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IEA: Renewables fastest growing energy sector

November 28, 2011


Renewable energy is now firmly entrenched as the world’s fastest growing energy sector, according to a major new report from the International Energy Agency released this week.

The book, entitled Deploying Renewables 2011: Best and Future Policy Practice, analyses current trends in renewable energy and sets out a series of proposals designed to help governments develop effective renewable energy policy.

It also repeats the IEA’s increasingly vocal predictions that several renewable energy technologies will become cost competitive with fossil fuels over the next decade, allowing renewables to emerge as the dominant energy technology.

“As the IEA’s analysis has shown, without an urgent and radical change of policy direction, the world will lock itself into an insecure, inefficient and high-carbon energy system,” said IEA executive director Maria van der Hoeven in a statement. “Renewables already play a central role in fostering sustainability and energy security, and their significance will only grow in the coming decades.”

Significantly, the report rejected many of the arguments put forward by critics of renewable energy who claim technologies such as solar and wind energy are too costly and unreliable to play a significant role in the energy mix.

“A portfolio of renewable energy (RE) technologies is becoming cost-competitive in an increasingly broad range of circumstances, in some cases providing investment opportunities without the need for specific economic support,” the report stated, adding that established hydro power, geothermal and bioenergy technologies are already cost-competitive with conventional energy in a wide range of circumstances, while the cost of solar and wind energy is falling fast.

As a result the IEA defended the use of subsidies to help drive the mass adoption of renewable energy technologies, arguing they will help result in lower cost technologies that will no longer require subsidies.

“Where technologies are not yet competitive, economic support for a limited amount of time may be justified by the need to attach a price signal to the environmental and energy security benefits of RE deployment,” the report said.

However, it also acknowledged that in mature renewable energy markets the removal or degression of subsidies can create policy challenges that have to be carefully managed.

The report confirmed that globally the renewable energy sector has grown by nearly 18 per cent between 2008 and 2009 and is currently on track to meet IEA projection for a “sustainable energy future” over the coming decades.

The IEA report came as the UK’s National Grid released new projections detailing how it expects the UK to generate over 30 per cent of its energy from renewables by 2030.

The company set out a “Gone Green Scenario” designed to ensure the UK meet’s its binding emission reduction targets that would see renewable energy generation double between 2020 and 2030 to 474 terawatt hours, or 33 per cent of total energy supply.

National Grid has consistently maintained that it can deliver the network upgrades required to manage a high proportion of intermittent renewable energy coming onto the grid, the UK government’s new electricity market reforms are partly designed to stimulate investment in more robust transmission networks.

However, the latest projections come in the same week as a new report from Allianz and the Chief Risk Officer Forum warned that the growth of the renewable energy sector globally and the failure of governments to adequately incentivise investment in new grid infrastructure means the risk of power blackouts is rising.

The report warned that by 2030 $13.6tr will need to be invested globally in new transmission and distribution networks, including smart grid technologies, in order to keep the lights on, adding that even short power outages can result in multi-billion dollar economic losses.



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