NewEnergyNews: TODAY’S STUDY: New Energy – A Global Overview


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  • TODAY AT NewEnergyNews, February 20:

  • ORIGINAL REPORTING: Solar boom raises questions about coal in utility power mixes
  • ORIGINAL REPORTING: Questions about EV battery degradation refuted

    Tuesday, June 19, 2018

    TODAY’S STUDY: New Energy – A Global Overview

    Renewables 2018 Global Status Report; A comprehensive annual overview of the state of renewable energy.

    June 3, 2018 (Renewable Energy Policy Network for the Twenty-First Century)

    Executive Summary


    Positive developments show that the renewable energy transition is possible, but advances so far are uneven across sectors. The year 2017 was another record-breaking one for renewable energy, characterised by the largest ever increase in renewable power capacity, falling costs, increases in investment and advances in enabling technologies. Many developments during the year impacted the deployment of renewable energy, including the lowest-ever bids for renewable power in tenders throughout the world, a significant increase in attention to electrification of transport, increasing digitalisation, jurisdictions pledging to become coal-free, new policies and partnerships on carbon pricing, and new initiatives and goals set by groups of governments at all levels.

    Increasingly, sub-national governments are becoming leaders in renewable energy and energy efficiency initiatives. At the same time, many developing and emerging countries are expanding their deployment of and investment in renewables and related infrastructure. The private sector is also increasingly playing a role in driving the deployment of renewable energy through its procurement and investment decisions.

    As of 2016, renewable energy accounted for an estimated 18.2% of global total final energy consumption, with modern renewables representing 10.4%. The number of countries with renewable energy targets and support policies increased again in 2017, and several jurisdictions made their existing targets more ambitious.

    Strong growth continued in the renewable power sector, while other renewable sectors grew very slowly. Solar photovoltaic (PV) capacity installations were remarkable – nearly double those of wind power (in second place) – adding more net capacity than coal, natural gas and nuclear power combined.

    In the transport sector, the use of biofuels is still held back by sustainability debates, policy uncertainty and slow technological progress in advanced fuels, such as for aviation. Similarly, renewable heating and coolingi continues to lag behind. Both sectors receive much less attention from policy makers than does renewable power generation. However, lack of policy attention does not reflect relative importance, as heating and cooling account for 48% of final energy use, transport for 32% and electricity for 20%.

    The interconnection of power, heating and cooling, and transport in order to integrate higher shares of renewable energy gained increased attention during the year, in particular the electrification of both heating and transport.


    There is slow progress in renewable energy uptake in heating and cooling. Modern renewable energy supplied approximately 10.3% of total global energy consumption for heat in 2015. Another 16.4% was supplied by traditional biomass, predominantly for cooking and heating in the developing world. While additional bio-heat, geothermal direct use and solar thermal capacities were added, growth was very slow.

    Energy demand for cooling is growing rapidly, and access to cooling is an issue for health and well-being. Renewables currently play a small role in providing cooling services, although there is considerable potential.


    Renewable energy progress in the transport sector remains slow. Biofuels provide most of the current renewable energy contribution, although electrification is gaining attention. The renewable energy share of transport continues to be low (3.1%), with more than 90% provided by liquid biofuels.

    Electrification of the transport sector expanded in 2017 – with electric vehicles (EVs) exceeding 1% of global light vehicle sales – and a number of countries announced plans to phase out sales of petrol and diesel vehicles. There are signs that the shipping and aviation sectors also may become open to electrification. Further electrification of the transport sector has the potential to create a new market for renewable energy and to facilitate the integration of higher shares of variable renewable energy, provided that the policy and market settings are suitable.


    The electricity transition is well under way, due mostly to increases in installed capacity and in the cost-competitiveness of solar PV and wind power. Renewable power generating capacity saw its largest annual increase ever in 2017, raising total capacity by almost 9% over 2016. Overall, renewables accounted for an estimated 70% of net additions to global power capacity in 2017, due in large part to continued improvements in the cost-competitiveness of solar PV and wind power.

    Solar PV led the way, accounting for nearly 55% of newly installed renewable power capacity in 2017. More solar PV capacity was added than the net additions of fossil fuels and nuclear power combined. Wind (29%) and hydropower (11%) accounted for most of the remaining capacity additions. Several countries are successfully integrating increasingly larger shares of variable renewable power into electricity systems.

