Bioenergy: the Overlooked Giant of Renewables

Bioenergy The overlooked Giant of Renewables

Dr. Paolo Frankl, Head Renewable Energy Division ABLC, San Francisco, 7 November 2018

IEA

Total final energy consumption Total final energy consumption from renewables, 2017 from renewables by sector, 2017

6% Modern 4% bioenergy Electricity 9% Hydropower Wind Heat 50% Solar PV Other 31% renewables Transport Electricity from renewables 100 200 300 400 500 Mtoe

Modern bioenergy is the only renewable source that can provide electricity, direct heat and transport fuels Two thirds of modern bioenergy heat is used in industry

Total energy consumption growth of renewables over 2012-23 Mtoe 80 70 60 50 40 30 20 10 0 Modern Solar PV Wind Hydropower bioenergy 2012-17 2018-23

Total renewable energy consumption is expected to increase by almost 30% over 2018-2023, covering 40% of global energy demand growth

Share of renewables in the electricity, heat and transport sectors % 30%

25%

20%

15%

10%

0% 2011 2014 2017 2020 2023 Renewable electricity Renewable heat Renewable transport % of renewables in total energy consumpon

Electricity contributes two-thirds of renewables growth But electricity accounts for less than 20% of total final energy consumption

Renewables contribution to energy consumption by country in 2017 and 2023 Mtoe 250 50%

200 40%

150 30%

100 20%

50 10%

0 0% 2017 2023 2017 2023 2017 2023 2017 2023 2017 2023 European Union China United States Brazil India Modern bioenergy Hydropower Wind Solar PV Others % of renewables (right axis)

China accounts for the largest absolute growth over the forecast period surpassing the EU, while renewable energy consumption in India increases by 50%

Renewable electricity capacity growth by technology GW 800 700 600 500 400 300 200 100 0

2006-2011 2012-2017 2018-2023 Wind Ulity-scale PV Distributed PV Hydropower Bioenergy Other renewables Accelerated case

Distributed generation capacity growth makes the difference in solar PV’s leadership Cumulative PV capacity could reach 1.1 TW and wind over 0.9 TW by 2023 under the accelerated case

Average auction price by project commissioning date USD/MWh 300

250

200

150

100

0 2012 2014 2016 2018 2020 2022

Onshore wind price Oﬀshore wind price Solar PV price Bioenergy price

More than the half of renewable capacity additions over 2018-23 remunerated by competitive auctions; announced contract prices need to be verified as project delivery schedules and final costs may differ

Biofuel production growth 2018-23 Renewables consumption in transport in 2023 Billion L 12 Road biofuels 10 8 Aviaon biofuels 6 Marime biofuels

4 Rail electricity 2 Road electricity 0 Other electricity - 2 Brazil United EU China India ASEAN States Ethanol Biodiesel

Biofuels production grows by 16%; EVs electricity consumption triples, with renewables providing 30% of demand from electrified transport by 2023

Cost premium of commercial aviation biofuels (15% blend) per passenger from London

Cost per passenger (USD) 35 30 25 20 15 10 5 0 Sydney Tokyo Delhi New York Berlin

Policies remain key to bridge the cost gap between aviation biofuels and fossil jet fuels The most efficient aircraft could reduce fuel costs by around 15%

Bioenergy and waste consumption in the cement industry by country Cement production by country, 2017 Mtoe 10 30% RoW 25% China 8 30% 57% 20% 6 15% 4 United 10% States 2% 2 5% EU 5% India 0 0% 6% China India EU United States Bioenergy and waste consumpon in 2017 % of bioenergy and waste in 2017 (right axis) Bioenergy and waste 2023 potenal

The share of bioenergy and waste in the cement industry could be doubled if the robust waste management frameworks present in Europe were replicated in large producing countries

Renewables upside potential over 2018-23 Mtoe 70 60 50 40 30 20 10 0 Electricity sector accelerated case Bioenergy scale-up potenal for selected sectors Renewables excl. bioenergy Bioenergy for power Road transport biofuels Bioenergy in cement Sugar and ethanol electricity Aviaon biofuels

Policies could accelerate renewable electricity and biofuels growth by 25%; bioenergy could accelerate RE consumption across all sectors with an enhanced use of available waste resources

Historical and forecast transport biofuel production compared to volumes within the IEA’s low carbon scenario

Mtoe 350 Historical Forecast Low carbon scenario 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2025 2030 Conventional (including waste and residue HVO/biodiesel) Novel advanced

Current market growth of sustainable biofuels falls short of the volumes required to keep on track with the COP 21 global climate agreement.

Modern bioenergy in final energy consumption in 2DS

EJ Other 80 4X Electricity 60 Transport 2X 10X Industry 40

20 3X

0 2015 2030 2060

Bioenergy in final energy consumption needs to double by 2030, and biofuels in transport treble. Advanced biofuels will need a massive scale up

1© OECD/IEA 2018 13 3 Conclusions n Even with ongoing cost reductions, government policy remains crucial to attract investment in renewables, ensure appropriate market design and reliable & cost-effective system integration n Modern bioenergy will continue to lead renewables growth in the next five years and its untapped potential remains huge particularly in China, India, Brazil and the EU n Further accelerating the use of modern bioenergy hinges on policies & incentives to foster innovation and on rigorous sustainability frameworks n Greater use of solar, wind, bioenergy & other renewables – together with energy efficiency & other clean energy technologies – is needed in all sectors for emissions to peak rapidly then decline - Electrification of end-use sectors - Better alignment of energy efficiency and renewable energy policies - Enhanced direct renewable heat uses - Stronger renewables penetration in industry, including through hydrogen-based fuels & feedstocks