Renewables in the Changing Energy Situation
12
© OECD/IEA 2012 Renewables in the Changing Energy Situation Didier Houssin Director, Energy Markets and Security International Energy Agency REWP-RIAB Workshop « Renewables – Policy and Market Design Challenges Paris, OECD, 27 March 2012
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Didier HoussinDirector, Energy Markets and SecurityInternational Energy Agency27 March 2012
Transcript of Renewables in the Changing Energy Situation
© OECD/IEA 2012
Renewables in the Changing Energy Situation
Didier Houssin Director, Energy Markets and Security International Energy Agency
REWP-RIAB Workshop « Renewables – Policy and Market Design Challenges
Paris, OECD, 27 March 2012
© OECD/IEA 2012
Recent Trends in Renewables
0.00
50.00
100.00
150.00
200.00
250.00
300.00
2005 2006 2007 2008 2009 2010 2011 G
W
RoW
India
Spain
Germany
US
China +25.3
+26.7
+22.5
+28.5
+31.7
+22.6%
Wind
+28.5% +35.5%
+70.1% +47.0%
+72.4%
0
10
20
30
40
50
60
70
80
2005 2006 2007 2008 2009 2010 2011
GW
RoW
China
US
Spain
Japan
Italy
Germany
+70.4
Solar PV
Strong growth continuing in 2011 despite uncertain economy
Markets rapidly moving to different regions
PV markets still concentrated in too few countries
© OECD/IEA 2012
Current context – Full of uncertainty
Uncertain economic recovery
Geo-political turmoil in North-Africa / Iran and impacts on oil prices
Unconventional gas in the US – and elsewhere?
Post-Fukushima concerns on nuclear
© OECD/IEA 2012
OECD power generation, 2007=1.00
Total electricity demand in 2011 still below 2007 levels
2
Sluggish Electricity Demand
Conventional generation is 370 Twh below 2007
© OECD/IEA 2012
Impacts on RE
Very different impacts depending on robustness of RE policy support framework
In some countries very low energy demand no additional capacity of any kind needed
Cost of capital and access to credit more difficult higher costs of up-front capital intensive renewables
© OECD/IEA 2012
Oil price trends and burden on GDP
World: Oil Burden & Price
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
No
min
al O
il E
xp
en
dit
ure
s a
s %
of
No
min
al G
DP
15
25
35
45
55
65
75
85
95
105
115
$/bbl
Oil Burden Brent (real, 2008 base)
C o ntribut ing to
the next sho ck?
1st oil
shock
2nd oil
shock
3rd oil
shock
Post-
recession
recoveries
Source: IEA 2012
© OECD/IEA 2012
Impacts of high oil prices General:
Strong driver for energy security and diversification
Make gas more expensive via indexation
BUT make unconventional production more profitable (oil shale, oil sands, GTL)
Electricity Around 1000 TWh produced worldwide RES-E attractive
Transport In principle make biofuels more competitive
(BUT also production of some biofuels more expensive via high oil and fertilizers price )
Render electro mobility more attractive
Heat Make RES-H applications more competitive
(23% of fuels for heat in OECD oil)
© OECD/IEA 2012
Continuing deglobalisation of gas markets
0
2
4
6
8
10
12
14
16
18
Pri
ces
[USD
/MB
tu]
Henry Hub (Monthly Average) German Border Price (Monthly Average)
Japan LNG (Monthly Average) TTF
LNG freight cost
From US
to Japan
From US
to Europe
Source: IEA 2012
© OECD/IEA 2012
North America ~ 420 bcm
Latin America Tight ~ 2 bcm
EuropeCBM < 1 bcm
FSUTight ~ 20 bcmCBM < 1 bcm
Middle East & AfricaTight: NA
AsiaTight ~ 30 bcmCBM ~ 6 bcm
AustraliaCBM ~ 5 bcm
Unconventional gas in the world The 2010 picture
So far, it is essentially a North American gas story... from the production point of view
For how long?
© OECD/IEA 2012
US: gas beats coal in conventional power generation, while renewables nicely grow
-300000
-200000
-100000
0
100000
200000
300000
coal gas non-hydro renewable
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
15.0%
16.0%
17.0%
18.0%
19.0%
20.0%
21.0%
22.0%
23.0%
24.0%
25.0%
2005 2006 2007 2008 2009 2010 2011
gas
non hydro renewable
Cumulative change in power generation 2005-2011, Gwh
Share of gas and non-hydro renewables in the US
© OECD/IEA 2012
Towards a low-nuclear scenario?
Overall, the biggest chunk of the lost nuclear generation is replaced by power generation from coal, leading to a 6% increase in CO2 emissions in the power sector
Impacts on RE strongly depending on country-specific factors and policies for renewables and climate change
2035: New Policies Scenario
2009
2035: Low Nuclear Case
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
Nuclear Coal Gas Renewables
TWh
Power generation by fuel in the New Policies Scenario and Low Nuclear Case
Source: WEO 2011
© OECD/IEA 2012
Conclusions
Current uncertain context produces both opportunities and challenges for renewables
Impacts strongly vary from country to country
Economic crisis and sluggish energy demand outlook has largest impact on RE
What will be the most important factors affecting RE outlook?