    Renewable-based stand-alone and off-grid single home or mini-grid systems represented about 6% of new electricity connections worldwide between 2012 and 2016…


    Renewable energy policies and targets remain focused on the power sector, with support for heating and cooling and transport still lagging. Renewable energy continues to attract the attention of policy makers worldwide. Renewable technologies for power generation, heating and cooling, and transport are considered key tools for advancing multiple policy objectives, including boosting national energy security and economic growth, creating jobs, developing new industries, reducing emissions and local pollution, and providing affordable and reliable energy for all citizens.

    Many historical policy trends remained unchanged in 2017. The growth of renewable energy around the world continues to be spurred by a combination of targeted public policy and advances in energy technologies. Direct policy support for renewable energy once again focused primarily on power generation, with support for renewable technologies lagging in the heating and cooling and transport sectors.

    Policies coupling the thermal (heating and cooling), transport and power sectors – and policies increasing the linkages between renewable energy and energy efficiency – continue to emerge slowly. New cross-sectoral integrated policies were introduced in 2017 in several countries, including Indonesia and Switzerland. Renewable energy and energy efficiency also are being advanced in some cases by climate change policies, including under commitments to achieve net-zero emissions or through specific mechanisms such as carbon taxes, the elimination of fossil fuel subsidies, and emissions trading schemes. In 2017, China launched the world’s largest emissions trading scheme, with the first phase of the new cap-and-trade programme focusing on the country’s power sector.

    Targets remain one of the primary means for policy makers to express their commitment to renewable energy deployment. Targets are enacted for economy-wide energy development as well as for specific sectors. As of year-end 2017, targets for the renewable share of primary and final energy were in place in 87 countries, while sector-specific targets for renewable power were in place in 146 countries, for renewable heating and cooling in 48 countries, and for renewable transport in 42 countries.




    Modern use of bioenergy for heating is growing slowly due to a lack of policy attention and to low fossil fuel prices.Bioenergy is the largest renewable contributor to global final energy demand, providing nearly 13% of the total. The traditional use of biomass in developing countries (for cooking and heating) accounts for almost 8% of this, and modern use for the other 5%. Modern bioenergy provides about 4% of heat demand in buildings and 6% in industry, as well as some 2% of global electricity generation and 3% of transport needs.

    Growth in modern use of bioenergy for heating has been relatively slow in recent years (below 2% annually) due to a lack of policy attention and to low fossil fuel prices. The electricity sector has seen more rapid growth, with generation from biomass increasing 11% in 2017. China overtook the United States as the largest producer of bioelectricity during the year.

    Production of biofuels for transport increased 2.5% in 2017. The United States and Brazil remained the world’s largest producers of ethanol and biodiesel. The production and use of new transport fuels such as hydrotreated vegetable oil (HVO) have grown significantly over the last five years, and in 2017 HVO accounted for about 6% of total biofuel production by energy content. Progress also is being made in developing the technologies needed to produce advanced biofuels for aviation use, for example.


    Technology innovation is addressing sector-specific challenges in the geothermal industry. An estimated 0.7 gigawatts (GW) of new geothermal power capacity came online in 2017, bringing the global total to around 12.8 GW. Indonesia and Turkey accounted for three-fourths of new capacity; installations also came online in Chile, Iceland, Honduras, Mexico, the United States, Japan, Portugal and Hungary.

    Geothermal direct use (direct thermal extraction for heating and cooling) increased by an estimated 1.4 gigawatts-thermal (GWth) of capacity to an estimated global total of 25 GWth. Space heating continued to be one of the largest and fastest growing sectors, with several new projects feeding into district heat systems in Europe and China, in particular.

    The geothermal industry remained constrained by various sector-specific challenges, such as long project lead-times and high resource risk, but technology innovation to address such challenges continued during 2017. The industry is focused on advancing technologies to reduce development risk and to cost-effectively tap geothermal resources in more locations, as well as to reduce the potential environmental consequences.


    Hydropower industry prioritises sustainability, modernisation and digitalisation of facilities. Global additions to hydropower capacity in 2017 were an estimated 19 GW, bringing total capacity to approximately 1,114 GW. While significant, this is the smallest annual increment seen over the last five years. China remained the perennial leader in commissioning new hydropower capacity, accounting for nearly 40% of new installations in 2017, and was followed by Brazil, India, Angola and Turkey. Other countries that added significant capacity included Iran, Vietnam, the Russian Federation and Sudan.

