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Renewable Energy Medium-Term Market Report 2016

Renewable Energy Medium-Term Market Report 2016

Full Title: Renewable Energy Medium-Term Market Report 2016
Author(s): International Energy Agency
Publication Date: November 1, 2016
Full Text: Download Resource
Description (excerpt):

In 2015, annual renewable electricity capacity growth reached an all-time record at 153 gigawatts (GW), thanks to record additions in both onshore wind (63 GW) and solar photovoltaics (PV) (49 GW). This is equivalent to more than the total cumulative installed power capacity of a country like Canada. For the first time, renewables accounted for more than half of net annual additions to power capacity and overtook coal in terms of cumulative installed capacity in the world.

Record deployment was accompanied by continued sharp generation cost reductions, with announced record-low long-term remuneration prices ranging from USD 30/megawatt hours (MWh) to 50/MWh for both onshore wind and solar (PV) plants. These projects are expected to become operational over the medium term in markets as diverse as North America, Latin America, Middle East, and North Africa. In addition, recent tender results in Europe for large-scale offshore wind projects indicate possible 40% to 50% cost reductions for new plants by 2021. While these contract prices should not be compared directly to average generation costs, and final project delivery costs may ultimately differ at the time of commissioning, still they signal a clear acceleration in cost reductions, increasing the affordability and improving the attractiveness of renewables among policy-makers and investors.

The Medium-Term Renewables Market Report (MTRMR) expects onshore wind generation costs to decrease by a further 15% on average by 2021, while utility-scale solar PV costs are anticipated to decline by another quarter. These trends are underpinned by a combination of sustained policy support, technology progress and expansion into newer markets with better renewable resources. In addition, improved financing conditions play a particularly important role, driven by the expanding use of long-term power purchase agreements (PPAs) awarded through price competitive public or private tenders, including government-backed auction systems.

All statements and/or propositions in discussion prompts are meant exclusively to stimulate discussion and do not represent the views of, its Partners, Topic Directors or Experts, nor of any individual or organization. Comments by and opinions of Expert participants are their own.

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