Clean Power

Published on November 14th, 2013 | by Giles Parkinson


World Will Need 48% Renewables By 2035 To Address Climate

November 14th, 2013 by  

Originally published on RenewEconomy

The International Energy Agency says the world will likely need to have around 48 per cent of total electricity generation sourced from renewable energy sources by 2035, if it is to meet the stated climate change goals of international governments.

In its World Energy Outlook 2013 report, a 760-page omnibus that is released each year by the conservative, Paris-based organisation, the IEA says that the use of renewables will need to double from the “current policies” scenario if it is to cap emissions at 450 parts per million.

As the table below shows, most of this increase comes from wind and solar, which will increase its share of total generation to 18 per cent. Critically, though, this means that the combined capacity of 2,700GW will be around 50 per cent of peak demand in 2035, and in some regions such as Europe it could be 90 per cent, and even in China and Japan wind and solar could account for more than 60 per cent of peak capacity.

Of course, this will have implications for the operations of the grid and for the structure of electricity markets, which designed around the marginal cost of generation. Because wind and solar have no fuel cost, so little or no marginal cost, this removes the price signal for other generators to stay in the market. That’s not all bad, but some capacity is required to fill in the gaps.

The IEA notes that this “merit order” effect is already putting some fossil fuel generation out of business, and warns of jeopardising the reliability of power supply.

This issue is being discussed in Germany at the moment, the country with the biggest penetration of renewables and the biggest impact on generation. It is likely to involve some form of capacity payments, but the IEA warns that care needs to be taken how these are allocated. Or they simply become another subsidy for fossil fuels. (I’ve been talking to many people in Germany about this and will be writing on this shortly).

The IEA says the total investment needed for such a renewables scenario would be more than $6 trillion. It says that by 2035, this will require an increase in renewable energy subsidies to $220 billion. To put that in some context, the amount of subsidies to the fossil fuel industry in 2012 was more than $550 billion.


The IEA report is massive, but a few other graphs caught my eye. This one below is on the power capacity changes in the “new policies” scenario, which is well short of what is required to meet climate goals. This, the IEA says, is probably the more likely, if less desirable outcome, but it still delivers a massive change in the electricity mix, with renewables dominating over other technologies.


And the cost? Well, like the subsidies, there is a lot of misinformation about the impact of renewables on bills to homes and business.

Here are the estimates of the costs of electricity to the average home, including the cost of renewable energy subsidy (in yellow at the top) – once again in the middle-of the-road New Policies scenario.


And here is an illustration of the costs, and renewable energy subsidies, to industry.

iea-cost-industry (1)

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About the Author

is the founding editor of, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.

  • Will E

    total cost of investment is an estimated 6 trillion.
    I think a trillion is 1000 billion. The EU States burn every year 1000 billion on fossil fuels.
    so compared to that, 6 trillion is minor to transit to renewables, because it will save the cost of fossil fuel costs. every year 1000 billion.
    the crisis is, consumers buy fossil fuels, money gone, and than they burn it.
    the EU consumers burn 1000 billion euros a year, every year. that can stop by transit to renewables.
    and stop the money drain from the EU.
    when I, as a person, burn every day 100 Euros , you will say that’s crazy.
    but when the EU burns a 1000 billion every year its normal

    • Bob_Wallace

      What’s often left
      out of the discussion about the cost to transition to renewables is the
      fact that we would be spending very large amounts of money on plant
      replacement even if we stayed with coal and nuclear.

      average lifespan of coal plants in the US is 40 or 50 years, depending
      on the data source. I haven’t found a definitive source (feel free to
      locate one).

      The planned lifespan for a nuclear reactor is
      generally 40 years. We are now pushing some toward 60 years, but we
      can’t push them on forever.

      the next 20 years, as we install wind, solar and other renewables we
      will see coal and nuclear plants closed simply because they are worn
      out. Those are costs we will incur, regardless of what we do. When we
      talk about the cost of a renewable grid we should subtract those costs,
      they are business as usual costs, not unique to changing our energy

      A picture of our plant age at the bottom. Our coal/nuclear energy production infrastructure is long of tooth….

  • JamesWimberley

    The biggest single jump between “current policies” and “450 scenario” is in CSP: 122 twh/yr to 806 twh/yr. For most technologies, it’s more like doubling. We are meant to think: it’s doable, just, if we start tomorrow.

    The title of the post suggests it’s 48% of all energy. The post immediately makes it clear that it’s 48% of all electricity, However, the 450 scenario implies a massive shift to electricity and away from oil and gas, for example in transport and space heating.

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