    Pumped storage is the dominant source of large-scale energy storage, accounting for an estimated 96% of global energy storage capacity. Global pumped storage capacity rose by more than 3 GW in 2017, for an estimated year-end total of 153 GW.

    Among the priorities of the hydropower industry in 2017 were continued advances towards more sustainable development of hydropower resources, increased climate change resilience, and ongoing modernisation efforts and digitalisation of existing and new facilities.


    Industry’s optimism and development efforts bring ocean energy closer to commercialisation. Of the approximately 529 megawatts (MW) of operating ocean energy capacity at the end of 2017, more than 90% was represented by two tidal barrage facilities. Ocean energy technologies deployed in open waters (excluding tidal barrage) had a good year, as tidal stream and wave energy saw new capacity come online, much of it in the waters of Scotland.

    Optimism prevailed in the industry in 2017, particularly in Europe, where some technologies advanced enough to be on the brink of commercialisation. The industry started constructing its first manufacturing plants, promising greater production scale and cost reductions. Government support of ocean energy, through direct funding and through research and infrastructure support, remains a critical element in ongoing development.


    New solar PV installations surpassed net additions of fossil fuels and nuclear power combined. Solar PV was the top source of new power generating capacity in 2017, due largely to strong growth in China, with more solar PV installed globally than the net additions of fossil fuels and nuclear power combined. Global capacity increased nearly one-third, to approximately 402 GWdc.

    Although solar PV capacity is concentrated in a short list of countries, by year’s end every continent had installed at least 1 GW of capacity, and at least 29 countries had 1 GW or more. Solar PV is playing an increasingly important role in electricity generation, accounting for over 10% of generation in Honduras in 2017 and for significant shares in Italy, Greece, Germany and Japan.

    Globally, market expansion is due largely to the increasing competitiveness of solar PV, combined with growing demand for electricity in developing countries and rising awareness of the technology’s potential to alleviate pollution, reduce carbon dioxide emissions and provide energy access. Nevertheless, most global demand continues to be driven largely by government policy.

    The year 2017 saw record-low auction prices driven by intense competition, thinning margins for manufacturers and developers alike, and continued consolidation in the industry. The drive to increase efficiencies and reduce energy costs has pushed innovations in manufacturing and product performance. Even as falling prices have challenged many existing solar PV companies, low and predictable energy prices offered by solar PV, along with expanding markets, are luring new participants to the industry, including oil and gas companies.


    CSP plants with thermal energy storage emerge as a viable competitor to fossil fuel thermal power plants. Global concentrating solar thermal power (CSP) capacity reached 4.9 GW in 2017, with South Africa being the only country to bring new CSP capacity online (100 MW). However, at year’s end about 2 GW of new plants was under construction; China (300 MW being built) and Morocco (350 MW) were particularly active. An estimated 13 gigawatt-hours of thermal energy storage (TES) was operational, and most new plants are incorporating TES.

    Spain remained the global leader in existing CSP capacity – followed by the United States – with Spanish CSP plants achieving record electricity generation in 2017. The year also saw record low CSP tariffs being bid and/or awarded in competitive tenders in Australia, Chile and the United Arab Emirates, where a 700 MW CSP tender was awarded. CSP with TES emerged as a viable competitor to fossil fuel thermal power plants. Price reductions were driven by competition as well as by technology cost reductions aided by ongoing research and development activity in the sector.


    Solar heat for industrial processes had a record year, and use in district energy systems advanced. An estimated 35 GWth of new solar thermal capacity was commissioned in 2017, increasing total global capacity 4% to around 472 GWthi. China again led for new installations, followed by Turkey, India, Brazil and the United States.

    Driven by government support, solar district heating advanced in an increasing number of countries, with the first large-scale installations coming online in Australia, France, the Kyrgyz Republic and Serbia. By year’s end, an estimated 296 large-scale solar thermal systems were connected to heating networks.

    The year also saw records for new solar heat for industrial processes (SHIP) installations, driven by economic competitiveness, a strong supply chain and policies to reduce air pollution. At least 110 such systems (totalling 135 MWth) started operation globally, raising the world total by 21%. Concentrating collector technologies played an increasing role in providing space heating and industrial heat, with Oman, China, Italy, India and Mexico being the largest markets.

