Clean Power Global renewable electricity production

Published on June 26th, 2013 | by Silvio Marcacci


IEA: Renewables Will Exceed Natural Gas And Nuclear By 2016

June 26th, 2013 by  

Natural gas is widely considered the bridge to take us from fossil fuel dependence to a clean energy future – but that bridge may be a lot shorter than anyone could have predicted.

The International Energy Agency (IEA) predicts power generation from renewable sources will exceed natural gas and be twice the contribution from nuclear energy globally by 2016 – just three short years from now.

IEA’s second-annual Medium-Term Renewable Energy Market Report (MTRMR) forecasts renewable generation will grow 40% in the next five years despite difficult economic conditions.

Wind And Solar Power The Renewables Charge

Renewable energy is now the fastest-growing sector of the global power market, and will represent 25% of all energy generation worldwide by 2018, up from 20% in 2011. In addition, renewable electricity generation is expected to reach 6,850 terawatt-hours (TWh) and total installed renewable capacity should hit 2,350 gigawatts (GW), both by 2018.

Wind and solar photovoltaic generation is powering this jump, and non-hydro renewable power will double from 4% of gross generation in 2011 to 8% in 2018. IEA cites two main drivers for their incredible outlook: accelerating investment and deployment, and growing cost competitiveness versus fossil fuels.

Strongest Growth In Developing Countries

Even though government funding has been inconsistent, private investment has remained strong, especially in developing economies. Rural electrification, energy poverty, and rising demand have been major challenges for policymakers in these countries, and renewables have become an increasingly attractive option for diverse and non-polluting power.

Non-developed countries, led by China, are expected to contribute two-thirds of all renewable market growth between now and 2018, compensating for slower growth and market volatility acorss Europe and the US.

Indeed, non-hydro renewable power will make up 11% of gross generation in these countries by 2018, up from 7% in 2012. By itself, China will account for 310GW, or 40% of all global renewable power capacity increases over this time period.

Falling Costs, Rising Capacity

Solving energy poverty issues without harmful emissions is key to renewables growth, but the larger reason for IEA’s outlook is more likely falling costs. The report finds renewables now cost-competitive with fossil fuels across many countries and a wide set of circumstances.

IEA notes wind is competitive with new fossil fuel in multiple markets, including Brazil, South Africa, Mexico, and New Zealand, and solar is competitive both in markets with high peak prices and decentralized power needs. “As their costs continue to fall, renewable power sources are increasingly standing on their own merits versus new fossil-fuel generation,” said Maria van der Hoeven of IEA.

IEA – Policy Uncertainty Is Public Enemy #1

However, the IEA warns renewables still face a challenging future. Global investment fell in 2012, and policy uncertainties loom over clean energy technology in several important markets. In addition, grid integration challenges have materialized in some regions as renewables penetration has hit new levels.

“Policy uncertainty is public enemy number one,” said Van der Hoeven. “Many renewables no longer require high economic incentives, but they do still need long-term policies that provide a predictable and reliable market and regulatory framework.”

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About the Author

Silvio is Principal at Marcacci Communications, a full-service clean energy and climate policy public relations company based in Oakland, CA.

  • Note to readers/commenters: If you spew over 10 pounds of potentially harmful nonsense in our comment area, we start bringing out the sweepers. It’s our way of protecting the atmosphere on at least the site, if not the globe.

    • Bob_Wallace

      That makes me the guy with a shovel who follows the elephants?

  • Matt

    If US EPA really moves forward with a cost for CO2 you could see a big jump in PV and wind in the US. I know there is a lot of political push back by old power around the world. But don’t be surprised if many countries overcome this an move forward much faster.

  • Edmund Kelly

    Even impressive sounding numbers have no meaning without a relevant context. The scale of green energy needed to actually reduce CO2 is unbelievably large even relative to current non fossil fuel energy production, never mind fossil fuel energy. Wind and solar account for only a few percent of current primary energy that does not produce CO2, which is mostly hydro and nuclear. If you want to get a sense of the scale of the problem watch the video at this location.

    • Bob_Wallace

      That’s true.

      But once upon a time there was only one automobile. Everyone else used horses, mules, oxen, camels, elephants, and all sorts of animals for transportation.

      At one point in time there was only one coal plant generating electricity.

      It all starts small, generally grows slowly for a while, and then takes off.

      Henry introduced his Model T in 1908. Look through some 1930s city street photos and see how many horses you can find. Outside of parades….

      • Edmund Kelly

        Things only take off when there is a clear benefit. Either it is a new capability like smart phones, or a better, cheaper way of doing something that exists. Cars were a bit of both. Unfortunately green energy is not seen as better by many, and is too expensive for most. It can only take off if it gets cheap enough. Taxing CO2 so that expensive green energy is competitive will only make for expensive energy for all, and a lower standard of living, especially for the poorest among us.

