Renewables 2021 - Analysis And Forecast To 2026

Renewables2021Analysis and forecast to 2026

INTERNATIONAL ENERGYAGENCYThe IEA examines thefull spectrumof energy issuesincluding oil, gas andcoal supply anddemand, renewableenergy technologies,electricity markets,energy efficiency,access to energy,demand sidemanagement andmuch more. Throughits work, the IEAadvocates policies thatwill enhance thereliability, affordabilityand sustainability ofenergy in its30 member countries,8 association countriesand beyond.Please note that thispublication is subject tospecific restrictions that limitits use and distribution. Theterms and conditions areavailable online atwww.iea.org/t&c/This publication and anymap included herein arewithout prejudice to thestatus of or sovereignty overany territory, to thedelimitation of internationalfrontiers and boundaries andto the name of any territory,city or area.Source: IEA. All rightsreserved.International Energy AgencyWebsite: www.iea.orgIEA membercountries:IEA Czech andsNew ZealandNorwayPolandPortugalSlovak RepublicSpainSwedenSwitzerlandTurkeyUnited KingdomUnited th AfricaThailandThe EuropeanCommission alsoparticipates in thework of the IEA

Renewables 2021Analysis and forecasts to 2026AbstractAbstractRenewables 2021 is the IEA’s primary analysis on the sector, based on currentpolicies and market developments. It forecasts the deployment of renewableenergy technologies in electricity, transport and heat to 2026 while also exploringkey challenges to the industry and identifying barriers to faster growth.Renewables are the backbone of any energy transition to achieve net zero. As theworld increasingly shifts away from carbon emitting fossil fuels, understanding thecurrent role renewables play in the decarbonisation of multiple sectors is key toensuring a smooth pathway to net zero.While renewables continued to be deployed at a strong pace during the Covid-19crisis, they face new opportunities and challenges. This year’s report framescurrent policy and market dynamics while placing the recent rise in energy andcommodities prices in context. In addition to providing detailed market analysisand forecasts, Renewables 2021 also explores trends to watch including storage,producing hydrogen from renewable electricity, stimulus packages, aviationPAGE 3IEA. All rights reserved.biofuels and residential heating.

Renewables 2021Analysis and forecasts to 2026AcknowledgementsAcknowledgements, contributorsand creditsThis study was prepared by the Renewable Energy Division in the Directorate ofEnergy Markets and Security. It was designed and directed by Heymi Bahar,Senior Analyst.The report benefited from analysis, drafting and input from multiple colleagues.The lead authors of the report were, Yasmina Abdelilah, Heymi Bahar, TrevorCriswell, Piotr Bojek, François Briens, Jeremy Moorhouse and Grecia RodríguezJiménez, who was also responsible for data management. The report alsobenefited from analysis and drafting from Kazuhiro Kurumi and KartikVeerakumar.Paolo Frankl, Head of the Renewable Energy Division, provided strategicguidance and input to this work. Valuable comments, feedback and guidance wereprovided by other senior management and numerous other colleagues within theIEA, in particular, Keisuke Sadamori and Laura Cozzi.Other IEA colleagues who have made important contributions to this work include:Nadim Abilllama, Ali Al-Saffar, Carlos Alvarez Fernandez, Lucila Arboleya, ElisaAsmelash, Praveen Bains, Christophe Barret, Jose, Bermudez Menendez, SylviaBeyer, Toril Bosoni, Stéphanie Bouckaert, Davide d’Ambrosio, Peter Fraser,Astha Gupta, Ilkka Hannula, César Alejandro Hernandez, Joerg Husar, KevinLane, Stefan Lorenczik, Dionisia Lyngopoulou, Yannick Monschauer, ApostolosPetropoulos, Kristine Petrosyan, Uwe Remme, Luis Fernando Rosa, MichaelOppermann, Gabriel Saive, Jacopo Tattini, Jacob Teter, Nicole Thomas, Aad VanBohemen, Peerapat Vithayasrichareon, Timothy Goodson, Ariane Millot, FabianVoswinkel, Brent Wanner, Daniel Wetzel.Timely data from the IEA Energy Data Centre were fundamental to the report, withparticular assistance provided by Mathilde Daugy, Julia Guyon, Nick Johnstone,Julian Prime, Céline Rouquette and Roberta Quadrelli.This work benefited from extensive review and comments from the IEA StandingGroup on Long-Term Co-operation, IEA Renewable Energy Working Party,members of the Renewable Industry Advisory Board (RIAB) and experts from IEAPAGE 4IEA. All rights reserved.partner countries and other international institutions. The work also benefited from

