Tackling climate change
Although we have made progress in decarbonising many aspects of the world’s energy matrix, with solar, wind and hydro all adding to “green” electricity generation, longdistance transport has proven much more difficult to decarbonise. Increasing electrification of urban transport is anticipated, with a steady increase in hybrid and fully electrified cars. In contrast, long-distance transport, particularly aviation, marine and road freight, will be much harder to electrify. Similarly, other possible “green”
options such as using renewable natural gas and green hydrogen, are proving challenging to commercialise and are likely to be at least a decade away. The aviation sector contributes about 2% of the world’s CO₂ emissions and about 12% of all transport emissions, amounting to 915 million tonnes (Mt) of CO₂ in 2019 (ATAG, 2020). Non-CO₂ emissions from aviation also have a significant climate impact, contributing almost two-thirds of net radiative forcing (Lee et al., 2021). Until the impact of COVID-19 on the global economy, aviation was one of the fastest-growing transport sectors, with demand increasing at about 4% per year (Wheeler, 2018) and pre-COVID projections suggesting
that the sector’s emissions could grow to 2.1 gigatonnes (Gt) per year (IRENA, 2018).

Figure 1 illustrates the potential contribution of different options, although considerable uncertainties remain. Various factors such as decarbonising airport/land operations, increasing the efficiency of aircraft and new infrastructure investment will help reduce the sector’s carbon emissions. Sustainable aviation fuels will provide the lion’s share of the sector’s decarbonisation potential (the orange section).

Sustainable aviation fuels
Biojet (i.e. aviation fuel produced from biomass) is currently the most certified type of sustainable aviation fuel. Over time synthetic aviation fuels produced from green hydrogen could also play a role as drop-in fuels, but production is currently very limited and costs are very high, exacerbated by a lack of demand for the fuels at the current price point (IRENA, 2020a). Biojet therefore holds the most promise for cost-effective scale-up and use in the 2020s and 2030s.


The aviation sector contributes about 2% of the world’s CO₂ emissions and about 12% of all transport emissions in 2019 (ATAG, 2020). Although not widely recognised, the vast majority of global transport energy needs are met by oil and petroleum products (96.7%), with biofuels (3.0%) and renewable electricity (0.3%) contributing only small amounts (REN21, 2020). Before COVID affected global transport, various groups had projected global demand for all liquid transport fuels (primarily fossil-derived), including biofuels (IRENA, 2016a). It was anticipated that total biofuels would increase significantly from over 100 billion litres today to about 600 billion litres by 2050. IRENA’s 1.5°C
Scenario (1.5-S) , which has a goal of holding the global temperature rise to no more than 1.5°C, estimates that about 740 billion litres per year of liquid biofuels will be required, of which around 200 billion litres is biojet fuel (IRENA, 2021).

As summarised in Table 1, although the number of renewable diesel facilities continues to grow globally, only two facilities produced biojet fuel in 2019, Neste (Rotterdam) and World Energy (California). The Neste Singapore facility is currently undergoing infrastructure modifications to produce biojet on a routine basis by 2022. It should be noted that only about 15% by volume of the total capacity of these refineries can be fractionated to produce biojet. Although this fraction can be increased (up to a maximum of 50%), it comes at a higher cost4 and a loss of yield. At this point in time it is not economically attractive for companies to produce a higher biojet fraction (UOP, 2020).


In the future, electric and hydrogen-powered aircraft will help reduce the sector’s CO₂ emissions as well as providing additional environmental benefits such as decreasing contrail emissions, improving local air quality and reducing noise pollution (ICAO, 2019a). However, emission reduction calculations must be based on a full life-cycle assessment, not just tailpipe emissions. For example, overall emission reductions will only occur if the source of electricity or hydrogen is from a renewable resource such as using solar/wind/ hydroelectricity to recharge batteries or using “green” hydrogen to power a fuel cell. Although there is enormous potential in these alternative propulsion systems, as mentioned earlier, most carbon emissions occur during long-distance flights while transporting large numbers of passengers. As aircraft have an average operating lifespan of about 30 years, and as it typically takes years to design and build these new propulsion systems, fleet replacement will not happen soon. It is likely that challenges such as the weight and size of batteries and sourcing green hydrogen will result in these technologies first being pioneered in short-distance flights involving a small number of passengers. Thus, any alternative propulsion systems used in long-distance flights are unlikely to have a significant impact on emission reductions before 2050 (Baraniuk, 2020).


The two main feedstock categories that are primarily being pursued are the oleochemical/lipid-based processes (using fats, oils and greases [FOGs], vegetable oils and animal/rendered fats) and the socalled biocrude-based processes derived from various lignocellulosic/biomass feedstocks (such as agricultural residues and woody biomass). The vast majority of biojet fuel that is produced today is derived via the oleochemical/lipid “conventional” route, and this conventional route to biojet fuels is likely to dominate the biojet market in the coming decade. As demonstrated by companies such as Neste, lipids are a relatively high-density feedstock, which allows them to be more readily transported over long distances, achieving benefits such as larger economies of scale. For example, the Neste facilities in Rotterdam and Singapore produce over one billion litres of renewable diesel per year, partly as a result of the company successfully establishing a global supply chain, sourcing fats and oils from New Zealand, Australia, China, Canada and other countries. Currently, alternative crops such as camelina, carinata and salicornia are also being assessed as lipid feedstocks for potential biojet fuel production. However, further work is required to fully develop and optimise these supply chains, including the establishment of more routine processing infrastructure.

As the technology used to make conventional biojet is relatively mature, the amount, cost and overall sustainability of the feedstock will be very important. For example, structuring policies to link with the carbon intensity of fuels in California has encouraged the increased use of waste lipid feedstocks such as used cooking oil and tallow (Figure 3), and this is reflected in the current feedstock mix used by companies such as Neste (Figure 4). One of the critical aspects of sustainability is the need for overall emission reductions, with CORSIA requiring at least a 10% reduction across the entire supply chain (ICAO, 2019b).

In contrast, advanced biojet fuel based on biomass (biocrudes), waste carbon, alcohols and sugars is still very much under development. As described earlier, lignocellulosic materials, such as agricultural residues and woody biomass, will be the primary feedstocks for thermochemical technologies such as gasification and thermochemical liquefaction (pyrolysis, etc.) (Karatzos et al., 2017). In addition, biomass feedstocks can be used to produce sugars that may be fermented to alcohols for ATJ production, or directly fermented to hydrocarbons such as farnesene (Karatzos, Mcmillan and Saddler, 2014).


As summarised in Figure 9, multiple technology pathways can be used to make biojet fuels.

this means that biojet produced via the HEFA pathway is the only technology that is at this level. As described earlier, CAAFI has developed Fuel Readiness Level (FRL) and Feedstock Readiness Level (FSRL) tools to assess potential feedstock supply chains, and progression between FRL levels can take three to five years (Mawhood et al., 2016). Figure 10 provides an estimate of the commercialisation status of various technologies.


ICAO members have agreed that global market-based measures will be one of the strategies used to address the environmental impact of the aviation sector. The ICAO CORSIA is designed to work in conjunction with efficiency improvements, innovative technologies and biojet fuels to achieve the indicated carbon reduction targets. However, to achieve carbon-neutral growth, offsets will be used by the airlines as an interim measure by financing emission reductions in other sectors. Until the COVID pandemic, the airline sector’s baseline emissions were due to be defined as an average of the 2019 and 2020 international flight emissions, with the offset requirements calculated against this baseline to ensure carbon-neutral growth. However, as a result of the pandemic, only the 2019 emissions will be used as the baseline. targets will be mandatory for all members unless they have obtained an exemption. Exceptions will include flights to and from least-developed countries, small island developing states, landlocked developing countries and states/countries that represent less than 0.5% of international revenue tonne kilometres. However, some exempt states may still volunteer to participate. The countries/regions that will participate or who are exempt from the various phases are summarised in Figure 11.


Biojet fuel is significantly more expensive than conventional jet fuel and is likely to remain so for some time to come. Estimates of the price difference vary from 2-7 times (IATA, 2015a) to 3-4 times higher (Hollinger, 2020). Although airlines and airports have signed several offtake agreements, the price of the biojet fuel in these contracts is not publicly disclosed. Thus, it has proven difficult to project accurate prices for biofuels, with most cost estimates derived from sources such as reports, online media, presentations and academic papers (Bann et al., 2017; IATA, 2015a, 2015b; de Jong et al., 2015; de Jong, Hoefnagels, et al., 2017; Pavlenko et al., 2019; Staples et al., 2014; Yao et al., 2017; Zhao, Yao and Tyner, 2016).

Figure 12 shows the estimated MFSPs for different biojet technologies according to a number of publications and the production costs, broken down by capital expenditure (CAPEX), operating expenditure (OPEX) and feedstock cost (see Annex B). MFSP represents the break-even price at which fuel products have to be sold to attain a zero NPV. It may include additional costs or benefits compared to the production cost, such as tax credits, additional infrastructure cost, environmental benefits and by-product revenue. HEFA is currently the most commercialised technology option, with low CAPEX and OPEX, but with high feedstock cost (Figure 12). Feedstock costs vary depending on the source, and waste-based feedstock such as UCO or tallow can lead to a significant reduction in the overall fuel production costs. HEFA is expected to play a pivotal role as a primary, short-term accelerator for biojet, but availability of sustainable oil-based raw material will become limiting. These feedstocks are already used extensively for biofuels in the road transport sector and biojet is likely to be in competition with renewable diesel for them.


As discussed earlier, the primary motivation for developing biojet fuels is to reduce the carbon footprint of the aviation sector. Thus, ensuring the overall sustainability of biojet production and use will be a critical component of its development. Overall sustainability is typically assessed by certification bodies who consider the complete supply chain against a number of principles and criteria. Two prominent certification bodies that have been involved in the assessment of the sustainability of biojet fuels are the Roundtable on Sustainable Biomaterials (RSB)14 and International Sustainability and Carbon Certification (ISCC).15 Other organisations such as the Programme for the Endorsement of Forest Certification (PEFC), the Sustainable Forest Initiative (SFI),16 the Forest Stewardship Council (FSC)17 and the Sustainable Biomass Program (SBP)18 are arms-length certification systems specifically designed to assess the sustainability of forestry-based feedstocks and forestry practices and to ensure that woody biomass is sourced


Potential feedstock supply and challenges
Multiple feedstocks can be used to produce biojet fuels, including lipids (vegetable oils, UCO and other waste lipids), starches, sugars and lignocellulosics (forest residues, agricultural residues and energy crops). Theoretical feedstock availability is not expected to a barrier to biojet production, although high prices may be a barrier. The challenge relating to feedstock is rather the competing uses for other applications, such as bioenergy for heat and electricity, and availability once these have been satisfied. The cost of feedstock can be a significant obstacle and biojet fuel production is very sensitive to the cost and sustainability of feedstock. The low energy density of lignocellulosic feedstocks such as forest residues makes transport cost an important factor, and feedstock can only be transported economically over limited distances.


Ambitious, stable and internationally relevant policies will be needed if there is to be a significant increase in biojet fuel production and use. Several recent reports have assessed the types of policies that will be required to increase biojet fuel production and use (World Economic Forum, 2020). Such policies will need to address factors such as unfavourable economics, limited feedstock availability, competition from other low-carbon fuel uses and immature technologies, which currently limit the use of sustainable aviation fuel, including biojet. If the aspirational 2050 carbon reduction targets of the sector are to be met, the construction and repurposing of hundreds of facilities will be needed, requiring hundreds of billions of dollars of investment. These facilities will then produce the low-carbon jet and other low-carbon fuels via many of the production pathways discussed in this report (Staples et al., 2018). Effective policies will also be required to catalyse many of the components of viable supply chains, from the production of low-cost and sustainably derived feedstocks through to the preferential production and use of low-carbon-intensive jet fuels. Aviation may compete with other modes of transport (e.g. cars, trucks, ships and trains) for similar fuels as they all seek to decarbonise. However, it is likely that biojet fuel production would still benefit from these types of incentive, as loan guarantees and grants could play an important role in encouraging initial investment in drop-in biofuel/ biojet fuel facilities. Other policies, such as producer incentives, would mitigate the longer-term risk to investors, with the information in Figure 14 illustrating the impact of incentives on five different transport fuels under the California LCFS (Lane, 2020). The current situation in California with respect to biofuel incentives and their impact on the value of the biofuel shows that conventional ethanol, cellulosic ethanol and renewable diesel can earn incentives under the federal Renewable Fuel Standard (orange), as well as LCFS credits under California’s policies (light green), while the two advanced biofuels (cellulosic ethanol and renewable diesel) can also earn further federal tax credits (yellow).


