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"Re-powering" refers to the process of replacing older power stations with ones that are more efficient and more powerful, but the term also lends itself to market design. To facilitate the transition to a low-carbon economy, electricity markets will need to be "re-powered": older market frameworks must be replaced with ones suitable for decarbonisation while ensuring a secure electricity supply. Market rules need to be modernised and better matched with lowcarbon policies while keeping the same overall market architecture.
Re-powering electricity markets can be done in several ways, depending on the existing market design or regulatory framework. Changes can be as limited as increasing the temporal or geographical resolution of existing markets or putting a price on scarcity, or as extensive as creating short-term markets and incorporating policies to increase renewables and reduce carbon emissions as part of a consistent market framework.
Re-Powering Markets brings together today’s best practices in new electricity market design and details the most effective and efficient ways for re-powering electricity markets to address the 21st century challenges of transitioning to low-carbon electricity.
Reaching climate neutrality requires economic transformations of unprecedented scale and speed. Immediate action from the business community can avoid unnecessary costs, create wellbeing co-benefits and prepare local businesses with a better competitive position in the future climate neutral economy. This report shows what reaching climate neutrality by 2040 means for Hamburg businesses and identifies key actions they need to undertake. It provides insights where the Hamburg economy and its businesses stand on the way to climate neutrality and on their needs to advance, drawing on a business survey. The study also shares insights from action plans of selected comparison cities. It points to cross-sector as well as to sector-specific challenges and opportunities for Hamburg businesses. This includes making better use of low-cost renewables, addressing energy efficiency in buildings as well as challenges and opportunities in activities in and around the port and in industry. It highlights Hamburg's potential as a hydrogen hub as well as the need to adopt circular economy practices. It illustrates that a regional and business perspective are necessary to achieve climate neutrality in prosperity, requiring individual and collective business action.
This report presents policy reform options to support Lithuania in meeting its climate neutrality target. It takes stock of Lithuania’s current and planned climate policies and assesses their potential for meeting the country’s climate ambitions. The report details the results of modelling carried out to assess the effectiveness of different policy scenarios, an analysis of carbon pricing and the role of innovation, an assessment of financial needs in the transition to net zero, and an analysis of the distributional implications of carbon pricing. Bringing together these findings the report offers recommendations for policy reform, highlighting the importance of setting price signals complemented by innovation support, as well as the potential of revenue recycling options in alleviating distributional concerns.
This report was commissioned by Korea's Ministry of Trade, Industry and Energy and carried out jointly by the International Energy Agency (IEA) and the Korea Energy Economics Institute. The objective of the study was to analyse market design improvements to enable achieving net zero in Korea's power sector, in accordance with the country's long-term decarbonisation objectives. For this the IEA devised a Korea Regional Power System Model to evaluate the emissions implications of the plans laid out in Korea’s 9th Basic Plan for Long-Term Electricity Supply and Demand and the Carbon Neutral Strategy published in 2021. The analysis includes a scenario elaborated by the IEA, based on the World Energy Outlook's Announced Pledges Scenario, to analyse potential for further market improvements. This analysis covers market improvements in areas such as carbon pricing, market price enhancements that better reward lowemissions technologies and security of supply, and market access reforms to ensure the participation of a wider range of new technologies and distributed energy resources.
The reform of the electricity supply industry is gathering pace in many countries. Independent regulatory agencies and other regulatory bodies have been created, and regulatory responsibilities redefined. This book reviews the evolving institutional structures to regulate the electricity supply industry in IEA member countries.
