© OECD/IEA 2016 © OECD/IEA 2016

Launch Presentation

Singapore International Energy Week, Singapore, 25 October 2016

Medium- Term Renewable Energy Market Report 2016

© OECD/IEA 2016

Context

A year of records for renewable electricity

A record amount of new capacity was installed in 2015

Total capacity has now overtaken coal

COP21 Paris Agreement gives momentum to renewables

Local air pollution & energy security are also key drivers

Energy investment flows confirm shift to renewables

But policy makers need to heighten their commitments and provide investors more clarity & certainty

© OECD/IEA 2016

0

200

400

600

800

1 000

MTRMR 2015 Forecast 2014-2020 MTRMR 2016 Forecast 2015-21

Net ad

ditio

ns (GW

) Others

Brazil

India

China

Japan

United States

EU28

New policies underpin a more bullish forecast for renewables

China remains key growth market for renewable capacity, while the United States surpasses the EU for the first time

Renewable electricity capacity growth (GW) in MTRMR’s main case

13%

© OECD/IEA 2016

Renewables to remain fastest growing source of electricity generation

Generation from renewables to rise by almost two-fifths over 2015-2021, pushing their share of total electricity generation from 23% to 28%

Indexed electricity generation by fuel (2001-21)

100 120 140 160 180 200 220 240 260 280

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021

2001

=10

0

Global power generation Coal Natural gas Renewable electricity generation

© OECD/IEA 2016

A two-speed world for renewable electricity

The increase in generation from renewables in 2015-2021 represents 60% of the global increase in electricity output, but prospects vary across regionally

Electricity and renewable generation growth by country/region

0

500

1 000

1 500

China India ASEAN Africa EU28 United States Japan

TWh

Electricity generation growth (2015-21) Renewable generation growth (2015-21)

Source: Total electricity generation from World Energy Outlook 2016, forthcoming.

© OECD/IEA 2016

Wind and solar PV compensate for slower hydropower growth

Solar PV & wind account for almost 2/3 of rise in renewables generation; total renewable electricity overpasses 7600 TWh by 2021, equivalent to EU+US today

Renewable electricity generation by source 2015

71%

8%

15%

4%

2%

Hydropower

Bioenergy

Wind

Solar PV

Other renewables

Renewable electricity generation by source 2021

71%

8%

15%

4%

2%

Hydropower

Bioenergy

Wind

Solar PV

Other renewables

© OECD/IEA 2016

Solar PV costs continue to decline with increasing competition

Utility-scale solar PV generation costs to fall by another quarter over 2015-21; competitive tenders may result in even faster cost reductions

Utility-scale solar PV generation cost and contract prices

0

100

200

300

400

500

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

USD/

MWh

Global reference UAE Brazil South Africa Germany Mexico Chile

Forecast

Tendered prices:

© OECD/IEA 2016

More ambitious policies could further enhance the outlook in line 2°C target

Renewables are in line with NDC pledges by 2030 but reducing policy uncertainty and overcoming financing & grid integration challenges remain key to achieve 2°C target

Renewable electricity capacity additions in Accelerated Case vs. Main Case

0

50

100

150

200

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

GW

Mainc case Accelerated case

© OECD/IEA 2016

Renewables to dominate electricity growth, but less progress in heat and transport

The share of renewables rises in all sectors, despite persistent challenges in heat & transport; interactions between energy efficiency & renewables become critical

Share of renewables in electricity, heat and transport sectors

0%

5%

10%

15%

20%

25%

30%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Share of ren

ewab

les in sector de

man

d

Renewable electricity Renewable heat Biofuels in road transport

© OECD/IEA 2016

Biofuel production shifts to Asia, as EU and US slows

Structural challenges in the US & policy uncertainty post-2020 in the EU slow growth; Thailand, India & Indonesia have strengthened policies despite low oil prices

Biofuels production growth (billion litres)

0

5

10

15

20

United States EU28 Brazil Asia

Prod

uctio

n grow

th (billion

L)

Production growth 2009-15 Production growth 2015-21

© OECD/IEA 2016

Conclusions

Prospects for renewables electricity revised upwards, driven by policy improvements, cost reductions & efforts to improve air quality

The impact of lower fossil fuel prices on renewables varies by sector. Wind (onshore) & solar PV are the only technologies on track for a 2oC scenario

Competition in Asia between renewables & coal/gas will be critical to meeting global decarbonisation targets

Attracting investment in renewables hinges on appropriate market rules & regulations, particularly in markets with slow electricity demand growth

IEA is working to accelerate energy transition with its analysis on policy & technology and system integration of renewables