Renewables 2019

Market analysis and forecast from 2019 to 2024

Renewables 2019 is the IEA market analysis covering the key developments in renewable energy in 2018 and forecasts from 2019 to 2024. It provides global trends and developments for renewable energy in the electricity, heat and transport sectors.


Heat: in this section


Summary


Accounting for 50% of global final energy consumption in 2018, heat is the largest energy end-use and contributes 40% of global carbon dioxide (CO2) emissions. About 50% of total heat produced was used for industrial processes, another 46% was consumed in buildings for space and water heating and, to a lesser extent, for cooking, while the remainder was used in agriculture, essentially for greenhouse heating.

Fossil fuels continue to dominate heat supplies, while modern renewables (i.e. excluding the traditional use of biomass) met only 10% of global heat demand in 2018. Renewable heat consumption expands 22% during the outlook period (2019‑24), with its share reaching 12% by 2024. Overall, this projected deployment is not in line with global climate change targets. Greater ambition and stronger policy support are needed to ramp up the use of renewables for heat and to improve energy efficiency in both buildings and industry.

Heat consumption by source, and renewable heat consumption outlook
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	Modern bioenergy	Renewable electricity	Solar thermal	Renewable district heat	Geothermal	Share of renewables in heat (right axis)
2007	12.21158807	2.07606188	0.379078956	0.519423866	0.235325123	8.297821058
2008	12.31168889	2.197268455	0.453492955	0.55784355	0.217857668	8.351016596
2009	12.31883789	2.335390144	0.542349681	0.586179339	0.240141911	8.58493946
2010	12.80914305	2.507077469	0.638028304	0.672351221	0.255771528	8.55999659
2011	12.78142611	2.643489643	0.766768281	0.678290061	0.298840679	8.635647525
2012	13.013253	2.809011674	0.840989572	0.744277867	0.340595678	8.829586804
2013	13.45195071	3.020450417	1.098975114	0.786779308	0.381857178	9.193891967
2014	13.197863	3.11069252	1.168230059	0.80963351	0.424854567	9.20430109
2015	13.52936873	3.17191005	1.246036008	0.822929054	0.484446882	9.461690312
2016	13.66665734	3.388825437	1.286007379	0.898033049	0.527958996	9.750143938
2017	14.00288208	3.60015621	1.33041746	0.935380702	0.568585359	9.942494289
2018	14.29897392	3.812942026	1.530057107	0.939367019	0.623108041	10.20150893
2019	14.72042738	4.06810239	1.618850934	1.039474202	0.662187157	10.45755831
2020	14.9542476	4.345272595	1.7290502	1.08899983	0.709206138	10.70047233
2021	15.19605873	4.615526264	1.847411602	1.170115123	0.755554946	10.97105168
2022	15.44157858	4.864623627	1.969870394	1.23803505	0.799110717	11.23335354
2023	15.69868534	5.122129948	2.100183169	1.287507041	0.842561016	11.48747045
2024	15.95044085	5.391997176	2.236346893	1.327135669	0.886170398	11.75113924
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Bioenergy remains by far the largest renewable heat source and is expected to lead growth with a 12% (1.7 EJ) increase during 2019-24. The industry sector consumes two-thirds of total modern bioenergy, mainly for industrial processes.

Owing to the combination of heat electrification and the increasing penetration of renewables in the power sector, renewable electricity use for heat increases 41% (1.6 EJ) globally over the period, showing similar absolute growth to bioenergy, with buildings accounting for more than two-thirds of it. 

Following rapid deployment during 2005-13, solar thermal market growth has since slowed, with a decline in new capacity additions for the fifth year in a row last year due to shifting market dynamics in China. Despite this slowdown, solar thermal heat consumption is expected to remain strong at an increase of almost 50% (+0.7 EJ) over 2019-24, of which 90% will be in buildings owing to relatively low costs. 