The countries of Continental Europe have started the process of reforming their natural gas markets. This book sets the context for, and considers the issues raised by, these reforms. It also analyses the key elements of effective reform, such as third party access to the gas infrastructure. Unlike earlier reformers, Europe faces important challenges of growing import dependency and reliance on a few large producer countries, against a background of strong demand growth. It is vital that both short and long term security of supply are sustained in the new market conditions. At the same time a key objective of reform is to improve economic efficiency through competition and short term trade, in order to reduce prices for natural gas consumers. The book argues that security and competition are not incompatible, and that security can be enhanced by competition provided that reform is handled with care. As Europe implements the EU Gas Directive, this book is a timely review for energy policy makers and others involved in the reform process. It is the latest in a series of IEA publications on energy market reforms.
The natural gas sector in Argentina is undergoing profound change as a result of regulatory and structural reforms launched at the end of the 1980s. Critical to achieving national economic restructuring, these reform measures were aimed at improving economic efficiency and increasing investment through greater reliance on market forces and new opportunities for private capital. This report -- the first IEA study to focus on Argentina -- critically reviews the impact of gas-sector reforms. It identifies challenges that policy makers, regulatory and competition authorities still confront, in particular the promotion of competition in gas supply.
The combined effects of the economic crisis and the recent popular uprisings in parts of the Middle East and North Africa have brought social and economic challenges back to the centre of attention of policy makers. For governments searching to create jobs, to satisfy the growing energy demand of their populations and to diversify their economies, the appeal of renewable energies is strong. However, the right policy framework and support need to be put in place if the region wants to attract private investment in the sector and reap the benefits of its favourable resource endowment, especially as regards solar and wind energy.
This report makes the case for a stronger deployment of renewables in the Middle East and North Africa and identifies the appropriate support policies required to stimulate the necessary private investment. An assessment of existing policy frameworks in the region and examples from OECD good practice are used as pointers to help guide policy makers in their choices.
The analysis contained in this report suggests that support policies targeting the life cycle of renewable energy projects such as feed-in tariffs and power purchase agreements are more effective and less distortive than policies subsidising the initial investment, such as cost reductions. The optimal incentive scheme provides investors with stability through a guaranteed but declining minimum return while imposing enough market risk to foster technological progress.
A review of the experience of IEA countries after the oil crises in the 1970s, which initiated a surge of investments in renewables research and development. While use of renewables has grown rapidly, they still account for only a small portion of the IEA energy mix. This work examines policies and measures that have been introduced in IEA countries to increase the cost effective deployment of renewables, reviews the objectives behind these policies, and evaluates the results.
The key areas examined by the report include the latest data and analysis on renewable power capacity additions in 2022 – globally and for major markets – as well as forecasts for 2023 and 2024.
The update will look at key topics for renewables this year and next, including how the energy crisis will affect their deployment in the EU, their impact on energy affordability, and the latest trends in the United States, China and India. It will also explore the implications of developments affecting major technologies like solar, wind and biofuels – including market dynamics, financing, energy security priorities, manufacturing and power system integration.
The report provides the IEA’s latest assessment of the state of play in renewables markets since the publication of our Renewables 2022 report in December.
In exploring the most recent market and policy developments as of April 2022, our Renewable Energy Market Update forecasts new global renewable power capacity additions and biofuel demand for 2023 and 2024. It also discusses key uncertainties and policy-related implications that may affect projections for 2024 and beyond.
Renewable electricity capacity additions broke another record in 2021 and biofuels demand almost recovered to pre-Covid levels, despite the continuation of logistical challenges and increasing prices. However, the Russian Federation’s (hereafter, “Russia”) invasion of Ukraine is sending shock waves through energy and agriculture markets, resulting in an unprecedented global energy crisis. In many countries, governments are trying to shelter consumers from higher energy prices, reduce dependence on Russian supplies and are proposing policies to accelerate the transition to clean energy technologies.
Renewable energy has great potential to reduce prices and dependence on fossil fuels in short and long term. Although costs for new solar PV and wind installations have increased, reversing a decade-long cost reduction trend, natural gas, oil and coal prices have risen much faster, therefore actually further improving the competitiveness of renewable electricity. However, how rapidly renewables can substitute fossil fuels hinges on several uncertainties and will depend on many factors. Will renewable electricity sources defy this global energy crisis and continue to expand quickly despite emerging political and macroeconomic challenges? At the same time, growth in biofuels demand faces significant headwinds from both lower transport demand growth and high biofuel prices. Will demand growth resume at historical rates?
