The expansion of renewable energy will slow over the next five years unless policy uncertainty is diminished, according to the International Energy Agency (IEA) Medium-Term Renewable Energy Market Report.
Power generation from renewable sources, including wind, solar and hydropower grew by an estimated 240 TWh in 2013, reaching almost 22% of global generation. However growth is expected to slow and stabilise after 2014, the report notes.
Overall, global renewable electricity generation is predicted to grow by almost 45% to reach 7 310 TWh in 2020. The main increases will be in hydropower (37%) and onshore wind power (31%). The OECD is expected to account for 30% of new renewable generation globally through 2020.
"Renewables are a necessary part of energy security. However, just when they are becoming a cost-competitive option in an increasing number of cases, policy and regulatory uncertainty is rising in some key markets. This stems from concerns about the costs of deploying renewables," said IEA executive director Maria van der Hoeven.
The report says that policy and market risks threaten to slow deployment momentum of renewables. In many non-OECD markets including China, constraints include non-economic barriers, an absence of needed grid integration measures, and the cost and availability of financing. In the European Union (EU), uncertainties remain over the precise nature of the post-2020 renewable policy framework and the build-out of a pan-European grid to facilitate the integration of variable renewables. On the other hand, with decreasing costs, competitive opportunities are expanding for some renewables in some countries, notably wind in Brazil and solar in northern Chile, according to the report.
Investment in new renewable power capacity is expected to average $230 billion per year through 2020. This represents a fall of $20 billion compared with the amount invested in 2013, which the report says is due to expectations that both unit investment costs for some technologies will fall and that global capacity growth will slow.
Finally, the report touches on the use of biofuels for renewable heating and cooling needs, which is says remains largely ‘undeveloped.’ The share of renewable energy use for heat is expected to. rise from 8% in 2013 to just 9% by 2020, the report says.