Although oleochemical/lipid feedstocks are currently the primary feedstocks used to make biojet fuels, in the longer term thermochemical technologies will use feedstocks such as biomass and residues to make lowcarbon-intensity fuels. While some parts of the process pathway have established regional/local supply chains (e.g. wood pellets and waste lipids), future biojet fuel pathways are likely to be based on current infrastructure (such as repurposed oil refineries), available feedstocks, and regional conditions and policies.


The deep decarbonisation of the aviation sector by 2050 will require concerted action on multiple fronts
and the use of a range of different solutions, including new propulsion systems such as electric and hybrid aircraft and the use of hydrogen. However, to achieve early reductions in emissions in the 2020s and 2030s, and deep reductions by 2050, the use of sustainable aviation fuels will be essential. Biojet is currently the most certified type of sustainable aviation fuel and whilst over time synthetic fuels will become available, biojet holds the most promise for cost-effective scaleup and use in the 2020s and 2030s, and is likely still to be playing a major role in the 2040s. However, to date very little biojet fuel has been used, with limited availability, high costs and a lack of policy drivers impeding its development. Significant progress has been made recently in several areas, such as ASTM certifying new biojet production routes, various airports successfully using airport fuel hydrant systems to deliver biojet/jet fuel blends and over 315 000 flights using some percentage of biojet fuels. But the production and use of these lower-carbon-intensive fuels remains small, contributing less than 1% of all of the jet fuel that is currently used.


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Climate change is one of the greatest threats of this century and is already affecting many regions around the globe. Such impacts are driven by rising GHG emissions, especially from the energy sector, which is responsible for two-thirds of the global total (IRENA, 2019a). Therefore, energy systems worldwide need to transition to renewable and clean energy sources and to undergo radical changes, driven by a combination of technological breakthroughs, the need to provide affordable energy sources and the pressing need to put an end to climate change. To transform the energy sector, a shift towards renewable energy sources is required. The world’s oceans are a source of abundant renewable energy, which can be tapped by offshore renewables – including offshore wind (with fixed and floating foundations, or airborne), floating solar photovoltaics (PV) and various forms of emerging ocean energy technologies – to decarbonise the energy sector. The benefits of offshore renewables go beyond the energy sector, as the energy harnessed from oceans has the potential to drive a vigorous global blue economy for a variety of end-use applications, including shipping, cooling, aquaculture and water desalination, among others. Offshore renewables are expected to provide significant socio-economic benefits and to improve the livelihoods of islands, and especially small island developing states (SIDS) and least developed countries (LDCs) through job creation, local value chains and enhanced synergies among the different blue economy actors.

Despite the noticeable potential and various benefits, offshore renewables are emerging technologies with varying degrees of maturity. Offshore wind power is the most mature technology and is already commercialised, while ocean energy technologies are still in the research, development and demonstration (RD&D) phases. Because these technologies are immature, they are bound to face a series of challenges that could encumber the commercialisation that would realise their full potential. Offshore renewables will be located mostly in harsh environmental conditions, and in areas with almost non-existent power grids. This corresponds to high capital costs and electricity prices. The limited established supply chains and low costcompetitiveness with other mature renewable energy sources, in addition to the lack of regulatory frameworks and inclusion in national policies, creates a gap to commercialisation. Such barriers have adverse effects on social awareness of offshore renewables, which shapes both the public and investors’ trust in these technologies.


Due to its offshore location, its high energy output per square metre and its ability to be built up quickly at gigawatt-scale, offshore wind is a valuable option to provide electricity to densely populated coastal areas in a cost-effective manner. Developments in turbine technologies as well as in foundations, installation, access, operation and system integration have made possible the move into deeper waters and farther from shore, in order to reach sites with greater energy potential. Over the past 5-10 years, offshore wind has reached maturity, making it the most advanced technology among offshore renewables (IRENA, 2019b).

Offshore wind with fixed foundations
Offshore wind farms with fixed foundations are the most common type of installation, with nearly 34 GW of cumulative installed capacity by the end of 2019 (IRENA, 2019b); they are also by far the most mature of the offshore renewables technologies. Such turbines, as a result of R&D, are being routinely deployed in water depths of up to 40 metres, and in some cases up to 60 metres, and at up to 80 kilometres’ distance from shore. A variety of fixed offshore wind turbines have been developed over time, with the most common types being gravity-based foundations, monopile foundations, tripod foundations and jacket foundations, as shown in Figure 7.

Offshore wind with floating foundations
Floating wind farms are one of the recent developments in offshore renewable energy technologies and offer several opportunities. In contrast to the fixed offshore wind farms that are limited to shallow water depths, floating foundations enable access to waters more than 60 metres deep. In addition, they facilitate setting up turbines even for mid-depth sites (30-50 metres), which could potentially become a lower-cost alternative to wind farms with fixed foundations (IRENA, 2016b). Another advantage is the reduced activity on the seabed during the installation phase, which lowers the impact on marine life (IRENA, 2019b).

The first commercial-scale offshore wind farm came into operation in 2002 in Denmark with a capacity of 160 MW. Since then, global installed offshore wind capacities have spiked rapidly over the past two decades. By the end of 2020, the overall installed capacity of offshore wind was around 34 GW (IRENA, n.d.), which represents a more than 10-fold increase from 2010, as shown in Figure 13. To date, the world’s largest offshore wind farm is the UK’s Hornsea 1, with 1.12 GW of capacity (Shin, 2021).

Offshore wind has the potential to play a pivotal role in achieving renewable energy targets in many countries around the globe. Over the past two decades, Belgium, China, Denmark, Germany and the UK were the leading countries in offshore energy deployment in the global market. In terms of new offshore wind installations, China and the UK have been leading this trend since 2018 and are expected to grow even further (Fortune Business Insights, 2019); this in turn will lead to growing jobs and benefits domestically. In 2020, China recorded the highest offshore wind installations with more than 3 GW of installed capacity, followed by the Netherlands with 1.5 GW, Belgium with 0.7 GW and the UK with 0.4 GW. To date, around 90% of the global installed offshore capacity is commissioned in the North Sea and nearby Atlantic Ocean (IRENA, 2019b).

The global weighted average levelised cost of electricity (LCOE) for offshore wind has decreased overall, from USD 0.162/kWh in 2010 to USD 0.084/kWh by 2020. However, the LCOE increased between 2010 and 2014 as projects started shifting more into deeper waters, reaching a peak of USD 0.171/kWh in 2011 and USD 0.165/kWh in 2014, followed by a sharp decline to 2020, as shown in Figure 17. The LCOE for offshore wind decreased sharply in frontrunner countries, with the lowest weighted average LCOE reported in China at USD 0.084/kWh in 2020 followed by Germany and the UK. Table 4 highlights the declining LCOE trends for the frontrunners between 2010 and 2020.

Of the emerging trends discussed above, the production of green hydrogen using offshore wind electricity is an innovative business model that received the most attention in 2020. Future developments of offshore wind are witnessing a coupling with hydrogen production through electrolysers, and more than a dozen projects have been proposed since 2019. Such projects are attracting global interest, and from the total pipeline of planned projects of more than 200 GW, at least 17 GW of projects coupled with offshore wind have already been proposed, mainly in Europe. This capacity holds a share of 53% of the overall announced electrolysis projects from various electricity sources (BloombergNEF, 2021). The near- or medium-term pipeline of electrolysis projects powered by offshore wind (2021-2035) is dominated by countries in north-western Europe, namely Germany with 10 GW, followed by the Netherlands with 4.3 GW, Denmark with 2.3 GW and the UK with 112 MW. The AquaVentus consortium in Germany, with a capacity of 10 GW, is the largest planned project followed by NortH2 and Massvlakte 2 in the Netherlands with capacities of 200 MW each (BloombergNEF, 2021). The AquaVentus project highlights the importance of cross-country co-operation to maximise wind yields and enhance coupling opportunities with enabling technologies.


Ocean energy technologies are niche and emerging technologies with the potential to power coastal communities, as well as to drive a blue economy. Globally, 40% of the population, around 2.4 billion people, live within 100 kilometres from the coast (UN, 2017). Those communities are in need of various economic activities and reliable power sources, which can be provided by predictable ocean energy
technologies as a baseload source. Moreover, ocean energy technologies could facilitate the integration of variable renewable energy sources such as solar PV and wind. Generally, ocean energy technologies are categorised based on the source used for power generation. For instance, tidal stream and tidal barrage are referred to when tidal energy is used, whereas the term wave energy is used when power is
produced from ocean waves. Other sources that harness energy from temperature difference or salinity difference are ocean thermal energy conversion (OTEC) and salinity gradient, respectively. Ocean energy holds an abundance of untapped resource potential that could meet the current global electricity demand and the projected demand well into the future. The theoretical potential differs greatly among different technologies (Figure 20). Based on IRENA’s analysis, the global cumulative resource potential
ranges from 45 000 terawatt-hours (TWh) to well above 130 000 TWh annually (IRENA, 2020d). Therefore, ocean energy alone has the potential to meet more than twice the current global electricity demand. Currently, most ocean energy technologies have not reached commercialisation and are still in developmental stages, with the majority of technologies being in the prototype phase with the exception of some reaching early commercialisation. The growth in the ocean energy sector has been slower than expected. However, the past decade has witnessed noticeable progress in tidal and wave energy. As shown in Figure 21, the current global cumulative installed capacity across all ocean energy technologies is more than 515 MW.

Wave energy
Wave energy is mainly influenced by the wave height, wave speed, wavelength (or frequency) and wave density, and such characteristics are most powerful in latitudes between 30 degrees and 60 degrees and in deep water (greater than 40 metres). Although waves vary seasonally and in the short term, they are
considered a reliable source of energy as they can be forecasted in the future with a significant degree of accuracy. Wave energy resources are better distributed than those of tidal energy resources. This can be seen directly in their huge resource potential of around 29 000 TWh annually, which would be capable of meeting the current global electricity demand (Mørk et al., 2010). Unlike offshore wind, wave energy technologies have not witnessed a convergence towards one type of design, but rather different types of technologies are being pursued. Historically, three main working principles to harness energy from waves have been developed: oscillating water columns, oscillating bodies and overtopping devices (IRENA, 2014a). Figure 23 provides an overview of the different wave energy technologies.

Ocean energy technologies are being developed and pursued globally in 31 countries. However, despite the global presence, only a few countries are at the forefront of the ocean energy market, namely European countries such as Finland, France, Ireland, Italy, Portugal, Spain, Sweden and the UK, in addition to Australia, Canada and the USA. These countries hold the largest number of projects tested, deployed and planned as well as the most project developers and device manufacturers. Although the majority of ocean energy technologies are in the RD&D stages, an increasing number of companies, research institutes, universities and investors are showing interest in ocean energy technologies and are allocating resources to further develop them and to increase the installed capacity in the coming years.
For example, the cumulative capacity of planned ocean energy projects, with the exclusion of tidal barrage projects, is around 3 GW (Figure 25). The breakdown by technology of the projected capacities for tidal stream and wave energy, including the number of projects in the pipeline and the number of developers involved, is shown in Figure 26.