Although the direct geothermal share in global renewable heat consumption remains limited, it is projected to increase more than 40% (+0.3 EJ) over the outlook period, with China, the United States and the European Union together responsible for more than 80% of additional consumption.

	Buildings	Industry	Agriculture
2013-18	0.0531	1.1541	0.0785
2019-24	0.4626	1.0539	0.1349
2013-18	0.7510	0.0045	0.0001
2019-24	1.0900	0.0382	0.0333
2013-18	0.6845	0.0114	0.0482
2019-24	0.6348	0.0064	0.0146
2013-18	0.2229	0.0617	0.0009
2019-24	0.2420	0.2345	-0.0004
2013-18	0.1325	0.2530	0.0000
2019-24	0.1536	0.4890	0.0000
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Sources: IEA (2019d), World Energy Statistics and Balances 2018 (database), www.iea.org/statistics/; IEA (forthcoming), World Energy Outlook 2019.

	Bioenergy	Solar thermal	Geothermal	Renewable district heat	Renewable electricity
2012	2.9	0.1	0.0	0.5	0.7
2018	3.3	0.1	0.0	0.6	0.9
2024	3.7	0.2	0.1	0.7	1.3
	0	0	0	0	0
2012	1.8	0.1	0.0	0.0	0.3
2018	1.8	0.1	0.0	0.0	0.5
2024	1.9	0.2	0.1	0.0	0.7
	0	0	0	0	0
2012	0.3	0.5	0.2	0.0	0.3
2018	0.3	1.1	0.5	0.0	0.7
2024	0.5	1.4	0.6	0.4	1.1
	0	0	0	0	0
2012	1.5	0.0	0.0	0.0	0.1
2018	1.7	0.0	0.0	0.0	0.1
2024	2.0	0.1	0.0	0.0	0.2
	0	0	0	0	0
2012	1.6	0.0	0.0	0.0	0.3
2018	1.7	0.0	0.0	0.0	0.3
2024	1.8	0.1	0.0	0.0	0.4
	0	0	0	0	0
2012	0.2	0.0	0.0	0.0	0.1
2018	0.3	0.0	0.0	0.0	0.1
2024	0.3	0.0	0.0	0.0	0.2
	0	0	0	0	0
2012	0.1	0.0	0.0	0.1	0.1
2018	0.2	0.0	0.0	0.1	0.1
2024	0.2	0.0	0.0	0.1	0.1
	0	0	0	0	0
2012	0.4	0.0	0.0	0.0	0.3
2018	0.4	0.0	0.0	0.0	0.4
2024	0.4	0.0	0.0	0.0	0.4
	0	0	0	0	0
2012	4.1	0.1	0.1	0.1	0.6
2018	4.7	0.1	0.1	0.1	0.8
2024	5.2	0.3	0.1	0.1	1.1
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* Although China does not currently report any renewable heat use in industry in its statistics, some bioenergy is consumed.

Note: RoW = rest of world. Sources: IEA (2019d), World Energy Statistics and Balances 2018 (database), www.iea.org/statistics/; IEA (forthcoming), World Energy Outlook 2019.

Policy attention and support for the uptake of renewables in the heating and cooling sector remains limited despite its large share in final energy consumption. Very few national heat policies were implemented, revised or extended in 2018, and new policy developments for renewable heat in industry were scarce.

However, at the subnational level an increasing number of cities and local governments are using their regulatory and purchasing authority to encourage the use of renewables through municipal mandates and policies for buildings, and through their management of urban district networks. Given the local nature of the heat sector, subnational governments have a key role in scaling up renewables use for heat.

 

Modern bioenergy


Modern bioenergy accounted for more than two-thirds of global renewable heat consumption in 2018, with a higher penetration in industry than in buildings. Bioenergy is expected to lead renewable heat expansion, its use rising 12% during 2019‑24, with almost two-thirds of this increase in industry.