    For the first time since the peak years of 2011-2012, new manufacturing capacity was constructed for flat plate and concentrating collectors. To make up for continued declines in their home markets, several European manufacturers increased their export volumes, supplying new emerging markets in North Africa, the Middle East and Latin America.


    Prices fell rapidly for both onshore and offshore wind power, and the offshore sector had its best year yet. The year 2017 brought tumbling bid prices for both onshore and offshore wind power capacity in auctions around the world. Bid prices were down due to technology innovation and scale, expectations of continued technology advances, reduced financing costs due to lower perceived risk, and fierce competition in the industry. Electric utilities and large oil and gas companies continued to move further into the industry.

    Wind power had its third strongest year ever, with more than 52 GW added (about 4% less than in 2016) for a total of 539 GW. China saw installations decline for the second year running, while Europe and India had record years.

    In some of the largest wind power markets, strong growth was driven by looming regulatory changes; elsewhere, wind energy’s cost-competitiveness and its potential environmental and developmental benefits drove deployment. Rapidly falling prices for wind power have made it the least-cost option for new power capacity in a large and growing number of countries.

    The offshore wind sector had its best year yet, as total capacity increased 30%. China’s offshore market started to take off in 2017, and the world’s first commercial floating project was commissioned in Scotland. The sizes of turbines and projects continued to increase, and several manufacturers announced plans to produce machines of 10 MW and larger.

    At least 13 countries – including Costa Rica, Nicaragua and Uruguay, and several countries in Europe – met 10% or more of their electricity consumption with wind power during 2017…


    Distributed renewables for energy access (DREA) systems are increasingly being considered as a solution to achieve energy access goals. Approximately 1.06 billion people (about 14% of the global population) live without electricity, and about 2.8 billion people (38% of the global population) are without clean cooking facilities. The vast majority of people without access to both electricity and clean cooking are in sub-Saharan Africa and developing Asia, and most of them live in rural regions.

    DREA systems are increasingly being considered as a solution to achieve energy access goals through the deployment of off-grid solar systems and renewable-based mini-grids, and through the distribution of clean cook stoves. Off-grid solar systems, and in particular those commercialised through the pay-as-you-go (PAYG) business model, were the most significant technology in the sector, providing electricity access to more than 360 million people worldwide. In 2017, although the sales of off-grid solar systems decreased in the two main regional markets of East Africa and South Asia, markets in Central Africa, East Asia and the Pacific were growing rapidly. An increasing number of private mini-grid developers are actively testing a range of business models and helping to move the mini-grids sector to maturity. In India alone, an estimated 206 mini-grid systems were installed during 2016-2017.

    Investment continued to flow to PAYG companies – with an estimated USD 263 million raised in 2017 – although investment in off-grid solar companies as a whole decreased 10% from 2016 to 2017. Investment in clean cook stove companies fell in 2016 to its lowest level since 2012 (USD 18.1 million), highlighting the need for more effort to raise funds in the sector.

    A growing trend in 2017 was the establishment of partnerships between multinationals, local businesses and/or governments to deploy DREA systems to meet energy access targets. The year also saw an increasing number of national governments enhancing the enabling environment to advance DREA. Similarly, development finance institutions continued to support the sector through various programmes and initiatives.


    Global investment in renewables increased even as costs continued to fall, and developing and emerging countries extended their lead over developed countries. Global new investment in renewable power and fuels (not including hydropower projects larger than 50 MW) exceeded USD 200 billion annually for the eighth year running. The investment total of USD 279.8 billioni was up 2% over 2016, despite further cost reductions for wind and solar power technologies. Including investments in hydropower projects larger than 50 MW, total new investment in renewable power and fuels was at least USD 310 billion in 2017.

    Dollar investment in new renewable power capacity (including all hydropower) was three times the investment in fossil fuel generating capacity, and more than double the investment in fossil fuel and nuclear power generation combined.

    Investment in renewable energy continued to focus on solar power, particularly solar PV, which increased its lead over wind power in 2017. Asset finance of utility-scaleii projects, such as wind farms and solar parks, dominated investment during the year at USD 216.1 billion. Small-scale solar PV installations (less than 1 MW) saw an investment increase of 15%, to USD 49.4 billion.

