Renewables “have become big business”, generating record levels of investment in 2015 and experiencing “explosive” growth over the past 10 years, a new report released today by the World Energy Council (WEC) has found.
However, the WEC cautioned that renewables still face challenges due to their variability.
Renewables now account for over 30 per cent of the world’s total installed power capacity and 23 per cent of global power production, the ‘Variable Renewables Integration in Electricity Systems – How to get it right’ report said. And, since 2005, wind and solar power have grown annually at 23 per cent and 50 per cent respectively.
In 2015, the WEC found that a record $286bn was invested in 154 GW of new renewable power capacity, as compared to the 97 GW of conventional generation capacity added globally. Of the investment in renewables, 76 per cent went toward wind and solar photovoltaic (PV) projects.
And, investment in renewables was seen to shift from developed countries to emerging economies, with China alone accounting for 36 per cent of global investment. In 2015, 164 countries were found to have supportive policies in place for renewables; 95 were developing countries, up from 15 in 2005.
The WEC found that a combination of technology improvements and cost reductions continues to drive down both CAPEX and the costs of operation and maintenance for renewables, and for PV installations in particular.
Given renewables’ market successes as well as their variability, integrating them into existing power networks has become an ever more crucial issue. The WEC recommends a two-pronged approach focused on both policy and market design and technology improvements.
On the policy side, the report said that governments must aim market rules at addressing the energy ‘trilemma’, and that introducing capacity markets can help to ensure security of supply. Its recommended adjustments to existing market design included larger balancing areas, aggregating bids of different plants, lining up renewables to provide ancillary services, and hourly and sub-hourly scheduling.
On the technology side, it called for further development of weather forecasting methodologies in order to promote rapid management of wind and sun variability, as well as advanced operating procedures to optimize reserve capacity and the flexibility of conventional generation. In addition, it said demand response must be further developed, transmission and distribution systems may need to be expanded, and energy storage technologies “could be a game-changer”.
The full report may be viewed here.