Executive Summary

In June 2004, delegates from 154 countries converged in Bonn, Germany, for the world's first government-hosted international conference on renewable energy. REN21 emerged from that process to become the first international organisation to track renewable energy developments. At that time, there were visible upwards trends in global renewable energy capacity and output, investment, policy support, investment, and integration. Yet even ambitious projections did not anticipate the extraordinary expansion of renewables that was to unfold over the decade ahead.

Global perceptions of renewable energy have shifted considerably since 2004. Over the last 10 years, continuing technology advances and rapid deployment of many renewable energy technologies have demonstrated that their potential can be achieved. Renewables advanced further towards realising that potential during 2013.

CONTINUED RENEWABLE ENERGY GROWTH

Renewable energy provided an estimated 19% of global final energy consumption in 2012,i and continued to grow in 2013. Of this total share in 2012, modern renewables accounted for approximately 10%, with the remainder (estimated at just over 9%) coming from traditional biomass.ii Heat energy from modern renewable sources accounted for an estimated 4.2% of total final energy use; hydropower made up about 3.8%, and an estimated 2% was provided by power from wind, solar, geothermal, and biomass, as well as by biofuels.

The combined modern and traditional renewable energy share remained about level with 2011, even as the share of modern renewables increased. This is because the rapid growth in modern renewable energy is tempered by both a slow migration away from traditional biomass and a continued rise in total global energy demand.

As renewable energy markets and industries mature, they increasingly face newand different challenges, as well as a wide range of opportunities. In 2013, renewables faced declining policy support and uncertainty in many European countries and the United States. Electric grid-related constraints, opposition in some countries from electric utilities concerned about rising competition, and continuing high global subsidies for fossil fuels were also issues. Overall—with some exceptions in Europe and the United States—renewable energy developments were positive in 2013.

Markets, manufacturing, and investment expanded further across the developing world, and it became increasingly evident that renewables are no longer dependent upon a small handful of countries. Aided by continuing technological advances, falling prices, and innovations in financing—all driven largely by policy support—renewables have become increasingly affordable for a broader range of consumers worldwide. In a rising number of countries, renewable energy is considered crucial for meeting current and future energy needs.

As markets have become more global, renewable energy industries have responded by increasing their flexibility, diversifying their products, and developing global supply chains. Several industries had a difficult year, with consolidation continuing, particularly for solar energy and wind power. But the picture brightened by the end of 2013, with many solar photovoltaics (PV) and wind turbine manufacturers returning to profitability.

The most significant growth occurred in the power sector, with global capacity exceeding 1,560 gigawatts (GW), up more than 8% over 2012. Hydropower rose by 4% to approximately 1,000 GW, and other renewables collectively grew nearly 17% to more than 560 GW. For the first time, the world added more solar PV than wind power capacity; solar PV and hydropower were essentially tied, each accounting for about one-third of new capacity. Solar PV has continued to expand at a rapid rate, with growth in global capacity averaging almost 55% annually over the past five years. Wind power has added the most capacity of all renewable technologies over the same period. In 2013, renewables accounted for more than 56% of net additions to global power capacity and represented far higher shares of capacity added in several countries.

Over the past few years, the levelised costs of electricity generation from onshore wind and, particularly, solar PV have fallen sharply. As a result, an increasing number of wind and solar power projects are being built without public financial support. Around the world, major industrial and commercial customers are turning to renewables to reduce their energy costs while increasing the reliability of their energy supply. Many set ambitious renewable energy targets, installed and operated their own renewable power systems, or signed power purchase agreements to buy directly from renewable energy project operators, bypassing utilities.

By the end of 2013, China, the United States, Brazil, Canada, and Germany remained the top countries for total installed renewable power capacity; the top countries for non-hydro capacity were again China, the United States, and Germany, followed by Spain, Italy, and India. Among the world's top 20 countries for non-hydro capacity, Denmark had a clear lead for total capacity per capita. Uruguay, Mauritius, and Costa Rica were among the top countries for investment in new renewable power and fuels relative to annual GDP.

In the heating and cooling sector, trends included the increasing use of renewables in combined heat and power plants; the feeding of renewable heating and cooling into district systems; hybrid solutions in the building renovation sector; and the growing use of renewable heat for industrial purposes. Heat from modern biomass, solar, and geothermal sources accounts for a small but gradually rising share of final global heat demand, amounting to an estimated 10%. The use of modern renewable technologies for heating and cooling is still limited relative to their vast potential.

i - Note that it is not possible to provide 2013 shares due to a lack of data.

ii - Note that there is debate about the sustainability of traditional biomass, and whether it should be considered renewable, or renewable only if it comes from a sustainable source.