For wave energy, around 9 operational projects with a total capacity of around 2.3 MW were deployed globally across 8 countries and 3 continents. The projects are relatively small in capacity, with only one project with an installed capacity that exceeds 1 MW deployed in late 2020 (in Hawaii). The majority of wave energy projects were developed in European waters. However, some were installed as demonstration projects and only stayed in the water for a few months. For example, the UK has deployed the most projects, but none of these were operational by the end of 2020. Other ocean energy technologies, such as OTEC and salinity gradient, are far less mature and still in the R&D and conceptual phases. Thus, their market actors are not commercial but rather research institutes and universities.

Since ocean energy technologies are still at relatively early life-cycle stages, their LCOEs are uncertain and are difficult to estimate with accuracy. Currently, the LCOE for tidal energy is estimated between USD 0.20/kWh and USD 0.45/kWh and for wave energy between USD 0.30/kWh and USD 0.55/kWh. Figure 29 provides cost estimate projections and targets based on technology deployment. Although current estimates are still not competitive with conventional energy and with mature renewable energy sources such as ground-mounted solar PV and onshore wind, recent estimates by developers with active projects show that costs may be lower. For instance, the LCOE of tidal energy is expected to reach USD 0.11/kWh between 2022 and the early 2030s, whereas wave energy will experience a lag of five years and is expected to reach USD 0.22/kWh by 2025 and USD 0.165/kWh by 2030 (European Commission, 2016; Magagna, 2019a; ORE Catapult, 2018). Small island developing states (SIDS) are positioned to be the main benefactors of ocean energy technologies, where ocean energy would compete with diesel imports. Thus, these technologies could reach grid parity first.


Floating solar PV (FPV) is a fast-emerging technology with a high potential for rapid growth. FPV panels, by definition, are mounted on buoyant platforms or membranes on a body of water without being fixed on piles or bridges. Floating solar PV, either on freshwater or on seawater, can be considered as the third pillar of the global PV market alongside ground-mounted and rooftop solar PV, due to the increasing demand for such a technology, especially for countries with limited land availability such as densely populated countries and islands (IRENA, 2020a).


In response to the increased use of ocean resources due to technological advancements and competitiveness in different economic sectors, governments need to establish frameworks and plans on how to best govern the use of their seas among different actors. Marine spatial planning (MSP) brings together all ocean users from energy, industry, government, regulations, conservation, protection
and recreation to formulate best practices and come up with optimal decisions on how to efficiently use marine resources. A variety of marine spatial plans globally are being developed, and good practices
are emerging in different regions. However, good practice in a certain region is not necessarily applicable to another region; therefore the Intergovernmental Oceanographic Commission of the United Nations Educational, Scientific and Cultural Organization (UNESCO) published a step-by step guide to MSP (see Figure 31).

Belgium was a pioneer in integrating offshore wind in MSP, with its 2014-2020 marine spatial plan allocating 7% of the country’s territorial waters for the development and deployment of offshore wind. Furthermore, Belgium’s new marine spatial plan for the years 2020-2026 provides a useful example on how the country unlocked a 2 GW offshore wind potential in a densely crowded sea area through a multiple-use approach. Other European countries, such as Germany and Finland, have also managed to unlock large potential allocation of their territorial waters. Germany has allocated 20 GW of priority areas for offshore wind deployment but is still undergoing the final consultation phase of its marine spatial plan, which is expected to be submitted by September 2021. Finland allocated around 15 GW of offshore wind in its 2020 marine spatial plan; however, national defence requirements might set important limitations (WindEurope, 2021).



Energy harnessed from oceans, through offshore renewables, can contribute to the decarbonisation of the power sector and other end-user applications relevant for a blue economy – for example, shipping, cooling, aquaculture and water desalination, in addition to the conventional oil and gas sector. More importantly, the predictability of power generation from ocean energy technologies complements the variable character of solar PV and wind (both on- and offshore), which makes them suitable to provide steady baseload power. Combined-technology electricity generating systems is a novel business model that does not view the individual offshore renewable power generating technologies as stand-alone, but rather combines them to reap synergies among them, especially when coupled with storage. Examples of projects being researched, planned or implemented are provided in Table 7.


Issue 1. Ocean governance and international co-operation Sharing the oceans is becoming more prominent with increased focus on the blue economy. More than two-thirds of the oceans are not governed by specific national governments but are part of the so-called global commons (Ocean Unite,
2019). This leaves much room for uncertainties that can lead to ownership disputes among communities, countries and sectors, particularly in areas where fisheries, conservation, shipping and defence are already in place. To overcome the offshore governance uncertainties, international co-operation can help.


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Renewables Readiness Assessment



The Renewables Readiness Assessment (RRA) is a tool developed by the International Renewable Energy Agency (IRENA) to comprehensively evaluate the conditions for accelerated renewable energy deployment in a country. It is a country-led, multi-stakeholder consultative process that allows for the identification of existing challenges for renewable energy deployment and recommends short to medium-term actions to guide decision makers and other stakeholders in addressing these challenges.
The RRA for Belarus was initiated by the State Committee for Standardisation of the Republic of Belarus (Gosstandart) in technical cooperation with IRENA. It has greatly benefitted from stakeholders’ inputs. Stakeholders in the RRA process included officials from ministries, utilities, power project developers, development partners, financial institutions, civil society and academia. As a first step of the RRA process, a background report on the energy sector in Belarus was developed that provided an overview and preliminary analysis of the energy sector context in Belarus. Thereafter, various interviews were held with institutional energy sector stakeholders in the country, supplemented with a set of detailed questionnaires aimed at further assessing the energy sector and determining the main barriers for renewable energy deployment. Based on desktop research, bilateral interviews and the
questionnaires, an issue paper was developed highlighting some of the challenges for renewable energy deployment in the country.

The Republic of Belarus is a landlocked country located in Eastern Europe bordered by the Russian Federation, Ukraine, Poland, Lithuania and Latvia. Its capital city is Minsk, located in the centre-west of the country. Belarus covers an area of 207600 square kilometres (km2 ), spanning about 650 km from east to west and 560 km from north to south. The topography of Belarus is mainly flat and lowlying. More than half of the country’s surface area is below 200 m of altitude, with the highest point of elevation at 346 m above sea level at Dzyarzhynskaya Hara in the vicinity of Minsk (Encyclopedia Britannica, 2020). Over 90% of the country is covered by natural vegetation, and about 40% of it is forested. The north of the country is predominantly characterised by gently sloping hills with many lakes, while the south is predominantly low-lying and mainly marshland. The largest and most significant river is the Dnieper, flowing through the east of the country, but other notable rivers include the Dvinar, Neman and Pripyat.

Social indicators
The population of Belarus numbered almost 9.5 million in 2019, with a decrease in population of 32 900 from the previous year. The population is largely urban: 78.4% of the population lives in urban settings, and over a fifth of the population, just under 2 million people, live in the capital city. More than half (57%) of the population is of working age (i.e., between the ages of 15 and 65 years) (BELSTAT, 2020a). The unemployment rate has been declining over the past few years and stood at 4.2% in 2019 (BELSTAT, 2020b). The country has a universal literacy rate, a 99% effective transition rate of students
from primary to secondary education, and 87.4% gross enrolment in tertiary education (UNESCO Institute of Statistics, 2020).

After the dissolution of the Union of Soviet Socialist Republics (USSR) in 1991, Belarus experienced an economic downfall. In 1994, gross domestic product (GDP) declined by as much as 11.7%.1 As shown in Figure 3, soon thereafter, the economy started to grow due to an increase in labour productivity, favourable trading terms (mainly with the Russian Federation and the European Union [EU]), further development of the services and manufacturing industries, and an increase in exports. The largest contributor to the country’s GDP is the services sector (49%), followed by manufacturing (22%), agriculture (7%), construction (6%), and, lastly, supply of energy and mining (BELSTAT, 2020d).
Within the services sector, wholesale and retail trade, motor vehicle repairs, transpiration, storage, information and communication, and real estate activities are some of the largest contributors to GDP. The country’s manufacturing industry includes machinery, minerals and metals, chemical products, textiles, and foodstuffs.

The supply3 of electricity, gas, steam and hot water contributes only 3% of GDP (BYR 3.95 billion, USD 1.9 billion) (BELSTAT, 2020d). This is largely due to very low domestic production of energy and an overreliance on energy imports. This in turn contributes to the seemingly weak correlation between total primary energy supply (TPES) and GDP as shown in Figure 4. Belarus imports most of its energy, particularly natural gas, from the Russian Federation at inexpensive prices. This has over time resulted
in the high use of gas in both electricity and heat generation. Crude oil is also imported and refined into petroleum products for domestic use and for exports, mainly to Ukraine. In 2019, gross energy imports amounted to USD 9.9 billion and the net energy import balance was USD 3.6 billion (BELSTAT, 2020c), which significantly contributed to the country’s trade deficit. Although energy supply is not significantly correlated to GDP, the energy intensity of the economy (i.e., the ratio of gross inland energy consumption to GDP) is high in relative comparison to EU countries, which signals a continued need for energy efficiency measures. As is shown in Figure 5, the energy intensity by power purchasing parity of Belarus is much higher than the EU average.

Greenhouse gas emissions
As shown in Figure 6, and according to the latest greenhouse gas (GHG) inventory, GHG emissions decreased by 32.5% in 2017 (93.96 megatonnes of carbon dioxide equivalent [MtCO2-eq]) from their 1990 levels (139.27 MtCO2-eq) excluding the land use, land use change and forestry sector (LULUCF). This fall can mainly be attributed to a decrease in emissions from the energy sector. The energy sector, which includes transport fuels, is the largest contributor to GHG emissions, contributing 61% of the total national emissions in 2017. However, when compared to 1990 emissions levels, the energy sector’s
GHG emissions have decreased by 41%, owing to reduced energy consumption, the implementation of energy efficiency policies, and a change in fuel consumption structure with the decreased use of highly GHG-emitting coal and oil products in the industrial and services sectors. The agricultural sector is the second-largest contributor to GHG emissions (26%; 24.04 MtCO2-eq) but has decreased by 25% compared to 1990 levels owing to a decrease in agricultural production. Emissions from industrial processes and waste each contribute a further 6.5% of total GHG emissions (UNFCCC, 2019).

The corporate tax rate stands at 18% and at 25% for banks, insurance companies and foreign exchange companies. A flat tax rate of 13% is imposed on personal incomes, and the standard rate of value added tax (VAT) is 20% on most supplied products, services and imports, rising to 25% for telecommunications (Deloitte, 2021). According to the World Banks’ Ease of Doing Business ranking, Belarus is ranked 49th globally (out of 190) and 11th (out of 24) in the European and Central Asian region (World Bank, 2020a). The highest ranking category is “getting electricity”, for which Belarus ranks third in the European and Central Asian region. This is due to minimal administrative procedures for electricity connection, the costs for each procedure, and the reliability of electricity supply and transparent communication on tariffs and tariff changes. There are only three administrative procedures for obtaining an electricity connection, which take approximately 105 calendar days to complete. The cost for electricity connection is 84.4% of the average monthly income per capita, which is considered relatively low in comparison to the region (World Bank, 2020a). Moreover, the reliability of electricity supply is high, with a system average interruption duration index5 of 0.5, owing to the country’s automated tools for monitoring outages and restoring services efficiently. Effective tariffs are readily available online and customers are notified of tariff changes well ahead of billing cycles.


Total primary energy supply The energy mix of Belarus is overwhelmingly fossil-fuel based. In 2019, Belarus’s TPES amounted to 26 607 ktoe, of which the largest share was natural gas at 62% of TPES,
followed by oil at 28%, and biofuel and waste at 6%. The total share of renewables in the TPES was 7.1% (BELSTAT, 2020e).

