Renewable energy

What is renewable energy?

Energy derived from natural processes (e.g. sunlight and wind) that are replenished at a faster rate than they are consumed. Solar, wind, geothermal, hydro, and some forms of biomass are common sources of renewable energy.

How much of the world's energy comes from renewable sources?

In 2012, the world relied on renewable sources for around 13.2% of its total primary energy supply. In 2013 renewables accounted for almost 22% of global electricity generation, and the IEA Medium-Term Renewable Energy Report 2015 foresees that share reaching at least 26% increase in 2020.

What are variable renewables?

Variable renewables include wind, solar, wave and tidal energy, and are based on sources that fluctuate during the course of any given day or season. Variability is not new to power systems, which must constantly balance the supply and variable demand for electricity and face all kind of contingencies. However, large shares of variable renewables supply may increase pressure on power systems, which may need increased flexibility to respond to this balancing issue. More flexible generating capacities (e.g. gas and hydro power plants), interconnections, storage (e.g. with pumped-hydro plants), and/or load-management empowered by smart grids, can be combined to provide the required flexibility.

In the IEA scenarios, what is the outlook for renewables?

Renewables increase their penetration significantly in all long-term scenarios. For example, in the central scenario of the World Energy Outlook, the New Policies Scenario – which takes account of broad policy commitments and plans that have been announced by countries – renewable electricity generation nearly triples from 2012 to 2040. In the 450 Scenario – which is in line with limiting global warming to about 2°C – renewables grow even more; by a factor of more than 3.5. As a carbon dioxide emissions reduction option, renewables and biofuels come in second only to energy efficiency improvements in IEA scenarios.

In 2012, the Agency acknowledged the coming of age of the renewable energy sector by introducing an annual medium-term report that analyses that market. Each edition includes five-year projections for global renewable energy electricity capacity and generation, providing an important benchmark to policy makers, industry and the wider market for measuring developments of renewable energy.

What is the impact of renewables on energy security?

Energy security and diversification of the energy mix is a major policy driver for renewables. Growth of renewables generally contributes to energy diversification, in terms of the technology portfolio and also in terms of geographical sources. Use of renewables can also reduce fuel imports and insulate the economy to some extent from fossil fuel price rises and swings. This certainly increases energy security. However, concentrated growth of variable renewables can make it harder to balance power systems, which must be duly addressed.

Are renewables competitive?

The renewable energy sector is demonstrating its capacity to deliver cost reductions, provided that appropriate policy frameworks are in place and enacted. Deployment is expanding rapidly. Costs have been decreasing and a portfolio of renewable energy technologies has become cost-competitive in an increasingly broad range of circumstances, particularly established technologies such as hydro and geothermal but also, where resources are favourable, technologies such as onshore wind. However, economic barriers remain important in many cases. In general, costs need to be reduced further. Moreover, fossil fuel subsidies and the lack of a global price on carbon are significant barriers to the competitiveness of renewables.

Should renewables be subsidised?

The IEA believes that further growth of renewable energy is essential for a secure and sustainable energy system. Transitional economic incentives that decrease over time are justified. Incentives are sometimes needed to stimulate cost reductions through technology learning, such as improvements in manufacturing, increased technology performances, economies of scale and larger deployment. Incentives may also be justified to secure additional energy security and environmental benefits. Current policies have started to deliver in this respect. Nevertheless, in several countries, the design of support policies has not been ideal, and this has led to higher than anticipated levels of deployment and excessive policy costs. The IEA offers policy makers guidance on how to steer policies on renewables.

What is the role of the IEA in the renewables sector, now that the International Renewable Energy Agency (IRENA) has been formed and its work is underway?

The IEA believes that the work of the two agencies is complementary. The role of the IEA is to assess the total energy mix including renewables, not just renewables in isolation. The IEA will continue to work in the fields of renewables, assessing their competitiveness against other energy sources and their outlook in the Agency’s world energy scenarios. The IEA analyses the effectiveness of renewable energy policies to identify best practices and securely integrate large shares of renewables into the energy mix, in particular in developing countries. The IEA has been very collaborative with IRENA from its inception. In  January 2012, the two Agencies signed a Letter of Intent which identifies three initial areas of co-operation: a) development and publication of a joint Global Renewable Energy Policies and Measures Database, which expands on the existing IEA database to cover up to 150 countries, including all IRENA member countries; b) co-operation in technology and innovation, including the involvement of IRENA in the IEA Technology Collaboration Programmes (TCPs); and, c) sharing of renewable energy statistics data and methods between the two organisations.