IEA urges flexible support for renewables and end to fossil fuel subsidies

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

The International Energy Agency (IEA) has called for increased support for renewable energy through “flexible” tariffs and for the end of market “distorting” fossil fuel subsidies.

At the launch of the World Energy Outlook 2013 edition in London yesterday, IEA executive director, Maria van der Hoeven, said flexible tariffs would give renewables vital support but also but respond to price bubbles such as those that have affected PV due to over-generous feed-in tariffs (FiTs).

“Renewables need to be supported, but there must be a flexible tariff; in accordance with technology changes as prices go down, tariffs go down. So the grid infrastructure can manage,” said van der Hoeven.

The IEA World Outlook uses a ‘New Policy Scenario’ by using current, and announced but not yet implemented energy policies to predict energy markets figures, up to 2035.

The New Policy Scenario predicts that solar PV could increases its share of global energy generation from 0.4%, to 2.6% by 2035. To realise the increase in generation van der Hoeven said renewables need support and a stable framework: “If changes are being made to the law all the time it is not a stable investor market.”

Renewables subsidies totalled US$101 billion in 2012, and according to IEA figures would need increase to US$220 billion in 2035 in order to support a high level of deployment in the New Policies Scenario.

The outlook shows although there are implications for market deign and cost, non-hydro renewables’ expansion depends on the doubling of subsidies up to 2035. In the IEA’s New Policies Scenario used by the IEA, world electricity demand increases by more than two thirds between 2011-2035.

Fatih Birol, the IEA chief economist agreed with van der Hoeven that renewables subsidies were “crucial” but said renewable subsidy design should not put an “excessive burden on consumers and the economy”.

Birol also said there was a “huge untapped industry in energy efficiency”, mainly in Europe, stating “we must have sound energy policies in Europe, we must be careful”.

Two-thirds of energy efficiency market potential is on track to remain untapped in 2035, unless market barriers can be overcome, the IEA said in a statement, also today.

Another major debate raised at the conference was the use of fossil fuel subsidies. Birol said “fossil fuel subsidies are bad for countries, for the economy, for the environment, efficiency, and most of all for poor people”.

The IEA said the incentives for fossil fuels are a “wasteful consumption at a cost of US$544 billion in 2012” and that fossil fuel subsidies are distorting the energy market.

Birol said that 90% of fossil fuel subsidies are traced to middle and high-income groups, “so only these income groups are benefitting from the subsidies”. The IEA currently estimates that 1.3 billion people are lacking electricity.

Fossil fuels account for 82% of the energy market presently, the same as 25 years ago, and renewables decrease this to just 75% in 2035, according to the New Policies Scenario.

Renewables (and nuclear) are predicted to meet 40% of growth in energy demand, with half of net increase in electricity generation coming from renewables by 2035, with China to deploy more renewables than the EU, Japan and the US, combined.

Also in the statement released today, the IEA concluded: “Transition to a more efficient, low carbon energy sector is more difficult in tough economic times, but no less urgent.”

9 December 2021
The Smart Energy Council is hosting Australia’s second Virtual Smart Energy Conference and Exhibition on Thursday, 9 December 2021. This event will show that the industry powers on despite COVID-19 and we are standing together undeterred in spirit. Bringing our global community together using the latest technology.
13 January 2022
Intersolar North America and Energy Storage North America “Come Together” for the first time in Long Beach, CA—connecting installers, developers, utilities, technology providers, policy makers, and key stakeholders from around the world to advance the clean energy future. With best-in-class conference programming, integrated exhibits and pavilions, and the live Solar Games installer competition, #isnaesna21 will showcase the industry trends, innovative solutions, and emerging talent transforming the solar, energy storage, and e-mobility markets. Register today to redeem our exclusive offer for PV Tech readers—free expo hall or 20% off full conference pass.
1 February 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.
7 March 2022
Take your chance to join the most powerful platform in the MENA region. Middle East Energy (MEE), Intersolar, and ees, the leading energy exhibitions are joining hands to co-deliver an outstanding renewables and energy storage event at Middle East Energy 2021. Renewables and energy storage at MEE is the largest gathering of solar and renewable energy industry professionals in the Middle East & Africa, offering the most effective trade focused platform to international manufacturers and distributors looking to meet regional buyers.
23 March 2022
When it comes to storage, the US market exceeded a gigawatt of advanced energy storage installations (weighted towards lithium ion) at 1.46 GW, more than the previous six years in total! An exponential growth rate could see the market hit 7.5 GW p.a. by 2025. The summit will provide a wealth of content around this vital piece in the US power puzzle, with sessions dedicated to explore how companies are making money from batteries, the latest chemistries and their applications as they apply to different use-cases. We ask how investors can match ESG criteria to batteries and we will bring case studies of successful deployment and project execution onto the stage to examine how you can ensure your own projects are successful.

Read Next

December 3, 2021
Norwegian module marketplace company Otovo has launched in Germany, with the company expecting 1,000 new customers over the next year
December 3, 2021
Solar investor and asset manager NextEnergy Capital Group (NEC) has secured backing from the UK Infrastructure Bank for a new fund that aims to raise £500 million (US$663 million) to invest in subsidy-free solar power plants in the UK.
December 3, 2021
Indian independent power producer (IPP) ReNew Power has signed an agreement with Indian engineering giant Larsen & Toubro (L&T) to develop green hydrogen facilities, becoming the latest PV developer to do so after a string of recent announcements
December 3, 2021
Koch Engineered Solutions (KES) LLC has acquired US engineering, procurement and construction (EPC) firm DEPCOM, which specialises in utility-scale solar PV projects, for an undisclosed amount
December 3, 2021
Heterojunction cell and module manufacturer Meyer Burger has reduced module output at one of its production plants in Germany as COVID-19 is causing above-average workforce absences due to illness and quarantine orders.
December 3, 2021
Tianjin Zhonghuan Semiconductor (TZS) has become the latest solar wafer manufacturer to cut prices, while also launching a new 218.2mm-size wafer.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
February 1, 2022
London, UK
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal