IEA Scales Back Renewable Energy Forecast Citing Policy Uncertainty
In its third annual Medium-Term Renewable Energy Market Report, the International Energy Agency has scaled back its predictions for renewable growth citing policy uncertainty as a major hindrance to the industry.
Still, renewable energy growth was strong in 2013 and accounted for around 22% of world energy generation. The report predicts that growth could be around 45% by 2020, though it would appear the industry may stagnate after 2014. This would keep the industry from meeting necessary goals to combat climate change.
Also, while renewable energy is taking off in markets such as China, it still doesn’t meet the power needs of countries with energy profiles dominated by fossil fuels.
Still, the biggest concern is the lack of policy clarity regarding renewable.
“Renewables are a necessary part of energy security. However, just when they are becoming a cost-competitive option in an increasing number of cases, policy and regulatory uncertainty is rising in some key markets. This stems from concerns about the costs of deploying renewables,” IEA Executive Director Maria van der Hoeven said. “Governments must distinguish more clearly between the past, present and future, as costs are falling over time. Many renewables no longer need high incentive levels. Rather, given their capital-intensive nature, renewables require a market context that assures a reasonable and predictable return for investors. This calls for a serious reflection on market design needed to achieve a more sustainable world energy mix.”
2020 is an important year in the report as it not only acts as a marker for the report’s energy forecast, but also is the end of the EU’s energy policy framework.
The outlook sees investments dropping from $250 billion to around $230 billion. This is attributed to both a slowdown in investments, but also simply decreased costs in deploying renewable energy.
The biggest opportunity for the industry lies in deploying renewables for heating and cooling needs. While the industry as a whole is expected to grow by around 25% to 2020, heating use is expected to grow 1%, from 8% to 9%.
The full report can be found here.
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.