Modern bioenergy consumption for heat
	Buildings	Industry	Agriculture	% in total heat consumption
2012	4.83583715	7.785051262	0.392364586	6.47401508
2013	5.004936057	8.04186985	0.405144807	6.599556968
2014	4.801620318	7.987556354	0.408686326	6.49218792
2015	4.804823345	8.289787435	0.434757954	6.648286326
2016	4.795889761	8.43050678	0.440260797	6.74096351
2017	4.828174799	8.7236221	0.451085184	6.812188759
2018	4.88897705	8.939176672	0.470820201	6.879269361
2019	5.015374505	9.21312997	0.491922908	6.962749774
2020	5.072811794	9.36720952	0.514226283	7.010079305
2021	5.145248323	9.514568346	0.536242058	7.068861645
2022	5.214721012	9.668211069	0.558646501	7.13442
2023	5.284877779	9.831605141	0.582202418	7.198822604
2024	5.351626725	9.99310842	0.605705702	7.267183243
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	Buildings	Industry	Agriculture
2013-18	0.115971312	0.264528428	0.025488548
2019-24	0.243138395	0.080106731	0.015202271
2013-18	0.02033445	0.092599581	2.13412E-06
2019-24	0.048722378	0.296321757	0.000238163
2013-18	-0.00041353	0.06771228	0.034410891
2019-24	0.001805947	0.123744709	0.030534751
2013-18	-0.082046626	0.064407717	0.009690767
2019-24	0.061338713	0.045204258	0.013046487
2013-18	-0.000705705	0.664877403	0.008863276
2019-24	0.107644241	0.508554292	0.075863829
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Sources: IEA (2019d), World Energy Statistics and Balances 2018 (database), www.iea.org/statistics/; IEA (forthcoming), World Energy Outlook 2019.

In the industry, the majority (86%) of renewable heat used is bioenergy, used mostly in sectors that produce biomass waste and residues (i.e. pulp and paper, wood products, food and tobacco, and sugar and ethanol). Its contribution is projected to increase from 8.9 EJ in 2018 to 10 EJ in 2024 (+12%); however, its share in industrial heat consumption remains under 9% because global industrial heat demand is expected to grow strongly.

Owing to the extensive use of bagasse in its sugar, ethanol and food industries, India is expected to nearly catch up with Brazil as the largest industrial bioenergy consumer by 2024, whereas the United States, using considerable bioenergy in its pulp and paper industry, remains the third-largest consumer. The largest absolute increases in industrial bioenergy heat consumption are anticipated to come from India (+296 PJ) and China (+195 PJ), particularly in the cement industry for the latter, with notable expansion in the European Union as well (+80PJ).

In buildings, direct and indirect uses of bioenergy together account for roughly half of total renewable heat consumption globally. Modern bioenergy use has increased only 10% globally in the past decade, due partly to a lack of policy support. With 9% growth expected during 2019‑24, modern bioenergy contributes less than one-fifth of the 2.6 EJ growth in buildings sector renewable heat consumption. Nonetheless, it remains the main renewable heat source over the next six years.

The European Union is expected to be responsible for more than half of the increase in bioenergy consumption in buildings, owing to the deployment of woodchip and pellet stoves as well as bioenergy consumption for district heating. Indeed, EU bioenergy use in buildings rises 0.28 EJ over the outlook period, to meet 20% of overall building heat demand, stimulated by the updated RED’s indicative target for member states to increase the share of renewable energy in heating and cooling by 1.3 percentage points per year. Following the European Union, the United States consumption of bioenergy in buildings is expected to increase 14% (+60 petajoules) during 2019-24 owing to various state-level incentives.

