APEC Renewable Energy Forecast

Alexey Kabalinskiy | Victor Martinez, Researcher

The 53th Meeting of APEC Expert Group on Renewable Energy Technologies (EGNRET)Seoul, South Korea, 23 Oct 2019

Challenges from RE side to achieved APEC energy goals

What does APERC’s Outlook do?

Challenges faced by APEC economies:

▪ Affordably meet growing energy demand▪ Reduce negative energy-related

environmental impacts

▪ Enhance energy security and resilience

APERC’s 7th Edition Outlook aims to answer:

▪ What would energy demand, supply, and emissions in APEC look like in 2050, based on present practices?

▪ How can we achieve global decarbonisation goals?

▪ How would acting on such goals change future energy demand, supply, investment, or security?

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APEC primary energy supply mix [%]

The “Outline” slide is optional.They are recommended for long presentations, but not for the shorter ones.

Renewables modelling in the 7th Edition

• Integrated renewables analysis into Demand and Power models;

• Improved policy analysis, incorporate technical limits etc.;

• Expanded list of renewable technologies: separated large, medium, small and pumped hydro; onshore and offshore wind; and introduced concentrated solar power and marine energy;

• Improved hourly demand and generation data (load curves) to quantify the impacts of variable renewables in Electricity;

• Assessed potential for renewable heating and cooling;

• Based on historical data availability biomass is counted as traditional in Residential and Commercial buildings and Agricultural and non-specified.

Scenarios

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APEC is poised to achieved its aspirational goal to reduce the energy intensity 45% (2035) and double the share of RE by 2030.

Source: APEC and IEA data and APERC analysis

APEC aspirational goal:A super wicked problem

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• The APEC energy intensity goal is met but the renewable share doubling goal is not. (renewable share falls just short of the goal).

• Efficiency, renewables, nuclear and CCS are all required for COP 21 goals

5.4%9.9%

7.0%

12.8%

16.8%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2000 2010 2020 2030 2040 2050

Sharein FED

Renewable Share Goal (2010-30)

BAU TGT

→ Projection

Better

In 2016, APEC generated 56% of global renewable energy (TWh)

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• In 2000-16, APEC generated 49% to 56% of global renewables electricity.

• Key drivers have been hydro and wind generation.

Sources: IRENA (2018), APERC analysis.

0

1 000

2 000

3 000

4 000

5 000

6 000

2000

HYDR

O

SOLA

R

WIN

D

BIO

-EN

ERGY

GEO

-TH

ERM

AL

TIDA

L

2016

TWh

TIDALGEOTHERMALBIOENERGYWINDSOLARHYDROWorld

Share of renewables grows in all scenarios

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• The doubling goal is NOT achieved in BAU, and energy sector is dominated by fossil fuels;

• In TGT, accelerated development of renewables achieve the goal in 2025.

Sources: IEA (2018), APERC analysis.

15.8%

24.9%

12.8%

16.8%

5.4%

12.2%

0%

5%

10%

15%

20%

25%

30%

35%

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

2000 2010 2020 2030 2040 2050

Shar

e of

rene

wab

les

Mtoe

Other

Heat

Electricity (non-renewable)

Electricity (renewable)

Renewables (modern)

Renewables (traditional)

Gas

Oil

Coal

RE share in 2DC (right axis)

RE share in TGT (right axis)

RE share in BAU (right axis)

→ Projection

APEC Final Demand in BAU share of renewables

Slightly more renewables in the TGT Scenario

Energy efficiency and renewables in the BAU and TGT, 2010-30

Final energy demand falls (mainly transport), but renewable supply increases (mainly solar), which has a two-fold impact on the doubling goal.

Sources: APERC analysis and IEA (2018). 8

To reach the renewables doubling goal, APEC needs to add an average 119 GW of renewable capacity (excluding pumped hydro) each year from 2016 to 2030, a 25% increase on the average additions in the BAU.

9Sources: APERC analysis and IEA (2018).

25% more renewable capacity additions needed per year in TGT

Generation capacity by fuel, TGT to BAU, 2016-50

Electricity drives renewable development

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• In BAU, renewable electricity more than triples and accounts for 70%,• In TGT, combination of energy efficiency and modest RE growth, helps achieve the

doubling goal,• In 2DC, Electricity decarbonisation drives renewables demand.

Sources: IEA (2018), APERC analysis.

Renewables by sector, 2000-50 Sectoral renewables index, 2010-30

-

500

1 000

1 500

2 000

BAU TGT 2DC

2000 2010 2050

Mtoe

Agricultureand otherElectricity

Buildings

Transport

Industry

→Projection

0

1

2

3

4

5

6

7

2010

2030

Industry

2010

2030

Transport

2010

2030

Buildings

2010

2030

Electricity

2010

2030

Agriculture and other

Index(2010=1)

0

1

2

3

4

5

6

7

2010

2030

Industry

BAU

TGT

2DC

To meet the 2DC pathway, RE would need to increased and its requires consolidated efforts by all APEC economies.

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For the electricity sector, the deployment of a range of technologies, including VRE is needed.

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

2016 2020 2030 2040 2050GW

Capacity

Coal Coal w/ CCS Oil Gas

Gas w/ CCS Nuclear Hydro Wind

Bioenergy Bioenergy w/ CCS Solar Geothermal & others

Storage Net imports

→ Projection

0

4 000

8 000

12 000

16 000

20 000

2016 2020 2030 2040 2050TWh

Generation

→ Projection• Electricity generation from VRE in 2DC reaches 31% at 2050.