Energy exports and imports
Belarus is highly dependent on energy imports, mainly from the Russian Federation, and is one of the world’s leading energy import-dependent countries. The country’s energy sufficiency, or the ratio of energy produced nationally compared to TPES, is valued at only 16.5%. The bulk of the energy supply is covered by energy imports, which amount to 84.8% of the TPES (BELSTAT, 2020c). Figure 8 compares domestic energy production and supply of energy by fuel. The largest fuel import dependency is natural gas. Only 2% of natural gas supplied is produced locally, which makes Belarus one of the countries most dependent on natural gas imports in the world. Crude oil is imported in similar quantities, but is refined and exported in significant amounts to Ukraine.

Final energy consumption
The final energy consumption is 70% of the TPES (i.e., 18 505 ktoe), with transformation, distribution and non-energy use losses accounting for 15%, 4% and 12%, respectively. As is shown in Figure 9, heat6 is the largest share of final energy consumption (30%), followed by transport fuel (26%), natural and liquid petroleum gas (21%), electricity (15%), and lastly by biomass, coal and peat (BELSTAT, 2020e).

The production of electricity has significantly increased in recent years with increased installed capacities. Since 2005, when electricity production stood at 31 terawatt hours (TWh), production has increased by over 30%. In 2019, production amounted to 40.5 TWh. Figure 12 shows the steady increase in electricity production over recent years and a very slight increase in the renewable energy share. Electricity is largely produced by thermal power plants (98.3% of total electricity production), which are predominantly fuelled by natural gas. Hydropower, solar PV and wind power account
for 0.9%, 0.5% and 0.4% of electricity production, respectively (BELSTAT, 2020h).

Belarus has a vast district heating network serving about 70% of the population (Euroheat & Power, 2017). Heat is largely produced by combined heat and power (CHP) plants fuelled by natural gas, while renewables account for 10.6% of the total heat production. The renewable share in heat production is almost entirely based on biomass, and negligible amounts (0.02%) of geothermal and solar thermal heat production. In 2019, the total heat production amounted to 59 269 tera calorie (Tcal). Heat distribution losses accounted for 7.3% of production, which rendered final heat consumption 54 971 Tcal (BELSTAT, 2020i).

At the end of 2019, installed power generation capacities in Belarus amounted to 10297 megawatts (MW), of which 391.8 MW were renewable energy power plants. Solar PV was the largest renewable energy installed capacity (154.3 MW), followed by wind (106.1 MW) and hydropower (95.7 MW). Over 86% of installed capacities were owned by BelEnergo, while the rest were owned privately or by local districts. BelEnergo’s power plants included 42 thermal power plants, 25 hydroelectric power plants and 1 wind power plant. In November 2020, Belarus commissioned its first 1.11 GW nuclear power plant.


Renewable energy is in a nascent stage in the Belarusian energy sector. The share of primary energy supply from renewables has been steadily increasing over the past decade and in 2019 stood at 7.1%. This share largely comprises biofuels and, to a lesser extent, solar PV and wind. Nonetheless, the country is well endowed with renewable energy resource potential that presents a viable and sustainable pathway for the development of the energy sector. Biomass Biomass is the most abundant renewable energy resource in the country. Much biomass potential lies in wood resources, including residues, given the vast expanses of forests11 covering approximately 40% of the country’s surface area. Waste wood resources that can be used for bioenergy production are estimated at 1.5 billion cubic meters (bcm) with an annual growth of 0.03 bcm (IEA, 2016). According to the National Programme on Local and Renewable Energy Development for 2011-15, solid biomass potential is valued at 2.2 million tonnes of oil equivalent (Mtoe)/year, while a further 1.7 Mtoe/year is estimated from agricultural waste (crop residues and straw). Currently, solid biomass is utilised for heat production in heat and cogeneration power plants and boilers, and 8.9 MW is installed for power production (Ministry of Economy, 2018).

The potential for biogas production is significant in Belarus, owing to the large quantities of manure available from cattle and poultry farming, residues from crop farming, waste from the food industry, municipal waste and sewage from treatment facilities. Resource assessment studies for biogas potential from these waste sources have not been extensively undertaken; however, several approximations have been made. Namely, these potentials include 2.3 Mtoe/year of biogas production from animal manure and 0.3 Mtoe/year from municipal solid waste. In 2019, the installed capacity of biogas power plants was 26.8 MW (Ministry of Economy, 2018).

The potential for geothermal is inadequately assessed to date, with studies carried out on only a few regions. In 2018, the first geothermal atlas of Belarus was published, consisting of around 50 detailed maps of the Pripyat Trough showing the most promising geothermal wells at depths between 100 m and 4 km. The atlas includes geothermal gradients, heat flow density and geothermal resources. Although some estimates show that temperatures of 150°C to 180°C are available within the crystalline basement of up to 6 km depths, they are not economically feasible for exploitation. As such, Belarus’s geothermal resources are not deemed significant enough for power generation (Dubanevich and Zui, 2019).

The presidential decree also obligates renewable energy generators to produce only according to schedules set by the dispatch control centre to offset potential instability on the grid system. According to the tax code of the Republic of Belarus, renewable energy equipment, components and spare parts for renewable energy generation are exempted from VAT upon import and may further be exempted from custom duties. Land tax is also waived for renewable energy facilities and plants. Furthermore, to promote electric mobility uptake, VAT for electric vehicle imports is waived. If the vehicles are purchased inland, the buyer is eligible for a VAT rebate. Further incentives for electric car owners include free public parking and free public road usage tax (, 2020).


Over the past two decades, global renewable power generation capacity has drastically increased, from 754 GW in 2000 to 2 799 GW in 2020. In fact, in 2020, renewables accounted for a record share (82%) of all new power generation capacities. In view of the COVID-19 global pandemic and the consequent adverse economic effects, it is clear that global renewable energy supply chains proved to be resilient and adaptable in dire crises. The increasing pace of renewable power capacity additions was facilitated by falling renewable energy technology costs due to technological advancements, economies of scale and competitive supply chains. In the past decade (i.e., between 2010 and 2020), the costs of power production from utility-scale solar PV, concentrated solar power and onshore wind have decreased by 85%, 68% and 56%, respectively. A shown in Figure 24, the global weighted-average levelised cost of energy (LCOE) of solar PV fell from USD 0.381/kWh in 2010 to USD 0.057/kWh in 2020, and for onshore wind from USD 0.089/kWh in 2010 to USD 0.039/kWh in 2020. This not only indicates that renewables are able to compete with the cheapest fossil fuels, but that they are able to surpass them in terms of cost and new installed capacities. This trend is firmly expected to continue in the coming years. As an example, based on data from IRENA’s Renewable Auction and PPA Database, utility-scale solar PV projects that have won recent competitive procurement processes and that are expected to be commissioned by 2022 could have an average price of USD 0.04/kWh, which is 27% less than the cheapest fossil fuel competitor, namely coal-fired plants.

The Belarusian energy sector is heavily based on fossil fuels and highly dependent on energy imports. The current energy demand is insufficiently met by locally available resources and, as a result, the energy sector relies to a great extent on imports of oil and gas. With energy imports amounting to 84.8% of the TPES, Belarus is one of the world’s most energy importdependent countries. The highest fuel import dependency is on natural gas, of which only 2% of demand is produced domestically. Furthermore, most of the energy imports are from a single source supplier, which additionally jeopardises the country’s energy security. Belarus imports most of its energy from the Russian Federation. Traditionally, such imports of natural gas and oil from the Russian Federation have benefitted from favourable import prices that are only a fraction of the prices charged to other European
countries. Nevertheless, because of Belarus’s overreliance on energy imports, high energy insecurity and extreme vulnerability to price changes, any increases in import prices have always been met with strong opposition. Figure 25 shows the strong fluctuations in import prices of fossil fuels between 2012 and 2019.

Belarus relies heavily on energy imports to meet its national energy demand. In 2019, gross energy imports amounted to USD 9.9 billion while the net energy import balance was USD 3.6 billion (BELSTAT, 2020c). In relative terms, the net energy import balance equates to approximately 5.5% of the country’s GDP, contributing significantly to the country’s trade deficit. Also, given this high reliance on energy imports and the fact that the primary energy supply is not predominately domestically sourced, the energy sector is not a significant direct contributor to the country’s GDP. In fact, the supply12 of electricity, gas, steam and hot water contributes to only 3% of the national GDP (BYR 3.95 billion, USD 1.9 billion) (BELSTAT, 2020d).


Scaling up the deployment of renewables requires ambitious supporting policies and conducive regulatory frameworks. Although Belarus has over the years put in place various frameworks and incentives for the development of renewables, they are still in an early stage, and the pace of their deployment has not taken advantage of the abundance of their resource potential. Some of the policy and regulatory reasons for this slow uptake have included unambitious and incoherent renewable energy targets. Furthermore, the deployment of renewables in power generation has been facilitated through yearly quota allocations that have been prone to revisions, reductions and low pricing of FiTs, which
have consequently deterred investments. To allow for a more conducive environment for renewable energy deployment, recommended actions include increasing the ambitiousness of renewable energy targets, improving the quota allocations and their pricing methodology, as well as introducing renewable energy auctions for pricing that is more market-based, especially for large-scale investments.

Heat accounts for the largest share (30%) of final energy consumption in Belarus, and given that it is overwhelmingly fossil-fuelled, its decarbonisation is imperative for ensuring a sustainable and energy-secure development future for Belarus. Currently, the heat sector does not have a dedicated law governing its development, decarbonisation and subsidisation. This has subsequently led to the slow uptake of renewables in heating and an over-subsidisation of the otherwise fossil-fuelled sector. Although the country plans for more integration of biomass in heating, sustainable biomass resource
potentials are insufficiently assessed, and the methodologies for the estimation of their energy content are outdated. Furthermore, alternative renewable energy technologies – such as geothermal and solar thermal, which would allow for a more diversified and decarbonised heat supply – are insufficiently accounted for in planning, despite their potential. It is therefore recommended that a law governing the broader energy sector, and heat supply specifically, be developed that would make provisions for decarbonisation and appropriately allocated subsidies that are more conducive to renewables. Finally, the development of heat supply in Belarus should be diversified and based on the integration of modern, technically and economically feasible energyefficient technologies harnessing the country’s renewable energy potential.


The Republic of Belarus is a landlocked country in eastern Europe with a population of approximately 9.5 million people. After the dissolution of the Union of Soviet Socialist Republics (USSR) in 1991, the economy of Belarus contracted, but it soon resumed growth due to an increase in labour productivity, favourable trading terms – mainly with the Russian Federation and the European Union (EU) – and further development of the manufacturing industry and exports. The Belarusian economy is highly energy intensive, and the country’s energy sector is overwhelmingly fossil-fuelled and import dependent. The country’s total primary energy supply (TPES) in 2019 was composed of 62% natural gas and 28% oil, with the remainder comprising mainly biomass, waste, coal and peat. Energy imports are mainly from the Russian Federation, and amount to about 85% of all energy supplied in the country. The largest fuel import dependency is on natural gas, of which only 2% supplied is produced domestically. This makes Belarus one of the world’s most energy import-dependent countries and dramatically compromises the country’s energy security.


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Trading into a bright energy future The case for open, high-quality solar photovoltaic markets


The COVID-19 pandemic has caused the most acute health crisis in generations and has sent shockwaves across economies worldwide. Renewable energies can play a dual role in helping the world to recover. First, they can strengthen healthcare and other critical public infrastructures. Second, when integrated into response plans and strategies to “build back better” (i.e. rebuild economies in light of the numerous problems which arose as a result of the pandemic), renewable energies can help mitigate the economic effects of the COVID-19 pandemic by supporting economic recovery, boosting job creation, fostering access to electricity and economic diversification and putting the world on a climate-safe path. Solar photovoltaic (PV) technologies use solar panels that convert sunlight directly into electricity. PV is a key renewable energy technology, which has experienced plummeting costs and increasing deployment across the world (IRENA, 2019a). Global value chains allow manufacturers of solar PV equipment to source goods and services from the most cost-competitive suppliers and reap economies of scale, helping to reduce costs (IRENA, 2019a). Well-designed policies geared at eliminating remaining trade barriers and facilitating trade could further enhance solar PV supply chains and accelerate the deployment of solar PV and other renewable energies.

