A Decade of Change

Global perceptions of renewable energy have shifted considerably since 2004, when people widely acknowledged the potential of renewable energy, but large-scale deployment still had to be demonstrated. Over the last 10 years, continuing technology advances and rapid deployment of many renewable energy technologies, particularly in the electricity sector, have demonstrated that their potential can be achieved.

Today, renewable energy technologies are not only viewed as tools for improving energy security and mitigating and adapting to climate change, but are also increasingly being recognised as investments that can provide direct and indirect economic advantages by reducing dependence on imported fuels, improving local air quality and safety, advancing energy access and security propelling economic development, and creating jobs.14

Declining costs have played a significant role in the expansion of renewable energy deployment in recent years. Now, several renewable energy technologies are cost competitive with conventional generation technologies, even before considering environmental and other externalities.15

As a result, companies have begun to realise that making the switch to renewable energy in conjunction with energy efficiency measures can reduce their energy costs while helping them to tackle sustainability concerns. An increasing number of companies, large and small, are either purchasing renewable electricity from utilities and other providers, or installing and operating renewable energy capacity at their own facilities. Furthermore, recent years have seen the rise of self-generation at the household level, as well as the spread of cooperative and community-owned renewable energy projects.

Extraordinary growth in renewable energy markets and their global spread have led to a significant rise in the number of manufacturers, the scale of manufacturing, and the number of jobs in installation and servicing of renewable energy technologies, as well as expansion into new markets. This is particularly true for the solar PV and wind power industries, which have experienced industry consolidation simultaneously.

Tenyearsago, mostdeploymentand manufacturing of renewable energy occurred in Europe, the United States, and Japan. Since then, markets, manufacturing, and investment have shifted to other regions. China has become the world leader in renewables manufacturing and installed capacity, having increased nvestment in the sector nearly every year for the past decade.16 ncreasing amounts of money are now flowing to developing and emerging countries across Africa, Asia, Latin America, and the Middle East, in response to the rapid growth in energy demand and growing interest in renewables in these regions.

Foreign direct investment in renewable energy and the mobilisation of private capital in emerging economies has also contributed to the past decade of growth across technologies and regions. Nonetheless, many of the countries that led global markets in 2004 continue to do so. These paved the way for technology advances and market expansion through early nvestment in technology and policy design.

As renewables have spread across the globe, they have seen growing use in remote and rural areas of the developing world. Renewable electricity in rural areas has continued to become more affordable and diversified in both application and size as technology has advanced, prices have decreased, knowledge of local renewable resources has improved, and new business and financing models have emerged.17 Parallel advances in electronics, management systems, mobile phones, and other technologies have also reduced the costs of renewable energy systems and services while extending their reach.

Over the past decade, the share of people who lack access to modern energy services has fallen by nearly 10 percentage points (down from almost 25%), even as the global population has expanded significantly.18 Renewables have played a role in this advancement. However, advances are not spread evenly geographically, leaving large areas of Africa still without access to modern energy services. Renewables are uniquely positioned to provide energy access in a sustainable manner, more rapidly and generally at lower cost than their alternatives. The UN SecretaryGeneral'sSustainable Energyfor All (SE4ALL) initiative, launched in 2012, aims to further boost international development in the fields of energy access, renewable energy deployment, and energy efficiency. While some countries had already established targets for 100% energy access, SE4ALL has encouraged many more countries to commit to this goal.19

The last decade has also brought a series of institutional changes. REN21—the Renewable Energy Policy Network for the 21st Century—was created as an outcome of the Renewables 2004 conference in Bonn, Germany. REN21 was established as the multi-stakeholder "coalition of the willing," bringing together key actors from both the private and public sector to facilitate a rapid global transition to renewable energy. Five years later, the nternational Renewable Energy Agency (IRENA) was founded and, by early 2014, it already counted 130 member countries, demonstrating the interest of most countries around the world in advancing renewable energy. Throughout the decade, the nternational Energy Agency has scaled up its analytical work on renewable energy, and all of these organisations work together closely to raise the profile of renewable energy.

14 0. Edenhofer et al., Intergovernmental Panel on Climate Change Special Report on Renewable Energy Sources and Climate Change Mitigation (New York: Cambridge University Press, 2012), http://www.ipcc.ch/pdf/special-reports/srren/SRREN_Full_Report.pdf.

15 Lazard Ltd., Lazard's Levelized Cost of Energy Analysis - Version 7.0 (New York: August 2013).

16 Frankfurt School-United Nations Environment Programme Collaborating Centre for Climate & Sustainable Energy Finance (FS-UNEP Centre) and Bloomberg New Energy Finance (BNEF), Global Trends in Renewable Energy Investment 2014 (Frankfurt: 2014), http://fs-unep-centre.org/publications/gtr-2014.

17 José Jaime de Domingo, "Accessible Energyfor Rural Communities without Electricity," Empowering the Sun blog (ISOFOTON), 31 July 2013, http://empoweringthesun.wordpress.com/2013/07/; see also section on Distributed Renewable Energy in Developing Countries in this report.

18 IEA, World Energy Outlook 2006 (Paris: OECD/IEA, 2006), http://www.worldenergyoutlook.org/media/weowebsite/2008-1994/WEO2006.pdf; World Bank, Global Tracking Framework (Washington, DC: 2013), http://www.worldbank.org/en/topic/energy/publication/Global-Tracking-Framework-Report.

19 United Nations Sustainable Energyfor All, "Universal Energy Access," 2013, http://www.se4all.org/our-vision/our-objectives/universal-energy/.