IEA FAQs: Renewable energy

What is renewable energy?

Energy derived from natural processes (e.g. sunlight and wind) that are replenished at a faster rate than they are consumed. Solar, wind, geothermal, hydro, and some forms of biomass are common sources of renewable energy.


How much of the world’s energy comes from renewable sources?

In 2009, the world relied on renewable sources for around 13.1% of its primary energy supply, according to IEA statistics. Renewables accounted for 19.5% of global electricity generation and 3% of global energy consumption for road transport in the same year.


How much has wind power grown since 2000?

Global wind power capacity was 238 Gigawatts (GW) at the end of 2011, up from just 18 GW at the end of 2000, with an average growth rate of over 25% over the past five years.


How much has solar photovoltaic (PV) grown over the last decade?

Solar photovoltaic (PV) directly converts solar energy into electricity using a PV cell; this is a semiconductor device. The global total of solar PV was roughly 67 GW at the end of 2011, to be compared with just 1.5 GW in 2000. Over the past five years, solar PV has averaged an annual growth rate of over 50%. Growth has been mostly concentrated in a few countries, where PV generates today a few percent of total yearly electricity production.


How much has biofuel production grown over the last decade?

Global biofuel production grew from 16 billion litres in 2000, to more than 100 billion litres in 2010. This biofuel provides around 3% of the world’s fuel for transport. (In Brazil, biofuel provides 23% of all transport fuel, compared with 4% in the United States and 3% in the European Union).


What are variable renewables?

Variable renewables include wind, solar, wave and tidal energy, and are based on sources that fluctuate during the course of any given day or season. Variability is not new to power systems, which must constantly balance the supply and variable demand for electricity, and face all kind of contingencies. However, large shares of variable renewables supply may increase pressure on power systems, which may need increased flexibility to respond to this balancing issue. More flexible generating capacities (e.g. gas and hydro power plants), interconnections, storage (e.g. with pumped-hydro plants), and/or load-management empowered by smart grids, can be combined to provide the required flexibility.


In the IEA scenarios, what is the outlook for renewables?

Renewables increase their penetration significantly in all long-term scenarios. For example, in the central scenario of theWorld Energy Outlook, the New Policies Scenario – which takes account of broad policy commitments and plans that have been announced by countries – renewable electricity generation grows threefold from 2009 to 2035. In the 450 Scenario – which is in line with limiting global warming to about 2°C – renewables grow even more; by a factor of almost four. As a carbon dioxide emissions reduction option, renewables and biofuels come in second only to energy efficiency improvements in IEA scenarios.

In July 2012, the Agency will acknowledge the coming of age of the renewable energy sector by publishing, for the first time, an annual medium-term report that analyses that market. The report will include five-year projections for global renewable energy electricity capacity and generation. In so doing, it will provide an important benchmark to policy makers, industry and the wider market for measuring developments of renewable energy.


What is the impact of renewables on energy security?

Energy security and diversification of the energy mix is a major policy driver for renewables. Growth of renewables generally contributes to energy diversification, in terms of the technology portfolio and also in terms of geographical sources. Use of renewables can also reduce fuel imports and insulate the economy to some extent from fossil fuel price rises and swings. This certainly increases energy security. However, concentrated growth of variable renewables can make it harder to balance power systems, which must be duly addressed.


Are renewables competitive?

The renewable energy sector is demonstrating its capacity to deliver cost reductions, provided that appropriate policy frameworks are in place and enacted. Deployment is expanding rapidly. Non-hydro renewables, such as wind and solar PV, are increasing at double-digit annual growth rates. Costs have been decreasing and a portfolio of renewable energy technologies is becoming cost-competitive in an increasingly broad range of circumstances. Established technologies such as hydro and geothermal are often fully competitive. Where resources are favourable, technologies such as onshore wind are almost competitive. However, economic barriers remain important in many cases. In general, costs need to be reduced further. Moreover, fossil fuel subsidies and the lack of a global price on carbon are significant barriers to the competitiveness of renewables.


Should renewables be subsidised?

The IEA believes that further growth of renewable energy is essential for a secure and sustainable energy system. Transitional economic incentives that decrease over time are justified. Incentives are sometimes needed to stimulate cost reductions through technology learning, such as improvements in manufacturing, increased technology performances, economies of scale and larger deployment. Incentives may also be justified to secure  additional energy security and environmental benefits. Current policies have started to deliver in this respect. Nevertheless, in several countries, the design of support policies has not been ideal, and this has led to higher than anticipated levels of deployment and excessive policy costs. The IEA offers policy makers guidance on how to steer policies on renewables.


What is the role of the IEA in the renewables sector, now that the International Renewable Energy Agency (IRENA) has been formed and its work is underway?

The IEA believes that the work of the two agencies is complementary. The role of the IEA is to assess the total energy mix including renewables, not just renewables in isolation. The IEA will continue to work in the fields of renewables, assessing their competitiveness against other energy sources and their outlook in the Agency’s world energy scenarios. The IEA analyses the effectiveness of renewable energy policies to identify best practices and securely integrate large shares of renewables into the energy mix, in particular in developing countries. The IEA has been very collaborative with IRENA from its inception. In  January 2012, the two Agencies signed a Letter of Intent which identifies three initial areas of co-operation: a) development and publication of a Joint Global Renewable Energy Policies and Measures Database, which will expand on the existing IEA database to cover up to 150 countries, including all IRENA member countries; b) co-operation in technology and innovation, including the involvement of IRENA in the IEA Multilateral Technology Collaboration Network (Implementing Agreements); and, c) sharing of renewable energy statistics data and methods between the two organisations.



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