The recent crisis has exposed massive gaps in energy access, which affect healthcare, water supply, information and communication technologies and other vital services. Recovery plans incorporating the transformation of energy systems toward sustainable energy could help tackle these challenges while helping to overcome the economic slump and create much-needed jobs. Due to the global diversification and decentralization of the solar PV market, as well as its rapid growth, renewable energies present an opportunity for job creation across the globe. It is estimated that 11.5 million jobs will be created in the
solar PV industry by 2050 (IRENA, 2019b). In 2019, the number of jobs in the solar PV sector reached 3.8 million, a threefold increase since 2012. Asia accounts for 3 million of these jobs (Figure 1). A growing number of jobs, especially in Africa, are being created in off-grid decentralized renewables, which are also propelling employment in agro-processing, health care, communications and local commerce, among other sectors. Employment in the renewable energy sector as a whole, which
totalled 11.5 million jobs worldwide in 2019, could almost quadruple by 2050 (IRENA, 2020b).

The role of solar PV in the transition towards sustainable energy systems

Solar PV, which can be deployed rapidly in a wide variety of locations, is one of the strategic renewable energy solutions needed to transform energy systems. It has the potential to generate over 25 per cent of all necessary electricity in 2050 and to reduce CO2 emissions by 4.9 Gt per year in 2050, equivalent to 21 per cent of the total emission mitigation potential in the energy sector (IRENA, 2020d).1 The rapid deployment of solar PV has led to a sharp increase in installed capacity. Between 2005 and 2018, the cumulative installed capacity of solar PV increased 100-fold to 480 GW,2 helped greatly by the emergence of a globally integrated solar PV supply chain.3 During the same period, the overall installed renewable energy capacity grew 2.5 times. According to IRENA projections, the installed capacity of solar PV will continue to increase to more than 5,200 GW in 2030 and to 14,000 GW in 2050 (Figure 2), which would account for 43 per cent of the global installed energy capacity (IRENA, 2021).
Already in 2018, the installed solar PV capacity increased by 100 GW, faster than fossil fuels and nuclear power generation technologies combined.

The role of international trade and quality infrastructure in the development of solar PV

The globalization of the solar PV market has been a major factor driving the decrease in the price of solar PV. Part of the reason for this is that the emergence of globally integrated solar PV value chains has allowed solar PV equipment manufacturers to source goods and services from the most competitive
suppliers in terms of cost, quality, skills, materials and other location-specific advantages. In addition, the globally integrated solar PV equipment market has expanded opportunities for solar energy companies to reap significant economies of scale and to “learn by doing”, while stimulating competition and strengthening incentives to invest in research and development (IRENA, 2017a). The COVID-19 crisis has disrupted crossborder supply chains, including in the renewable energy sector. Looking ahead,
further diversification of solar PV supply chains may be needed to improve their long-term resilience against exogeneous shocks (IRENA, 2020a). The current momentum for policymakers to consider
ways to “build back better” offers a unique opportunity to pursue policies that facilitate trade and spur diversification through the integration of newcomers into value chains. Trade policies can also accelerate the cross-border dissemination of affordable and high-quality solar PV technologies, taking them from where they are produced to where they are needed. This could boost the competitiveness of solar energy across countries, helping to deepen the transition towards sustainable energy systems and to secure the jobs that go with it.


Value creation along the solar PV supply chain involves a broad range of goods and services (Box 1). Some of these goods and services are supplied domestically, but many others are traded across borders. This section provides an overview of global trade flows in selected goods along the solar PV value chain. Included in the analysis are machines to manufacture solar PV wafers, cells, modules and panels, along with selected solar PV components, such as PV generators, inverters, PV cells and, where relevant, the parts needed to produce some of these goods (see Appendix). Estimating international trade flows of goods along the solar PV value chain is very challenging. Many goods related to sustainable energy systems are highly specialized and often relatively new in the market. Others have multiple uses, so they are used in both renewable energy and non-renewable energy applications. This means that the classification and identification of solar PV and other renewable energy goods are difficult to achieve uniformly across governments. Even the Harmonized System (HS) – a multipurpose international product nomenclature developed by the World Customs Organization (WCO) and comprising about 5,000 commodity groups, each identified by a six-digit “subheading” – lacks the required level of detail. As a result, internationally comparable estimates of trade for solar PV goods must rely on product categories that are often quite broad and that include other goods besides solar PV goods.

represented around 82 per cent, on average, of the total value of exports of these goods between 2017 and 2019, and around 70 per cent of imports. Two-way trade is also prevalent for specific solar PV products. For example, China is both the top exporter and top importer of goods under HS code 854140, which includes solar PV cells and modules.2 China represented, on average, around 36 per cent of the value of world exports and almost 16 per cent of the value of world imports of these goods for the period 2017-19. Japan is the fourth-largest exporter and importer of these goods.


Open and transparent trade policies implemented over several decades have resulted in lower barriers to goods and services trade, including goods and services related to renewable energies in general and solar PV in particular. More open and transparent trade regimes have enabled the emergence of a globally integrated solar PV market where silicon, wafers, cells, modules, inverters, mounting systems, combiner boxes and other solar PV components, along with the machines to manufacture PV cells, modules and panels, are routinely traded back and forth among countries along tightly integrated value chains. Additional policy efforts to reduce remaining trade barriers and facilitate trade could further enhance solar PV supply chains, reduce costs and accelerate the dissemination of solar PV and other renewable energies to where they are needed.

At the global level, there have been several efforts to tackle tariffs and other trade barriers affecting solar energy, often as part of trade initiatives targeted at broader categories of goods and services, including the category of environmental goods and services (Table 3). Environmental goods and services, according to a common definition developed in the 1990s by the Organisation for Economic Co-operation and Development (OECD) and Eurostat (the EU’s statistical agency), are activities which produce goods and services to “measure, prevent, limit, minimise or correct environmental damage to water, air and soil, as well as problems related to waste, noise and eco-systems” (Eurostat, 2009).

Broader challenges

Solar PV is a technology with extremely high potential, but there are many barriers besides those affecting trade that could hinder its deployment. Such barriers may be of a technological, economic, policyrelated or regulatory nature (Figure 9). With declining costs and financial schemes to support further deployment, some of the remaining challenges are often of a technical nature. They relate mostly to keeping the energy supply and demand balanced at all times. These concerns are often not exclusive to solar PV, but are general issues that arise with an increasing integration of variable renewable energy. While some of these barriers are universal, many vary across regions. This poses an additional challenge to the deployment of solar PV. Not all countries have the same preconditions in terms of starting points within the energy transition, degree of fossil fuel dependency, means of implementation, and diversity and strength of supply chains (IRENA, 2019b). Overcoming these barriers while considering local conditions is crucial to achieving a just and inclusive transition, which in turn calls for innovation, investment, and an enabling and integrated policy framework focused on deployment. While such policies must be country-specific, the solutions may have an impact on a much broader scale and may influence global markets.


A robust quality infrastructure is essential to participate in solar PV trading markets

Trade in solar PV goods and services can only help to build a competitive solar energy sector if the goods and services in question meet customer requirements and are otherwise fit for the purpose for
which they are intended. Underperforming, unreliable and failing products create barriers to the development and enhancement of solar PV and hamper the role of trade in promoting the technology’s rapid diffusion across borders. A wellfunctioning QI system is a key tool to keep deficient, sub-standard quality products from entering the supply chain and to build a competitive solar PV sector that delivers
economic, social and environmental benefits (IRENA, 2017a). A QI system is made up of the institutions and the legal and regulatory frameworks responsible for standardization, accreditation, metrology and conformity assessment (IRENA, 2017a). These frameworks are essential to build trust
among consumers, producers, investors, traders and governments that imported and domestic products and services will meet all the relevant state-of-the-art requirements and best practices. QI systems thereby contribute to ensuring stability and predictability for investors and other stakeholders and are essential instruments for protecting and accelerating future investments in PV deployment.


In today’s globalized world economy, QI systems cannot operate in isolation. Cross-border cooperation on QI can help governments achieve sustainable energy systems, while helping companies along the solar PV value chain seize market opportunities and avoid unnecessary costs. International cooperation on QI takes different forms, from mutual recognition and regulatory provisions in trade agreements to formal cooperation partnerships and regulatory harmonization. The most appropriate approaches in any given situation differ depending on the compatibility of regulatory environments and systems, the sector, type and degree of regulation already in place and the level of technical and institutional capacity of the countries involved, among several other factors. International organizations serve as institutional forums for governments to cooperate on QI-related issues. For example, international organizations enable countries to share practices in specific fields and to develop a common language and joint approaches.


Solar photovoltaic (PV) technologies use solar panels to convert sunlight into electricity. Having been rapidly deployed, solar PV has become the cheapest source of new electricity generation in many parts of the world. The cost of the electricity generated by PV plants declined by 77 per cent between 2010 and 2018, while the cumulative installed capacity of solar PV increased 100-fold between 2005 and 2018. As a result, solar PV has become a pillar of the low-carbon sustainable energy system needed to
foster access to affordable and reliable energy and help achieve the goals of the Paris Agreement and the 2030 Sustainable Development Agenda. Underpinning the rapid deployment of solar PV is a globally integrated market in which PV components such as wafers, cells, modules, inverters and combiner boxes, as well as the machines which produce them, routinely criss-cross the world. Trade in solar PV components, which has grown faster than overall manufacturing trade since 2005, has become a critically important means for firms, governments and consumers around the world to access the most efficient, innovative and competitive goods (and services) needed for the transition to sustainable energy systems.


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BRACING FOR CLIMATE IMPACT: Renewables as a climate change adaptation strategy

Climate change has multidimensional impacts on human society and on natural systems. Climate change impacts, both direct and indirect and both short and long term, have become more evident – from extreme weather events to gradual changes in climate variables, such as temperature rise or altered precipitation patterns. By putting agriculture, water, human health, oceans, supply chains and infrastructure – all of which are vital to the socio-economic routines of human beings – at severe
risk, climate change poses real threats to local communities and indigenous people. Developing countries in high mountain areas and small islands developing states (SIDS) are already observing visible climate impacts. To address these issues and reduce adverse impacts, the global community agreed a landmark joint pact, the Paris Agreement (2015).

Countries agreed to enhance action on climate adaptation, recognising the increasing urgency of tackling climate change impacts. At COP 16 in 2010, the Cancun Adaptation Framework was adopted and commenced the process of formulating NAPs on a voluntary basis. The establishment of a new climate fund (currently the Green Climate Fund [GCF]) and a separate adaptation committee within the UNFCCC was also decided at Cancun. In the lead up to COP 21 in Paris in 2015, the Parties to the Convention agreed to submit NDCs and a long-term low emission development strategy (LTS), in which countries pledge their mitigation and adaptation targets.

With the establishment of adaptation as an integral part of development planning, countries have taken different approaches to targeting, planning and implementing adaptation measures, documented in NDCs, NAPAs and NAPs. In the first submission of their NDCs, countries outlined their pledges to reduce GHG emissions and had the option to include targets for adaptation. NDCs were originally seen as a way to document GHG mitigation targets (AfDB, 2019a). However, many countries exercised this option and included adaptation targets (Paris Agreement, article 7.11; WRI and UNDP, 2019). By the end of 2020, 190 Parties had submitted NDCs. Of those, around threequarters of the countries had included an adaptation component, and 64 countries had recognised the contribution of renewables in climate change adaptation and resilience building. Renewable energy has come to the forefront of the climate change discussion, with a majority of NDCs including renewable energy as part of their
mitigation and adaptation strategies. The number of countries that have included renewable energy in adaptation strategies within NDCs increased from 47 in 2017 to 64 in 2020. Many countries, especially those most vulnerable to climate change impacts, indicate in their NDCs that renewable energy can improve adaptation implementation measures and broaden the scope of adaptation.