The growth of liquid biofuels has been uneven in recent years, but their production and use increased in 2013. There is also growing interest in other renewable options in the transport sector. The year saw a continued rise in the use of gaseous biofuels (mainly biomethane) and further development of hybrid options (e.g., biodiesel-natural gas buses, and electric-diesel transport). There are limited but increasing initiatives to link electric transport systems with renewable energy, particularly at the city and regional levels.

Some highlights of 2013 include:

  • In the European Union, renewables represented the majority of new electric generating capacity for the sixth consecutive year. The 72% share in 2013 is in stark contrast to a decade earlier, when conventional fossil generation accounted for 80% of new capacity in the EU-27 plus Norway and Switzerland.
  • Even as global investment in solar PV declined nearly 22% relative to 2012, new capacity installations increased by about 32%.
  • China's new renewable power capacity surpassed new fossil fuel and nuclear capacity for the first time.
  • Variable renewables achieved high levels of penetration in several countries. For example, throughout 2013, wind power met 33.2% of electricity demand in Denmark and 20.9% in Spain; in Italy, solar PV met 7.8% of total annual electricity demand.
  • Wind power was excluded from one of Brazil's national auctions because it was pricing all other generation sources out of the market.
  • Denmark banned the use of fossil fuel-fired boilers in new buildings as of 2013 and aims for renewables to provide almost 40% of total heat supply by 2020.
  • Growing numbers of cities, states, and regions seek to transition to 100% renewable energy in either individual sectors or economy-wide. For example, Djibouti, Scotland, and the small-island state of Tuvalu aim to derive 100% of their electricity from renewable sources by 2020. Among those who have already achieved their goals are about 20 million Germans who live in so-called 100% renewable energy regions.

The impacts of these developments on employment numbers in the renewable energy sector have varied by country and technology, but, globally, the number of people working in renewable industries has continued to rise. An estimated 6.5 million people worldwide work directly or indirectly in the sector.

AN EVOLVING POLICY LANDSCAPE

By early 2014, at least 144 countries had renewable energy targets and 138 countries had renewable energy support policies in place, up from the 138 and 127 countries, respectively, that were reported in GSR 2013. Developing and emerging economies have led the expansion in recent years and account for 95 of the countries with support policies, up from 15 in 2005. The rate of adoption remained slow relative to much of the past decade, due largely to the fact that so many countries have already enacted policies.

In 2013, there was an increasing focus on revisions to existing policies and targets, including retroactive changes, with some adjustments made to improve policy effectiveness and efficiency, and others aimed to curtail costs associated with supporting the deployment of renewables. At the same time, some countries expanded support and adopted ambitious new targets.

Policy mechanisms continued to evolve, with some becoming more differentiated by technology. Feed-in policies in many countries evolved further towards premium payments in the power sector, and continued to be adapted for use in the heating sector. Particularly in Europe, new policies are emerging to advance or manage the integration of high shares of renewable electricity into existing power systems, including support for energy storage, demand-side management, and smart grid technologies.

As in past years, most renewable energy policies enacted or revised during 2013 focus on the power sector. A mix of regulatory policies, fiscal incentives, and public financing mechanisms continued to be adopted. Feed-in policies and renewable portfolio standards (RPS) remained the most commonly used support mechanisms, although their pace of adoption continued to slow. Public competitive bidding, or tendering, gained further prominence, with the number of countries turning to public auctions rising from 9 in 2009 to 55 as of early 2014.

Although the heating and cooling sector lags far behind the renewable power sector for attention from policymakers, the adoption of targets and support policies has increased steadily. As of early 2014, at least 24 countries had adopted renewable heating (and cooling) targets, and at least 19 countries had obligations at the national or state/provincial level. Renewable heating and cooling is also supported through fiscal incentives, as well as through building codes and other measures at the national and local levels in several countries.

As of early 2014, at least 63 countries used regulatory policies to promote the production or consumption of biofuels for transport; this was up from the 49 reported in GSR 2013. Some existing blend mandates were strengthened, and the use of fiscal incentives and public financing expanded. In some countries, however, support for first-generation biofuels was reduced due to environmental and social sustainability concerns. Although most transport-related policies focus on biofuels, many governments continued to explore other options such as increasing the number of vehicles fuelled with biomethane and electricity from renewable sources.

Thousands of cities and towns worldwide have policies, plans, and targets to advance renewable energy, often far outpacing the ambitions of national legislation. Policy momentum continued in 2013 as city and local governments acted to reduce emissions, support and create local industry, relieve grid capacity stress, and achieve security of supply. To accomplish these goals, they increasingly made use of their authority to regulate, make expenditure and procurement decisions, facilitate and ease the financing of renewable energy projects, and influence advocacy and information sharing. As cities seek to share and scale up best practices, highlight their commitments to renewable energy, and account for their achievements, local governments are increasingly prioritising systematic measurement and reporting of climate and energy data.