        • Bob_Wallace

          Utilities are starting to see clear benefits for renewables. When they can sign 20, 30 year PPAs for renewable wind or solar close to the current price of NG generation they know they’ve got a good thing going. Locking in low prices is very desirable as opposed to being vulnerable to market fuel prices.

          End-users are starting to see clear benefits for rooftop solar. When you can install a solar system, have it pay for itself in a few years, and then give you almost free electricity for several more decades, it’s a sweet thing.

          If people think renewables are too expensive then they’re probably getting their information from the fossil fuel and nuclear industries.

          Clearly you could do with a bit of fresh info, Edmund.

          Do you know that having only a moderate amount of solar on their grid allowed Germans to save about 5 billion euros in wholesale electricity prices in 2012? That’s avoided expensive peaker power that German’s won’t have to purchase going forward.

          Do you know that having wind on the ERCOT grid has reduced the cost of electricity in Texas?

          The poorest enjoy decreases in electricity costs.

          • Edmund Kelly

            The PPAs for wind and solar all rely on subsidies. Over half the cost of solar is subsidy, a cost born by society, or a part of society. Roof top solar is cost effective in sunny markets when it competes with monopoly priced electricity, and it is still subsidized nearly everywhere. The cost is again born by society. The German consumer pays heavily for the FIT, which only they pay, and not business electricity consumers. The fundamental fact is wind and solar are not economically competitive without subsidy. Wind production almost collapsed last year until the PTC was restored. Solar is stalled at 30GW/y and chasing subsidies in China and Japan as the European subsidies are declining. The size of subsidy sets the market size. Solar is growing in sunny US locations because panel prices fell sufficiently to where the ITC and MACRS make projects profitable. This was not planned. The ITC has been around for years without making solar competitive and probably won’t be renewed unless there is a major change in Congress.
            The fundamental problem with wind and solar is not that they are too expensive and need subsidy. At the current miniscule fraction of energy supplied by wind and solar, the subsidy is affordable. The problem is they are not getting cheaper at a rate that means they will ever be competitive without subsidy.

          • Bob_Wallace

            You get one sentence right and then your post goes sour.

            No, over half of the cost of solar is not subsidy. That’s a crock.

            Germany is saving far more in energy/electricity costs than they are spending to get renewable installed.

            You are extremely ill-informed or an intentional liar.

            Edmund, I’m not going through your post line by line. It’s just a pile of crap.

          • Edmund Kelly

            I just made a quick google search to make a point.


            In recent years Germany invested over $150B in very expensive solar. They way the FIT works, German consumers pay the price for this over the next twenty years. This article shows that cost is significant. 5.3cents/kWh in 2013 and rising every year. A 20.3B euro bill in 2013.

            Overall this was a good thing for everyone but the German consumer because it broke the cartel that had been keeping polysilicon prices high, and resulted in todays much lower PV panel prices. Unfortunately PV still has a way to go to be cost competitive without subsidy, even in Sunny expensive electricity markets like California.

          • Bob_Wallace

            From your link – ‘Germany’s surcharge for renewable energy will rise to 5.3 cents per kilowatt hour (kWh) in 2013 from 3.6 cents in 2012″.

            Yes, Germans are paying a modest surcharge in order to green their grids. What are they receiving in return?

            Solar on the grid reduced the wholesale price of electricity by approximately EUR 5 billion in 2012.


            Germany is saving EUR 8 billion a year in fossil fuel import costs right now


            Germans know what they are doing. They are making smart moves in getting nuclear and fossil fuel generation off their grids. It won’t happen overnight and it will require some up front investment. But in the long run they will end up with much cheaper and safer power.

            Germany’s current FiT levels are high because that causes more activity in the industry and gets installation infrastructure built up quickly. Those initial high tariffs will largely be offset by savings in gas peaker plant costs.

            As the amount of solar increases on the grid the FiTs are being reduced.

        • Solar, wind, geothermal are clearly a much better way. Over 80% of people get that. And also increasingly cheaper. Wind power is the cheapest form of new electricity in many or most places. Solar power produces power at peak demand (high worth) and competes with residential electricity in many areas. The average 20-year savings for Americans who went solar in 2011 was about $20,000. The cost of *not* putting a price on CO2 is several times more than the cost of doing so, so let’s not try to confuse people and only look at one part of the equation. 😉

          • Matt

            Is was amaze that the US president spoke as strongly as he did on climate. Including that there needs to be a cost to dumping CO2 on the rest of human kind. The two biggest stumbling blocks to a world accord on CO2 reduction (costing) have been US and China; and both are starting to move. Yes we/they have been slow and Europe must want to scream; but both will join the party. And my crystal ball says much sooner that most people think.

