IEA Technology Roadmaps for Solar Electricity 2014 Editions

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1 IEA Technology Roadmaps for Solar Electricity 2014 Editions Maria van der Hoeven Executive Director International Energy Agency 29 September, 2014

An Energy Revolution is needed 2011 6DS 2DS

2 An Energy Revolution is needed DS 2DS hi-ren Generation today: Fossil fuels: 68% Renewables: 20% Generation 2DS 2050: Renewables: 65-79% Fossil fuels: 20-12% OECD/IEA 2013

3 PV ahead, STE (CSP) lagging behind PV: Massive cost reductions Also for distributed generation STE: Flexible generation not yet fully valued Progress in 2013 Old Roadmap Milestones for 2020 (GW) To be reached PV years ahead STE 140 > 7 years later

4 Complementary roles of PV and STE Thanks to thermal storage, STE is generated on demand when the sun sets while demand often peaks

5 Global generation in TWh Share of total electricity generation New roadmap vision for solar electricity: PV + STE % % % % % % Solar PV Solar CSP Share of PV Share of PV+STE 0% Together, PV and STE could become the largest source of electricity worldwide before 2050

6 STE vs. PV generation by region in STE PV 0 China alone accounts for 37% of global PV deployment STE eventually dominates in Africa and the Middle East; it comes close to PV in India and the United States

7 Selected messages to policy makers 1. Set or update long-term targets Consistent with overall energy strategies Taking into account past and future cost reductions 2. Develop market designs in a system-approach, e.g: Fair rules for residential and commercial PV rooftops Time-of-delivery remuneration to take full advantage of dispatchable and flexible generation from STE 3. De-risk financing with predictable policies Both capital-intensive technologies Policy predictability most effective and efficient way to reduce risk, thereby improving competitiveness

8 IEA technology roadmaps for solar electricity a closer look Paolo Frankl & Cédric Philibert Renewable Energy Division

9 IEA Technology Roadmaps Energy Storage Hydrogen

10 Solar s share varies significantly by region Regional Power Generation Mixes by 2050

11 Contributions to cumulative CO 2 emission cuts Technology shares (over 6DS) PV STE

12 Projected LCOEs of PV and STE USD/MWh Mini Utility-scale PV Avg Maxi Mini Rooftop PV Avg Maxi Mini STE Avg Maxi CO2 price (USD/tCO2) Note: all costs are calculated with 8% weighted average capital costs for new-built plants/systems

13 USD/MWh Socket parity emerging as potential deployment driver for distributed PV LCOE of residential PV vs variable portion of electricity tariff LCOE Variable Portion of Residential Rate Australia France Germany Italy Korea Mexico Netherlands United Kingdom Economic attractiveness from offsetting electricity bill requires self-using most of the PV electricity Currently limits potential, in particular for households Reaching socket parity is a driver for private actors But PV may still have significant impact on total system costs, in particular depending on allocation of fixed network costs

14 USD/MWh TWh PV growth by sector utility industrial commercial residential off-grid Average LCOE (rooftop) Average LCOE (rooftop) Note: all costs are calculated with 8% weighted average capital costs Electricity from PV systems progressively competitive on several markets Distributed PV represents more than half of total deployment

of other power system components Grids Generation Storage Demand

15 Integrating large shares of PV is a challenge Expected evolution of the net load of a typical spring day in California Flexibility of other power system components Grids Generation Storage Demand Side High shares of PV (and wind) require more flexible power systems

Detailed actions and milestones POLICY AND FINANCE - Set / update long-term targets - Predictable policy framework to de-risk financing - In new & emerging PV

16 Detailed actions and milestones POLICY AND FINANCE - Set / update long-term targets - Predictable policy framework to de-risk financing - In new & emerging PV markets - Permitting and connecting - In mature PV markets - Progressively expose to market signals - Facilitate distributed PV generation and self-consumption

17 LCOE from new-built plants and STE generation

18 Detailed actions and milestones Technology Innovative HTF Supercritical Hybrid PV-CSP R&D Solar Fuels VALUE of STE Policy Framework

RENEWABLE ENERGY IN AUSTRALIA

RENEWABLE ENERGY IN AUSTRALIA Increasing electricity generation from renewable energy sources is one of the main strategies to reduce greenhouse emissions from the power sector. Australia has historically