02

FIGURE 16. Targets for Renewable Power and/or Electric Vehicles, 2018 NATIONAL TARGETS POLICY LANDSCAPE

Both renewable electricity and electric vehicle targets Electric vehicle target only, no renewable electricity target

No policy or no data

STATE/PROVINCIAL TARGETS

United States and Canada United Kingdom India

ScotlandScotlandScotlandScotlandScotland British Columbia Washington QuébecQuébecQuébecQuébec Maharashtra OregonOregonOregonOregon VermontVermontVermontVermont Massachusetts Rhode Island KarnatakaKarnatakaKarnatakaKarnatakaKarnataka Connecticut

CaliforniaCaliforniaCaliforniaCalifornia New YorkYorkNew IllinoisIllinoisIllinoisIllinois MarylandMarylandMarylandMaryland

SELECTED CITY TARGETS

Oslo London Vancouver Oxford Seattle Québec Portland Montréal Beijing San Francisco New York Seoul Los Angeles Jeju Shenzen Dubai

Note: The figure provides a sample of local renewable energy commitments Source: See endnote 65 for this chapter. worldwide. It does not aim to present a comprehensive picture of all municipal electric vehicle or renewable electricity goals.

57 RENEWABLES 2019 GLOBAL STATUS REPORT

SIDEBAR 2. Policies Potentially Enabling Renewable Energy Penetration in Transport

Policies and targets for electric and hydrogen fuel cell ban on inefficient ICE vehicles and, in the meantime, was vehicles are not renewable energy policies and targets by implementing production quotas for “new energy vehicles”i. themselves. Similarly, “zero-emission vehicles” typically In Europe, Denmark pledged to sell only electric passenger refer to vehicles that produce no atmospheric pollutants cars by 2030. Ireland and Portugal pledged that by 2030 during operation but are not necessarily fuelled by and 2040, respectively, no new “non zero-emission vehicles” renewable sources. In most cases, the term refers to EVs, will be sold within their jurisdictions. Ireland’s National albeit without reference to the source of the electricity. Development Plan for 2018-2027 also targets the sale of However, while EVs and hydrogen fuel cell vehicles do 500,000 EVs. The United Kingdom released its Road to Zero not necessarily increase the renewable energy share in strategy in 2018, which sets targets for 50% to 70% of new transport, they do offer the potential for greater penetration car sales and 40% of van sales to be ultra-low emission by of renewables and lower emissions. 2030, 100% of cars to be zero-emission by 2040 and 25% of Many governments are providing financial incentives for the government fleet to be ultra-low emission by 2022. EVs. In 2018, Costa Rica, Germany, the Kyrgyz Republic At the sub-national level, Brussels (Belgium) agreed to and Ukraine all reduced various taxes for EVs. India ban diesel cars from the city starting in 2030, and British allocated INR 87.3 billion (USD 1.3 billion) to incentives Columbia (Canada) and California (United States) adopted for EVs, electric buses and other electrified vehicles such as scooters, and Scotland instituted GBP 1.3 million 2040 phase-out targets for ICE vehicles. California also (USD 1.7 million) in grants and loans to encourage electric called for 5 million zero-emission vehicles on the road by bike purchases. In Sweden, the government introduced 2030. Madrid (Spain) banned the majority of non-zero- a new tax system, increasing taxes on light-duty petrol emissions vehicles from its city centre, and Rome (Italy) and diesel vehicles and providing a tax incentive for EVs. announced its intention to ban all diesel cars from its roads Beyond EVs, the Republic of Korea eased regulations on the by 2024. production and transport of hydrogen fuel cell buses as part Countries also are pledging to develop supporting of an effort to reach 1,000 such buses on the road by 2022. infrastructure to encourage EV adoption. For example, in At least 19 countries aim to replace or phase out internal 2018 Germany established a target of 100,000 public EV combustion engine (ICE) vehicles and “non zero-emission charging stations installed by 2020, which it supported vehicles” to stimulate EV uptake. In 2018, Cabo Verde with a EUR 70 million (USD 78 million) scheme for charging announced a plan to gradually replace ICE vehicles with stations and electric buses. California set a target to EVs by 2050. Nepal announced plans to replace all ICE commission 250,000 vehicle charging stations by 2025 and vehicles with EVs by 2030, while Israel pledged to sell only a goal to have 200 hydrogen refuelling stations in place electric passenger cars by the same year. Also in 2018, state-wide by 2025. China set a target of 2 million EV sales annually by 2020,

and India launched a national E-Mobility Programme with a i In China, “new energy vehicles” include plug-in hybrid electric goal of having more than 30% of new car sales come from vehicles, battery electric vehicles and hydrogen fuel cell vehicles. EVs by 2030. By the end of 2018, China was considering a Source: see endnote 65 for this chapter.

58 can help reduce fossil fuel use in the sector. in the use fuel fossil reduce help can –also ports for electricity renewable shore-side for funding as (USD 150 billion) public infrastructure plan. infrastructure billion) public 150 (USD billion 190 aCAD of part as capacity backup to and add demand energy peak reduce to systems PV-plus-storage solar using Toronto rail light line anew (Canada) to develop 2018, began to link renewable power generation with rail transport. with generation topower link renewable have attempted companies and jurisdictions some years, recent In chapter. Overview in Global section ( use. fuel to global overall contribution large their despite sectors, in these limited been has support Policy industries. cross-border regulating with associated challenges ii i existed although indirect some support policy 2018, of end the of as sources energy renewable of use the promoting directly were policies few sector, shipping maritime the For National governments, as well as the aviation industry sectors. to in ofother used roadtransport the technologies transport many of applicability the –have limited range and weight battery to related challenges as well as biofuels advanced of cost the as –such deployment and to commercialisation barriers Several transport. road for has it than slowly more developed has transport maritime and aviation rail, power to electricity and fuels renewable of use The TRANSPORT MARITIME AVIATION AND RAIL, supply chain. supply fuel aviation renewable in the R&D supporting of goal the the Limit Challenge with the Sky’s Canada established plants. power and railroads by used fuel to cover sector transport blending biofuel mandate B20 from the road the country’s (Europe’s largest) starting in 2030. in starting largest) (Europe’s port the from emissions to reduce acommitment as well as fuels, zero-carbon or low-carbon use that owners vessel to support in the announced Netherlands an Authority incentiveRotterdam plans to begin using ethanol-blended fuel in its aircraft. in its fuel ethanol-blended using to begin plans announced Force Air Indian the and in 2020, starting aviation in use biofuel advanced 0.5% for aquota established Norway 2018, In development. their for incentives or fuels these of use for mandates either issuing –including in aviation fuels alternative of use the increasing towards steps initial taken fuelled by a minimum 10% blend of Canadian-made biojet fuel. biojet Canadian-made of blend aminimum by 10% fuelled flight commercial cross-Canada first the for 740,000) (USD

