BREAKING: Record-Breaking New Renewables in 2016 Still Fell Short of Paris Targets as Investment Lagged
While renewable energy developers in 2016 installed more new generating capacity at less cost than ever before, global investment is down and is not coalescing fast enough to meet the emission reduction goals in the Paris agreement, the REN 21 secretariat reported this morning with the release of its 2017 Global Status Report.
“The world is in a race against time,” said Executive Secretary Christine Lins. “The single most important thing we can do to reduce CO2 emissions, quickly and cost-effectively, is phase out coal and speed up investments in energy efficiency and renewables.”
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While the Trump administration’s decision to yank the United States out of the Paris agreement “is unfortunate,” she added, “the renewables train has already left the station and those who ignore renewables’ central role in climate mitigation risk being left behind.”
Global investment in new renewable fuel and electricity capacity was roughly double that in fossil fuels, the Paris-based REN 21 secretariat notes. The global industry exceeded past development records with a total of 161 new gigawatts (GW) of installations, and smashed the “myth” the utilities need baseload capacity to deliver reliable electricity supply. Renewables are rapidly becoming the least-cost generation source, with recent contracts in Denmark, Egypt, India, Mexico, Peru, and the United Arab Emirates delivering power for US$0.05 per kilowatt-hour or less.
And yet, “investments in new renewable energy installations were down 23% compared to 2015,” the organization states in a release. Investment dropped 30% in developing and emerging markets, to US$116.6 billion, and 14% in developed countries, to US$125 billion, and “continues to be heavily focused on wind and solar PV,” even though “all renewable energy technologies need to be deployed in order to keep global warming well below 2.0°C.”
Solar led the new installation revolution last year, with 47% of the new capacity added, followed by wind at 34% and hydropower at 15.5%.
Even this mind-boggling yet still middling level of activity shows that “integrating large shares of variable renewable generation can be done without fossil fuel and nuclear ‘baseload’, with sufficient flexibility in the power system—through grid interconnections, sector coupling, and enabling technologies such as ICT, storage systems, electric vehicles, and heat pumps,” REN 21 concludes. “This sort of flexibility not only balances variable generation, it also optimizes the system and reduces generation costs overall.”
“Holistic, systemic approaches are key and should become the rule rather than the exception,” said REN 21 Chair Arthouros Zervos. “As the share of renewables grows, we will need investment in infrastructure as well as a comprehensive set of tools: integrated and interconnected transmission and distribution networks, measures to balance supply and demand, sector coupling (for example the integration of power and transport networks), and deployment of a wide range of enabling technologies.”
The release notes that renewables and energy efficiency deployment in transport, heating, and cooling all lag behind the electricity sector, with distributed heating and cooling a continuing challenge. Despite cascading interest in electric vehicles, “much more needs to be done to ensure sufficient infrastructure is in place, and that they are powered by renewable electricity,” and governments haven’t done enough to stimulate solutions in the most challenging transportation segments, shipping and aviation.
Part of the problem is that fossil fuel and nuclear subsidies still “dramatically exceed” renewables by a 4:1 ratio, and “continue to impede progress,” the secretariat adds. “By the end of 2016, more than 50 countries had committed to phasing out fossil fuel subsidies, and some reforms have occurred, but not enough.”