Renewables 2018

Market analysis and forecast from 2018 to 2023

Modern bioenergy is the overlooked giant of the renewable energy field. But the right policies and rigorous sustainability regulations will be essential to meet its full potential.
Dr Fatih Birol, Executive Director, IEA


Renewables 2018 is the IEA market analysis and forecast from 2018 to 2023 on renewable energy and technologies. It provides global trends and developments for renewable energy in the electricity, heat and transport sectors.

The analysis this year contains an in-depth look at bioenergy, the world’s largest source of renewable energy, highlighting the untapped potential of modern bioenergy and other renewable sources for greening the industry and transport sectors. Under an accelerated case, the report also highlights policy and market improvements that can unlock further growth of renewable energy in electricity and transport biofuels.

Purchase report Read press release

Overview


Modern bioenergy is the overlooked giant within renewable energy. Modern bioenergy (excluding the traditional use of biomass) was responsible for half of all renewable energy consumed in 2017 – it provided four times the contribution of solar photovoltaic (PV) and wind combined. Most modern bioenergy is used in final energy consumption to deliver heat in buildings and for industry.

Bioenergy is the largest source of growth in renewable consumption over the period 2018 to 2023. Bioenergy – as solid, liquid or gaseous fuels – will account for 30% of the growth in renewable consumption in this period. This is a result of the considerable use of bioenergy in heat and transport. Other renewables have less penetration in these two sectors, which account for 80% of total final energy consumption.

In 2023, bioenergy will remain the predominant source of renewable energy, although its share of total renewable energy declines from 50%, in 2017, to 46% as the expansion of both solar PV and wind accelerates in the electricity sector.

Renewable energy consumption by technology, 2017-23

Renewables increasingly central to total energy consumption growth

The share of renewables in meeting global energy demand is expected to grow by one-fifth in the next five years to reach 12.4% in 2023.

Renewables will have the fastest growth in the electricity sector, providing almost 30% of power demand in 2023, up from 24% in 2017. During this period, renewables are forecast to meet more than 70% of global electricity generation growth, led by solar PV and followed by wind, hydropower, and bioenergy. Hydropower remains the largest renewable source, meeting 16% of global electricity demand by 2023, followed by wind (6%), solar PV (4%), and bioenergy (3%).

While growing more slowly than the power sector, the heat sector – which includes heating for buildings or industry – will account for the biggest overall share of renewables in meeting energy demand in 2023. Renewable heat consumption is expected to increase by 20% over the forecast period to reach a share of 12% of the heating sector demand by 2023. However, a modest increase in the share of renewable heat is foreseen, as robust growth in total heat demand is expected to result from continuous economic and population growth.

Renewables in transport have the lowest contribution of all three sectors, with their share growing only minimally from 3.4% in 2017 to 3.8% in 2023. Although they expand by almost one-fifth over the forecast period, renewables cover only a small portion of all energy demand in transport because of ongoing petroleum product consumption. Renewables in transport mostly comes from biofuels, and although renewable electricity consumption in road (such as electric cars, two- and- three wheelers, and buses) and rail transport modes increases 65% over the forecast period, this is from a low base.

	Renewable electricity	Renewable heat	Renewable transport
2011	19.33038941	8.958818752	2.607130142
2012	20.27235706	9.20081439	2.867448175
2013	21.02044618	9.610069626	3.016084463
2014	21.71460689	9.619055943	3.10832393
2015	22.12102384	9.829043975	3.16897268
2016	23.08917055	10.06969049	3.243285662
2017	23.94589656	10.31088773	3.356016381
2018	24.9373095	10.57436357	3.431193075
2019	25.89148009	10.83275305	3.504954941
2020	26.81046814	11.08620205	3.577341548
2021	27.69618433	11.33485093	3.648391002
2022	28.55040344	11.57883477	3.718140015
2023	29.37477621	11.81828364	3.786623967
{
	"chart":{
		"type":"spline"
	},
	"plotOptions":{
		"spline":{
			"marker":{
				"enabled":false
			}
		},
		"series":{
			"zoneAxis":"x",
			"zones":[{
				"value":2017
			},{
				"dashStyle":"longDash"
			}]
		}
	},
	"title":{
		"text":"Share of modern renewable energy by sector, 2011-23"
	},
	"tooltip":{
		"valueDecimals":1,
		"valueSuffix":"%"
	},
	"yAxis":{
		"labels":{
			"format":"{value}%"
		}
	}
}
	Blank	Renewable electricity	Heat from renewable electricity	Heat from direct renewables	Transport from renewable electricity	Transport from biofuels
2017	0	4.029223086	0.97619664	4.333017599	0.08656725	0.976695889
Growth 2018-23	10.40170046	1.139034669	0.286132732	0.437146119	0.046832087	0.077468224
2023	0	5.168257755	1.262329372	4.770163718	0.133399337	1.054164113
{
	"chart":{
		"type":"bar"
	},
	"plotOptions":{
		"bar":{
			"borderWidth":0,
			"stacking":"normal"
		}
	},
	"title":{
		"text":"Share of modern renewable energy in total final energy consumption by sector, 2017-23"
	},
	"xAxis":{
		"type":"category"
	},
	"yAxis":{
		"labels":{
			"format":"{value}%"
		},
		"reversedStacks":false
	},
	"tooltip":{
		"valueDecimals":1,
		"valueSuffix":"%"
	},
	"series":[{
		"showInLegend":false,
		"color":"rgba(0,0,0,0)",
		"enableMouseTracking":false
	}, {}, {}, {}, {}, {}
	]
}
Direct renewables refers to the direct consumption of bioenergy, solar thermal, and geothermal for heat-raising purposes.

