Is IEA Really Expecting the Sun to Electrify Half the World?

The International Energy Agency
has outlined its vision of how solar energy technologies could form the
backbone of the world’s electricity network, providing half its electricity
needs by 2060.The scenario, outlined in the IEA’s Solar Energy Perspectives,
looks at the options available to the world if it took decisive, but belated
action, on climate change, and alternative technologies such as nuclear and
carbon capture and storage failed to deliver as promised. Read More

Giles Parkinson in Climate
Spectator (6 December 2011):

The International Energy Agency
has outlined, in detail, its vision of how solar energy technologies could form
the backbone of the world’s electricity network, providing half its electricity
needs by 2060.

The scenario, outlined in the
IEA’s Solar Energy Perspectives, released last week, was first canvassed in
late August. Essentially, it looks at the options available to the world if it
took decisive, but belated action, on climate change, and alternative
technologies such as nuclear and carbon capture and storage failed to deliver
as promised.

And, for the first time, it also
recognises a future where baseload power may no longer provide the bedrock of
the world’s energy needs, as it has done for a century or more, but is replaced
by a system of flexible and inflexible energy sources, where intermittent
sources such as wind and solar PV are complemented by “dispatchable” and
flexible sources such as solar thermal with storage, hydro, and gas.

The IEA has been canvassing a
range of scenarios over how the energy systems of the future may look under
various climate and energy policy responses. Under its 450 scenario, where the
world holds true to its political target of limiting global warming to an
average 2°C by capping greenhouse gas emissions at 450 parts per million, solar
accounts for less than 20 per cent of total generation by 2050, rising to 25
per cent of generation in its “high renewable” scenario, where renewables need
to account for 75 per cent of the world’s generation to make up for the lack of
nuclear or CCS.

However, in its “Testing the
Limits” scenario, the IEA considers what would happen if the world made a
belated but sharper change in its energy policy – whether for security,
economic or climate reasons, as seems increasingly likely given the nature of
the international climate talks – and if many countries decided to abandon
nuclear power and carbon capture and storage was found to be costlier, more
limited or not as safe as hoped, which it concedes is quite possible.

In this scenario, the IEA says,
solar energy could become the backbone of a largely renewable energy system
worldwide. The make-up of energy sources varies from region to region, thanks
to climate variations, but most of the estimated nine billion people will live
in warmer climates, and areas with strong solar radiation (such as north Africa
and the Middle East to Europe, and Australia to Indonesia), and become net
exporters of solar energy. In colder climates such as Europe, wind and solar PV
match the seasonal demand peaks.

Globally, the IEA scenario has
solar thermal accounting for 28 per cent of total electricity generation by
2060, with some 6,000GW of capacity with storage (it has around 1GW now). Solar
PV accounts for 20 per cent of generation, with 12,000GW of installed capacity
(about 40GW now), and solar fuels add a further 2 per cent of generation.

Of the other technologies, wind
power also makes up 28 per cent of generation, with 10,000GW of capacity,
hydropower provides 10 per cent, and baseload – a mixture of geothermal,
nuclear and biomass with CCS – provides 11 per cent of generation with around
1,200GW of capacity. Natural gas has capacity of around 3000GW, but is used
sparingly as a balancing fuel and accounts for just 1 per cent of total
generation.

The IEA does not break down the
energy contributions in individual regions, but it should be noted that in its
“high renewable” 450 scenario, the IEA says 40 per cent of the energy in
regions such as Australia, central Asia, parts of India and south-western US,
and the Middle East, could come from solar thermal alone.

As for costs, the IEA says, it is
simply a matter of planning ahead. “Renewables in general, and solar energy in
particular, may not always offer the lowest cost options to meet our energy
needs, nor even the cheapest way of doing so while reducing global carbon
emissions,” it notes. But because of the risk that other options may fall
short, solar technologies offering “indigenous, inexhaustible resources”, are
more secure, less likely to experience price volatility once the technologies
are mature, are environmentally sustainable, and “the cheapest known antidote
to catastrophic climate change, even if they are or appear to be higher-cost
options in other ways.”

It says that by 2060, the world
is four times richer, but only consuming 50 per cent more energy because of
energy efficiency measures. “Even if the cost of one energy unit were twice as
much as today, the total energy expenditure would be proportionally smaller
than today. It is thus conceivable to prefer an energy future that provides
security, economic stability and preserves the sustainability of ecosystems and
the environment, even if it is not the least-cost option when such
considerations are ignored.”

But it may not be that expensive.
The IEA notes that solar PV is already competitive with “bulk power” in many
areas, particularly islands, off-grid locations, and where PV is competing with
oil. Solar thermal is also likely to fall substantially – a recent tender for a
50MW solar thermal plant in Mongolia was bid at $140/MWh. It says that solar
thermal will be competitive with intermediate and peaking plant by 2020, and by
2030, solar costs will range from $50/MWh in the best solar regions, to
$150/MWh in the worst. Other technologies will be grouped north or south of
$100/MWh. It notes that, in the case of building integrated solar PV, where
solar will be crucial to the value, “the cost of PV would almost vanish in the
market segment where it currently costs the most.”

Even though solar electricity is
already competitive in some markets, and will soon be in much larger ones, it
will still require efficient policy support, whether feed-in tariffs or power
purchase agreement rooted in renewable portfolio standards. “Only a small
proportion should be considered subsidies or, rather, learning investments
required to bring solar technologies to competitiveness,” it writes. “Their
success would provide broad access to an inexhaustible source of energy and
help give more than a billion people around the world greater opportunity and
economic freedom. By contrast, fossil fuel subsidies only serve to perpetuate a
system that is ultimately not sustainable and distributes energy production and
its benefits by chance.”

The IEA says several enablers
will need to occur, including a greater focus on energy efficiency, demand
response and smart grids, as well as the electrification of transport, where
one kW/h of electricity in electric vehicles and hybrids replaces the
equivalent of 3kWh in liquid fuels. It notes that “contrary to common
belief,” intermittent renewables do not need ME for MW backup. Indeed, it
says while significant current capacity of
flexible gas will remain online in the coming decades, notably in
industrialised countries, their capacity factor will decrease, and there will
be no, or little, need to build greenfield fossil-fuelled plants for backup.

As mentioned earlier, the IEA
also picks up on the principal of flexible and inlflexible generations, and how
this might replace the concept of baseload energy, as foreshadowed by Australian
solar expert David Mills, and more recently by a UNSW team. The IEA says solar
thermal with storage are are expected to be able to deliver competitive
electricity by about 2030, depending on the costs of fossil fuels and the price
attributed to CO2 emissions, by 2030. It says the distinction between peak
power and baseload would become less relevant, as flexible solar thermal
electricity could, at all times, complement inflexible variable renewables.

Source: www.climatespectator.com.au