IEA hosts meeting for senior finance, policy and industry stakeholders.
1 April 2011
An international group of over 180 energy experts stressed that renewable sources of energy can keep the window of opportunity open for limiting the global temperature increase to about two degrees, but only if urgent action is taken.
The group of senior finance, policy and industry stakeholders gathered in Paris on 15 and 16 March at a meeting hosted by the International Energy Agency (IEA), the theme of which was ‘Renewable Energy: From Analysis to Action’. The main goal was to examine the state of play of renewables in light of increasingly tightening market conditions and to identify a set of priorities for action.
The meeting was held at a particularly opportune moment, in which renewable energy policies are under pressure to deliver effectively and efficiently, policy costs are under the spotlight, and the benefits of renewables are not fully spelled out and recognised by many in society.
In the first session, two forward-thinking and ambitious scenarios were presented, which demonstrated that limiting global temperature increase below 2ºC is still feasible if swift and decisive action is taken.
The first scenario was presented by Dr. Fatih Birol, Chief Economist of the IEA, who shared findings from the World Energy Outlook 2010 – one of the Agency’s flagship publications. Dr. Birol presented a scenario which assumes that countries will vigorously implement a wide range of polices aimed at moving toward a low-carbon economy.
If these policies are put in place, it will be possible to stabilise the concentration of greenhouse gases at a level no higher than 450 parts per million (ppm) of CO2-equivalent. At this level, there would be a 50% chance of meeting the 2ºC maximum temperature increase. In this scenario, renewables supply 45% of global electricity by 2035 (up from 19% today) and almost 20% of total heat demand, while biofuels cover 14% of the total demand of fuels for transportation.
Ryan Katofsky, representing the IEA’s Renewable Energy Technology Deployment Implementing Agreement (RETD), presented a scenario where renewable energy provides 60% of global electricity generation by 2030, and 70% by 2060. But for this to happen, Mr Katofsky stressed the urgency of rapid and prominent action. “There is a need to do something in the next five years to dramatically accelerate renewable energy deployment,” he said.
Surge of interest
As well as highlighting the increasing role renewable energy should play in the years ahead, there was also widespread recognition at the meeting of the prominence it already enjoys.
Guy Turner, from Bloomberg New Energy Finance, acknowledged that “global investment in clean energy has been gaining momentum since mid-2010. Last year [it] reached USD153 billion, compared to USD120 billion in 2009, with a significant boom in Asia. Also noteworthy is the fact that costs are coming down, debt rates improving and [grid] parity is being achieved in more areas”.
Eric Peeters, Vice President of Solar at Dow Corning, a global silicon supplier, said: “We should not forget that renewable energy is already a several hundred billion dollar industry.”
Mark Fulton, from Deutsche Bank, noted that renewable investment would continue to grow, as long as policy support from governments remains robust. “By the end of 2010 almost 300 pieces of support policy have been put in place since mid-2008 in significant markets at a global level, such as at federal and state levels in the USA, in the European Union, China and others. That is 57% higher than in December 2009.”
Paolo Frankl, Head of the Renewable Energy Division at the IEA, said that there are several new challenges facing the deployment of renewable energy sources, including how to prevent growth of some technologies being concentrated in too few countries and causing concerns about costs of incentives.
Other speakers stressed the need for governments to create a long-term strategic commitment to Renewable Energy coupled to clear targets, and a stable policy environment. Angeles Santamaría, from Iberdrola, and Olivier Petros, from EdF, called for attention towards a stable and predictable policy framework and sustainable support schemes for renewables. This includes financing technologies far from maturity at research and development stage, and near mature technologies through downstream subsidies.
The main message from the industry panel was that the industry is ready to deliver, if the necessary policy frameworks are in place. TK Kallenbach, President of the Components Business Group at First Solar, the world’s largest thin film PV manufacturer, remained bullish on the future of this technology and of the company.
“We will continue to drive costs down and capacity up,” he said. “First Solar produces modules at a cost of USD0.75 per watt, down more than 60% from USD1.6 per watt in 2005. We have also announced plans to nearly double our annual manufacturing capacity from 1.5 gigawatts in 2010 to nearly 3 gigawatts in 2012, including new plants in Arizona and Vietnam, as well as expansions in Ohio, Germany and Malaysia.” Mr Kallenbach added that First Solar has produced more than 3 gigawatts of solar modules to date, which displace more than 1.5 million metric tons of CO2 emissions per year.
No time to lose
The Executive Director of the IEA, Nobuo Tanaka, praised the fruitful discussions that took place over the course of both days. “The IEA is convinced that renewable energy has a key role to play for meeting the growing need for energy; for energy security; and for climate change mitigation,” he said.
“The challenge of responding to climate change is becoming more and more urgent,” he observed, adding that “we have no time to lose – waiting will push up the cost of action and make success less likely”. Mr Tanaka pointed out that delivering a low carbon future will depend on industry responding to the opportunities and challenges associated with the ongoing revolution in energy supply and use.
“Innovation and entrepreneurialism are essential to meeting the scale of the challenge affordably,” he said, adding: “This will require close team work between industry, the finance sector and policy makers.”
Mr Tanaka praised the collaborative work between representatives of these sectors in trying to overcome the “growing pains” of renewable energy development and deployment, and concluded: “Together these players will be able to deliver the sustainable future we all wish for.”
More information can be found here.
Photo. From left to right: Ryan Katofsky, representing the IEA’s Renewable Energy Technology Deployment Implementing Agreement, Dr. Fatih Birol, Chief Economist at the IEA, and Didier Houssin, Director of Energy Markets and Security at the IEA. ©IEA
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