In the International 2018, 2030 from by standards shipping intensity Maritime in carbon total targeting40% Organization a reduction adopted energy efficiency The International AirTransport (IATA), Association by fuelled onflights having agoalof fly a trade set passengers 1billion representing association 290 airlines, Beyond_Road_ZEV_Working_Paper_20180718.pdf the Transport Options Across nology (International Sector onCleanTransport, Council 18July https://www.theicct.org/sites/default/files/publications/ 2018), ingreenhouse gas reduction and a50% 2050. by emissions DaleHall, Pavlenko Nikita andNic Lutsey, room/pr/Pages/2018-02-26-01.aspx sustainable aviation 2025.IATA, by fuel “Aim 2025”, by on sustainable to flights fuel passengers fly for1billion https://www.iata.org/press 2018, 26 February 69 66 Aviation jurisdictional also and face maritime transport 71 The programme offers a prize of CAD 1 million CAD of prize a offers programme The . transport. in road than those continue to receive to receive continue transport maritime and rail Renewables in aviation, attention less policy 73 ) Alternative measures – such –such measures Alternative 68 Indonesia expanded expanded Indonesia . p See Transport Transport See ii . The Port of of Port . The

i , have 67 In In 70 72

market segments. market these of in each are prevalent trends maturation technology or price-reduction same many the of projects, distributed, and centralised as well as small-scale, and large- to support adopted been have policies different Although delivery. technology establishing mechanisms for achieving new lower for prices in and systems renewable grid-connected for prices power in setting suppliers, power renewable for access market in guaranteeing instrumental –have been standards portfolio renewable and policies feed-in including – policies Regulatory energy storage and other ( enabling technologies. of use and development in the advances and countries, some in mix power in the renewables of shares increasing rapidly reductions, cost and advances to technology in response evolved ( generation to expanding energy access. electricity decarbonising from ranging goals to meet sources power to renewable have turned development economic of all at levels Countries deployment of renewable power generation technologies. primarily attention policy on promoting the development and energy renewable their have focused governments Worldwide, POWER larger of segment the economy. a across felt be can policies power renewable of impact the that means sectors these of electrification the development, power renewable with paired When transformation. energy global the in role an to important play begun has supply electricity the of – with decarbonisation combined cooling andheating, transport as –such sectors end-use of electrification increasing The chapter. Integration p See Distributed Renewables chapter. Renewables Distributed See Beyond Road Vehicles: Survey of Zero-emission Tech Zero-emission of Survey RoadVehicles: Beyond ) 74 ) These policies have policies ) These p See Systems Systems See - ­ 02 59 POLICY LANDSCAPE RENEWABLES 2019 GLOBAL STATUS REPORT

Accurately accounting for to 750 MW of grid-connected offshore capacity; and a series Renewable power auctions system costs and bene­fits in of power purchase agreements signed in South Africa for were held in at least renewable power support 2.3 gigawatts (GW) of long-delayed renewable power capacity, mechanisms remains an awarded under its national auction scheme.85 important challenge for Policy makers in some countries used auctions for more specialised policy makers looking 48 countries renewable energy projects. Bahrain announced plans to develop to promote the deploy­ worldwide in 2018, up 150 MW of solar PV through tenders on a landfill site, and Jordan ment of renewable power from 29 the year before. auctioned 30 MW of solar PV capacity to support water pumping projects. Adjustments stations throughout the country.86 At the sub-national level, the – such as updating long- Indian states of Maharashtra and Uttar Pradesh auctioned projects standing fixed-price for floating solar PV to generate electricity on dam reservoirs.87 policies by introducing (p See Sidebar 3 in Market and Industry chapter.) pricing measures such as automatic rate reductions tied to specific deployment levels – have Several offshore wind power auctions were held in Europe in 2018, been implemented to keep up with declining technology costs. To and in the United States both Rhode Island and Massachusetts better match declining costs, manage capacity levels and steer used competitive bidding through auctions to select offshore deployment to specific areas or technologies, policy makers have wind projects for development.88 The US Bureau of Ocean Energy continued to turn to competitive auctions in lieu of traditional fixed- Management continued to hold auctions to allocate leases for price policies.75 These objectives also can be achieved through offshore wind power projects, bringing the total number of active feed-in tariffs and other policies, depending on policy design. leases nationwide to 15 by the end of 2018.89 Renewable power auctions were held in at least 48 countries worldwidei in 2018, up from 29 countries in 2017.76 At least Despite the shift to one of the auctions in 2018 was technology-neutral (in Brazil), auctions in many countries, 111 countries, while six were neutral for renewable technologiesii.77 (R See feed-in tariff (FIT) policies states or provinces Reference Table R12.) Both Ireland and Kenya announced that continue to play a role in had feed-in tariff policies they would employ auctions to support renewable energy project national and sub-national in place by the end of 2018. development in future years.78 Auctions were delayed in several policy schemes and were countries, and some contracts were annulled (especially in India), in place in 111 countries by resulting in significant impacts on industry.79 year’s end.90 FIT support Policy makers have used the flexibility of auction mechanisms to for utility-scale renewable design tenders to meet various national goals beyond awarding projects is often now limited to countries with nascent renewable contracts at minimum prices.80 This includes the use of domestic energy markets. FITs also are used to support less-established content requirements to promote domestic manufacturing – such technologies, or technologies with relatively high project as in India, which mandated that all future solar power bids include development costs that often are not included in auctions. (R See at least 50% locally manufactured components.81 Auctions also Reference Table R11.) can be designed to overcome unintended consequences that In 2018, Zambia’s FIT-based renewable energy support scheme have been overlooked previously in power sector development, – modelled on an existing programme in Uganda – entered its such as the exclusion of local communities and small actors, or first round after officially launching in 2017.91 Japan postponed to 82 the concentration of projects in specific areas. September 2019 its deadline for planned cuts to FIT solar projects Likely the biggest auction-related policy development in 2018, larger than 2 MW, and Serbia extended its existing FIT scheme and perhaps in all recent years, occurred in China. As part of – which was set to expire at the end of 2018 – for an additional broad changes to its national solar power policy, Chinese officials year.92 Serbia ultimately plans to replace the scheme with new halted all financial support for utility-scale and distributed solar mechanisms including feed-in premiums and tenders.93 Also projects in favour of project support through auctions.83 Wind in 2018, Switzerland increased its geothermal power FIT, and energy projects in China also will be supported through auctions Vietnam raised its FIT for onshore and offshore wind power.94 84 in the coming years. Some countries reduced their FIT rates in 2018. Although the Other notable developments worldwide included the first renewable roll-back of feed-in policies has tended to focus primarily on energy auction ever held in Benin, for a 25 megawatt (MW) large-scale installations, even smaller-scale systems have seen solar PV project; a contract awarded in the Netherlands for up reductions in rates. For example, in 2018 the United Kingdom