          • “Europe must want to scream.” Ha, yes, and if it weren’t so reserved, I think it would. 😀

          • Edmund Kelly

            It is a fundamental fact that all forms of alternative energy and nuclear energy only exist because of subsidies. This is not a bad thing if it allows technologies to mature and become cost competitive. Unfortunately wind and solar and nuclear are far from that point, and the additional problems that occur with scale add new costs.

            If the world as a whole could agree to spend twice as much on energy say 16% of GDP as against today’s 8%, then maybe we could ramp to a scale necessary to reduce CO2.

            However in a world where the emerging economies economic growth is fueled with cheap energy, and almost all energy growth is in those countries, this is not going to happen. China is easily becoming the world leader in wind and solar and even has fast growing nuclear. However, because their overall growth is so large, this is a diminishing percentage of their overall energy production.

            I firmly believe the world is on a path to climate disaster. I don’t think current technology and policy us going to even get us to a declining CO2 level because economic growth will swamp even robust growth in current wind and solar.

            I outline this in as simple a way as I can in the video at

          • Bob_Wallace

            It is a fundamental fact that all forms of energy exist because they received significant subsidies. Federal money built the railroads that hauled coal.

            Over the first 15 years of these energy sources’ subsidies, oil and gas got 5 times what renewables got (in 2010 dollars) and nuclear energy got 10 times as much. (Much of the renewable subsidies went to corn farms.)

            Between 1918 and 2009 oil and gas received average annual subsidies of $4.86 billion.

            Between 1947 and 1999 nuclear received average annual subsidies of $3.50 billion.

            Between 1980 and 2009 biofuel received average annual subsidies of $1.08 billion.

            Between 1994 and 2009 renewables received average annual subsidies of $0.37 billion.


            Renewables received 92% less per year than oil and gas, 89% less than nuclear and 76% less than biofuels. And for many fewer years.

            How have those subsidies paid off? In the last 30 or so years the cost of wind-electricity has dropped from $0.38/kWh to $0.05/kWh. A 7x drop. The price of solar panels has fallen from around $100/watt to just above $0.50/watt. Almost a 200x drop.

            As we all know the price of fossil fuels and nuclear just keeps going up. (Aside from a short term drop in the price of natural gas.)

            I agree that the world is on a path to climate disaster. If we don’t drastically cut our use of fossil fuels and do it rapidly we are in for some very bad times. Times that will last for a long, long time.

            To minimize our pain we need to install the least expensive, safest and quickest to bring on line alternatives to fossil fuels and those are renewables.

            It’s not at all clear that economic growth will at swamp wind and solar growth. You overlook efficiency which is cutting use, allowing growth without increasing demand.

            And if economic growth might swamp wind and solar growth it would absolutely swamp new nuclear or coal growth. Those plants take far too long to bring on line to even consider as solutions.

            Emerging economies are going straight to renewables. They aren’t building coal plants.

            China has reduced their nuclear plans by one third.

            Now, you’ll have to excuse me if I don’t watch your video. You don’t know enough about energy to be worth a look.

          • Andrew Gebert

            The other huge subsidy coal gets is that it can dump its actual costs, the destruction of climate change, on society as a whole to pick up the tab.

          • Bob_Wallace


            And don’t forget that we pick up the health costs from coal pollution which makes coal our most expensive way to generate electricity.

          • Bob_Wallace

            I took a look at your site. You want to put solar panels in space. It’s not a new idea, apparently the Japanese are working on it right now. Can it be done cheaply? Time will tell.

            In the meantime, I would suggest that you aren’t going to win friends and build support by misrepresenting what is happening with other renewables.

            You will win only by having a better idea, not trying to tear down other technologies with misrepresentations.

          • Edmund Kelly

            This thread started with an IEA optimistic spin on renewables. They were actually trying to downplay the lack of recent and projected progress. Wind and solar projections from the IEA, and almost every other credible source that projects future energy don’t show them plus hydro and nuclear being more than 25% of primary energy by 2050. This does not mean that wind and solar disappear. On the contrary they grow to 10 to 30 times their current annual market. Also, energy intensity is projected to at least double, a big part of which is efficiency. The problem is this is not enough to even cause CO2 to decline. It grows every year.

            All the major energy agencies and economic agencies like the OECD and the world bank have aggressive 450 plans. None say how the policy objectives can be met. China is still building coal fired power plants at over one a week and while they will introduce scrubbers to clean up the pollution, they won’t implement CCS. China is also building more wind, solar and nuclear than anyone else.

            My point is simple: wind and solar are not solving the CO2 problem, and no credible agency expects they will by 2050. This does not mean drop wind and solar, but it does mean be realistic in your expectations.

            There is a common politically correct perspective that anyone who questions the sanctity of wind and solar must be in the hands of the devil fossil fuel camp. The world is not that black and white.