Recently, there has been growing acceptance among academics and policy makers that energy and climate change adaptation are deeply interconnected. The most widely debated topic has been how the energy sector would adapt to climate change impacts. Clearly, energy as a sector itself is affected by climate change, as extreme weather events and gradual climate changes have increased the exposure of power systems to climate impacts. Generation diversification, distributed energy solutions and technical advancement to increase the resilience of physical assets have been the most commonly discussed measures to increase the adaptation capacity of the energy sector. Despite the increasing demand for the energy sector to address climate change impacts, how the energy sector can facilitate and build climate resilience of the societies is a relatively new topic. Energy is a basic human necessity, and energy
supply is an indispensable element in all economic activities. As the impacts of climate change grow, energy demand is expected to increase accordingly. Increases in global temperature have created significant upward shifts in energy demand for cooling, with implications for energy efficiency. For example, the International Energy Agency (2018a) estimates that a 1°C increase in global temperature could bring about 25% increase in cooling demand by 2050.

As can be seen in the left-hand diagram of Figure 3, adaptation measures that lean on extensive energy consumption are inextricably linked to increased emissions; the trade-offs (vulnerability reduced but emissions increased) are shown in the upper-left quadrant. Monocultural plantations for biofuel and increased reliance on hydropower dams (lower-right quadrant) are some examples of consequent environmental degradation that could increase vulnerability through, for example, displacement of
indigenous people, loss of biodiversity and degradation of water quality.

Amongst various energy sources, renewable energy can facilitate climate adaptation actions without resulting in significant GHG emissions. Renewable energy enables “sustainable win-win” solutions, rather than trade-offs between mitigation and adaptation being inevitable, as they have been in the past. Through its net zeroemission impact, renewable energy enables adaptations such as air conditioning and
irrigations systems to move from being increased emissions solutions (upper-left quadrant of the left diagram) to sustainable win-win solutions (upper-right quadrant of the right diagram), where both vulnerability and emissions are reduced. Likewise, the potential environmental effects of renewable energy technology (RET) in the bottom-right corner in Figure 3 can be addressed and minimised by adopting more environmentally sustainable practices, especially by incorporating climate change adaptation into decision-making processes and by making greater efforts to avoid environmentally and socially negative impacts. There is significant potential to build resilience by improving social and environmental practice to avoid unintended outcomes of engineering solutions (Hills et al., 2018). For instance, sustainable hydropower approaches – such as the International Hydropower Association’s
hydropower sustainability assessment protocol and the World Commission on Dams’ guidelines – can reinforce the sustainability of hydropower projects. A properly designed hydropower project can ensure that economic development reduces negative impacts on the environment (IPCC, 2011). Taking into account the short- to long-term effects of climate change in the deployment of renewables is one way
of safeguarding the sustainability of RET. For instance, small and run-of-the-river hydropower are technologically viable options that can evade negative ecological impacts and the need to build large dams.

Renewable energy opportunities in adaptation interventions
The water sector consumes 4% of electricity globally, which mainly consists of water supply (42%), desalination (26%), wastewater treatment (14%) and distribution (13%) (IEA, 2018). From new desalination and wastewater treatment techniques to airto-water distillation systems, RETs are drivers of innovative approaches to secure, preserve and manage freshwater resources. Table 2 shows a range of renewable energy options in the water sector.

The climate change risk profile of the food, agriculture and forestry industry is complex. Because of multidimensional climate change impacts on the food sector, the Food and Agriculture Organization has established the “food system”5 approach, which captures the entire range of food-related systems including land, water, oceans and human health (Figure 4).

Overall, climate change is projected to negatively impact crop production globally, especially in tropical and temperate regions with temperature increases of 2°C, while high-latitude regions may benefit from climate change effects. The loss of arable land due to increased aridity, groundwater depletion and sea level rise is likely to aggravate these impacts. Livestock and aquaculture are also vulnerable to climate change. Temperature rise is likely to affect livestock production and reproduction negatively, while increasing both heat stress and water consumption.

General electricity provision for health facilities
Renewable energy solutions can play a critical role in the functioning and quality of health care facilities and service delivery, especially in places where climate change negatively affects human health. In many remote and isolated areas, reliable electricity supply can not only limit sensitivity to climate change but enhance adaptive capacity against harsh climate conditions through the provision of basic health care and power for medical devices (e.g. solar PV-powered refrigerators for samples and vaccines
to replace kerosene-powered refrigerators). The ongoing COVID-19 pandemic has increased the urgency of addressing these issues. Renewable energy can provide the means to operate health care facilities. In addition, improved access to electricity enables enhanced public health education and communication. Box 3 illustrates the various needs for general electricity provision in health facilities.


A renewable energy-based integrated approach between mitigation and adaptation at the international and national levels can bring synergistic effects in tackling climate change (Nordic Council of Ministers, 2017). This section examines, through analysis of international and national documents (NDCs, NAPs, etc.), how countries are including and using renewables in their adaptation planning, beyond their impact on mitigation, and identifies the missing gaps.

Altogether, 64 countries have mentioned RET in the adaptation component of their NDCs as a technological option for climate resilience in various sectors. Figure 7 shows the number of NDCs with an adaptation component (in orange) and the number of Parties that submitted an NDC with an adaptation component that includes RET (in grey) by region. Most developing countries in Sub-Saharan Africa, Asia and the Middle East and North Africa region, as well as SIDS, have a strong interest in and focus on adaptation. Sub-Saharan African countries and SIDS particularly stand out for their specificity
in needs and plans to use RET. Almost half the countries in these regional groups include RET in their adaptation actions. The countries share common climate change challenges, such as high exposure to climate change impact, lack of local adaptive capacity and dependency on traditional fuels. As such, leveraging synergies between renewables and other sectors has great importance for these countries, and “good examples” can be shared among them.

The landscape of climate finance is rapidly developing and growing in volume. Pledges to support adaptation and resilience have significantly increased in amount, with growing acknowledgement that further delays to adaptation actions will result in increasingly costly measures to adapt to climate change (UNEP, 2021). The climate finance provided and mobilised for adaptation activities rose to USD 16.8 billion in 2018, which accounts for 21% of total climate finance, up from 17% in 2016 (OECD, 2020).
According to the Global Commission on Adaptation, the global investment required for climate adaptation could reach USD 180 billion annually from 2020 to 2030, and investing USD 1.8 trillion globally in just five adaptation areas could yield USD7.1trillion in net benefits (GCA, 2019). Similarly, the United Nations Environment Programme (2018b) estimates that the annual cost of adaptation could be USD 140–300 billion between 2025 and 2030 and USD 280–500 billion between 2030 and 2050 if temperature rise is controlled under 2°C from the pre-industrial level. While financing adaptation has significantly scaled up, these estimations indicate a huge adaptation investment gap that needs to be met by public and private finance.

Establishing a framework provides the basis for adaptation intervention; therefore, it is critical to establish a clear climate rationale by using robust climate methodologies and the best available science. Climate adaptation strategies should build on this rationale, and impact modelling and vulnerability assessment should be used to identify and prioritise the most vulnerable sectors. If a climate rationale is not clearly articulated, an action could be implemented that insufficient to be counted as a climate adaptation action. However, renewables are often included in the planning and project levels without
proper adaptation rationale, and the role of renewable energy in climate adaptation shows considerable variation in each country. This may signify that further studies and good practices need to be established globally. In particular, good practices can be shared with other countries facing similar climate risks in the current context,where renewable energy is becoming more important in establishing the adaptation

The impacts of climate change are being seen with increasing frequency and intensity around the world. Climate change mitigation (action to reduce greenhouse gas emissions) remains vital but is just one of the two main pillars of climate change response. The critical importance of the second pillar, adaptation (action to adjust to and protect against the impacts of climate change), has gained significant recognition in recent years, and an increasing flow of finance to adaptation activities is being seen at the international and national levels. Many climate adaptation strategies require considerable energy use, yet the role of reliable, affordable and modern renewable energy services in climate adaptation is not widely acknowledged in policy making or practice.


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Renewble Readlness Assessment Paraguay


Country profile
The Republic of Paraguay is located in central South America and bordered by Argentina, Bolivia and Brazil. The country has a landlocked area of 406 752 square kilometres, divided into two natural regions
by the Paraguay River. The eastern zone contains 90% of the population, while the western zone, known
as the Paraguayan Chaco, represents 60% of the territorial surface. The eastern region is dominated by
the Amambay, Mbaracayú and Caaguazú mountain ranges. The Paraguay River is the main fluvial system, navigable by deep-sea vessels from Paraná to Asunción and by medium-sized fleets from Asunción to Corumbá (Brazil). The next largest river is the Paraná River, which extends for 679 kilometres bordering the east-south limits of Paraguay. Paraguay’s population, estimated at 7.3 million, is growing at an average annual rate of 1.5%, exceeding the 1% average annual growth rate for Latin America and the Caribbean overall (Figure 1). Of this population, 62.5% is located in urban areas and 37.5% in rural areas (DGEEC, 2015). The most populated cities are Asunción and Ciudad del Este in Alto Paraná. In 2018, the Human Development Index value for Paraguay was 0.72, below the regional average of 0.76 for Latin America and the Caribbean, ranking Paraguay in 98th place out of 198 countries worldwide.

By the end of 2019, 99.95% of the population had access to electricity, and 69% used modern energy sources – such as liquefied petroleum gas (LPG) or electricity – for cooking purposes (ANDE, 2019a). Between 2015 and 2016, the country’s energy intensity (energy consumption per unit of gross domestic product, (GDP) decreased by 1.85%, from 10 267 kilojoules per USD to 10 080 kilojoules per USD (DGEEC, 2015).

Energy Conext

Energy sector overview
Energy supply
The energy supply in Paraguay is dominated mainly by hydrologic and biomass resources, which
represented 41.0% and 36.8%, respectively, of energy use in 2019. Between 2010 and 2019, energy supply grew at an average annual rate of 1.3%, to reach a total of 457.4 petajoules (PJ) in 2019 (Figure 3). There are no recorded imports of crude oil since the closing of the operations of the Petróleos Paraguayos refinery (PETROPAR) in 2005. Paraguay depends heavily on imports of oil derivatives, mostly petrol and diesel, which account for nearly 90% of liquid fuel imports. The import of oil derivatives has increased rapidly in recent years, growing 5.1% annually on average during the period 2010-2019, driven primarily by the increase in the country’s vehicle fleet.

Paraguay is home to around 14 bioethanol plants, which are distributed among 12 alcohol producers
authorised by the Ministry of Industry and Trade (MIC). In 2018, the national bioethanol production capacity reached 550 million litres. The current production, 55% from corn and 45% from sugar cane, doubled the cultivated area of these raw materials during the period 2008-2018 (FAO, 2018). Table 2 shows the six companies with the highest installed bioethanol production capacity, led by Paraguayan Alcohols Industry S.A. (INPASA) and PETROPAR. Biodiesel production capacity has grown steadily, achieving total production of 376 million litres in 2019, up from 138 million litres in 2010 (SIEN, 2019). By 2014, around nine companies had a combined annual capacity of 45 million litres (MIC, 2018). Since 2019, ECB Paraguay S.A. (part of the ECB Group) has been planning to build a second-generation plant with an installed capacity of 3 million litres per day for the production of biodiesel and biokerosene, equivalent to one-third of the conventional diesel currently consumed in the country (MIC, 2019).

