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Modern bioenergy leads the growth of all renewables to 2023 – IEA market forecast

Half of all renewable energy consumption in 2017 came from modern bioenergy. Modern bioenergy will have the biggest growth in renewable resources between 2018 and 2023, underscoring its critical role in building a robust renewable portfolio and ensuring a more secure and sustainable energy system, according to the International Energy Agency’s (IEA's )latest market forecast.

According to the IEA’s “Renewables 2018 Market Analysis and Forecast to 2023, renewables will continue their expansion in the next five years, covering 40 percent of global energy consumption growth. Their use continues to increase most rapidly in the electricity sector and will account for almost a third of total world electricity generation in 2023. Because of weaker policy support and additional barriers to deployment, renewables use expands far more slowly in the transport and heat sectors.

Half of all renewable energy consumption in 2017 came from modern bioenergy. Modern bioenergy will have the biggest growth in renewable resources between 2018 and 2023, according to the International Energy Agency’s (IEA’s )latest market forecast Renewables 2018 (graphic courtesy IEA).

While the growth in solar PV and wind is set to continue in the electricity sector, bioenergy remains the largest source of renewable energy because of its widespread use in heat and
transport, sectors in which other renewables currently play a much smaller role.

Modern bioenergy is the overlooked giant of the renewable energy field. Its share in the world’s total renewables consumption is about 50 percent today, in other words as much as hydro, wind, solar and all other renewables combined. We expect modern bioenergy will continue to lead the field and has huge prospects for further growth. But the right policies and rigorous sustainability regulations will be essential to meet its full potential, said Dr Fatih Birol, the IEA’s Executive Director.

Highlighting blindspots

The focus on bioenergy is part of the IEA’s analysis of “blind spots” of the energy system – issues that are critical to the evolution of the energy sector but that receive less attention than they deserve – such as the impact of air conditioners on electricity demand, or the growing impact of petrochemicals on global oil demand.

Assuming strong sustainability measures are in force, the report identifies additional untapped potential for bioenergy to “green” and diversify energy usage in the industry and transport sectors.

Fortum Värme's newly commissioned biomass-fuelled combined heat and power plant in Stockholm, Sweden.

In 2016, Stockholm Exergi (previously known as Fortum Värme, a leading heating, cooling and power utility) commissioned a biomass-fuelled combined heat and power (CHP) plant in Stockholm, Sweden. Recently the company signed a large-scale heat reuse agreement. The agreement is the world’s first where an already operational data centre with an indirect evaporative air-to-air cooling solution, will be retrofitted to recover excess heat for use in the local district heating system.

China leads global growth in renewable energy as a result of policies to decarbonise all sectors and reduce harmful local air pollution and becomes the largest consumer of renewable energy, surpassing the European Union (EU) by 2023.

Of the world’s largest energy consumers, Brazil has the highest share of renewables by far – almost 45 percent of total final energy consumption in 2023, driven by the significant contribution of bioenergy and hydropower.

Solar PV dominates power capacity expansion

Meanwhile, solar PV dominates renewable electricity capacity expansion. Renewable capacity additions of 178 GW in 2017 broke another record, accounting for more than two-thirds of global net electricity capacity growth for the first time. Solar PV capacity expanded the most (97 GW), over half of which was in China.

Onshore wind additions globally declined for the second year in a row, and hydropower growth continued to decelerate. Solar PV capacity is forecast to expand by almost 600 GW – more than all other renewable power technologies combined, or as much as twice Japan’s total capacity, reaching 1 TW by the end of the forecast period.

The 26 929 m2 concentrated solar power (CSP) plant now provides the city of Brønderslev, Denmark with sustainable heating, but it will also enable power production as an add-on to a biomass-fired Organic Rankine Cycle (ORC) combined heat and power (CHP) plant that was inaugurated in March 2018 (photo courtesy Aalborg CSP).

Despite recent policy changes, China remains the absolute solar PV leader by far, holding almost 40 percent of global installed PV capacity in 2023. The United States (US) remains the second-largest growth market for solar PV, followed by India, whose capacity quadruples.

Wind remains the second-largest contributor to renewable capacity growth, while hydropower remains the largest renewable electricity source by 2023. Similar to last year’s forecast, wind capacity is expected to expand by 60 percent. Meanwhile, spurred by technological progress and significant cost reductions, offshore wind capacity triples, with growth moving beyond Europe to Asia and North America.

Appropriate policies and market design critical

Even with renewable energy technologies becoming increasingly competitive, appropriate policies and market design are critical. Under an accelerated case, which assumes greater supportive government measures, the expansion of renewables in electricity and in transport could be 25 percent higher.

Untapped potential of bioenergy in cement, sugar and ethanol industries is also significant. Bioenergy growth in the industry, transport and electricity sectors combined could be as
considerable as that of other renewables in the electricity sector.

A significant proportion of this potential relies on wastes and residues that offer low lifecycle greenhouse gas (GHG) emissions and mitigate concerns over land-use change. In addition, using these resources can improve waste management and air quality.

"Modern" and "traditional" bioenergy

The ‘traditional use of biomass’, which is not covered in the report, refers to the use of local solid biomass resources by low-income households that do not have access to modern cooking and heating fuels or technologies. The report notes that such consumption occurs principally in emerging economies and developing countries using solid biomass such as wood, charcoal, agricultural residues and animal dung in open flame cookstoves for heating and cooking often with poor ventilation.

The report also points out that using firewood in a traditional open fireplace in the developed world is also inefficient. Policy attention focuses on reducing the traditional use of biomass and encouraging the adoption of more sophisticated, cleaner and resource efficient heating and cooking technologies to reduce negative health and environmental impacts and are not the scope of the IEA report.

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