IEA sees a world run on solar

The IEA paints a picture where nuclear and CCS are out, and solar – the cheapest antidote to catastrophic climate change – becomes the backbone of a largely renewable global energy system.

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.

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