Renewables 2018
Market analysis and forecast from 2018 to 2023
Modern bioenergy is the overlooked giant of the renewable energy field. But the right policies and rigorous sustainability regulations will be essential to meet its full potential.
Dr Fatih Birol, Executive Director, IEA
Renewables 2018 is the IEA market analysis and forecast from 2018 to 2023 on renewable energy and technologies. It provides global trends and developments for renewable energy in the electricity, heat and transport sectors.
The analysis this year contains an in-depth look at bioenergy, the world’s largest source of renewable energy, highlighting the untapped potential of modern bioenergy and other renewable sources for greening the industry and transport sectors. Under an accelerated case, the report also highlights policy and market improvements that can unlock further growth of renewable energy in electricity and transport biofuels.
Overview
Modern bioenergy is the overlooked giant within renewable energy. Modern bioenergy (excluding the traditional use of biomass) was responsible for half of all renewable energy consumed in 2017 – it provided four times the contribution of solar photovoltaic (PV) and wind combined. Most modern bioenergy is used in final energy consumption to deliver heat in buildings and for industry.
Bioenergy is the largest source of growth in renewable consumption over the period 2018 to 2023. Bioenergy – as solid, liquid or gaseous fuels – will account for 30% of the growth in renewable consumption in this period. This is a result of the considerable use of bioenergy in heat and transport. Other renewables have less penetration in these two sectors, which account for 80% of total final energy consumption.
In 2023, bioenergy will remain the predominant source of renewable energy, although its share of total renewable energy declines from 50%, in 2017, to 46% as the expansion of both solar PV and wind accelerates in the electricity sector.
Renewables increasingly central to total energy consumption growth
The share of renewables in meeting global energy demand is expected to grow by one-fifth in the next five years to reach 12.4% in 2023.
Renewables will have 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. Hydropower remains the largest renewable source, meeting 16% of global electricity demand by 2023, followed by wind (6%), solar PV (4%), and bioenergy (3%).
While growing more slowly than the power sector, the heat sector – which includes heating for buildings or industry – will account for the biggest overall share of renewables in meeting energy demand in 2023. Renewable heat consumption is expected to increase by 20% over the forecast period to reach a share of 12% of the heating sector demand by 2023. However, 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. Renewables in transport mostly comes from biofuels, and although renewable electricity consumption in road (such as electric cars, two- and- three wheelers, and buses) and rail transport modes increases 65% over the forecast period, this is from a low base.
Renewable electricity Renewable heat Renewable transport 2011 19.33038941 8.958818752 2.607130142 2012 20.27235706 9.20081439 2.867448175 2013 21.02044618 9.610069626 3.016084463 2014 21.71460689 9.619055943 3.10832393 2015 22.12102384 9.829043975 3.16897268 2016 23.08917055 10.06969049 3.243285662 2017 23.94589656 10.31088773 3.356016381 2018 24.9373095 10.57436357 3.431193075 2019 25.89148009 10.83275305 3.504954941 2020 26.81046814 11.08620205 3.577341548 2021 27.69618433 11.33485093 3.648391002 2022 28.55040344 11.57883477 3.718140015 2023 29.37477621 11.81828364 3.786623967
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Blank Renewable electricity Heat from renewable electricity Heat from direct renewables Transport from renewable electricity Transport from biofuels 2017 0 4.029223086 0.97619664 4.333017599 0.08656725 0.976695889 Growth 2018-23 10.40170046 1.139034669 0.286132732 0.437146119 0.046832087 0.077468224 2023 0 5.168257755 1.262329372 4.770163718 0.133399337 1.054164113
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Brazil has the greenest energy mix, and China leads absolute growth. Of the world’s largest energy consumers, Brazil employs the highest share of renewables by far – almost 45% of total final energy consumption in 2023. Bioenergy consumption in transport and industry is significant, and hydropower dominates the electricity sector. Meanwhile, because of policies to decarbonise all sectors and reduce harmful local air pollution, China leads global growth in absolute terms during the forecast period, surpassing the European Union to become the largest consumer of renewable energy. In the European Union, greater use of renewables is spurred by binding renewable energy targets for 2020 and 2030 as well as implementing country-level policies and improved energy efficiency.
Hydropower Wind Bioenergy Solar PV Others % of renewables (right axis) 22.85065264 27.44369387 116.3347233 8.703898991 4.07081899 16.9638591 27.04345242 38.69948752 125.0124662 13.17314016 7.085190083 20.50316411 84.73154738 21.80389987 15.82361365 9.479860873 33.50708955 8.920980229 92.23539466 39.55254664 22.52354044 33.04364725 42.53657506 11.59032593 22.9578698 19.52744198 87.86593761 5.196849497 4.850232302 10.18068477 21.25203423 28.77304498 93.64169392 12.69339271 8.255918563 11.88685812 26.89338326 3.073342034 58.60538831 0.060345517 0.765841354 42.14324007 30.2784936 4.506134622 67.66963719 0.639912592 1.211667354 44.25174206 9.027590192 3.820682585 42.59891896 2.145652007 0.881675817 10.82554833 10.85383839 6.86288179 55.0320996 11.41839719 1.780143798 12.12726231
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To meet long-term climate and other sustainability goals, renewable energy development in the heat, electricity and transport sectors must accelerate. Should progress continue at the pace currently forecast, the share of renewables in final energy consumption would be roughly 18% by 2040 – significantly below the IEA Sustainable Development Scenario’s benchmark of 28%.
Robust sustainability frameworks are key to bioenergy growth. Only bioenergy that reduces lifecycle GHG emissions while avoiding unacceptable social, environmental and economic impacts has a future role in decarbonising the energy system. Robust sustainability governance and enforcement must therefore be a central pillar of any bioenergy support policy.