i African nations were particularly active in 2018, with auctions held in Algeria, Benin, Egypt, Eswatini, Ethiopia, Madagascar, Malawi, Niger, Senegal, Seychelles, South Africa, Tanzania, Tunisia and Zambia. Auctions were also held in Asia and Oceania (Australia, Bangladesh, China, India at both the national and sub- national level, Japan, Kazakhstan, Singapore, Sri Lanka and Tonga); in Europe (Albania, Armenia, Denmark, Finland, France, Germany, Greece, Malta, Montenegro, the Netherlands, Poland, the Russian Federation); in the Middle East (Afghanistan, Bahrain, Jordan, Kuwait, Lebanon, Oman, State of Palestine, Qatar, Saudi Arabia and Turkey); and in North America, Latin America and the Caribbean (Argentina, Brazil, Canada and the United States). ii The specific design of individual auction mechanisms – including rules governing critical features such as permitting, grid connection or local content require- ments – can impact the ability of auctions to attract developer interest or result in successful project development. Auction design varies widely: while some are technology-specific calls for individual projects, others are technology-neutral tenders where renewable, nuclear and fossil fuel generation options all compete to provide new power capacity, or are neutral for renewable technologies only.

60 PV systems or, less commonly, small-scale wind turbines. By the the By turbines. wind small-scale commonly, or, less systems PV solar rooftop small-scale of development the to spur adopted are often policies These levels. commercial and residential the 5% by 2020, and solar power is capped at 5% from 2018 to 2020. 2018 5%from at capped is power solar and 2020, 5% by and in 2019 10% at capped is power wind of curtailment regulations, new the Under capacity. generation power renewable variable new of expansion rapid China’s of result power, the were in turn which solar and wind for rates growing by curtailment was driven move rate for solar PV. solar for rate FIT in its reduction Wales (Australia) a44% approved South New passed a ballot measure supporting a 50% RPS by 2030. by RPS a50% supporting measure aballot passed committed to 100% clean power clean to 100% committed under the FIT implemented in 2009. implemented FIT the under systems PV solar household for contracts FIT 10-year the of year iii ii i billing net or metering Net grid. into the fed is that electricity surplus for remuneration as well as networks to grid access provide that policies through support find often projects energy renewable Smaller-scale power. renewable of use the for rules setting purchasers, power and utilities grid for were established quotas China, In 2032. by power renewable 100% for mandate anew passed also Columbia of District the and in 2018, levels RPS increased Columbia of District the and states five States, United the In level. sub-national the at typically jurisdictions, many in place in remained (RPSs), standards portfolio renewable of form in the often obligations, Renewable in 2019. starting systems, PV solar household new for FIT to the eliminate plans its confirmed year. same the by 40% of requirement anew set Connecticut and 2030, by electricity renewable 50% for an RPS established Jersey New

See Glossary fordefinition. Glossary See fordefinition. Glossary See to from resources. come renewable andzero-carbon energy 2045 resources by sales California’s calls forallretail electricity policy 100 Massachusetts increased its RPS, while voters in Nevada in Nevada voters while RPS, its increased Massachusetts 98 97 California, the world’s fifth largest economy, largest the fifth world’s California, ii 95 is a primary mechanism used at at used mechanism a primary is In Japan, 2018 marked the final full full final the marked 2018 Japan, In i by 2045 as part of its RPS. its of part as 2045 by 96 At the sub-national level, level, sub-national At the 101 102 The 103 99

territories. and states in 45 adopted been had they alone, States United in the level; sub-national or national the at countries 66 least in at existed policies metering net 2018, of end across the state. across solar) community (including development solar promotes programme SMART Massachusetts approved newly the fed to the grid. to the fed metering reducing incentives, payments for surplus generation all prosumers all that to ensure in 2018 an agreement EU reached The grid. the to to connect charge utilities that fees of elimination or adoption in the have resulted revisions and costs, technology falling with pace to keep enacted have been adjustments rate cases, some In in response. policies have to revise had often makers policy and challenges, legal and to political led has policies metering net under systems grid-connected of deployment increased The grid. into the fed electricity incentives increasing for energy producers, payments for surplus to strengthen policy metering net existing its revised Malaysia systems. PV solar rooftop industrial and commercial to residential, time first the for access grid opening policy metering anew adopted Indonesia 2018, In to renewable energy development and deployment. barriers financial and fiscal overcoming in role important an play –also etc. credits, tax rebates, –grants, incentives Fiscal networks. distribution own electricity their purchase or rent own, can they that EU ensuring by the within to operate right the communities energy guaranteed the European Commission energy In generation. 2018, renewable local increase also projects power Community will also support these installations via a new rebate scheme. rebate anew via installations these support will also and (kW) kilowatts up to 100 installations renewable of metering charge on self-consumption adopted in 2015. adopted self-consumption on charge the to and remove procedures registration to simplify PV solar for storage (as gas).storage natural as well energy and PV solar including bases, military at upgrades infrastructure energy-resilient for initiative million 133.5 USD their the government federal residence; also launched a at turbine wind asmall-scale installing of cost the for credit a30% with homeowners provides which TaxEnergy Credit, Renewable Residential the reinstated States United the 2018 in example, For systems. energy renewable residential scale small- to installations commercial large-scale from ranging technologies to promote used be can policies regulatory fees. to being subject connection without to gridconnect networks 109 Meanwhile, the US state of Michigan rolled back net net back rolled Michigan of state US the Meanwhile, 104 iii 110 with systems of 25 kW or smaller be allowed to allowed be smaller or kW 25 of systems with 112 105 107 Romania approved new rules for net net for rules new approved Romania Spain revised its net metering policy policy metering net its revised Spain 114 66 in least at existed meteringnet policies 2018, of end the By national level. national at the national or sub- 111 In the United States, States, United the In