Energy consumption
Between 2010 and 2019, total final energy consumption (TFEC) increased by 48.8%, from 180.4 PJ to
268.5 PJ. The transport sector accounted for the largest share, followed by the residential, commercial,
industrial and public sectors (VMME, 2012, 2020a), as shown in Figure 4. Between 2010 and 2019, the consumption of biomass increased in the residential and commercial sectors by 20.7% and in the industrial sector by 23.7%. In 2019, biomass supplied 41.3% of the TFEC, mainly from firewood (69.8%) and charcoal (8.1%). Firewood was mainly used for cooking purposes, which has traditionally been based on the use of inefficient stoves. In the same period, the use of electricity increased by 91%, and transport increased its consumption of derivatives (diesel and petrol) by 68.6%. The consumption of LPG at the residential level increased by 7.2% and displaced part of the consumption of firewood for cooking (DGEEC, 2016).

Power sector
The Itaipú and Yacyretá hydropower plants represent the largest installed generation capacity in the country and are integrated with the electricity systems of Brazil and Argentina. The Acaray hydropower plant is the third largest, followed by small thermal plants using diesel, bagasse and biogas that are mostly managed by the National Electricity Administration (ANDE). Table 4 shows the installed generation capacity by type in 2020; the capacity shares have remained similar for the past decade, with small variations in the installed capacity from bioenergy.

Several factors have contributed to the increase in domestic electricity consumption, including GDP growth, which averaged 3.87% during the 2001-2018 period (World Bank, 2020b); the low cost of electricity; and growing energy intensity in the industrial sector (where average consumption per user grew from 7.7 kilowatt hours (kWh) per month to 90 kWh per month) and in the residential sector (where average consumption per user grew from 231 kWh per month to 363 kWh per month) (ANDE, 2018a).

Transmission and distribution network
In 2019, the National Interconnected System (SIN) comprised 6 682 kilometres of transmission networks. Of the total, 10.6% corresponded to 500 kilovolt (kV) lines, 69.1% to 220 kV networks, and the remaining 20.3% to 66 kV lines. The installed power in transformers reached 15 585 megawatts (MW) distributed in 94 sub-stations. The electricity distribution networks comprised 68 331 kilometres of medium-voltage lines and 85 913 transformers with an installed power of 6 561 MW (see Figure 10) (ANDE, 2019a).

The operational capacity of the transmission system needs to be improved to ensure the quality of the electricity supply. In hours of high demand for the Metropolitan System, the 500 kV transmission lines and the 500 kV to 220 kV transformation sub-station operate at near-maximum capacity, leading to increasing technical losses and risks due to unscheduled interruptions (IDB, 2020b). Paraguay is among the countries with the highest electricity losses in Latin America. In 2019, the electricity losses represented 25.8% of the internal supply of electricity, equivalent to 4 470 GWh; of this, 5.2% was transmission losses and 20.6% was distribution losses (ANDE, 2019a).

Energy and climate action
In 2015, Paraguay’s carbon dioxide emissions totalled 45 841 gigagrams (Gg), around 1% of global emissions. This was up from 40 023 Gg in 2000, representing an average annual increase of 0.97% during the period. On average, the energy sector accounted for 10.3% of national CO2 emissions in the period 2000-2015 (UNFCCC, 2018). Between 2010 and 2018, CO2 emissions from the energy sector (fossil fuels) and biofuels increased from 8 753 Gg to 13 996 Gg, a rise of 59.9%. The consumption of fossil fuels averaged 52% of the total, and biomass5 averaged 41% (as a result of the degradation of native forests). Figure 13 groups the emissions from the energy sector and biofuels.

Renewable Energy Development

Renewable energy development in Paraguay focuses on the use of hydrologic resources and biomass.
Other renewable energy sources were not included in the country’s energy balance as of 2019, although
small-scale wind and solar projects do exist in isolated areas. Energy crops7 such as corn, sugar cane and soybeans have maintained sustained growth driven by the demand for liquid biofuels (bioethanol and biodiesel). The country seeks to take advantage of the potential to produce biogas and green hydrogen by implementing the actions defined in the Energy Policy 2016-2040 and the Sustainable Energy Agenda 2019-2023.

Challenges and Recommendations

This section presents the main recommendations for accelerating the deployment of renewable energy in
Paraguay, based on the challenges identified during the Renewable Readiness Assessment (RRA) process. The consultative process included a review of the literature, insights from interviews, and outcomes from focus groups and multi-stakeholder roundtable discussions held during workshops, along with subsequent exchanges with selected stakeholders. This section groups the recommendations in six areas and identifies the main challenges for each. Within the six groupings are a total of 15 short- to mid-term actions for an accelerated deployment of renewable energy in Paraguay.


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A large number of stakeholders were interviewed and/or responded to questionnaires regarding the requirements for developing local capacity around solar water heaters. These included project developers, component manufacturers, service providers, energy authorities and representatives of national and global associations dedicated to solar water heaters or renewable energy in general. The study also draws on the public reports of relevant companies, including annual reports, technical specifications and equipment handbooks, and public price lists. Heating and cooling consume the most energy of all end uses, accounting for nearly half of global final energy consumption. Most of this is generated from fossil fuels. In 2019, fossil fuels and non-renewable electricity met more than 77% of heating and cooling demand (IRENA, IEA, REN21, 2020). The energy consumed for heating and cooling is thus a significant contributor to air pollution and carbon dioxide emissions: heating and cooling accounted for almost 40% of energy-related emissions in 2018, a share that has remained almost unchanged for the past decade, owing to the continued dominance of fossil fuels (IRENA, IEA, REN21, 2020). Half of the energy consumed for heating and cooling is consumed in industrial processes, while another 46% is used in residential and commercial buildings – for space and water heating and, to a lesser extent, for cooking. The remainder is used in agriculture for greenhouse heating and for drying, soil heating and aquaculture (IRENA, IEA, REN21, 2020). Given that heating water accounts for about 18% of household energy use (US DOE, n.d.), on average, and that demand for hot water is growing with household incomes, the decarbonisation of heating and cooling in general, and water heating in particular is thus a key element of the on-going energy transition needed to limit the rise in global temperatures to well below 1.5°C (IRENA, IEA and REN21, 2018, 2020).

China had the largest number of newly installed solar water heaters (glazed and unglazed), at
almost 25 GWth in 2018, followed by Turkey and India with around 1.3 GWth. Brazil installed
875 megawatts thermal (MWth), and the United States, 623 MWth. Figure 2.2 shows the installed
capacity by 2018 of the ten countries that installed the most solar water heaters in 2018 (MWth). Since
China imbalances any cross-country comparison by its sheer size, looking at recent additions per capita
and cumulative additions per capita completes the picture. For example, looking at newly installed
solar water heaters per 1 000 inhabitants in 2018 reveals that several small countries and territories
with smaller populations made important strides in deploying the technology (Figure 2.3). Resource
potential cannot be the main driver of deployment, given that Denmark, a country with poor solar resources, ranks among the top ten.

Policy instruments driving the deployment of solar water heaters

Although often cost competitive, solar water heater deployment requires policy support. The barriers are
manifold. For instance, low levels of awareness by households about modern hot water generating
systems based on renewables hinders deployment. Homeowners tend to choose a known option. As
a result, the deployment of solar water heaters has been largely supported by a mix of policies in
many countries. These include direct policies such as targets, programmes, obligations and mandates,
and financial incentives such as subsidies and low-interest loans to lighten the burden of the high
initial cost (relative to cheaper alternatives such as gas boilers). In addition, enabling policies such as technical standards and certificates and training and retraining measures help create an enabling environment for the development of a solar water heater sector. Broader enabling policies are discussed in Policies in a Time of Transition: Heating and Cooling (IRENA, IEA and REN21, 2020).

Targets provide a clear indication of the intended deployment and timeline envisioned by the government. They inform industries and consumers alike, and often become key drivers of policy, investment and development. Targets for solar water heaters are set in terms of the number of systems, collector surface or thermal capacity. Ambitious solar thermal targets and low system prices have driven the impressive growth of solar water heaters in China. The country’s 12th Five-Year Plan (2011-2015) included a target of installing 400 million m² of cumulative solar water collector surface. It was exceeded by more than 10.5%. By 2020, the end of the 13th Five-Year Plan period, this number
was expected to have doubled to 800 million m² (NDRC, 2016).


As countries move towards their renewable energy targets and ramp up efforts to reduce carbon emissions, heating water using renewable energysources should be considered as a part of this
effort. Estimates for the near future see the global market for solar water heaters cross USD 4 billion
by 2024 (Global Market Insights, 2017). Next to the environmental benefits, this presents ample
opportunities for socio-economic value creation and employment. The deployment of renewable energy leads to jobs in different sectors, of different qualifications and duration. This study focuses on direct employment, which refers to employment that is generated directly by core activities without considering the intermediate inputs necessary to manufacture, install and operate solar water heaters. Other types of employment are indirect employment, including in upstream industries that supply and support core activities, or even more comprehensive induced employment, encompassing jobs resulting from additional income being spent on goods and services in the broader economy (such as food, clothing, transportation and entertainment).

Worldwide employment (direct and indirect) in the solar heating and cooling sector was estimated at around 817 620 jobs in 2019. The largest number of jobs were in China, Brazil, Turkey and India. China accounted for about 83% of the global employment in the sector, with 670 000 jobs, followed by Brazil with 43 900 jobs, Turkey with 21 600 and India with 20 690 jobs (IRENA, 2020b) (Figure 3.1).

Sales and distribution
In the sales and distribution phase, distributors and wholesalers transport solar water heaters from manufacturers to households, creating many opportunities for value creation. In this analysis, the term wholesale refers to the purchase of solar water heaters from the manufacturers (including imports for imported equipment) and distribution involves the sale of systems to final customers using multiple
channels. Distribution also encompasses the transport of solar water heaters from the warehouse to the
installation site, including logistical arrangements. Components can be conveyed in a typical pickup
truck, with no special handling required apart from proper packaging to avoid breakage or scratching.
Selling and distributing solar water heating systems for 10 000 single-family households requires 44 160 persondays (around 10% of the total requirements along the value chain) (Table 4.4). The wholesale activity requires 30% of the total person-days, while the retail distribution of systems is the most labour-intensive activity, involving an estimated 30 960 person-days (70% of the total).

Renewable sources of energy are key for the energy transition. It is widely acknowledged that the
expansion of renewable energy not only supports climate goals and other environmental protection
objectives, but also increases energy security, decreases dependence on fossil fuels and enables energy access. In addition, the deployment of systems that harness renewable energy supports economic
growth, creates employment opportunities and enhances human welfare. Domestic value creation
can be maximised by leveraging and enhancing capabilities in existing industries along the value chain, or developing them. While efforts to deploy renewable-based systems have generally focused on power generation, there is a growing global consensus on the need to shift attention to end-use sectors. The transport and the heating and cooling sectors account for more than 30% and almost 50% of global energy consumption, respectively. Therefore, utilising renewables in these sectors is key to accelerating the pace of the global energy transition. For heating and cooling, renewables are becoming increasingly cost-competitive relative to the alternatives, in particular for heating water. In contexts characterised by an insufficient energy supply and high reliance on fossil fuels, or where inefficient electric boilers are common and peak power loads need to be dropped, solar water heaters represent a promising solution. Their deployment is labour intensive, presenting opportunities for local job creation, and for the establishment of businesses focused on the sales, distribution and installation of systems. These opportunities for value creation are amplified by the fact that the requisite activities can build on existing capacity.


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This study seeks to map areas in Burkina Faso that are suitable for deploying utilityscale solar photovoltaic (PV) and wind power projects. It aims to i) provide insights into the country’s potential to adopt solar PV and wind power; ii) inform national infrastructure planning across the electricity supply value chain, spanning generation, transmission and distribution; and iii) provide critical input for high-level policy models that aim to ensure universal electricity supply and support the long-term abatement of climate change. The study combines high-quality resource data with ancillary factors, such as local
population density, protected areas, topography, land use, electrical transmission lines and road network proximity, using a suitability assessment approach. This approach – developed by the International Renewable Energy Agency (IRENA) in 2013 and now updated based on accumulated global experience and heightened data collection capacity – has enabled the identification of areas in the country worthy
of further investigation in the context of intensified renewable energy development.