In exploring the most recent market and policy developments as of April 2022, our Renewable Energy Market Update forecasts new global renewable power capacity additions and biofuel demand for 2022 and 2023. It also discusses key uncertainties and policy-related implications that may affect projections for 2023 and beyond.
This report is a market update on the IEA’s most recent five-year renewable energy forecast, Renewables 2019, published in October 2019. It provides an early analysis of the drivers and challenges since last October, and covers renewable capacity additions for all technologies and transport biofuel production expected during 2020 and 2021. An update on renewable heat technologies is also included; however, the analysis is qualitative due to limited data availability.
Given ongoing uncertainty, the forecasts for 2020 and 2021 will be updated in the second half of the year to reassess recent market and policy developments.
Mauritania has high-quality wind and solar resources whose large-scale development could have catalytic effects in supporting the country to deliver universal electricity access to its citizens and achieve its vision for sustainable economic development.
Renewables deployment would benefit mining – the largest industry in the country – which is currently reliant on diesel and heavy fuel oil for its operations. A switch to renewable energy in the sector could lower costs, reduce emissions, increase efficiency and improve energy security in the country. There is also potential to further electrify energy uses in mining.
The government has announced various export-oriented projects to produce renewable hydrogen, ammonia and/or hydrogen-reduced iron. Anchoring demand on foreign offtakers would contribute significantly to de-risk these projects and generate the stable revenue stream needed to mobilise investors at the necessary scale. By attracting significant amounts of capital, such large-scale projects could enable a transformation of the power sector and spur sustainable economic development and growth, but robust and transparent policies and regulatory frameworks are needed.
This new IEA report – the first focusing on Mauritania – explores the potential benefits to Mauritania of developing its renewable energy options and includes an analysis of the water requirements of hydrogen and the potential for expanding potable water availability through seawater desalination.
This book reviews the current status of the portfolio of renewable technologies and provides guidance on their development. It explores the options for the RD&D to achieve breakthroughs that will lead to large-scale markets and identifies what activities should take priority. It also looks at the benefits of increased RD&D funding in terms of technological advancement and cost improvement. Country reports provide information on national renewable RD&D budgets and programme trends.
The production of hydrocarbons has a dominant role in Oman’s economy with oil and gas representing around 60% of total export income in recent years. In 2022, Oman announced a target to become net zero by 2050 and an aim to significantly ramp up the domestic production of hydrogen from renewable electricity.
The country is well placed to produce large quantities of renewable hydrogen and hydrogen-based fuels like ammonia thanks to its high-quality renewable resources. Oman has also vast amounts of land for large-scale project development, and existing fossil fuel infrastructure that can be used or repurposed for low-emission fuels. Oman can become a competitive producer and exporter of renewable hydrogen and ammonia already by the end of this decade, while simultaneously increasing the share of renewables in its power mix.
This new IEA report – the first of its kind analysing the potential of renewable hydrogen in a producer economy – indicates that renewable hydrogen is set to bring multiple benefits in terms of investment, natural gas savings and avoided CO₂ emissions as Oman transitions towards a net zero economy.
The renewable electricity market has witnessed an unprecedented acceleration in recent years, and it broke another annual deployment record in 2016. The market’s main driver last year was solar photovoltaics, which is boosting the growth of renewables in power capacity around the world. As costs decline, wind and solar are becoming increasingly comparable to new-build fossil fuel alternatives in a growing number of countries. China remains the dominant player, but India is increasingly moving to the centre stage. Government policies are introducing more competition through renewable auctions, further reducing costs.