countries 108

113 Non-

106

02 61 POLICY LANDSCAPE RENEWABLES 2019 GLOBAL STATUS REPORT

and commercial). These POLICIES TO INTEGRATE VARIABLE storage mandates have To date, RENEWABLE ENERGY focused increasingly on battery storage few countries As the transformation of energy systems continues in many have implemented technologies, and some, countries, policy makers have focused on the development and such as California’s, policies to advance deployment of enabling technologies to facilitate the integration explicitly exempt pumped of renewable energy technologies. (p See Systems Integration sector integration storage.119 chapter.) Policies to integrate VRE can address both supply and specifically with demand to increase the flexibility of the overall energy system. Among new policies in renewables. Traditional fiscal and regulatory mechanisms have been used 2018, Jordan issued a to advance the deployment of enabling technologies, and new tender for a new energy mechanisms also have emerged. storage project that aims to put 30 MW of storage capacity online by early 2019.120 Ireland established new rules that accelerate the Sector integrationi offers the potential to overcome challenges process for approving connections for more than 370 MW of associated with higher shares of VRE or to maximise the value energy storage projects.121 For household systems, the state of of renewable energy investments. Policy makers can directly South Australia launched an AUD 100 million (USD 70.5 million) link sectors, as in the case where renewable electricity is used subsidy scheme for the installation of home battery systems, for charging EVs. This leads to numerous benefits: for example, particularly to facilitate rooftop solar PV, and the Australian renewable electricity can help to decarbonise transport or other Capital Territory began a household energy storage rebate sectors, while the batteries found in EVs offer electricity storage programme.122 capacity, which can help integrate VRE into the wider energy system. To date, however, few countries have implemented Another emerging trend is policies that encourage the joint policies to advance sector integration specifically with installation of renewables (primarily solar PV) and energy storage renewables. systems. Both Lebanon and Madagascar held solar PV-plus- storage auctions in 2018, and India solicited bids for a 160 MW Increasingly, policy makers are promoting the ancillary grid solar PV-wind-storage hybrid project.123 Multiple jurisdictions servicesii offered by enabling technologies and, to a lesser also offered incentives for the development or deployment of extent, by renewable energy. The design of appropriate power solar PV-plus-storage, including Ireland, which began providing market rules is an important lever for increased participation of household grants in 2018, and Thailand.124 At the sub-national VRE and other enabling technologies in electricity markets and level, the US states of California, Massachusetts and New York trade. In China, the 13th Five-Year Plan (2016-2020) and related introduced new incentives for solar PV-plus-storage projects.125 initiatives aim in part to create new wholesale electricity markets that work for renewables.115 In the EU, the Clean Energy for Governments continued to invest in R&D to further advances Europeans Package, finalised in late 2018, further opens markets in battery storage technology. In 2018, the UK government to renewable electricity, energy storage and demand response; invested GBP 246 million (USD 312 million) in battery R&D; it will allow energy consumers to be exposed to wholesale the US Department of Energy provided USD 27.7 million for electricity pricing, increasing opportunities for arbitrage and for long-duration energy storage; and the US state of Iowa began higher levels of distributed renewables.116 supporting battery technology research.126 In 2018, Australia’s Renewable Energy Agency and the Targets focused on enabling and integrating technologies – such government of the state of Victoria jointly funded battery storage as energy storage and EVs – also have gained prominence in at a transmission terminal to help stabilise the grid by drawing recent years. For example, in 2018 the US state of New York power at peak times.117 At the transmission level, in a major established an initial target of 1.5 GW of energy storage by 2025 development in the United States, the Federal Energy Regulatory and later doubled this target to 3 GW by 2030.127 In addition, Commission issued orders to grid operators to develop rules for many countries have set targets for specific shares or volumes energy storage to participate in wholesale, capacity and ancillary of EVs, which can enable increasing shares of renewable services markets.118 electricity in the transport sector. (p See Sidebar 2 in this chapter, and Systems Integration chapter.) The ongoing maturation of battery storage technologies – driven largely by the rapidly expanding EV sector – has created opportunities for the deployment of battery and other storage solutions alongside more traditional technologies such as pumped (hydropower) storage. This has led to a push for mandates and incentives promoting the deployment of energy storage capacity both in front of the meter (for example, utility- scale, centralised) and behind the meter (for example, residential

i Sector integration refers to the interconnection of the power, heating and cooling, and transport sectors to facilitate the integration of higher shares of renewable energy. ii Ancillary grid services support the transmission and distribution of electric power so that supply will continually meet demand.

62 gas and renewable fuels. renewable and gas natural of in favour 2030, by transport and production energy for diesel and gasoline coal, of use to the eliminate pledged become the first decarbonised country in the world. country decarbonised the first become and fuels fossil to ban plan its announced Rica Costa 2018, In targets. 2030 EU-wide meet to plans climate and energy national establish to required were countries EU member individual and 2050, by region the across economy for reaching strategy outlined its a zero-carbon the economy. example, the For European in 2018 Commission of in many sectors fuels away fossil from a shift necessitate often goals These sector. energy renewable in the growth scaling for mechanisms indirect establish can decarbonisation complete or partial for targets set that strategies Climate Change. Climate on Convention Framework Nations United the under countries 181 by submitted NDCs the as such strategies, reduction emissions national through set targets renewable-specific include mechanisms Direct adaptation. as well as mitigation targeting policies through support indirect and direct both have received technologies energy Renewable change. climate address to efforts in global point focal akey remains consumption and production Energy CLIMATE AND POLICY RENEWABLES by 2050. carbon zero for strategy its outlined London and 2045, than later no neutrality carbon to achieve goal astate-wide established change, and more than half establish renewable energy targets. energy renewable establish half than more and change, climate mitigating for tools as renewables reference specifically 2018 GSR in chapter 9,200 cities committed to combatting climate change. climate to combatting committed cities 9,200 over included 2018 of end the by &Energy, which Climate for Mayors of Covenant Global the as such partnerships through 133 Municipal initiatives continued to be advanced advanced be to continued initiatives Municipal .) Approximately three-quarters of NDCs NDCs of three-quarters .) Approximately 130 132 At the sub-national level, California California level, sub-national At the 128 ( p See See Policy Landscape Landscape Policy 134 131 Israel Israel 129

cover an additional 7%. an additional cover would implementation for were scheduled that those while emissions, gas greenhouse global of 13% around covered 2018 of end the by implemented were being that initiatives pricing a commitment to phase out coal power in Hungary by 2030. by in Hungary power coal out to phase a commitment chapter. Integration Systems trading systems and 27 carbon taxes. carbon 27 and systems trading emissions 27 including in (up 2017), 46 2018 of from end the by implemented been had initiatives pricing carbon 54 At least goals. mitigation climate to meet technologies energy renewable in low-carbon, interest stimulate can that mechanisms policy and trading emissions taxes are systems Carbon among the grid services. ancillary offer that technologies enabling and energy renewable for in opportunities resulted has This mixes. generation new using supply electricity of reliability the ensuring on focus increased an to led –has plants power nuclear and coal of closure the as such ongoing transformationThe of power – spurred systems by factors 135 ( p

See Integration section in this chapter, and chapter, and this in section Integration See 138 ) New developments in 2018 included included in 2018 developments ) New the end of 2018. of end the by implemented been had pricing initiatives carbon 54 At least 137 ( See Figure 17. Figure p See ) Carbon ) Carbon 136

02 63 POLICY LANDSCAPE RENEWABLES 2019 GLOBAL STATUS REPORT

FIGURE 17. Carbon Pricing Policies, 2018

Alberta British Columbia Newfoundland Washington and Labrador Saskatchewan California

Québec Vermont Beijing Saitama Maine Tianjin New Hampshire Nova Scotia Chongqing Hubei Connecticut Massachusetts Rhode Island Tokyo Maryland New York Shanghai New Jersey Fujian Delaware Guangdong Shenzhen (except Shenzhen)