This suitability assessment was carried out at the request of the Government of Burkina Faso to map
potential areas for utility-scale solar photovoltaic (PV) and wind projects. Currently, less than 25% of the population has access to electricity and the majority of those with access live in urban areas. In cities, the electricity access rate averages 65%, dropping to 3% in rural areas. The country aims to reach 95% electricity access, with 50% in rural areas and universal access to clean cooking solutions in urban areas, with 65% in rural areas by 2030, up from 9% in 2020. The utilisation of Burkina Faso’s renewable resource potential would enable the country to reduce its heavy reliance on thermal generation and energy imports. The country could also move to attain the 50% renewable energy generation targets stipulated in the 2014 Energy Sector Policy and the 2017 law on the regulation of the energy sector.


The suitability assessment is predominantly a GISbased multi criteria decision making analysis that
enables the objective mapping of the renewable energy potential in a country or a region. The resource data – such as solar irradiance or wind speed at a specific height – is the most important criterion in evaluating the potential of an area for solar and wind energy project development. Such evaluation requires a representative mapping of the renewable resources. The solar irradiance component affecting photovoltaic (PV) output is global horizontal irradiance (GHI). This component is commonly calculated
using either physical-based or statistical-based approaches that also require satellite or ground measurements. Datasets, such as the World Bank’s Global Solar Atlas and Transvalor’s SODA solar maps, cover more than 20 years of hourly historical data at 1 km grid cell resolution; they allow the calculation of a representative long-term average annual global horizontal irradiation.


The data considered to perform the suitability assessment for solar PV and wind projects were
sourced for the defined criteria. These criteria include solar and wind resource maps, topography features (elevation and slope), proximity to transmission line and road networks, and proximity to population centres and environmentally sensitive areas.

Solar resource data

The average annual global horizontal irradiation (GHI) data employed in this study were sourced
from the World Bank’s Global Solar Atlas, developed by Solargis (ESMAP, 2019b), (Figure 2).
The data are calculated at a grid cell resolution of 1 km using long-term satellite-based solar irradiance covering a time period from 1994 to 2015.

Transmission line network

The transmission line network used in this analysis was provided by the National Observatory of
Territorial Economy office in Burkina Faso as shown in Figure 5.


Figures 9 and 10 display the land suitability map for solar PV and wind project development in Burkina
Faso generated using the suitability assessment approach discussed The results obtained indicate that 27.4% and 0.5% of the total country land area is suitable for solar PV and wind project development, respectively (i.e. suitability index exceeding 60%). These areas are largely located along the transmission network.


The findings of this study indicate that there is significant potential for utility-scale solar PV and
wind power development in Burkina Faso. The maximum development potential across the country
is estimated at approximately 95.9 GW and 1.96 GW for solar PV and wind projects, respectively, considering land-use footprints of 50 MW/km2 for solar PV and 5 MW/km2 for wind, with a land utilisation factor of 1%. These findings are intended to prompt more indepth investigation to establish specific sites for detailed evaluation using high temporal and spatial resolution resource data. Yet the limitations of this study must be noted – including the sensitivity of the land suitability maps to the assumption made to set the thresholds and the underlying quality of criteria datasets. Notably, non-technical issues, such as land ownership, can also influence the selection of land for further prospecting.


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Renewable Energy and Jobs Annual Review 2021


The renewable energy sector employed 12 million people, directly and indirectly, in 2020.1 The number has continued to grow worldwide over the past decade. The solar photovoltaic (PV), bioenergy, hydropower and wind power industries have been the largest employers. Figure 1 shows the evolution of IRENA’s renewable energy employment estimates since 2012.

These employment trends are shaped by a multitude of factors (see Figure 2). Key among them is the rate at which renewable energy equipment is manufactured, installed and put to use (largely a function of costs and overall investments). Costs, especially of solar and wind technologies, continue to decline. With relatively steady annual investments, lower costs have translated into wider deployment. An increase in investments would boost future job creation, even allowing for growing labour productivity. Policy guidance and support remain indispensable for establishing overall renewable energy roadmaps, driving ambition, and encouraging the adoption of transparent and consistent rules for feed-in tari-s, auctions, tax incentives, subsidies, permitting procedures and other regulations.

The geographic footprint of renewable energy employment – the physical location of the jobs – depends on the dynamism of national and regional installation markets; on technological leadership, industrial policy and domestic content requirements; and on the resulting depth and strength of the supply chain in individual countries. As the industry changes and matures, policy instruments must be fine-tuned.

The complex impact of COVID-19
The COVID-19 pandemic loomed over the global economy for most of 2020 and 2021, a-ecting both the volume and structure of energy demand. Employment, including in the energy sector, has been deeply a-ected by repeated lockdowns and other restrictions which put pressure on supply chains and constrained economic activity. Across the global economy, millions of jobs were lost and many others put at risk. According to the International Labour Organization (ILO, 2021), 8.8% of global working hours were lost in 2020, equivalent to 255 million full-time jobs. Available information indicates that women were more aŠected than men, given that they tend to work in sectors more vulnerable to
economic shocks. This comes on top of a long-standing imbalance in the energy sector, including renewables, i.e. a marked gender inequality. A two-page feature on this topic begins on page 18.
In renewable energy as elsewhere in the economy, the ability of companies and industries to cope with the pandemic and comply with social-distancing requirements in the workplace varies enormously. Companies and government agencies face not only the direct health impacts of the virus, such as sick and quarantined workers or temporary factory shutdowns, but also the economic repercussions of border closures and interruptions in deliveries of raw materials and components.

In many countries a cycle was established in which delays were followed by surges of activity. This reflected the newfound reality in which countries’ varying degrees of success in reducing COVID-19 infections alternated with a resurgence of cases. But some of the late surge was also driven by developers rushing projects to meet permitting deadlines (some of which were extended in response to pandemic delays) or reacting to impending changes in policies, such as expiring tax credits, phaseouts of subsidies or cuts in feed-in tari-s. In a sense, the pandemic further amplified the ups and downs seen in the sector in ordinary years. Due to the mobility constraints inherent in the COVID-19 policy response, transport energy demand was far more a-ected than electricity use. This played to renewables’ advantage, in that the bulk of renewable capacity has been installed in the power sector, whereas renewables’ role in transport fuels remains quite small for the time being. An added wild
card were the extreme swings in the price of oil during parts of the year, triggered by oversupply and a price war among some major producers. Cheaper petroleum fuels had the e-ect of diminishing demand for biofuels.

Renewable energy employment by technology
This section presents estimates for employment in solar PV, liquid biofuels, wind and hydropower. Less information is available for other technologies such as solid biomass and biogas, solar heating and cooling, concentrated solar power (CSP), geothermal energy and ground-based heat pumps, waste-to-energy, and ocean or wave energy. Most of these other technologies also employ fewer people (see Figure 4). Observations on o–grid and mini-grid developments are also o-ered here, as well as glimpses at other energy transition technologies (battery storage and green hydrogen).


Accelerating the energy transition in line with global climate and development objectives will continue to have significant implications for employment in the energy sector as well as the wider economy. The energy transition can create many new job opportunities along the value chain. Reaping the benefits and overcoming challenges in this regard requires a deep understanding of the interplay of the energy transition with economies and societies. For this reason, IRENA has put forward a comprehensive approach that links the world’s energy systems and economies within one consistent quantitative framework, which allows socio-economic indicators to be compared under diŠerent scenarios. All other things held equal, this leads to an analysis of the impacts of the energy transition expressed in the indicators of employment, gross domestic product and welfare.

HYDROPOWER: Jobs in hydropower are expected to amount to 3.7 million37 in 2050 under the 1.5°C Scenario. For one, this is because significant hydro potential has already been exploited, implying smaller incremental capacity additions, and thus slower growth than newer technologies. In addition, new hydro installations increasingly have to be aligned with eŠorts to protect natural habitats and to minimise social impacts and conflicts surrounding the use of water resources among di-erent communities and countries that share watersheds. Some regions may see more hydro development, and hence job creation, than others; for instance, hydro power is growing fast in Africa owing to some large-scale projects and, to date, limited environmental regulation and local community protection laws that make further development of large-scale hydro resources possible (IRENA, 2021e forthcoming).


The energy transition o-ers significant employment opportunities across di-erent countries and market segments. Education, skills, training and retraining will support realignment. The trends in the educational requirements of the energy sector call for better co-ordination between the sector and educational institutions. An integrated approach to labour and educational policy and planning will be needed to address this challenge, and also to better integrate the educational requirements in the energy sector with those of other sectors. Part of the answer will lie with e-orts to better anticipate emerging trends that influence education levels and specialisations. Another aspect concerns identifying
transversal skills, i.e., skills that are not exclusively related to a particular job or task but rather are applicable to a wide variety of work settings and roles. Despite positive trends and recent developments, skills gaps and shortages are increasing and likely widespread across countries unless proactive measures are taken. In highincome countries, including those even with well-developed skills anticipation systems, a lack of both technical and transferable core skills remains a significant recruitment barrier for employers, while developing countries are especially challenged by deficiencies at higher skills levels. Many of the most significant changes in skills and occupations in the green economy are taking place at higher skill levels, requiring university education. This represents a critical barrier for many low-income countries, where university graduates and high-level skills in general tend to be in short supply. These may constitute a constraint on the net-zero transition.

Occupational patterns and skill levels
Renewable energy employs people across all trades and levels. IRENA’s analysis of the human resource requirements for the solar PV (IRENA, 2017a) and onshore wind (IRENA, 2017b) industries shows that over 60% of the workforce requires minimal formal training. Individuals with degrees in fields such as science, technology, engineering and mathematics (STEM) are needed in smaller numbers (around 30%). Highly qualified non STEM professionals (such as lawyers, logistics experts, marketing professionals or experts in regulation and standardisation) account for roughly 5%, while administrative personnel make up the smallest share (1 4%). In oŠshore wind, the proportion is similar: those with
lower skills and training again represent the largest share of employment (47%) (IRENA, 2018). When it comes to the value chain of SWHs, less than 10% of the human resources required are for STEM and non-STEM professionals. In comparison, the remaining 90% required are workers with minimal or no certification (IRENA, 2021d) (see Figure 15).


As the world navigates to a climate-safe energy system centred on renewables and energy e«ciency, it seems clear that more energy jobs will be created than lost, especially if governments ensure strong policies in support of deployment and integration of renewables. Workforce development is essential, and job quality deserves increasing attention. While skills training is important, policy makers need to understand it within a broad, holistic policy framework. Among other measures, that framework embraces industrial policies, labour market policies, social protection measures, and diversity and
inclusion strategies. This final chapter discusses this holistic approach for a smooth and successful energy transition.

A comprehensive policy framework for jobs and a just energy transition
This report reveals the need for a holistic approach to policy making that focuses not only on policies and programmes in the energy sector itself, but builds on a sophisticated understanding of the close inter-connections between energy, the economy at large, and social and planetary sustainability. This implies a need for renewable energy policies that are linked to structural change and the assurance of a just transition – all within a holistic global policy framework (see Figure 22).

A critical dimension in all of this is the proper balance between the public and private sectors – and their
respective strengths and weaknesses. In past years, the policy landscape has been focused on enabling
private sector actors and reducing risks, and it has yielded maturing technologies and lower costs. But this alone will no longer su«ce. As the climate challenge mounts, strategic action is urgently needed to deliver a comprehensive, holistic and just transition. A speedy and co-ordinated approach requires governments to take on a much more proactive role, acting in the public interest and safeguarding broad social imperatives. This may occur through regulations and incentives, public investment strategies, and public ownership of transition-related assets and infrastructure (both at national and community levels). As the policy discussion continues to evolve, it is likely to yield varying answers in di-erent national settings.


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