Renewables 2018

Market analysis and forecast from 2018 to 2023

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.


In this section


Summary


Heat is the largest energy end‑use. Providing heating for homes, industrial purposes and other applications accounts for around 50% of total energy consumption. Just over half of heat produced was consumed in industry – for example, for process heat, drying and industrial hot water uses. Another 46% was used for space and water heating and cooking in the buildings sector. The remainder was used in agriculture. In 2017, only 10% of heat was produced from renewables.

Renewable heat consumption is expected to grow 20% between 2018 and 2023, with bioenergy contributing the most. However, this would increase the share of renewables in the heating sector to only 12% by 2023, highlighting the need for more policy action to deliver greater deployment. Most renewable heat is currently produced from bioenergy although in recent years there has been a significant expansion in solar thermal, geothermal, and the use of renewable electricity for heat.

Two-thirds of global renewable heat growth to 2023 is expected to take place in China, the European Union, India, and the United States. Targets and policies are important drivers for renewable heat growth. Over the last year, the European Union has agreed on a new target for renewable heat, while China has released a new clean heating plan. A number of countries have extended support measures or introduced new ones. However, despite some positive developments, fewer countries have policies for renewable heat than they do for renewable electricity and transport. 

Renewable heat consumption by country/region (left) and by source (right)
	European Union	United States	Brazil	India	China	Rest of world
2017	115.4931306	57.10583377	47.27657366	41.7029622	48.91273036	167.0901845
2018	119.3140159	59.6150717	48.69611006	44.9178299	51.81540281	170.6104992
2019	122.0301328	61.61796604	49.77598299	47.61038118	55.45563521	175.2269628
2020	124.9109766	63.40096357	50.24950703	49.77763766	59.28042914	179.65549
2021	127.6870472	65.1197778	50.8682646	51.57756638	63.15027607	184.0508801
2022	130.5785977	66.71896862	51.47933715	53.50279136	66.85545199	188.5698345
2023	133.3095767	68.32694512	52.06599958	55.54504586	70.63459748	193.2373273
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	Modern bioenergy	Solar thermal	Geothermal	Renewable district heat	Renewable electricity for heat
2017	323.5368381	33.17306778	14.0854743	21.53783913	86.11238225
2023	368.1981817	48.49828297	19.9514684	23.74158643	116.816163
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Modern bioenergy


Modern bioenergy – which excludes the traditional use of biomass – produced almost 70% of direct renewable heat in 2017. Bioenergy penetration is higher in industry than in buildings. It currently meets 8% of industrial heat demand, mostly in sectors that produce biomass waste and residues.

Bioenergy consumption in industry is anticipated to grow 13% by 2023. There is significant untapped potential to increase bioenergy use in the cement subsector and in the sugar and ethanol industry. Around two-thirds of bioenergy used in cement production is from waste. In the cement sector, projected growth of almost 40% will raise the share of bioenergy from 5% of the sector’s energy demand to 7% by 2023. In addition, a further increase to 13% could be achieved if key cement producing countries were to introduce robust frameworks for waste management.

Renewable energy generation from the sugar and ethanol industry could be significantly increased if all sugar cane-cultivating countries exploited the potential of high-efficiency co-generation, sugar cane straw, and new energy cane varieties.

In buildings, bioenergy use grows 8% to 2023, less than the 16% growth seen in the past six-year period. In the residential sector, the European Union accounts for an even greater share of global bioenergy consumption (54%), with France, Germany and Italy consuming the most (44%). Italy leads the European pellet stove market. In Germany, pellet boilers make up almost half of the market although sales of both pellet boilers and stoves have declined 3%. The United States remains the largest single consumer of bioenergy in the buildings sector.

	Buildings	Industry	Agriculture
2012	105.62651	187.459445	9.275255
2013	109.409717	194.0224778	9.547254
2014	104.676296	192.7167238	9.642885
2015	106.333606	195.068921	9.81629
2016	106.206547	199.2693433	9.857417
2017	107.9651198	204.3790701	10.20476172
2018	110.1562443	210.7844111	10.55125256
2019	111.2689837	216.7764558	10.92686412
2020	112.7276286	220.7269567	11.28970393
2021	114.2499967	224.4653734	11.64210509
2022	115.7213462	228.167908	11.99110959
2023	117.2224577	231.9060428	12.33947889
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		"text":"Modern bioenergy consumption for heat by end-use sector, 2012-23"
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Solar thermal


Most solar thermal systems are small-scale systems for domestic water heating. These systems have seen rapid growth over recent years, especially in China. While the Chinese market has slowed down, cumulative solar thermal capacity still grew 3.5% in 2017 to reach 472 GWth – or 20% higher than the total installed solar PV capacity in power generation. Over the outlook period, solar thermal consumption in buildings is expected to rise more than 40% to 46 Mtoe by 2023.