Regional Emissions Trading System National ETS (ETS) (EU-28-plus) Sub-national ETS

Both regional ETS (EU-28-plus) National carbon taxes Both sub-national ETS and carbon taxes and national carbon taxes

Both national ETS and carbon taxes

Note: The Regional Greenhouse Gas Initative (RGGI) includes the US Source: World Bank. See endnote 137 for this chapter. states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

If well-designed, carbon pricing policies can incentivise the – as demonstrated in the European Commission’s New Entrants’ deployment of renewable energy technologies by internalising Reserve mechanisms – or can be returned to residents through at least some externalities of fossil fuels, thereby increasing the carbon dividends (p see Box 2 in this chapter).139 relative cost of these fuels. However, some uncertainty exists as to In 2018, the European Commission established new rules for whether these mechanisms are sufficient to drive deployment of phase IV (2021-2030) of the EU Emissions Trading System, with renewable energy, particularly in the power sector, as many other adjustments designed to accelerate the deployment of low- factors are at play, including the structure of power markets and carbon technologies.140 At the national level, Canada established a regulations governing market access. revenue-neutral carbon tax that was scheduled to be implemented The impacts of carbon pricing policies on renewable energy vary in 2019.141 Finland increased its carbon tax rate for coal and for by technology and sector, and according to factors such as market heavy and light fuel oil, and Kazakhstan restarted its emissions prices within trading systems. Revenue accrued through these trading system following a two-year hiatus.142 systems can be used to fund new renewable energy projects

64 fee-and-dividend policy in provinces that did not already already not did that in provinces policy fee-and-dividend acarbon applied government Canadian the 2019, early In divides. political across support receives often and voters with popular to be tends policy of type This solutions. based renewables- and innovative to investment shift to them spurring producers, fuel to fossil signal price astrong send to intended is fee increasing predictably the decreases, consumption as turn, In sources. energy renewable as such replacement with oflower-emission fuels fossil alternatives energy or use through the througheither more-efficient – consumers large and individuals both –for habits in consumption changes encourage can apolicy Such andhouseholds businesses. have might on consumption fuel fossil on afee that impact financial the counterbalances it because fuels fossil from away transition” a“just of notion the with consistent is policy the that to key ensuring is dividend The payments. through or fixed on other reductions taxes rebates, “dividends”: via to taxpayers redistributed revenue resulting the with use, fuel fossil on tax or fee increasing gradually a –place tax carbon arevenue-neutral or policy dividend fee-and- acarbon as known –also dividends Carbon 2. BOX Policy Spotlight: Carbon Dividends Policy Spotlight: Carbon potentially associated with increases elsewhere. with increases potentially associated remains,“leakage” with emissions reductions in the province of possibility the and time, over narrowed has coverage However, policy the 2.2%. an estimated declined emissions annual while 10%, least at by decreased consumption fuel fossil capita per Columbia’s British 2016, and 2007 Between market. labour overall the on effects positive seen has –and province any of Canadian growth economic strongest the maintained has Columbia British as – even consumption fuel fossil capita per reduced has It population. province’s the of half than more of support maintained has policy Columbia’s British on, years 10 than More Columbia. British of province Canadian in the 2008 since in place been has that asimilar policy on builds policy federal The most. with lower-income fee, the carbon benefiting households from result might that costs in energy any increase exceed to expected are dividends annual the households, Canadian affected of 70% For thresholds. federal met –that otherwise or dividend acarbon –whether plan pricing have acarbon Source: see endnote 139 for this chapter. this for 139 endnote see Source: 02 65 POLICY LANDSCAPE RENEWABLES 2019 GLOBAL STATUS REPORT

Table 2. Renewable Energy Targets and Policies, 2018

Country Fiscal Incentives and Regulatory Policies Public Financing

, 2

7 billing credits targets payment Tendering Biofuel blend Biofuel blend Reductions in Reductions in Investment or Tradable REC Tradable production tax Feed-in tariff/ Net metering/ Net Tax incentives Tax obligation/RPS Renewable heat heat Renewable in INDC or NDC Public investment, Energy production VAT or other taxesVAT premium payment premium sales, energy, CO sales, energy, subsidies or rebates or subsidies Renewable energy energy Renewable energy Renewable loans, grants, capital Electric utility quota obligation/mandate obligation/mandate High Income Countries Andorra Antigua and Barbuda P Argentina P Australia P Austria E, P, HC, T 6, * Bahamas, The P Bahrain P(R) Barbados1 P Belgium E, P, HC, T Brunei Darussalam E, P Canada P* , 7 Chile P 6 Croatia E, P, HC, T 6 Cyprus E, P, HC, T Czech Republic E, P, HC, T 6 Denmark E, P, HC, T 6 Estonia E, P, HC, T Finland E, P, HC, T France E, P(R), HC, T 6 6 6 Germany E, P, HC, T 6 Greece E, P, HC, T Hungary E, P, HC, T 6 Iceland E, T Ireland E, P, HC, T 6 Israel E, P, T Italy E, P, HC, T , 6 Japan E, P Korea, Republic of E, R(P) 6 Kuwait P Latvia E, P, HC, T Liechtenstein Lithuania E, P(R), HC(R), T Luxembourg E, P, HC, T Malta E, P, HC, T 6 Monaco Netherlands E, P, HC, T 6 6 6 6 New Zealand P Norway E, T, P , 7 6 Oman Palau E, P Panama E Poland E, P, HC, T 6 Portugal2 E, P, HC, T Qatar P, T San Marino Saudi Arabia P Seychelles P Singapore P Slovak Republic E, P, HC, T 6 Slovenia E, P, HC, T 6 Spain3 E, P(R), HC, T 6 St. Kitts and Nevis Sweden E, P, HC, T Switzerland E, P 6 Trinidad and Tobago P United Arab Emirates E, P United Kingdom E, P, T, HC 6 6 United States4 P*(R) , , * 6 Uruguay 6

Note: Please see key on last page of table.

