Expansion Beyond Expectations

Developments in the early 2000s showed upwards trends in global renewable energy investment, capacity, and integration across all sectors. Yet most mainstream projections did not predict the extraordinary expansion of renewables that was to unfold over the decade ahead. Scenarios from the renewable energy industry, the nternational Energy Agency, the World Bank, Greenpeace, and others all projected levels of renewable energy for the year 2020 thatwere alreadywell exceeded by 2010.1

Several factors set the foundation for this rapid growth. Energy crises beginning in the 1970s, and economic downturns following each global oil shock, underscored the role of energy in national and economic security. At the same time, a handful of pioneering countries—such as Germany, Denmark, Spain, and the United States—created critical early markets for renewables, which drove early technological advances and economies of scale, setting the stage and helping to fuel the past decade of explosive market expansion. Growing emphasis on mitigating climate change and adapting to its impacts has further contributed to the momentum.

Renewable energy's contribution to the global heat, power, and transport sectors has increased steadily; growth in renewables' share of total energy use has been moderated by increases in both population and world energy demand, most notably in developing and emerging economies.2 Renewable energy markets and technology developments have accelerated quickly, even compared to other rapidly developing technologies such as mobile phones.

Hydropower continues to claim the largest share of renewable electric capacity and generation worldwide.3 In 2004, hydropower dwarfed all other renewable electricity technologies, but today non-hydro renewables generate large and growing shares of electricity in an increasing number of countries. While hydropower leads globally in terms of electricity generation, biomass accounts for the largest portion of renewable energy production. The share of traditional biomass in global primary energy has held steady or declined in the past decade, while modern biomass has gained ground.4

Wind capacity has grown by a factor of more than eight since the beginning of 2004. Dynamic wind power markets are now located throughout the world rather than just in a few countries in Europe and the United States, as they were back in 2004. By the end of 2013, 24 countries had more than 1,000 MW of wind capacity, including emerging economies such as China, India, and Brazil, which have experienced rapid growth.5 The average size of installed wind turbines has doubled over the past 10 years, and technological improvements have reduced the costs of wind-generated electricity significantly, making wind power competitive with new fossil fuels in many markets today.6

Solar PV has been the fastest growing energy technology by far, with global capacity experiencing an extraordinary 53-fold increase between the beginning of 2004 and the end of 2013.7 The last decade has seen a spectacular decline in solar PV costs due to technology advances, the increasing scale of industrial production, and improved efficiency of solar PV cells and modules. With a learning rate of 18-22% for each doubling of installed capacity, solar PV module prices have dropped dramatically over the past two decades; prices fell 60% during 2011-2012 alone.8 In the solar PV industry, the most striking development has been seen in China, which now dominates global module production. Also, China has risen from near-zero levels 10 years ago to become the world's largest market in 2013.9

During the same period, concentrating solar thermal power (CSP) capacity increased nearly 10-fold.10 Investment has moved beyond the traditional markets of Spain and the United States, with increasing development in South Africa, the Middle East and North Africa (MENA) region, Asia, and Latin America.

The use of geothermal energy for the generation of electricity and heat has seen steady expansion. Furthermore, ocean technologies for electricity generation have evolved significantly throughout the last 10 years.

Although the last decade has seen tremendous advances in the electricity sector, the renewable heating and cooling sector has lagged behind. This is despite the marked significant growth over the past decade in the use of geothermal, solar thermal, and biomass heating technologies for water and space heating, process heat, and cooling.11 Given that the share of heating and cooling in final energy demand is much higher than that of electricity, fostering growth of renewable energy in this sector is of particular importance.

In the transport sector, the use of renewable energy in the form of biofuels grew at a rapid pace for much of the decade ending with 2013. Biodiesel production increased 15-fold, while ethanol production grew nearly fourfold (from much higher levels).12 Over the past decade, gaseous biofuels have seen small but growing markets in the transport sector, and initiatives to link renewable energy with electric transport also have emerged.13

1 Renewable Energy Policy Network for the 21st Century (REN21), Renewables Global Futures Report 2013 (Paris: REN21 Secretariat, 2013), http://www.ren21.net/Portals/0/REN21_GFR_2013_print.pdf.

2 Ibid.; REN21, Renewables 2007 Global Status Report (Paris: REN21 Secretariat, 2007), http://www.ren21.net/Portals/0/documents/activities/gsr/RE2007_Global_Status_Report.pdf.

3 REN21, Renewables 2013 Global Status Report (Paris: REN21 Secretariat, 2013), http://www.ren21.net/Portals/0/documents/Resources/GSR/2013/GSR2013_lowres.pdf; see also data in relevant sections of this report.

4 REN21, Renewables 2005 Global Status Report (Paris: REN21 Secretariat, 2005), http://www.ren21.net/Portals/0/documents/activities/gsr/RE2005_Global_Status_Report.pdf; REN21, Renewables 2013..., op. cit. note 3; see also data in relevant sections of this report.

5 Global Wind Energy Council, Global Wind Report- Annual Market Update 2013 (Brussels: 2014); REN21, Renewables 2005..., op. cit. note 4; REN21, Renewables 2013..., op. cit. note 3; data in relevant sections of this report.

6 International Energy Agency (IEA), Technology Roadmap: Wind Energy (Paris: Organisation for Economic Co-operation and Development (OECDVIEA, 2013), http://www.iea.org/publications/freepublications/publication/Wind_2013_Roadmap.pdf.

7 REN21, Renewables 2005..., op. cit. note 4; REN21, Renewables 2013..., op. cit. note 3; see also data in relevant sections of this report.

8 IEA Energy Technology Systems Analysis Program (IEA-ETSAP) and International Renewable Energy Agency (IRENA), Technology Brief E11 - January 2013 (Parisand Abu Dhabi/Bonn: 2013), http://www.irena.org/DocumentDownloads/Publications/IRENA-ETSAP%20Tech%20Brief%20Ell%20Solar%20PV.pdf.

9 European Commission Joint Research Centre, "PV Production Grows Despite a Crisis-driven Decline in Investment," press release (Brussels: 30 September 2013), http://ec.europa.eu/dgs/jrc/downloads/jrc_20130930_newsrelease_pv_status.pdf; see also section on Solar PV in this report.

10 REN21, Renewables 2005..., op. cit. note 4; REN21, Renewables 2013..., op. cit. note 3; see also relevant sections of this report.

11 Ibid.

12 Ibid.

13 Ibid.