 

Solar thermal


Having expanded 82% since 2013, solar thermal energy accounted for around 7% (1.5 EJ) of global renewable heat consumption in 2018, with most applications being small-scale thermal systems for domestic water heating. However, gross annual capacity additions registered a decline for the fifth year in row. This decline is attributed mostly to China, which still dominates the market, and where reduced construction activities for new buildings, market saturation and competition with electric systems (e.g. heat pumps) are curtailing demand for new systems. With system replacement accounting for a substantial part of gross additions, cumulative global operating capacity increased by just 1.4% (6.5 GWth) in 2018, reaching an estimated 480 GWth at the end of the year.

Solar thermal gross capacity additions
 
Sources: Sources: IEA SHC (2019), Solar Heat Worldwide 2019

Global solar thermal consumption is expected to increase more than 45% (+620PJ) over the outlook period, mostly in buildings, of which it is expected to meet 2.2% of the heat demand in 2024. With solar thermal expansion supported by current government targets to 2020 as well as by incentives aimed at controlling air pollution under the 13th FYP, China is still expected to account for 40% of this growth, followed by the United States and the European Union. Significant acceleration is also expected in the Middle East and North Africa, as well as in India, Brazil and Mexico.

Although its current share in global industrial heat demand is still negligible (less than 0.02%), solar heat for industrial processes (SHIP) continues to be an expanding niche market. In 2018, at least 108 new systems (about 37.6 MWth) were commissioned, bringing the worldwide installed capacity to 567 MWth (+7%) at the end of the year.

	Solar thermal consumption growth
2013-18	567.6287594
2019-24	281.6786361
	0
2013-18	22.78661713
2019-24	95.78959623
	0
2013-18	27.60131886
2019-24	81.96966781
	0
2013-18	22.51690766
2019-24	39.59451074
	0
2013-18	6.924728971
2019-24	90.91681721
	0
2013-18	23.32005447
2019-24	26.08732366
	0
2013-18	18.28914837
2019-24	90.2532341
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Geothermal


Meeting about 0.3% (0.13 EJ) of global heat demand, direct geothermal, although on the rise, is currently the smallest renewable heat source. Deployment of geothermal systems remains confined to a limited number of countries, with China and Turkey alone accounting for about 80% of global geothermal heat consumption in 2017 and responsible for most of the growth in recent years.

Worldwide installed thermal capacity expanded by an estimated 1.4 GWth in 2018, totalling 26 GWth at the end of the year. Direct geothermal use is projected to increase more than 40% (+0.3 EJ) globally over the outlook period, with almost two-thirds of this growth in China (where air pollution concerns are expected to stimulate the development of geothermal district heating) and the United States.

In the European Union, direct geothermal energy consumption is anticipated to increase almost 270% during 2019 24, albeit from a small basis, with district heating remaining a key application. Policy support in the form of risk guarantees (e.g. available in France and the Netherlands) or investment grants (e.g. available in Poland) can help mitigate the investment risks associated with high upfront costs and uncertain drilling operation outcomes.

Direct geothermal heat consumption
	Buildings	Industry	Agriculture	% Geothermal in heat (right axis)
2012	271.8807437	15.5486029	53.16633101	0.169444301
2013	306.914965	16.40605954	58.53615322	0.187339982
2014	339.2983557	18.74250328	66.81370802	0.208991084
2015	383.6092279	20.76514636	80.07250813	0.23805557
2016	419.0556397	22.53737693	86.36597987	0.260411324
2017	451.0085018	24.13694387	93.43991299	0.276608113
2018	494.7892736	26.98047105	101.3382965	0.299778717
2019	530.5212293	27.46332521	104.2026028	0.313213969
2020	573.8270902	28.18033903	107.1987091	0.332453454
2021	616.7134042	29.08285323	109.758689	0.351467014
2022	657.0446832	30.19198615	111.8740476	0.369210405
2023	696.9390406	31.60614314	114.0158324	0.386366575
2024	736.8368899	33.3547727	115.9787349	0.403748255
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	China	EU	US	RoW
2013-18	256.45	5.53	-0.20	20.73
2019-24	109.31	45.49	54.62	53.64
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Sources: IEA (2019d), World Energy Statistics and Balances 2018 (database), www.iea.org/statistics/; IEA (forthcoming), World Energy Outlook 2019.