    Developing and emerging economies overtook developed countries in renewable energy investment for the first time in 2015 and extended their lead in 2017, accounting for a record 63% of the global total, due largely to China. Investment in developing and emerging countries increased 20% to USD 177 billion, while that of developed countries fell 19% to USD 103 billion. China accounted for a record 45% of global investment in renewables (excluding hydropower larger than 50 MW), up from 35% in 2016, followed by Europe (15%), the United States (14%) and Asia-Oceania (excluding China and India; 11%). Smaller shares were seen in the Americas (excluding Brazil and the United States, 5%), India (4%), the Middle East and Africa (4%) and Brazil (2%)…


    Energy systems are adapting to rising shares of renewable energy. With rising penetration of renewable energy – whether variable renewable energy (VRE; wind and solar power), thermal energy or gaseous and liquid fuels – there are challenges to integrating it into existing energy systems. The penetration of modern renewable energy is highest in the electricity sector, where many countries already are successfully integrating high shares of VRE. At least 10 countries generated 15% or more of their electricity with solar PV and wind power in 2017, and many had far higher short-term shares.

    Power systems are adjusting to better accommodate rising shares of VRE by increasing system flexibility. Utilities and system operators also are adjusting their operations, adding energy storage and digitising systems to help integrate VRE. At the same time, renewables are evolving to improve the ease of integration, and state-of-the-art solar PV and wind energy generators can provide a variety of relevant system services to stabilise the power grid.

    Several technologies – including energy storage, heat pumps and electric vehicles – have evolved in parallel with renewable energy and are now helping to integrate VRE into the electricity sector and to facilitate the coupling of renewable power with the thermal and transport sectors.

    Energy storage, mainly in the form of pumped storage, has been used for decades to support grid reliability, increase infrastructure resilience and for other purposes; increasingly, it is being used in conjunction with renewable energy technologies. During 2017, at least 3.5 GW of utility-scale storage capacity was commissioned. Residential and commercial electricity storage capacity also grew rapidly in some countries, particularly in combination with solar PV. The year saw continued technology advances and cost reductions, the diversification of renewable energy and other companies into the storage industry, and increasing linkages with VRE.

    Heat pump markets continued to expand, driven by policies to mitigate air pollution (particularly in China) and to advance opportunities to use renewable electricity for heating and cooling (particularly in Europe). Heat pumps have the potential to help balance the electrical system by shifting loads and reducing VRE curtailment, using (surplus) solar and wind power to meet heating and cooling demand. Manufacturers continued to pursue acquisitions to gain access to new markets and know-how, and to increase their market share.

    Electrification of the transport sector gained increasing attention in 2017, and could enable greater integration of renewable electricity. Global sales of electric passenger cars increased 58% over 2016, and more than 3 million of them were traveling the world’s roads by year’s end. The passenger car market remained a small share (1.3%) of total passenger vehicle sales and was eclipsed by two- and three-wheeled EVs. Use of electric buses also increased, with an estimated 386,000 in service (mostly in China). In several countries, utilities are playing a significant role in expanding EV charging points and, along with vehicle manufacturers and others, continue working to advance the synergies between EVs and VRE.


    The importance of energy efficiency is increasingly recognised internationally, while global energy intensity continues to fall. Dialogue at the international level has begun to recognise the importance of integrating energy efficiency and renewable energy. International organisations, global campaigns and a host of other actors are increasingly raising awareness and encouraging policy makers to consider the two in concert. As a result, policies have emerged in recent years that attempt to link renewables and energy efficiency.

    In 2016, global gross domestic product (GDP) grew 3%, whereas energy demand increased only 1.1%. However, countries outside of the Organisation for Economic Co-operation and Development (OECD) continue to see increasing energy use alongside growing GDP, while OECD countries, as a whole, do not.

    The decline in energy demand per unit of economic output has been made possible by a combination of supply- and demand-side focused policies and mechanisms as well as structural changes. These include: the expansion, strengthening and long-lasting impact of energy efficiency standards for appliances, buildings and industries; improved fuel efficiency standards and, more recently, the growing deployment of EVs – especially when supplied by renewable energy sources; fuel switching to less carbon-intensive alternatives, including renewables; and structural changes in industry, including a transition towards less energy-intensive and more service-oriented industries.


    Corporate sourcing of renewable energy continued to increase and spread to new regions. Corporations began sourcing renewable energy in the mid-2000s to meet their own environmental and social objectives and to address the growing demand for corporate sustainability from investors and consumers. More recently, renewables have become attractive energy sources in their own right, providing cost-competitive energy, long-term price stability and security of supply, among other benefits…

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