Renewables 2021Analysis and forecasts to 2026Acknowledgementsfeedback by the IEA Committee on Energy Research and Technology, IEATechnology Collaboration Programmes (IEA TCPs).Many experts from outside of the IEA provided valuable input, commented andreviewed this report. They include:Countries:Austria (Austrian Energy Agency), Belgium (Federal Public Service Economy),Brazil (Empresa de Pesquisa Energética), Canada (Natural Resources Canada),Chile (Ministry of Energy), People’s Republic of China (Energy Research Institute– ERI), Colombia (Unidad de Planeación Minero Energética), European Union(European Commission – DG Energy), Finland ( Ministry of Economic Affairs andEmployment), France (Ministry of Ecological and Solidarity Transition), Italy(National Agency for New Technologies, Energy and Sustainable EconomicDevelopment ENEA), Ireland (Sustainable Energy Authority – SEAI), Japan(Ministry of Economy, Trade and Industry - METI), Spain (Institute for EnergyDiversification and Energy Saving - IDAE), Switzerland (Federal Office of Energy),United States (Department of Energy).Technology Collaboration Programme (TCPs):Bioenergy TCP, Heat Pumping Technologies (HPT) TCP, Hydropower TCP,Photovoltaic Power Systems (PVPS) TCP, Solar Heating and Cooling TCP,SolarPACES TCP, Wind Energy TCP.Other Organisations:Abengoa Solar, Acciona Energía, American Clean Power Association (ACPA),American Wind Energy Association (AWEA), Amrock Pty Ltd, Australian EnergyMarket Operator (AEMO), Council on Energy, Environment and Water (CEEW),Electric Power Development Company (JPOWER), Électricité de France (EDF),ENEL, Energy Insights Ltd, European Bank for Reconstruction and Development(EBRD), European Commission, European Geothermal Energy Association(EGEC), European Bioenergy (AEBIOM), EA Energy Analyses, European HeatPump Association (EHPA), European heating industry (EHI), newableEthanolAssociation (EPURE), European Solar Thermal Industry Federation (ESTIF), FirstSolar, FTI Consulting, General Electric (GE), Gestore dei Servizi Energetici(GSE). Global Wind Energy Association (GWEC), Iberdrola, Institute of Association(IHA),International Renewable Energy Agency (IRENA), National Renewable EnergyPAGE 5IEA. All rights reserved.Laboratory (NREL), Neste, Ørsted, POET, Queen’s University, REN21, Siemens

Renewables 2021Analysis and forecasts to 2026AcknowledgementsGamesa, Solar Power Europe, SPV Market Research, TECSOL, SOLISART,United Nations Economic Commission for Europe (UNECE), US Grains Council,Università Degli Studi di Firenze, Vestas, WindEurope, World Bank, WorldBioenergy Association.The authors would also like to thank Justin French-Brooks for skilfully editing themanuscript and the IEA Communication and Digital Office, in particular JonCuster, Astrid Dumond, Merve Erdem, Christopher Gully, Jad Mouawad, BarbaraMoure, Jethro Mullen, Julie Puech, Robert Stone and Therese Walsh for theirassistance. In addition, Ivo Letra from the Office of Management andAdministration supported data management.Questions or comments?PAGE 6IEA. All rights reserved.Please write to us at IEA-REMR@iea.org

Renewables 2021Analysis and forecasts to 2026Tables of contentsTable of contentsExecutive summary . 14Improved policies and COP26 climate goals are set to propel renewable electricity growth tonew heights . 14Despite rising prices, solar PV will set new records and wind will grow faster than over theprevious five years . 15Asia is set to overtake Europe as India and Indonesia lead renewed growth in global demandfor biofuels . 16Renewable heat has gained some policy momentum, but its market share is not set toincrease significantly . 16High commodity and energy prices bring significant uncertainties . 17Supported by the right policies, recovery spending on renewables could unleash a huge waveof private capital . 18Faster growth of renewables is within reach but requires addressing persistent challenges . 18Renewables’ penetration in to hard-to-decarbonise sectors is slowly emerging and promises abright future . 19Renewables need to grow faster than our forecasts to close the gap with a pathway to netzero by 2050. 19Chapter 1. Renewable electricity . 21Forecast summary . 21Renewable capacity additions are set to grow faster than ever in the next five years, but theexpansion trend is not on track to meet the IEA Net Zero by 2050 Scenario . 21Growing policy momentum worldwide is driving our forecast upward . 22Government-led auction capacity is in slight decline, but is compensated by robust corporatePPA activity . 24Top-10 countries continue to dominate renewables expansion, indicating that more diversity isneeded . 25Solar PV breaks new records in our forecast, despite rising prices . 26Low wind conditions and droughts in key markets hamper more rapid growth of renewablegeneration in 2021 . 30Achieving the IEA Net Zero by 2050 Scenario requires policy makers to significantly increasetheir ambition for all renewables . 34Country and regional analysis . 35China . 35United States . 37Asia Pacific . 40India . 41Japan . 45Korea . 46ASEAN . 47PAGE 7IEA. All rights reserved.Australia . 50

Renewables 2021Analysis and forecasts to 2026Tables of contentsEurope . 52Germany. 54Spain . 56France . 58The Netherlands . 60Turkey . 62Poland . 64Italy . 65United Kingdom . 67Denmark . 68Belgium . 69Latin America . 71Sub-Saharan Africa . 78Middle East and North Africa . 81References . 84Chapter 2. Biofuels . 89Forecast summary . 89Biofuels recover in 2021 despite high costs . 89Asia to surpass European biofuel production before 2026 . 90Ethanol and renewable diesel lead biofuels growth . 91Four policy discussions to watch that will help double biofuel growth rates . 91Demand and supply . 93Asia surpasses European biofuel demand and supply . 95Different fuels for different parts of the world . 96Fuel demand and government policies are driving different supply outcomes in differentregions . 98Biofuel demand growth doubles in the accelerated case . 102Biofuels need to expand faster to align with the IEA Net Zero by 2050 Scenario . 105Trade . 107Renewable diesel and biojet lead growth in net trade . 108Singapore climbs to second largest exporter, while top importers remain the same . 109Ethanol and biojet import demand drives trade growth in the accelerated case . 110References . 111Chapter 3. Renewable heat. 114Recent trends . 114Global progress on conversion to renewable heat has been limited . 114Policy update. 115Renewable heat has gained some policy momentum, but not enough to put the heat sector ontrack to meet climate ambitions. 115PAGE 8IEA. All rights reserved.Outlook to 2026 . 122