Renewable electricity for heating and cooling


The amount of renewable electricity used for heat is projected to increase 41% over the projection period, accounting for one-fifth of global renewable heat consumption by 2024 as the share of renewables in electricity generation rises and more electricity is used for heat generation. In absolute terms, this increase (two-thirds of which is in buildings) is almost equivalent to bioenergy expansion.

Renewable electricity consumption for heat
	EU	USA	China	India	Brazil	RoW	% in heat
2012	0.662428253	0.323976677	0.338285066	0.055511525	0.318702984	1.110107168	1.397466409
2013	0.733800591	0.366567319	0.375364205	0.060507969	0.315861403	1.168348931	1.481839699
2014	0.747298792	0.384701606	0.43530997	0.062407143	0.314630065	1.166344944	1.530187152
2015	0.783176695	0.37133441	0.483578331	0.063818555	0.313070063	1.156931996	1.558665938
2016	0.799058861	0.418638132	0.547182522	0.073149132	0.341405907	1.209390884	1.671509576
2017	0.81069335	0.463695218	0.613548326	0.076675171	0.339656243	1.295887902	1.751421137
2018	0.87126278	0.480226379	0.689661419	0.084704198	0.345623689	1.341463561	1.83441521
2019	0.934197083	0.517869897	0.748942739	0.092822277	0.367501813	1.406768581	1.92420901
2020	0.999306722	0.555131161	0.816346032	0.106681339	0.383683795	1.484123546	2.036926652
2021	1.062050274	0.592153778	0.888550748	0.120599099	0.393361583	1.558810782	2.147038069
2022	1.127092798	0.623473554	0.953452846	0.136329326	0.402781883	1.62149322	2.247585499
2023	1.199616129	0.652700767	1.023216239	0.152003449	0.412197578	1.682395786	2.348814825
2024	1.274497466	0.682202216	1.09496543	0.169322566	0.425197592	1.745811906	2.45664881
{"chart":{"type":"area"},"plotOptions":{"area":{"stacking":"normal","marker":{"enabled":false}}},"series":[{"colorIndex":2},{"colorIndex":3},{"colorIndex":7},{"colorIndex":8},{"colorIndex":0},{"colorIndex":99},{"colorIndex":6,"type":"line","yAxis":1,"tooltip":{"valueSuffix":" %"}}],"yAxis":[{"title":{"text":"EJ"}},{"labels":{"format":"{value}%"},"opposite":true,"min":0,"title":{"text":"  "}}],"xAxis":[{"categories":["2007","2009","2011","2013","2015","2017","2019","2021","2023","2024"],"plotLines":[{"value":0.5,"width":1,"dashStyle":"shortDash"}]}],"tooltip":{"valueSuffix":" EJ","valueDecimals":0},"title":{"text":"Renewable electricity consumption for heat"}}
	Buildings	Industry
2013-18	0.750950527	0.252979825
2019-24	1.090038153	0.489016997
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Sources: IEA (2019d), World Energy Statistics and Balances 2018 (database), www.iea.org/statistics/; IEA (forthcoming), World Energy Outlook 2019.

The People’s Republic of China, the European Union and the United states together are responsible for almost two-thirds of this growth. Drivers vary across regions, however: in China, renewable electricity consumption for heat increases as heat production is electrified and electrically driven heat pumps become more widespread. In the European Union and the United States, rapid expansion in the share of renewables is the key reason for higher renewable electricity consumption for heat. 

