IEA: PV concentrated on too few markets; clean energy not being deployed quickly enough26. April 2012 | Top News, Global PV markets, Markets & Trends | By: Becky Stuart
In a new report presented to Ministers at the Clean Energy Ministerial (CEM), the International Energy Agency (IEA) has said photovoltaics must embrace market diversification if it is to maintain its growth trajectory. Overall, it believes clean energy will deliver substantial savings to countries across the globe, however, these savings are currently not on track to be realized by 2050.
The third CEM, which opened its doors yesterday in London, the U.K., has seen energy ministers from 22 national governments and the European Union gather together to discuss progress made on the CEM’s 11 clean energy initiatives, in addition to outlining the path forward for clean energy policy development and integration.
A Sustainable Energy for All initiative was also introduced by the UN Secretary-General, with the 2030 goal of: doubling the global rate of improvement in energy efficiency; doubling the share of renewable energy in the global energy mix; and ensuring universal access to modern energy services.
Energy technology perspectives
While positive progress is being made, the IEA says the majority of clean energies are not being deployed quickly enough. It adds that there is evidence that "rapid technology change is possible. Unfortunately, however … most clean energy technologies are not on track to make their required contribution to reducing carbon dioxide (CO2) emissions and thereby provide a more secure energy system."
In its report, Energy Technology Perspectives 2012, the IEA says the CEM is in a unique position to impact clean energy development – it represents 80 percent of today’s global energy consumption, and around two-thirds of projected global growth in energy demand over the next decade, according to the agency – however it must seize this opportunity and leverage its "operational flexibility".
"If the 2DS objectives [which aim to limit global temperature rise by 2050 to 2oC above pre-industrial levels] are achieved, CO2 emissions among CEM member countries would decrease by over five gigatonnes (Gt), and they would save 7700 million tonnes of oil equivalent (Mtoe) through reduced fuel purchases. Globally, the near-term additional investment cost of achieving these objectives would amount to USD 5 trillion by 2020, but USD 4 trillion will be saved through lower fossil fuel use over this period. The net costs over the next decade are therefore estimated at over USD 1 trillion," explains the IEA.
These benefits may be realized, continues the agency, if the CEM both encouraged national clean energy goals, supported by policy action and appropriate energy pricing; and escalated the ambition of international collaboration.
"With these two objectives in mind, if taken up by energy ministers, the following three key recommendations, and specific supporting actions, can help move clean energy technologies from fringe to main-stream markets," says the IEA. The recommendations are:
1. Create a level playing field for clean energy technologies, by pricing energy appropriately and encouraging clean energy technology investment;
2. Develop holisitic energy system policies, which takes into account three electricity market changes: increased deployment of variable renewables; electric vehicles; and rising peak and global energy consumption; and
3. Develop carbon, capture and storage (CCS). This, says IEA is critical to reducing CO2.
Reversing the trend
Global energy needs are steadily increasing. To address them, while at the same time reducing CO2 emissions, "enhanced power generation efficiency, a switch to lower-carbon fossil fuels, increased use of renewables and nuclear power, and the introduction of CCS are all required," states the IEA
Over the last ten years, however, it says that nearly 50 percent of new electricity demand has been met by coal. "This trend must be reversed quickly to successfully reduce power sector carbon emissions and have any chance of meeting the 2DS objectives," says the agency.
On a more positive note, the IEA notes that 2011 saw investments in renewable energy power plants surpass those of fossil-fuel plants (US$240 billion, compared to $219 billion). 2012, however, will be a challenging year, it believes, due to market consolidation and declining technology costs.
It adds, "The slow economic recovery across Europe and parts of North America will likely have different impacts … In those countries where long-term, effective and cost-efficient policies are implemented, renewables will be relatively sheltered … On the contrary, in countries where governments are rethinking policy schemes, investor confidence may decline. In general, the costs of financing are increasing, and developers may struggle to raise capital for renewable projects that require intensive up-front capital investments."
If the 2DS goals are to be achieved, investments in the power sector will need to reach $6.4 trillion, says IEA, 30 percent of which is expected to come from China, and 30 percent from the U.S. and Europe, combined.
Photovoltaics may only comprise one part of the IEA’s ideal future energy mix. However, its importance is reflected in the fact that between 2000 and 2011, it was found to be the fastest growing renewable energy technology worldwide, with an average annual growth rate of above 40 percent.
Although positive, IEA says growth has thus far been too concentrated on a small number of markets, most notably in Europe, the U.S. and Japan. In order to ensure its survival and to continue on the strong growth trajectory, it must embrace market diversification. Specifically, says IEA, "Regions with good solar potential (e.g. Africa and parts of Asia) need to add significant solar capacity to meet the technology contribution share in the 2DS scenario."
As has already been widely reported, emerging markets are key for future photovoltaic development, particularly since European market deployment is expected to slow.
In addition to market diversification, photovoltaics must, along with the other clean technologies, improve grid integration, and planning and permitting times, continue to invest in R&D, engender public acceptance and strengthen pricing and policies.
Keep your finger firmly on the photovoltaic pulse: sign up for our daily newsletter
- 6331 views
- 5415 views
- 4301 views
- 2406 views
- 2199 views
Want to publish your press releases for free? Simply log in or register, enter the information you want to appear and we'll publish it for you!