Identified by the IEA as the ‘overlooked’ renewable, modern bioenergy will show the biggest growth in renewable resources between 2018 and 2023, underscoring its critical role in building a robust renewable portfolio and ensuring a more secure and sustainable energy system, according to the IEA’s latest market report and forecast Renewables 2018: Analysis and forecasts to 2023.

Renewables and the transition

Renewable energy is at the centre of the transition to a less carbon-intensive and more sustainable energy system. Renewables have grown rapidly in recent years, accompanied by sharp cost reductions for solar photovoltaics and wind power in particular. The electricity sector remains the brightest spot for renewables with the exponential growth of solar photovoltaics and wind in recent years, and building on the significant contribution of hydropower generation. But electricity accounts for only a fifth of global energy consumption, and the role of renewables in the transportation and heating sectors remains critical to the energy transition.

In the Renewables 2018 forecasts, the share of renewables in meeting global energy demand is expected to grow by 20% in the next five years to reach 12.4% in 2023.

Renewables will show the fastest growth in the electricity sector, providing almost 30% of power demand in 2023, up from 24% in 2017. During this period, renewables are forecast to meet more than 70% of global electricity generation growth, led by solar PV and followed by wind, hydropower, and bioenergy. A modest increase in the share of renewable heat is foreseen, as robust growth in total heat demand is expected to result from continuous economic and population growth. Renewables in transport have the lowest contribution of all three sectors, with their share growing only minimally from 3.4% in 2017 to 3.8% in 2023. Although they expand by almost one-fifth over the forecast period, renewables cover only a small portion of all energy demand in transport because of ongoing petroleum product consumption.

Continued expansion

Renewables will continue their expansion in the next five years, covering 40% of global energy consumption growth. Their use continues to increase most rapidly in the electricity sector, and will account for almost a third of total world electricity generation in 2023. Because of weaker policy support and additional barriers to deployment, renewables use expands far more slowly in the transport and heat sectors.

While the growth in solar PV and wind is set to continue in the electricity sector, bioenergy remains the largest source of renewable energy because of its widespread use in heat and transport, sectors in which other renewables play a much smaller part.

“Modern bioenergy is the overlooked giant of the renewable energy field,” said Dr Fatih Birol, the IEA’s executive director. “Its share in the world’s total renewables consumption is about 50% today, in other words as much as hydro, wind, solar and all other renewables combined. The IEA expects modern bioenergy will continue to lead the field, and has huge prospects for further growth. But the right policies and rigorous sustainability regulations will be essential [for it] to meet its full potential.”

Bioenergy focus

Bioenergy is a special focus of this year’s report. Half of all renewable energy consumed in 2017 came from modern bioenergy, which provided four times the contribution of solar photovoltaic and wind combined. Most of the modern bioenergy (ie excluding the traditional use of biomass) contributing to final energy consumption provides heat in buildings and for industry. The rest is consumed in the transport sector and for electricity.

The focus on bioenergy is part of the IEA’s analysis of ‘blind spots’ in the energy system – issues that are critical to the evolution of the energy sector but that receive less attention than they deserve – such as the impact of air conditioners on electricity demand, or the growing impact of petrochemicals on global oil demand. Assuming strong sustainability measures are in force, there port identifies additional untapped potential for bioenergy to ‘green’ and diversify energy usage in the industry and transport sectors.

The untapped potential of bioenergy in the cement, sugar and ethanol industries is also significant. Modern bioenergy consumption in the industry sector is anticipated to increase 13%. The use of biomass and waste fuels in the cement subsector is expected to grow almost 40%. However, the potential for further expansion is considerable, as demonstrated by the EU cement industry in which bioenergy and waste meet one- quarter of energy demand in accordance with robust waste management policies. With the exception of pulp and paper, in other energy- intensive industries bioenergy is expected to make only a minimal contribution.

Bioenergy growth in the industry, transport and electricity sectors combined could be as considerable as that of other renewables in the electricity sector. A significant proportion of this potential relies on wastes and residues that offer low lifecycle greenhouse gas (GHG) emissions and mitigate concerns over land-use change. In addition, using these resources can improve waste management and air quality.

China leads

China leads global growth in renewable energy as a result of policies to decarbonise all sectors and reduce harmful local air pollution, and becomes the largest consumer of renewable energy, overtaking the European Union by 2023. Of the world’s largest energy consumers, Brazil has the highest share of renewables by far – almost 45% of total final energy consumption in 2023, driven by a significant contribution of bioenergy and hydropower.

Solar expansion

Meanwhile, solar PV dominates renewable electricity capacity expansion. Renewable capacity additions of 178 GW in 2017 broke another record, accounting for more than two-thirds of global net electricity capacity growth for the first time. Solar PV capacity expanded the most (97 GW), over half of which was in China. Meanwhile, onshore wind additions globally declined for the second year in a row, and hydropower growth continued to decelerate.

Solar PV capacity is forecast to expand by almost 600 GW – more than all other renewable power technologies combined, or as much as twice Japan’s total capacity, reaching 1 TW by the end of the forecast period. Despite recent policy changes, China remains the undisputed solar PV leader, and by some distance, with almost 40% of global installed PV capacity in 2023. The United States remains the second-largest growth market for solar PV, followed by India, where capacity quadruples.

Wind and hydro

Wind remains the second-largest contributor to renewable capacity growth, while hydropower remains the largest renewable electricity source to 2023. Wind capacity is expected to expand by 60%, a similar increase to that reported in last year’s forecast. Meanwhile, spurred by technological progress and significant cost reductions, offshore wind capacity triples, with growth moving beyond Europe to Asia and North America.

Policies

Even with renewable energy technologies becoming increasingly competitive, appropriate policies and market design are critical. Under an ‘accelerated’ case, which assumes greater supportive government measures, the expansion of renewables in electricity and in transport could be 25% higher. 

Conclusions

  • Even with ongoing cost reductions, government policy remains crucial to attracting investment in renewables, ensuring appropriate market design and for reliable & cost-effective system integration
  • Greater use of solar, wind, bioenergy & other renewables – together with energy efficiency and other clean energy technologies – is needed in all sectors for emissions to peak immediately then decline
  • Modern bioenergy will continue to lead renewables growth in the next five years and its untapped potential remains huge, particularly in China, India, Brazil and the EU
  • Further accelerating the use of modern bioenergy hinges on policies and incentives to foster innovation & strict sustainability regulations
  • The IEA has identified energy ‘blind spots’: road transport, air conditioners, petrochemicals and modern bioenergy.

Context

 

Global emissions are set to increase in 2018 – again. Despite the need for early emission reduction, the world is not moving towards the Paris goals but rather away from them.

In 2000 global CO2 emissions amounted to 23 Gtonnes. This rose steadily to 32 Gt in 2013, then levelled off, but is now set to rise again. The 2017 figure shows a rise of nearly 1Gt, and will rise further when the final figures for 2018 are known.

  • Renewables grew three times faster than total energy demand in 2017 but this was not enough to stop global CO2 emissions from rising
  • Solar PV capacity rose faster than any other fuel in 2017 driven by China; offshore wind installations broke a record with auction prices showing significant cost reduction potential
  • Shining light on a ‘blind spot’ – modern bioenergy is critical to the environment, energy markets and investment
  • Today modern bioenergy accounts for half of all renewable energy consumption – four times solar PV and wind combined – and has a huge untapped potential
  • The world energy system has a number of ‘blind-spots’ that require policy attention to achieve a secure, sustainable and affordable energy system.