	Electrification of heat demand	Penetration of renewables in the electricity mix	Change in overall heat demand
2013-18	10.38	21.64	3.71
2019-24	9.24	26.00	6.17
2013-18	-1.38	35.89	-2.98
2019-24	9.66	37.68	-1.06
2013-18	-2.82	40.85	10.20
2019-24	0.06	39.46	2.54
2013-18	71.90	34.87	-2.90
2019-24	31.95	23.27	3.55
2013-18	21.45	16.67	14.46
2019-24	31.53	41.27	27.10
2013-18	12.08	-2.76	-0.87
2019-24	2.064468511	10.47581139	10.48299789
2013-18	3.636501778	10.39571335	6.808691049
2019-24	5.564482574	17.45725344	7.120591872
{"chart":{"type":"column"},"plotOptions":{"column":{"stacking":"normal"}},"xAxis":[{"categories":["2013-18","2019-24","2013-18","2019-24","2013-18","2019-24","2013-18","2019-24","2013-18","2019-24","2013-18","2019-24","2013-18","2019-24"]},{"categories":[" "," "," "," "," "," "," "],"opposite":true,"plotLines":[{"value":-0.5,"width":1,"dashStyle":"shortDash","label":{"text":"World"}},{"value":0.5,"width":1,"dashStyle":"shortDash","label":{"text":"EU"}},{"value":1.5,"width":1,"dashStyle":"shortDash","label":{"text":"USA"}},{"value":2.5,"width":1,"dashStyle":"shortDash","label":{"text":"China"}},{"value":3.5,"width":1,"dashStyle":"shortDash","label":{"text":"India"}},{"value":4.5,"width":1,"dashStyle":"shortDash","label":{"text":"Brazil"}},{"value":5.5,"width":1,"dashStyle":"shortDash","label":{"text":"RoW"}}]}],"series":[{"colorIndex":2},{"colorIndex":3},{"colorIndex":0},{"showInLegend":false,"xAxis":1,"data":[0,0,0,0,0,0,0],"enableMouseTracking":false}],"yAxis":{"title":{"text":"EJ"},"labels":{"format":"{value}%"},"reversedStacks":false,"min":-0.2,"max":110},"tooltip":{"valueDecimals":0,"valueSuffix":" EJ"},"title":{"text":"Factors contributing to higher renewable electricity use in selected regions, 2013 18 and 2019 24"}}
Sources: IEA (2019d), World Energy Statistics and Balances 2018 (database), www.iea.org/statistics/; IEA (forthcoming), World Energy Outlook 2019.

Following bioenergy, renewable electricity is the second-largest renewable heat source in buildings, supplying 3% of total heat demand in 2018. The European Union was responsible for 25% of this consumption, with the United States and China together accounting for another 28%, followed by Canada and Brazil.

With the electrification of heat in buildings (through electric heaters and heat pumps) and increasing shares of renewables in electricity generation, renewable electricity has been the largest contributor to renewable heat uptake in buildings in the past decade in absolute terms. This trend is set to continue, with an additional 1.1 EJ of renewable electricity consumption expected over 2019‑24, amounting to 42% of global renewables expansion in buildings – more than double bioenergy growth. The European Union (+0.33 EJ) is expected to lead the way, followed by China (+0.22 EJ) and the United States (+0.16 EJ).

In industry, renewable electricity is also the second-largest renewable energy source, although it met less than 1% of global industrial heat demand in 2018. Worldwide consumption increased 34% in the last six years, and it is projected to continue rising at the same pace over the outlook period. China, which accounted for 29% of the world total in 2018, remains the primary industrial consumer of renewable electricity, with more than 60% growth over 2019 24 anticipated from both electrification of industrial heat and a greater share of renewables in the electricity mix. This latter factor is the main reason for growth in the European Union (+68 PJ) and the United States (+38 PJ), which together continue to account for one-quarter of global industrial renewable electricity consumption over the next six years. On a single-country basis, India demonstrates the second-largest absolute growth in renewable electricity consumption (+53 PJ) after China (+184 PJ), as its industrial heat demand rises dramatically (+39%) over the outlook period, especially for steelmaking. With expanding shares of renewables in electricity generation, electrification is a promising option for industrial decarbonisation. 

 

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