The IEA’s newly renamed Renewables 2017 (formerly titled Medium-Term Renewables Market Report) provides a detailed market analysis and overview of renewable electricity capacity and generation, biofuels production, and heat consumption, as well as a forecast for the period between 2017 and 2022. This year’s report also provides additional analysis on the contribution of electric vehicles to renewable road transport and on the off-grid solar market in Africa and developing Asia.
Finally, the report identifies a set of policy improvements in key markets that could accelerate the growth of renewables in the electricity sector as well as the growth of transport biofuels for the first time. These are needed to accelerate decarbonisation in all sectors in order to be on track to meet long-term climate goals.
The electricity sector remains the brightest spot for renewables with the exponential growth of solar photovoltaics and wind in recent years, and building on the significant contribution of hydropower generation. But, electricity accounts for only a fifth of global energy consumption, and the role of renewables in the transportation and heating sectors remains critical to the energy transition. This is why Renewables 2018, the annual IEA market analysis and forecast on renewable energy, takes an in-depth look at bioenergy, the largest source of renewable energy globally. Often overlooked, the contribution of sustainable bioenergy represents a “blind spot” in the global debate about renewables. Bioenergy makes a significant contribution across the energy system, particularly in the heat and transport sectors.
In addition to looking at renewable energy across the entire energy system, Renewables 2018 provides a detailed market analysis and overview of renewables in the electricity, heat and transport sectors as well as forecasts for the period between 2018 and 2023. The report also highlights policy and market improvements that can unlock further growth of renewable energy in electricity and transport biofuels, as well as underlines the untapped potential of sustainable bioenergy and other renewable sources in greening the industry and transport sectors. For the first time, Renewables 2018 also includes a chapter dedicated to answering some of the key questions raised by the latest developments in renewable energy markets.
Solar photovoltaics (PV) is driving the growth of renewable power capacity around the world. At the same time, it is raising the prospect of a significant shift in the role of electricity consumers. This is the result of distributed solar PV: the use of solar power systems by households, businesses and industry to generate their own electricity.
Distributed solar PV capacity is set to more than double in the next five years, accounting for almost half of all solar PV growth, according to a new in-depth focus in Renewables 2019, the annual IEA market analysis and forecast on renewable energy. The report assesses the current state of play of distributed solar PV and maps out its huge growth potential in the coming years. It also considers the implications for policy makers, utilities and consumers.
More broadly, this report analyses the role of renewable energy across the entire energy system – including the electricity, heat, and transport sectors – and provides forecasts for the period from 2019 to 2024.
In May 2020, the IEA market update on renewable energy provided an analysis that looked at the impact of Covid-19 on renewable energy deployment in 2020 and 2021. This early assessment showed that the Covid-19 crisis is hurting – but not halting – global renewable energy growth. Half a year later, the pandemic continues to affect the global economy and daily life. However, renewable markets, especially electricity-generating technologies, have already shown their resilience to the crisis. Renewables 2020 provides detailed analysis and forecasts through 2025 of the impact of Covid-19 on renewables in the electricity, heat and transport sectors.
Renewables 2021 is the IEA’s primary analysis on the sector, based on current policies and market developments. It forecasts the deployment of renewable energy technologies in electricity, transport and heat to 2026 while also exploring key challenges to the industry and identifying barriers to faster growth.
Renewables are the backbone of any energy transition to achieve net zero. As the world increasingly shifts away from carbon emitting fossil fuels, understanding the current role renewables play in the decarbonisation of multiple sectors is key to ensuring a smooth pathway to net zero.
While renewables continued to be deployed at a strong pace during the Covid-19 crisis, they face new opportunities and challenges. This year’s report frames current policy and market dynamics while placing the recent rise in energy and commodities prices in context. In addition to providing detailed market analysis and forecasts, Renewables 2021 also explores trends to watch including storage, producing hydrogen from renewable electricity, stimulus packages, aviation biofuels and residential heating.