While individual solar water heating installations dominate the global market, large-scale solar thermal plants connected to district heating systems or to large buildings have been expanding in several countries, led by Denmark. By the end of 2017, roughly 300 large-scale (>350 kWth) solar thermal systems were in operation, with a total capacity of 1 140 MWth. The economics of such large-scale systems are generally more favourable than for smaller systems.

There is also vast potential for using solar thermal in industrial applications, especially in regions in which low-temperature heat demand is growing for industrial uses such as foods and beverages, textiles, agriculture, and chemicals. 2017 was a record year for solar heating in industrial processes, with 124 projects in 17 countries adding over 130 MWth (an increase of 46%), led by the first 100‑MWth phase of the Miraah project for enhanced oil recovery in Oman.

Solar thermal gross capacity additions (left), and consumption growth in buildings (right)
Sources: Based on IEA (2018d), World Energy Statistics and Balances 2018 (database), www.iea.org/statistics/; IEA-SHC (2018), Solar Heat Worldwide Edition 2018; REN21 (2018), Global Status Report 2018.

Geothermal


Only a limited number of countries use geothermal energy directly for heat production, with China and Turkey alone accounting for 80% of consumption in 2017. Over 2012-17, global consumption almost doubled, mostly due to rapid growth in China. Over the outlook period (2018-23), growth is expected to be lower at 24% but to remain important in a number of countries and sectors.

While most geothermal heat is used for bathing (45%) and space heating (34%), agriculture (primarily for heating greenhouses) has long been an important end-use sector in some countries. Over recent years, the energy-intensive greenhouse sector in the Netherlands has expanded geothermal use due to strong policy support, and the country has become the fourth-largest user of geothermal heat in the agriculture sector after China, Turkey and Japan.

Elsewhere, new geothermal heat developments have focused mainly on district heating. In the European Union, nine plants were put into operation in 2017, with 75 MWth of new capacity in France, Italy and the Netherlands.

	Buildings	Industry	Agriculture
2012	6.74599	0.387430996	1.324757
2013	7.61384	0.415353	1.452709
2014	8.359246	0.452088	1.649041
2015	9.443436	0.500645	1.965823
2016	10.340409	0.557084	2.11787
2017	10.85640714	0.62292197	2.60614519
2018	11.77818455	0.633808455	2.666335403
2019	12.73939201	0.64920119	2.729062788
2020	13.75616171	0.669569191	2.781167893
2021	14.7639371	0.694168926	2.822180945
2022	15.73264871	0.726237584	2.856267277
2023	16.68801627	0.767327527	2.886534672
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Renewable electricity for heating and cooling


Electricity accounts for around 7% of global heat demand, mostly in buildings. Electrification of industrial processes is gaining in popularity, while the use of heat pumps in buildings is becoming more widespread. The use of electricity for heat is expected to grow 20% in the industry sector and 11% in buildings through 2023. With this growth, renewable electricity for heat is expected to have the second-largest absolute growth after bioenergy. This is because 1) the use of electricity to produce heat is increasing at a faster rate than total heat consumption growth, and 2) the share of renewables in the electricity sector is expanding rapidly.

The number of efficient heat pumps, which mostly run on electricity, has also been increasing. Annual heat pump sales around the world more than doubled, from 1.8 million units in 2012 to over 4 million in 2017, with year-on-year growth of 30%. More than 90% of this growth was in China, with most of the rest in the European Union, Japan and the United States. In the European Union, heat produced by heat pumps counts as renewable, subject to certain energy performance requirements.

Cooling currently accounts for 6% of energy consumption in the buildings sector but is growing rapidly. Cooling is mainly supplied by electric fans or air conditioners, although some direct renewable cooling options exist (for example, large-scale solar thermal collectors combined with adsorption chillers). For small and medium-sized cooling systems, the combination of solar PV and air conditioners/reversible heat pumps offers great potential since solar PV generation and cooling demand operate in a complementary way.

	Buildings	Industry
2012	48.787399	17.85718739
2013	53.878943	18.63395479
2014	55.3786714	19.4598137
2015	56.8004339	19.4631136
2016	60.9317641	20.5524262
2017	64.2587832	22.0404668
2018	68.045186	23.3810677
2019	71.966306	25.1757237
2020	75.811766	26.8255771
2021	79.52204	28.5159017
2022	83.273943	30.3016164
2023	86.94984	32.1205009
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