66 02

Table 2. Renewable Energy Targets and Policies, 2018 (continued)

Country Fiscal Incentives and Regulatory Policies Public Financing

, 2

7 billing credits targets payment Tendering Biofuel blend Biofuel blend Reductions in Reductions in Investment or Tradable REC Tradable production tax Feed-in tariff/ Net metering/ Net Tax incentives Tax obligation/RPS Renewable heat heat Renewable in INDC or NDC Public investment, Energy production VAT or other taxesVAT premium payment premium sales, energy, CO sales, energy, subsidies or rebates or subsidies Renewable energy energy Renewable energy Renewable loans, grants, capital Electric utility quota obligation/mandate obligation/mandate Upper-Middle Income Countries Albania E, T Algeria E, P Armenia P 6 POLICY LANDSCAPE Azerbaijan P Belarus E, P Belize P Bosnia and E, P Herzegovina Botswana Brazil E, P Bulgaria E, P, HC, T 6 China E, P(R), HC, T Colombia P Costa Rica P Cuba P Dominica P Dominican Republic P Ecuador Equatorial Guinea Fiji E, P Gabon E, P Grenada E, P Guatemala E, P Guyana E, P Iran P Iraq P Jamaica E, P Jordan E, P, HC Kazakhstan P Lebanon E, P, HC 6 Libya E, P, HC Macedonia, FYR E, P, HC, T 6 6 6 Malaysia P Maldives P Marshall Islands P Mauritius P 6 Mexico P, HC Montenegro E, P, HC, T Namibia P Nauru Paraguay P Peru E, P Romania E, P, HC, T , 6 Russian Federation P Samoa E, P Serbia E, P, HC, T South Africa P(R) St. Lucia P St. Vincent and the P Grenadines1 Suriname Thailand E, P(R), HC, T Tonga P Turkey P Turkmenistan Tuvalu P Venezuela P

Note: Please see key on last page of table.

67 RENEWABLES 2019 GLOBAL STATUS REPORT

Table 2. Renewable Energy Targets and Policies, 2018 (continued)

Country Fiscal Incentives and Regulatory Policies Public Financing

, 2

7 billing credits targets payment Tendering Biofuel blend Biofuel blend Reductions in Reductions in Investment or Tradable REC Tradable production tax Feed-in tariff/ Net metering/ Net Tax incentives Tax obligation/RPS Renewable heat heat Renewable in INDC or NDC Public investment, Energy production VAT or other taxesVAT premium payment premium sales, energy, CO sales, energy, subsidies or rebates or subsidies Renewable energy energy Renewable energy Renewable loans, grants, capital Electric utility quota obligation/mandate obligation/mandate Lower-Middle Income Countries Angola E Bangladesh E, P Bhutan P, HC Bolivia P Cabo Verde (P) Cambodia P Cameroon P Congo, Republic of P Côte d’Ivoire E, P Djibouti E, P Egypt E, P El Salvador Eswatini Georgia 6 Ghana E, P Honduras P India P, HC, T 6 Indonesia E, P 7 Kenya P, HC Kiribati P Kosovo E, P, HC Kyrgyz Republic Lao PDR E Lesotho P Mauritania E Micronesia, P Federated States of Moldova E, P, HC, T Mongolia E, P Morocco P, HC Myanmar P Nicaragua P Nigeria P Pakistan Palestine, State of E, P Papua New Guinea P Philippines P São Tomé and P Príncipe Solomon Islands P Sri Lanka P, T Sudan E, P Timor-Leste P Tunisia P 6 Ukraine E, P, HC, T 6 Uzbekistan P Vanuatu E, P Vietnam E, P, T 6 Zambia

Note: Please see key on last page of table.

68 02

Table 2. Renewable Energy Targets and Policies, 2018 (continued)

Country Fiscal Incentives and Regulatory Policies Public Financing

, 2

7 billing credits targets payment Tendering Biofuel blend Biofuel blend Reductions in Reductions in Investment or Tradable REC Tradable production tax Feed-in tariff/ Net metering/ Net Tax incentives Tax obligation/RPS Renewable heat heat Renewable in INDC or NDC Public investment, Energy production VAT or other taxesVAT premium payment premium sales, energy, CO sales, energy, subsidies or rebates or subsidies Renewable energy energy Renewable energy Renewable loans, grants, capital Electric utility quota obligation/mandate obligation/mandate Low Income Countries Afghanistan E, P Benin E, P Burkina Faso P POLICY LANDSCAPE Burundi E, P Central African Republic Chad Comoros P Congo, Democratic P Republic of the Eritrea P Ethiopia P Gambia P Guinea E, P Guinea-Bissau P Haiti P Korea, Democratic People's Republic Liberia E, P, T Madagascar E, P Malawi E, P, HC Mali E, P Mozambique P, HC Nepal E, P, T Niger E, P Rwanda Senegal P Sierra Leone P, HC Somalia South Sudan P Syria E, P Tajikistan E, P Tanzania E, P Togo E, P Uganda Yemen P Zimbabwe

Policies Targets Existing national policy or tender framework E Energy (final or primary) (could include sub-national) P Power Existing sub-national policy or tender framework HC Heating or cooling New (but no national) T Transport Revised National tender held in 2018 * Indicates sub-national target Removed Sub-national tender held in 2018

1 Certain Caribbean countries have adopted hybrid net metering and feed-in policies whereby residential consumers can offset power while commercial consumers are obligated to feed 100% of the power generated into the grid. These policies are defined as net metering for the purposes of the GSR. 2 FIT support removed for large-scale power plants. 3 Spain removed FIT support for new projects in 2012. Support for projects is based on the “reasonable return” concept meant to ensure a fixed return on investment over the lifetime of a plant. Incentives for projects that previously had qualified for FIT support continue to be revised. 4 State-level targets in the United States include RPS policies. 5 The area of the State of Palestine is included in the World Bank country classification as “West Bank and Gaza”. 6 Includes renewable heating and/or cooling technologies. 7 Aviation, maritime, or rail transport.

Note: Countries are organised according to annual gross national income (GNI) per capita levels as follows: “high” is USD 12,056 or more, “upper-middle” is USD 3,896 to USD 12,055, “lower-middle” is USD 996 to USD 3,895, and “low” is USD 955 or less. Per capita income levels and group classifications from World Bank, “Country and Lending Groups”, http://data.worldbank.org/about/country-and-lending-groups, viewed May 2019. Only enacted policies are included in the table; however, for some policies shown, implementing regulations may not yet be developed or effective, leading to lack of implementation or impacts. Policies known to be discontinued have been omitted or marked as removed or expired. Many feed-in policies are limited in scope of technology. Source: See endnote 1 for this chapter.

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Project and City: McNeil Generating Station, Burlington, Vermont, US Technology: Burlington, Vermont, US Biomass power plant In 2018, renewable energy supplied 100% of Burlington’s electricity. More than a third of the renewable power comes from bioenergy produced at the McNeil Generating Station. Operational since 1984, the 50 megawatt biomass power plant is fuelled by wood, most of which arrives via rail from sustainably managed forests in Vermont and New York, within a 100-kilometre radius of Burlington. The plant is owned and operated by Burlington Electric Department, the sole electricity provider to the city of 42,000 inhabitants. The remainder of Burlington’s electricity is provided by wind power, solar PV and hydropower. 03 MARKET AND INDUSTRY TRENDS