 

Brazil has the greenest energy mix, and China leads absolute growth. Of the world’s largest energy consumers, Brazil employs the highest share of renewables by far – almost 45% of total final energy consumption in 2023. Bioenergy consumption in transport and industry is significant, and hydropower dominates the electricity sector. Meanwhile, because of policies to decarbonise all sectors and reduce harmful local air pollution, China leads global growth in absolute terms during the forecast period, surpassing the European Union to become the largest consumer of renewable energy. In the European Union, greater use of renewables is spurred by binding renewable energy targets for 2020 and 2030 as well as implementing country-level policies and improved energy efficiency.

	Hydropower	Wind	Bioenergy	Solar PV	Others	% of renewables (right axis)
	22.85065264	27.44369387	116.3347233	8.703898991	4.07081899	16.9638591
	27.04345242	38.69948752	125.0124662	13.17314016	7.085190083	20.50316411
	84.73154738	21.80389987	15.82361365	9.479860873	33.50708955	8.920980229
	92.23539466	39.55254664	22.52354044	33.04364725	42.53657506	11.59032593
	22.9578698	19.52744198	87.86593761	5.196849497	4.850232302	10.18068477
	21.25203423	28.77304498	93.64169392	12.69339271	8.255918563	11.88685812
	26.89338326	3.073342034	58.60538831	0.060345517	0.765841354	42.14324007
	30.2784936	4.506134622	67.66963719	0.639912592	1.211667354	44.25174206
	9.027590192	3.820682585	42.59891896	2.145652007	0.881675817	10.82554833
	10.85383839	6.86288179	55.0320996	11.41839719	1.780143798	12.12726231
{
	"chart":{
		"type":"column","height":"35%"
	},
	"plotOptions":{
		"column":{
			"borderWidth":0,
			"stacking":"normal"
		},
		"line":{
			"marker": {
				"symbol":"circle"
			},
			"lineWidth":0,
			"states":{
				"hover":{
					"lineWidthPlus":0
				}
			}
		}
	},
	"title":{
		"text":"Renewable energy consumption in major markets, 2017 and 2023"
	},
	"tooltip":{
		"valueDecimals":1,
		"valueSuffix":" Mtoe"
	},
	"xAxis":[{
		"categories":["2017","2023","2017","2023","2017","2023","2017","2023","2017","2023"]
	},{
		"categories":["European Union","China","United States","Brazil","India"],
		"offset":0,
		"tickLength":40,
		"labels":{
			"y":40
		}
	}],
	"yAxis":[{
		"title":{
			"text":"Mtoe"
		},
		"offset":0
	}, {
		"title":{
			"text":null
		},
		"labels":{
			"format":"{value}%"
		},
		"opposite":true
	}],
	"series":[{
		"colorIndex":2
	},{
		"colorIndex":3
	},{
		"colorIndex":0
	},{
		"colorIndex":8
	},{
		"colorIndex":4
	},{
		"yAxis":1,
		"colorIndex":9,
		"type":"line",
		"className":"noLine",
		"tooltip":{
			"valueSuffix":"%",
			"valueDecimals":1
		}
	},{
		"xAxis":1,
		"data":[0,0,0,0,0],
		"showInLegend":false,
		"enableMouseTracking":false
	}]
	
}
The share of renewables in total final energy consumption in the European Union is calculated using the methodology outlined in IBRD, World Bank and IEA (2015), Global Tracking Framework (GTF) 2015. The exact calculation and inclusion of specific energy flows may differ from that outlined in EU Directive 2009/28/EC.

To meet long-term climate and other sustainability goals, renewable energy development in the heat, electricity and transport sectors must accelerate. Should progress continue at the pace currently forecast, the share of renewables in final energy consumption would be roughly 18% by 2040 – significantly below the IEA Sustainable Development Scenario’s benchmark of 28%.

Robust sustainability frameworks are key to bioenergy growth. Only bioenergy that reduces lifecycle GHG emissions while avoiding unacceptable social, environmental and economic impacts has a future role in decarbonising the energy system. Robust sustainability governance and enforcement must therefore be a central pillar of any bioenergy support policy.