REN21 - Renewable Energy Prospects

Expert views on long term energy development are becoming increasingly demanded and are relevant far beyond energy policy. The way renewables are presented in future scenarios - and especially in the most widely recognised ones - has important political implications. Underestimated renewable energy scenarios may misguide policy makers about how high the potential of renewables really is. This could lead to a lack of political action - and ultimately turn the erroneous scenario into reality through self-fulfilling prophecy.

In September 2007, REN21 presented an intermediate report on Renewable Energy Potentials in Large Economies to the Gleneagles Dialogue on Climate Change, Clean Energy and Sustainable Development. Building on the huge technical potential for renewable energy, which takes into account the primary resources, the socio-geographical constraints and the technical losses in the conversion process, the intermediate report argues that from now, RE technologies should be given priority in incremental and replacement investment in the power and heat energy sector. A special background report by Ecofys provides an extensive literature assessment on the global potential and cost of renewable energy sources. Another background paper by DLR provides in-depth information on the methodology and results of this assessment.

The Centre for Resource Solutions carried out an Link to an external resource

analysis of recently published energy scenarios for the IEA Implementing Agreement on Renewable Energy Technology Deployment (RETD). This analysis tries to explain why certain scenarios expect larger shares of renewable energy than others, in order to recommend appropriate assumptions crucial to the role of renewable energy.

In an article for Annual Review of Environment and Resources 2007, Eric Martinot and others have reviewed a large number of Link to an external resource

Renewable Energy Futures: Targets, Scenarios, and Pathways.

Some scenarios, prospects and proposals with a strong impact on energy, environment and development policies globally merit special treatment:

The International Energy Agency (IEA) annually published the World Energy Outlook (WEO) with a time horizon of 25 years, currently until 2030. The WEO is a forward-looking exercise based on assumptions on economic development and energy prices, and provides two scenarios for different policy assumptions. In 2006, the IEA also published Energy Technology Perspectives to 2050 (ETP), which explores technological options. A new version of the ETP will be published in 2008. The future role assigned to renewable energy in the various scenarios is very different.

The Link to an external resource

World Energy Outlook 2007 is - like its predecessors - an exercise to elaborate energy 'futures' until 2030 from today's situation and perceptions. It is assumed that world economic growth will be healthy in real terms and that world real GDP in 2030 is approximately 2.5 times the GDP of 2005. The oil price is assumed to be rather stable in real terms around USD 60 per barrel. In the Reference Scenario (RS), no significant new policy initiatives are assumed, which leads to a 55% growth of world primary energy demand. 84% of the increase is provided by fossil fuels... and world energy related CO₂ emissions increase by 57% to 41.9 Giga tons. Compared to WEO 2006, most numbers are somewhat higher, electricity generation by almost 5%. Only traditional biomass consumption and nuclear power generation have been reduced marginally; renewable energy outlook is 2-10% higher. With respect to primary energy, the share of renewables in the RS does not evolve from today's 13%. Higher use of new renewables would merely compensate decreasing use of traditional renewable energy fuels.

In the Alternative Policy Scenario (APS) the IEA assumes policies to be implemented which are already under consideration in the national energy policy pipelines. This would reduce primary energy demand in 2030 by 10.9% and electricity generation by 11.7% . It would also cut (in comparison to the reference case) fossil fuel consumption by 26% (coal) and 12-13% (oil and gas), and boost the input of renewables across the board, as well as nuclear energy. In the APS, renewables attain a share of 17% in primary energy. If instead of the IEA energy conversion methodology the so-called partial substitution accounting methodology was applied, renewables share would account for over 21%. In the APS, the WEO predicts a share of renewable energy in electricity generation of 29% by 2030, up from 18% in 2005. Renewables overtake gas to become the second largest sources of electricity after coal. Renewables account for 43% of incremental power generation between 2005 and 2030. In transport, global biofuel consumption increases from 19-164 Mtoe. This number is up from 102 Mtoe in the RS.

Like in 2006, IEA again qualifies the projection of the Energy Outlook as unsustainable. In an attempt to identify what changes would be required to bring energy related CO₂ emissions down to 23 Giga tons, the WEO 2007 brings a new scenario, called the 450 Stabilization Case. The large emission savings would come mainly from improved efficiency, the switch in electricity generation to renewables (more than 40%), nuclear and coal carbon-capture-and-sequestration (CCS), , and the doubling of biofuel use to 330 Mtoe, mainly expected from lignicellulosic feedstock.