            BTW StratoSolar is not in space. Read again or watch the video.

          • Bob_Wallace

            “StratoSolar is not in space.” Just floating 20 km up in the stratosphere. Sorry for being sloppy with my use of the word “space”.

            Let’s see what else I can find….

            “$2.50/Wp capital cost is approximately the 2012 cost. At historical rates of improvement, the $1.50/W cost may occur by 2020 at best.”

            Germany has been installing utility scale solar for under $2/watt. Their average cost (no subsidies) is $2/watt.

            The UK recently installed a large array for $1.59/watt. No subsidies.

            Non-subsidized rooftop in parts of Australia is down to $2/watt.

            I’ll be very surprised if $1.50/W isn’t common by 2015. It looks like we might be only nine cents away right now.

            “Even in the best desert locations, the resulting ground based PV electricity will still cost $0.12/kWh which will not be competitive without subsidy in 2020 except in high priced markets.”

            Recently we’ve seen solar PPAs for around $0.10/kWh – pre-subsidy price. Palo Alto signed a non-inflating 30 year PPA for solar electricity at ten cents, pre-subsidy. A 20 year PPA was signed in New Mexico for under eleven cents, pre-subsidy.

            “Utility scale PV in the desert needs huge additional investment in electricity distribution and backup generation that is not factored into the normal PV $/Wp estimates for construction cost and also has environmental and political problems.

            Actually ‘desert’ solar gets built close to existing transmission. Not off in the boonies where it is necessary to run long wires.”

            The 10 cent stuff I gave you right above? Includes transmission, real estate, profits, everything. It’s a selling price.

            Neither solar nor wind need backup generation. We already have enough dispatchable generation, storage and load-shifting available to incorporate 40% or more wind and solar on our grids. That is plenty to retire coal.

            Now, good luck with your idea. But you are going to turn people off by making false claims.

          • By many accounts, the IEA projections are not optimistic at all, but pessimistic.

            The issue of coal and natural gas still being built is primarily an issue of there not being an adequate price on pollution (i.e. we are still subsidizing them with our health and well being!). The focus needs to be on getting that price put on global warming pollution, not bashing the cleanest technologies we have in order to try to get funding for a new solar technology that won’t bear fruit anytime soon, if ever.

          • It’s a fundamental fact that coal and other fossil fuels have been subsidized massively for centuries. China has put in place 2016 CO2 cap. Solar is cheaper than diesel all across the developing world… and the grid is not coming to those places anytime soon.

            I agree that the growth needs to go from strong to exponential, but I think it will if we continue deploying the adequate solar and wind technologies we have. The prices drop with that. The price of solar PV modules has dropped 80% since 2008, the price of wind turbines 29%. And they continue to drop fast as technologies improve and the markets grow and mature.

            In all seriousness, we don’t really leave this forum to people who come here with the intention of confusing others about the true cost of burning fossil fuels… acting as if minor subsidies for wind and solar come close to the massive subsidies for coal and natural gas that we have given for years and continue to give.



            In other words, stop confusing others about the cost of subsidies or move on. I think your intentions are good, but selling your product by bashing excellent clean energy products and trends is not the way to go.

          • Edmund Kelly

            Sorry to have upset you Zachary and Bob. I try to have an objective, realistic perspective. True believer optimism is just as dangerous as true believer skepticism. The real world is somewhere in the middle, and CO2 keeps on growing every year…….

          • I don’t think either of us our upset. We just not big on wasting our time on misinformation we’ve looked into numerous times. And I’m simply not in this business to help spread misinformation — that’s what I’m working to counter. You don’t seem to have noted the facts that you weren’t aware of when you came here, but hopefully you will…

  • anderlan

    Hold up, renewables were 20% of energy produced in 2011? Key point: 95+% of that was hydro (just a guess, but I’d bet $50). This is good news, but my mind is not blown. Nice slam on natural gas, though!

  • And after the small players have been cleared away, renewables can take on the big ugly sources like coal and oil (petrol/diesel in transportation)

  • Bob_Wallace

    I have a hard time believing solar installation rates will be that low going forward.

    The price decreases have become so great and are continuing. Concern over climate change is increasing. Solar installation has a fairly low skill level requirement. We’ve got tremendous manufacturing capacity on line. Investment payback rates are competitive with even more risky options.

    I won’t be at all surprised if those projections turn out to be very low.

    • Ivor O’Connor

      I agree. But by quoting these low numbers I will probably win many more flame wars with the trolls from the gas and nuclear industries.

    • JamesWimberley

      Hear,hear, China’s solar PV installation rate will level out in 2015? Why? Is that what the Chinese planners are saying? Why should not India and Brazil take off in PV, as their recent data suggests? Deutsche Bank are predicting 20% global growth even in 2013.

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