• Emission reduction is achieved by installed solar PV and wind power instead of fossil fuel-based power plants.

Power capacity [GW] and electricity generation [TWh] by fuel, 2016-50

To reach the renewables doubling goal, APEC needs to add an average 119 GW of renewable capacity (excluding pumped hydro) each year from 2016 to 2030, a 25% increase on the average additions in the BAU.

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25% more RE capacity additions in TGT

Sources: APERC analysis and IEA (2018).

30%

41%

51%

49%

58%

53%

60%

0

2 000

4 000

6 000

8 000

10 000

Foss

il

Nuc

lear RE

Foss

il

Nuc

lear RE

Foss

il

Nuc

lear RE

Foss

il

Nuc

lear RE

Foss

il

Nuc

lear RE

Foss

il

Nuc

lear RE

2030 2050 2030 2050 2030 2050

2016 BAU TGT 2DC

GW

Installed capacity by fuel, 2016-50 Storage

Geothermal &othersSolar

Bioenergy

Wind

Hydro

Nuclear

Gas

Oil

Coal

BAU TGT 2DC

APEC renewable electricity generation share grows

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• In BAU, the share of renewable electricity grows from 21% to 32%;

• In TGT, electricity demand is 16% below BAU and the share reaches 39%;

• In 2DC, carbon-free electricity is 76%; 58% is RE, driven by wind and biomass.

21%

28%

32%

34%

39%

41%58%

0

5 000

10 000

15 000

20 000

25 000Fo

ssil

Nuc

lear RE

Foss

il

Nuc

lear RE

Foss

il

Nuc

lear RE

Foss

il

Nuc

lear RE

Foss

il

Nuc

lear RE

Foss

il

Nuc

lear RE

2030 2050 2030 2050 2030 2050

2016 BAU TGT 2DC

TWh

Electricity generation by fuel, 2016-50Geothermal &othersSolar

Bioenergy

Wind

Hydro

Nuclear

Gas

Oil

Coal

BAU TGT 2DC Sources: IEA (2018), APERC analysis

Estimating solar potential in buildings

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• Solar photovoltaic (PV) potential exceeds 4 500 TWh, or 395 Mtoe, in 2050.

• MAX HEAT is a case with maximised solar heating deployment. Solar water heating could supply over

30% of residential demand.

Source: APERC analysis.

0

1 000

2 000

3 000

4 000

5 000

BAU TGT 2DC MAXHEAT

2016 2050

TWh

Solar PV potential, 2016-50

Solar PV inServices

Solar PV inResidential

0

200

400

600

800

1 000

BAU TGT 2DC MAXHEAT

2016 2050

TWh

Solar hot water potential, 2016-50

Solar hotwater inServices

Solar hotwater inResidential

Electricity decarbonises the most in 2DC

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• In TGT, electricity accounts for 37% of CO2 reduction followed by transport (36%).

• In 2DC, the sector decarbonises the most (-91%), contributing nearly 2/3 of the total.

0

5 000

10 000

15 000

20 000

2016 BAU2050

- TGT2050

- 2DC2050

MtCO2

APEC CO2 emissions, by sector, 2016-2050

Buildings

Industry

Transport

E_Own

Electricity

Sources: IEA (2018) and APERC analysis.

From the policymakers' side, increasing renewable deployment requires

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• A strong institutional framework to support policies and specific energy targets: i.e., carbon neutrality policy.

• Tender process (auctions) to support the entrance and uptake of renewables.

• Easy access and priority for small-scale renewables developers• Utility obligations/quotas (share) for modern renewables. • Net-metering/ Net-billing implementation for end users.• Gradually incorporation of carbon-tax and associated environmental

policies to boost competitiveness.• Reliability and adequacy in the power system need to be addressed:

Flexibility is required to maximize the efficient integration of VRE.

The energy transition is an opportunity to increase the role of renewables in the energy mix but there is not a single recipe.

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• New trends and technological advances/disruptions.• Improved technical-economics modeling of energy systems• Working with local communities• Strength education in energy, economy and related subjects.• New financial and market mechanisms for low-carbon technologies.• Economical alternatives to carbon-intensive technologies and potential

phase-out of inefficient power plants i.e., subcritical coal power plants.• Direct and indirect effects of decarbonization policies on jobs local

communities in the short and mid-term.

A dynamic policy is needed to articulate:

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New Outlook is underway…

We have been providing data and analysis from the Outlook to support policy actions from the economies, and we open to suggestions to improve the 8th Edition of the Outlook.

https://aperc.ieej.or.jp/https://aperc.ieej.or.jp/publications/reports/outlook.php

Thank you!

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The “Outline” slide is optional.They are recommended for long presentations, but not for the shorter ones.

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Further related Work Decarbonization roadmap

This is an opportunity to review the outcomes of the document: “Filling the Gap to Double Renewable Energy in the APEC Region” and update its objectives.

• Incorporating an additional perspective toward carbon neutrality, i.e., a multidisciplinary approach.

• Efficient integration of variable renewable energy.• Carbon consequences of investment decisions, i.e., tipping

points of gas investment who may affect emissions targets. • Roadmap periodicity and flexibility.