have not sufficiently stimulated the development of solutions.
Fossil fuel subsidies continue to impede progress. Globally, subsidies for fossil fuels and nuclear power continue to dramatically exceed those for renewable technologies. 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. The ratio of fossil fuel subsidies to renewable energy subsidies is 4:1. For every $1 spent on renewables, governments spend $4 perpetuating our dependence on fossil fuels.
Christine Lins, Executive Secretary of REN21, explains: "The world is in a race against time. The single most important thing we could do to reduce CO2 emissions quickly and cost-effectively, is phase-out coal and speed up investments in energy efficiency and renewables. When China announced in January that it was cancelling over 100 coal plants currently in development, they set an example for governments everywhere: change happens quickly when governments act by establishing clear, long-term policy and financial signals and incentives."
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