REN21, a global renewable energy policy multi-stakeholder network that connects a wide range of key actors, seeks to facilitate knowledge exchange, policy development and joint action towards a rapid global transition to renewable energy. To assist policy decision making, The REN21 provides high quality analyses and data, including the Renewables Global Status Report, a comprehensive annual overview of the state of renewable energy.
The Renewables 2018 Global Status Report reveals that the renewable energy transition is possible, but advances so far are uneven across sectors. A dynamic renewable power sector in 2018 has been characterised by falling costs, increased investment, record-setting installation and new, innovative business models that are creating rapid change. The REN21 had identified following trends that defined the renewables sector in 2018:
A. The share of modern renewable energy in the total global energy supply is on the rise
The share of renewables in final energy consumption continues to grow globally with some technologies growing very rapidly. However, the global energy transition is only fully underway for the power sector; for other sectors, especially heating and cooling and transport sectors, it has barely begun. In this context, the REN21 emphasizes that the power sector on its own will not deliver the emissions reductions demanded by the Paris Agreement. Therefore, we must move from an electricity transition to an energy transition.
B. Renewable electricity saw record global growth in solar PV and continued acceleration of wind power
As regards solar PV, newly installed capacity increased by about 33% over the record-setting additions in 2016. Similarly, the global offshore wind market grew 30%. The Report reveals that, taken together, renewables accounted for an estimated 70% of net additions to global power generation capacity in 2017. 75% of the global investment in renewable power and fuels were made in China, Europe and the United States.
C. The costs of solar PV and wind continued to fall
Due to technological innovations, changes in markets, effective policies and new business models the costs of solar PV and wind has fallen dramatically. For example, in Germany, winning bids were on average nearly 50% lower than those over the last two years, in Canada, India, Mexico and Morocco, the prices bid for onshore wind power came down to about USD 30 per MWh.
D. Higher shares of variable renewable energy are being successfully integrated into electricity systems across the globe, without affecting grid stability
Penetration reached significant levels in many regions in 2017 and the countries leading in wind and solar PV penetration are Denmark (52.9%), Uruguay (28.1%), Germany (26%) and Ireland (25.2%). However, integrating high shares of VRE into the power system requires a conceptual shift integrating both supply- and demand-side solutions across sectors and across borders. For example, China is specifically encouraging the electrification of heating, manufacturing and transport in parts of the country where large renewable power capacity exists, The European Union is providing funding to support the construction of four major transmission lines across Europe, enabling surpluses in one area to be used or stored in another.
E. New market players emerged as costs decreased, and traditional utilities are changing their business models
According to the REN21, more than 130 leading global corporations had joined the RE100 initiative, a network of corporations committed to using 100% renewable power by early 2018, up from 87 corporations in 2016. Some utilities have announced that they will disengage from fossil fuel generation and move into large-scale renewable energy generation. For example, the French utility company Engie sold off coal and gas assets worth EUR 15 billion and will reinvest EUR 22 billion by the end of 2018 in energy efficiency and renewables.
F. Progress continued towards increasing energy access in developing countries, particularly those in sub-Saharan Africa
According to the REN21, the number of people without access to electricity in developing and emerging countries of Asia decreased from over 1 billion in 2000 to 0.44 billion in 2016. Significant progress has been observed particularly in Bangladesh, China, India and Indonesia. Especially distributed renewables for energy access systems such as off-grid solar devices provide cost-effective alternatives to extending or improving the grid. Thus, distributed renewables for energy access systems, serving an estimated 300 million people by the end of 2016, play a very important role in improving energy access.
G. Pledges to phase out coal power are on the rise
In 2017, Angola, Denmark, Italy, Mexico, New Zealand and the United Kingdom joined the Powering Past Coal Alliance that is committed to phasing out coal power by 2030. In addition, an increasing number of companies that operated coal-fired power plants moved away from the coal business in 2017.
The Report concludes that despite positive trends, the current pace of the energy transition will not allow us to keep global temperature rise below 2°C compared with pre-industrial levels. We also are falling behind on meeting the global energy targets for 2030 as set out in SDG 7. In other words, the transition to a renewable energy future is unstoppable, however, it is not happening within the time frame needed to ensure a stable climate. Thus, governments have a key role to play in accelerating momentum in the energy transition. The following are key actions that governments should take to level the playing field:
1. Set priorities through tax and other financial incentives - continuing to subsidise fossil fuels and nuclear power distorts the market and slows the renewable energy transition. These subsidies need to be phased out as quickly as possible
2. Set targets for the energy system as a whole, including for all major end-use sectors – targets may take many forms, including goals for achieving a specified contribution of renewable generation, or for shares of renewable energy overall and in specific sectors.
3. Think outside the box: approach challenges systemically - a faster transition to a renewable energy future requires a holistic, system-wide approach, including increasing energy efficiency measures to reduce overall energy demand.
4. Design for flexibility - energy systems must be flexible enough to accommodate the variable nature of wind and sun, by e.g. incorporating sufficient flexible generation and maximising the use of demand management. To date, most flexibility in power systems has been provided by transmission interconnections with neighbouring systems and by flexible generation capacity (particularly hydropower and natural gas-fired power plants).
5. Adopt policies that enable the rapid uptake of renewables such as further measures to integrate renewables and energy efficiency, already under way to some extent in the building, heating and cooling sectors, measures to increase the uptake of renewable energy in transport, measures to increase energy access and measures to encourage innovation.