Are we on track for 48% renewable electricity by 2035?

The International Energy Agency (IEA) last week released its latest World Energy Outlook report, World Energy Outlook 2035. While the IEA hasn’t always pushed for strong renewable energy growth or the need to more firmly tackle global warming and climate change, it has shifted to this noticeably in the past couple of years. In World Energy Outlook 2035, the world-leading energy agency contends that we need to collectively reach 48% renewable electricity by 2035 in order to hit global climate goals.

Are we on track for 48% renewable electricity by 2035? Not at all. With current policies, the IEA says that we’re on track for just 31%, just up 11 percentage points from the 20% we were at in 2011.

Is the governmental investment needed for renewables unprecedented? Not in the least. The IEA reports that about $220 billion a year in incentives for renewable energy will be in place by 2035, according to its central New Policies Scenario, but about twice that much is needed. That may sound like a lot, but it is far less than the $544 billion in subsidies that fossil fuels received in 2012, and the trillions upon trillions they have received in the previous century. (Notably, renewables only received about $101 billion in subsidies in 2012.)

All in all, the IEA contends that, under the most likely scenario, we are going to far exceed what climate scientists consider to be a safe level of global warming by 2035. “Energy-related carbon-dioxide emissions are projected to rise by 20% to 2035, leaving the world on track for a long-term average temperature increase of 3.6 °C, far above the internationally-agreed 2 °C climate target.”

Fossil Fuel Subsidies Need To Go

One important call to action that the IEA reiterates in this report is a global move to cut fossil fuel subsidies, which it logically contends counterproductively distort the market. That would certainly help to balance out the energy market. However, I doubt many people think that it will actually happen anytime soon, or even by 2035. Extremely rich and powerful fossil fuel industries have a great deal of control over governments around the world.

Nonetheless, a push by the IEA is very useful for getting us moving in that direction. Thankfully, it is pushing hard for this. Fatih Birol, the IEA’s chief economist, at the launch of World Energy Outlook 2013, noted, “fossil fuel subsidies are bad for countries, for the economy, for the environment, efficiency, and most of all for poor people.” The IEA called fossil fuel subsidies a waste, and also noted that 90% of fossil fuel subsidies only benefit the rich and the middle class, and are thus extremely inequitable.

Other Challenges To 48% Renewables By 2035

Aside from a distorted market that benefits fossil fuels, there are some other challenges to renewable energy growth. Electricity markets are designed around marginal generation cost, which is largely fuel costs. The merit order is used on grids around the world to determine which power plants get their electricity on the market. Solar, wind, and other renewable energy power plants don’t have fuel costs, which allows them to outbid other power plants and drive down the price of wholesale electricity. In some places with a high market penetration of solar PV, this even brings the price of electricity at mid-day down to about what it is in the middle of the night. Aside from bringing down these wholesale electricity costs, this makes it very hard for non-renewable power plants to turn a profit and stay in operation.

However, when renewables are not needed and energy storage supply is tapped out, electricity from these other power plants is needed in order to keep electricity supply matching demand. So, a transition in energy market policies is probably needed in order to make sure an adequate amount of dispatchable power capacity remains available as renewables grow. High-penetration markets like Germany are already working on solutions for this.

IEA Still Misses The Boat On Solar PV’s Value

While the IEA’s push for renewables has increased in recent years, it still suffers from a bias against them. As Giles Parkinson of RenewEconomy notes, “it’s hard to find a renewable energy representative” on the report’s list of peer reviewers. As such, a lot of the value of solar PV has been ignored or left out in the latest report.

For example, when discussing the topic of solar PV “grid parity” and what solar power producers should receive for their electricity, no value is provided for the reliability, grid security, peak production, reduced grid infrastructure, or reduced CO2/pollution benefits solar power offers. As such, the IEA thinks that solar power producers shouldn’t get more than the wholesale price of electricity for electricity it sends back to the grid, a shockingly simplistic and harmful conclusion, and not one we should expect from the world’s highest-regarded energy agency.

Where Will Energy Be In 2035?

While the IEA thinks we need to get to 48% renewable electricity by 2035, its New Policies Scenario puts fossil fuels at 57% of the market by 2035, down just a bit from the 68% it is at today. It projects that 12% of electricity will come from nuclear power. (Note that for the energy sector as a whole, the IEA projects that fossil fuels will fall slightly from 82% of the mix to 76% of the mix.)

The exponential growth of disruptive technologies or breakthrough technologies could change the entire game and bring us to a much cleaner energy future by 2035. There are more optimistic scenarios than that presented by the IEA. However, the trajectory at the moment does seem to be a disastrous one, as the IEA indicates.

The Behemoth That Is China

With China’s humungous population and light-speed economic growth, the world’s most populous country is projected to deploy more renewable energy capacity by 2035 than the EU, the US, and Japan combined. Clearly, the route this country takes will be the leading driver behind the route the world as a whole travels.

While that comes with its own challenges, if China really wanted to help address its pollution problems and the growing global warming crisis (something that will have an increasingly negative effect on the country), its government would certainly be capable of doing so just about as quickly and thoroughly as any other nation.

Editor’s note: This is a guest post written by Zachary Shahan, editor of CleanTechnica and Planetsave. The views expressed in this post do not necessarily reflect or represent the views of ABB or its employees.