Renewable Energy Policies in a Time of Transition

The International Renewable Energy Agency (IRENA) is an intergovernmental or ganisation that supports countries in their transition to a sustainable energy future, and serves as the principal platform for international co-operation, a centre of excellence, and a repository of policy, technology, resource and financial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy, in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity.

Renewable energy targets, which serve as a principal way for public and private actors to demonstrate a commitment to the energy transition, range from official government announcements to codified plans with fully developed metrics and compliance measures. Targets also vary in focus, from a single technology or sector to economy-wide. By the end of 2016, at least 176 countries had targets for renewable energy. At least 150 countries had adopted targets relating to the share of energy from renewables
in power; at least 47 countries had renewables targets in place for heating and cooling; and at least 41 countries had targets for transport.

Demand for hot water in buildings is an important driver of growth in the demand for energy in emerging economies. In these countries, hot water is often produced with inefficient electric immersion heaters, which can contribute to electricity shortages
and blackouts. Because many of them have excellent potential for solar energy, solar thermal water heaters offer a good alternative; several countries have already enacted policies to promote them. Solar thermal growth has been particularly impressive in China (Figure 2.5), driven by ambitious solar thermal targets and low prices for the systems. The country’s 12th Five-Year Plan (2011- 15) had a target of reaching 400 million m2 of solar water collector surface, which it exceeded by 10%. A total of 800 million m2 is planned for installation during the 13th Five-Year Plan period.

Renewable energy solutions for transport range from liquid biofuels, biomethane, renewable electricity, and renewable electricity-derived hydrogen, to ammonia and synthetic fuels (power-to-X or P2X). Some of these energy carriers can be used in conventional vehicles (internal combustion engines), whereas others require the use of
alternative vehicles (Figure 3.4). Fuels and vehicle technologies vary greatly in terms of their technical maturity and level of sustainability (AFDC, 2018a).

The air quality benefits from biofuels relative to fossil fuels vary according to fuel used and vehicle type; however, analysis indicates biofuels can reduce carbon monoxide, hydrocarbons and particulate matter emissions. A modal switch from internal combustion vehicles to electric vehicles cuts tailpipe emissions, resulting in improved local air quality, especially in urban environments, apart from the benefits of using electricity produced by renewable sources to fuel vehicles.

The potential of auctions to discover real prices has been a major motivation for their adoption worldwide. As Figure 4.7 illustrates, the price results of solar and wind auctions have gradually decreased in recent years. In 2016, solar energy was contracted at a global average price of USD 50/megawatt hour (MWh), a striking difference from 2010’s average price of almost USD 250/MWh. Wind prices also fell in the same period, albeit at a slower pace (since the technology was more mature than solar in 2010). The average price in 2016 was USD 40/MWh, down from USD 80/MWh in 2010. Even auctions for other renewable technologies attracted investment in 2016. Examples include auctions for offshore wind in Denmark, Germany and the Netherlands; for bioenergy capacity in Argentina and Peru; and for solar thermal power in Dubai (IRENA, 2017b).

Where the goal is expanding energy access to rural communities, decentralised solutions feature lower costs and shorter wait times compared with grid extension. In this context, many countries are prioritising renewable decentralised technologies to meet energy access and broader goals. Energy access strategies can also be designed to address key barriers to successful renewable deployment in off-grid settings. Such barriers include financial constraints, lack of trust in renewable technologies and sustainability issues related to long-term operation and maintenance of renewable systems.

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