BIOENERGY

A wide range of biological feedstocks can be converted Bio-heat Markets A via a number of different processes into thermal Bioenergy – in the form of solid fuel (biomass), liquids (biofuels) energy, electricity and fuels for transport (biofuels). or gases (biogas or biomethane) – can be used to produce heat Many bioenergy conversion pathways are well established for cooking and for heating residential spaces and water, either in and fully commercial, while others are still at the early stages of traditional stoves or in modern appliances such as pellet-fed central 1 development, demonstration and commercialisation. heating boilers. At a larger scale, bioenergy can provide heat for public and commercial buildings as well as for industry. Bioenergy BIOENERGY MARKETS also can be used to co-generate electricity and heat via combined Bioenergy makes the largest renewable contribution to global heat and power (CHP) systems to serve residential, commercial energy supply. Including the traditional use of biomassi, bioenergy and industrial buildings – either on-site or distributed from larger contributed an estimated 12.4% – or 46.0 exajoules (EJ) – to final production facilities via district heating and cooling systems. energy consumption as of the end of 2017.2 Modern sustainable The traditional use of biomass to supply energy for cooking bioenergyii (excluding the traditional use of biomass) provides and heating in simple and usually inefficient devices, mostly in around half of all renewable energy in final energy consumption.3 developing and emerging economies, is still the largest use of 7 In 2017, modern bioenergy contributed an estimated 5.0% to total bioenergy. (p See Figure 18.) Given the serious negative health 4 impacts of traditional biomass use, the effects on local air quality final energy consumption (TFEC). (p See Figure 18.) It contributed an estimated 13.3 EJ to the global supply of heat (5.0% of the heat and the unsustainable nature of much of the supply of this total), 3.5 EJ in transport (3.0% of the transport total) and 1.6 EJ biomass, efforts are being made to reduce the use of traditional to global electricity supply (2.1% of the electricity total).5 Modern biomass in the push to improve access to clean fuels. (p See bioenergy use is growing most quickly in the electricity sector (at Distributed Renewables chapter.) around 9% per year), compared to around 7% in the transport Because the supply of biomass for traditional use is informal, sector; its use for heating is growing more slowly, at around 1.8%.6 obtaining accurate data on this usage is difficult.8 The amount of

i The traditional use of biomass for heat involves the burning of woody biomass or charcoal as well as dung and other agricultural residues in simple and ineffi- cient devices in developing and emerging economies. ii Bioenergy is considered to be sustainable when its use reduces greenhouse gas emissions compared to the use of fossil fuels in the applications where it is used, and where its use avoids significant negative environmental, social or economic impacts and plays a positive role in the achievement of sustainable development objectives. See endnote 3 for this section.

71 RENEWABLES 2019 GLOBAL STATUS REPORT

FIGURE 18. Estimated Shares of Bioenergy in Total Final Energy Consumption, Overall and by End-Use Sector, 2017 Traditional Modern Non- biomass bioenergy biomass 3.0 2.1 100% 6.1 20.7 87.6 % Transport Electricity Non-biomass 4.0 1.0% 0.4% 75%

1.4% Heat, buildings 50% 7.4% Traditional biomass 2.2% 25% 5.0% Heat, industry Modern bioenergy 0%

Heat, Heat, Transport Electricity buildings industry

Source: Based on OECD/IEA. See endnote 4 for this section.

biomass used in traditional applications has been largely stable in The market for pellets for heating residential and commercial recent years, totalling an estimated 27.5 EJ in 2017.9 However, the buildings is based mainly in Italy, Germany and Sweden. The use share of traditional biomass in TFEC has been declining gradually of wood pellets in stoves for residential heating (rather than for for several years, from 8.8% of global consumption in 2006 to boiler systems) has grown rapidly in France and Italy in recent 7.6% in 2017.10 (p See Figure 2 in Global Overview chapter.) years.21 Sweden and Finland lead globally in the use of bioenergy The use of modern bioenergy for direct heat production has in district heating schemes, but this practice also is widespread in 22 grown only around 1.8% annually on average since 2006, mainly other countries, including Denmark and Lithuania. because of a lack of policy interest.11 Use of modern bioenergy in North America followed the EU for bioenergy consumption in district heating – where bioenergy provides 95% of the renewable buildings. In 2017, more than 2 million US households (2% of the energy used – grew more rapidly, at more than 5% annually during total) used wood or wood pellets as their primary heating fuel, and a the period 2006-2017.12 In 2017, modern bioenergy applications further 8% of households used wood as a secondary heat source.23 provided an estimated 13.3 EJ of heat, including 0.9 EJ provided In the industry sector, heat supplied from bioenergy accounted by district heating; of this total, 8.0 EJ is consumed in industry and for some 6.1% of all heat consumption.24 Generally, the use of the rest in buildings.13 bioenergy has been concentrated in industries where biomass Europe is the largest consumer of modern bio-heat by region. residues are created as part of the production process – such as European Union (EU) member states have promoted the use of renewable heat in both buildings and industry in order to meet mandatory national targets under the EU Renewable Energy Directive.14 Bioenergy use for heat production in the region rose at an average rate of around 2.2% annually between 2012 and 2017, and totalled an estimated 4.0 EJ in 2018.15 Other major users of bioenergy for heat include the United States (1.8 EJ), Brazil (1.6 EJ) and India (1.6 EJ).16 China also is expanding its use of biomass for heating in both the industry and buildings sectors.17 Globally, modern bioenergy provided around 4.0% of the energy used for heating buildings in 2017.18 Modern use of bioenergy for heating in the buildings sector is concentrated in the EU.19 In 2016, the region accounted for some 46% of all bioenergy used for heat in individual buildings, and for an even higher share of global bioenergy use in the residential sector (54%); together, Italy, France and Germany accounted for 44% of the global total.20