In the WEO 2006, IEA had offered a brief discussion of "beyond alternative policies scenario" (BAS) which would be necessary to reduce CO₂ emissions. The results of the 450 Stabilization Scenario are more specific than the results of the 2006 BAS, and renewables' contribution is higher.

In an exercise requested by the Parties of the UN Framework Convention on Climate Change (UNFCCC), the UNFCCC Secretariat carried out an Link to an external resource analysis of existing and potential investment and financial flows for climate change mitigation and adaptation. In the mitigation scenario, built upon the Beyond Alternative Policy Scenario of IEA's WEO 2006, investment in renewable energy power generation in 2030 is higher than in any other generation technology, including coal and its CCS.

In Link to an external resource Energy Technology Perspectives (ETP), the IEA explores the possibilities to restructure energy demand and supply in a way that the CO₂ emissions return to their current level by 2050. The IEA finds that this is technologically and economically feasible. While the IEA points to energy efficiency as a top priority, the role of renewables is considered significant. In the ETPs TECH-plus Scenario, the share of renewables accounts for more than 35% of electricity generation in 2050, up from 18% today. This can, according to IEA, only be implemented in a stable policy environment that promotes low-carbon options.

In January 2007, Greenpeace, in cooperation with the European Wind Energy Council (EREC) launched Link to an external resource energy (r)evolution, a global energy scenario to 2050. Designed as a practical blueprint, this backcasting exercise explores the possibility to cover the growing energy demand without using nuclear energy or CCS and yet reduce CO₂ emissions by 50% as required in order to limit climate change. The resulting scenario, distinguishing 10 world regions, is considered feasible. Much higher energy efficiency is the prerequisite for an energy supply structure which is dominated by renewable energies. In addition to the global scenario, Greenpeace and EREC also publish national and regional scenarios.

In July 2007, Greenpeace and EREC delivered Link to an external resource futu(r)e investment, an estimate of the investment requirements to implement their global energy scenario, maintaining that requirements for this scenrio would be significantly lower than in the business as usual fossil fuel and nuclear scenario.

In May 2007, WWF published its vision for 2050 Link to an external resource Climate Solutions. It concludes that "the technologies and sustainable energy resources known or available today are sufficient" to meet "the more than doubling of global energy demand projected by 2050, while avoiding dangerous climatic change of more than two degrees Celsius above pre-industrial levels", and that "there is still sufficient time to build up and deploy them, but only if the necessary decisions are made in the next five years". A key part of the solution are low-emissions technologies: "The rapid and parallel pursuit of the full range of technologies, such as wind, hydro, solar PV & thermal, and bio-energy is crucial, but within a set of environmental and social constraints to ensure their sustainability. By 2050, these technologies could meet 70% of the remaining demand after efficiencies have been applied, avoiding a further 10.2Gt carbon emissions annually."

The Intergovernmental Panel on Climate Change (IPCC) has prepared its 4th Assessment Report (4AR), and launched it step by step during 2007, after receiving final comments from governments for each part. Among other objectives, the 4AR explores scenarios for keeping green house gas (GHG) emissions stable in order to achieve the lowest possible atmospheric CO₂ concentration levels in the Working Group III. Its report Link to an external resource Climate Change 2007: Mitigation of Climate Change was published in May 2007. It contains energy policy recommendations and highlights options to prevent some of the worst effects of climate change. Renewable energy is considered a very important part of the solution. Its share (including large hydro and biomass) in global primary energy is projected to be between 8% and 17% possibly increasing to above 61% in 2100. Renewables are expected to provide up to 35% of electricity generated in 2030. Feed-in tariffs and renewable energy obligations are emphasised as policy instruments that have proven effective.

The World Bank's Link to an external resource Clean Energy and Development: Towards an Investment Framework (CEDIF) is also a forward-looking exercise, but takes a look at the investments needs for a sustainable future. The CEDIF distinguishes three critical pillars: Energy for development (in particular energy access for the poor), the transition to a low-carbon economy, and adaptation to climate change. Comparing the financial requirements and potential sources, it identifies a gap to financing the transition to a low-carbon economy. This CEDIF is currently being discussed with the World Bank's member countries. In the CEDIF, renewable energy technologies are seen as important options for the transition to a low-carbon economy, although the CEDIF seems to be more focused on high-efficient and low-carbon supply technology and power plant rehabilitation, as the continuous use of coal in large economies is the most worrisome. Within the proposed strategies for energy development and access, some renewable energy technologies, such as solar home systems, are given a specific role, and clean energy is strongly recommended altogether. On the whole, the CEDIF is not particularly aggressive in promoting renewable energy.