72 03

pulp and paper (where bioenergy provides 30% of energy needs), 2018 – and in the rest of Asia (16%), while generation in North food, tobacco, and wood and wood products.25 America remained essentially stable.32 (p See Figure 19.) Bioenergy can deliver low-temperature heat for heating and drying China maintained its position as the largest country producer applications, as well as high-temperature process heat – either of bioelectricity, followed by the United States.33 The other through direct use of the fuel or by gasifying the biomass and using major producers in 2018 were Brazil, Germany, India, the United the resulting fuel gas. However, very little bioenergy is used in the more Kingdom and Japan.34 energy-intensive industrial sectors where very high-temperature heat Europe continued to lead regionally in bioelectricity production, is required, such as iron and steel and chemicals; in these sectors, with capacity rising from 39 GW to 42 GW during 2018 and 26 lower-cost, higher energy density fossil fuels usually are preferred. generation increasing 6% to 196 TWh.35 However, in Germany, One exception is the cement industry, where wastes and biomass Europe’s largest bioelectricity producer (primarily from biogas), can substitute for the coal that typically is used in cement generation rose less than 1%, to 51 TWh.36 This continued production. The extent of this substitution varies by region: for Germany’s slow growth trend that began in 2014, when example, the EU’s cement industry is the largest user of wastes feed-in tariff (FIT) rates for bioelectricity generation became and biomass, especially in Germany and the United Kingdom. As less favourable.37 In the United Kingdom, bio-power capacity coal replacement in the EU has grown, the level of substitution increased 30% to 7.7 GW, due primarily to the conversion of coal in the region’s cement sector reached 25% in 2018, compared capacity to use imported biomass fuels, and generation rose 11% to only 15% in Brazil.27 In India and China, the two largest global in 2018, to 35.6 TWh.38 Generation also increased strongly in the cement manufacturers, only low levels of substitution have been Netherlands (8%) and France (5%).39 achieved, although in 2018 the use of wastes and biomass in In China, bio-power capacity increased 21% to 17.8 GW in 2018, clinker production was being considered as part of the evolving growing in line with the provisions of the country’s 13th Five-Year 28 waste management strategy in both countries. Plan (2016-2020).40 Generation continued to grow strongly as MARKET AND INDUSTRY TRENDS well, increasing 14% to 91 TWh.41 Elsewhere in Asia, India’s bio- Bio-power Markets power capacity increased 16% to 10.2 GW and generation rose Global bio-power capacity increased an estimated 6.5% in 2018 to 4% to 50 TWh.42 Capacity and generation growth also remained 130 gigawatts (GW), up from 121 GW in 2017.29 Total bioelectricity strong in Japan, where the capacity of dedicated biomass generation rose 9%, from 532 terawatt-hours (TWh) in 2017 to plants increased 11% to reach 4 GW and generation totalled 581 TWh in 2018.30 The EU remained the largest generator by some 29 TWh in 2018 (a 25% increase from 2017), stimulated region, with generation growing 6% in 2018, stimulated by the by a generous FIT.43 Biomass generation increased 50% in the Renewable Energy Directive.31 Other trends of previous years Republic of Korea (to 11.2 TWh) and 39% in Thailand (to 14 TWh), continued: generation grew most rapidly in China – up 14% in and it doubled in Vietnam (to 0.5 TWh).44

FIGURE 19. Global Bioelectricity Generation, by Region, 2008-2018

Terawatt-hours per year World Total Rest of World 600 581 Terawatt-hours China South America 500 Rest of Asia North America 400 EU-28

300

200

100

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: See endnote 32 for this section.

73 RENEWABLES 2019 GLOBAL STATUS REPORT

The United States had the second-highest national levels of Transport Biofuel Markets bio-power capacity (16 GW) and generation (69 TWh) in 2018.45 In 2018, global production of all biofuels increased nearly 7% However, generation did not increase during the year and has not compared to 2017, reaching 153 billion litres (equivalent to grown significantly over the last decade, due to a lack of strong 3.8 EJ).49 The United States and Brazil dominated production policy drivers and to increasing competition from other renewable – together producing 69% of all biofuels in 2018 – followed 46 In some cases, biomass generation plants generation sources. by China (3.4%), Germany (2.9%) and Indonesia (2.7%).50 were closed down when supply contracts were not renewed.47 (R See Reference Table R14.) Brazil is the third-largest producer of bioelectricity globally and The main biofuels produced are ethanol (produced mostly from the largest producer in South America. In 2018, the country’s corni, sugar cane and other crops) and biodiesel (fatty acid capacity reached 14.7 GW and generation rose 9% to 54 TWh.48 methyl ester, or FAME, fuels produced from vegetable oils and Most of the bioelectricity generation is from sugarcane bagasse fats, including wastes such as used cooking oil).51 In addition, the (fibrous sugarcane waste). production and use of diesel substitute fuels – made by treating animal and vegetable oils and fats with hydrogen (hydrotreated vegetable oil (HVO) and hydrotreated esters and fatty acids (HEFA)) – is growing. In 2018, ethanol accounted for an estimated 63% of biofuel production (in energy terms), FAME biodiesel for 31% and HVO/HEFA for 6%.52 (p See Figure 20.) The contribution from biomethane is also increasing rapidly in some countries. Nevertheless, it represented less than 1% of the biofuel total in 2018, and other advanced biofuels had shares below 0.5%.53 Production, consumption and trade in biofuels are affected by numerous factors, including biomass growing conditions (such as the weather), the demand for biofuels in the producing countries, and import markets, which are influenced by policy developments. Changing import tariffs and other measures also affect international trade in biofuels.54

i The word “corn” has various meanings depending upon different geographical regions. In Europe, it includes wheat, barley and other locally produced cereals, whereas in the United States and Canada it generally refers to maize. See endnote 51 for this section.

FIGURE 20. Global Ethanol, Biodiesel and HVO/HEFA Fuel Production by Energy Content, 2008-2018

Energy content (exajoules) World Total HVO/HEFA 4 3.8 Exajoules Biodiesel (FAME)

Ethanol 3

2

1

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Note: HVO = hydrotreated vegetable oil; HEFA = hydrotreated esters and fatty acids; Source: See endnote 52 for this section. FAME = fatty acid methyl esters

74 (a similar share as in 2017). in as (a share similar year that total global the of 83% for accounted together which Brazil, and States United in the concentrated remains production played a strong role in increasing the domestic use of biofuels. of use domestic the in increasing role astrong played followed by a further 75 importing countries. importing 75 afurther by followed India, theCanada, Republic of Korea and the Netherlands, was exported. production) total of (10.6% fuel the of volume arecord approached, were limits blending as plateaued States United in the ethanol litres. billion 33 to arecord 15% increased production ethanol Brazil, In harvest. corn agood following 2018, during litres billion 61 to arecord 1.7% rose production ethanol US litres. billion 112 to litres billion 104 from 2018, during 7% than more increased production annual ethanol Global widespread agriculturalthe residues. country’s feedstock as use can that biofuels advanced on emphasis term amedium- with priority, greater given are being biofuels India, In biomethane. and biofuels advanced of use 3.5% least at of asub-target with 2030, by sector transport in the energy renewable 14% share of a for atarget sets 2018, in December approved 2020-2030, for Directive Energy EU Renewable revised the Europe, In fuels. low-carbon to use level federal the at an overallobligation setting by market the (RFS) driven has Standard Fuel Renewable the example, for States, United the In countries. and regions within regimes regulatory and policy the by strongly driven is market biofuel The 1.9 billion litres. billion 1.9 to 7% increased in 2018, globally fourth ranked which in Canada, 2025. by role an to important play are expected ethanol cellulosic of production large-scale the and technologies biofuel advanced and 2020, by province in every mandates blending initiating by expanded being is in petrol ethanol of use potential indirect land-use change impacts. change land-use indirect potential about and fuel and food between competition about concerns EU reflecting food, as used be could also that feedstocks on based biofuels conventional by met be can that target overall the greenhouse gas emissions. of levels lower provide can that fuels of use and development the incentivises which Standard, Fuel Carbon Low California’s as such China, Canada, Thailand and India. and Thailand Canada, China, contributed to an increase in domestic demand. domestic in increase an to contributed and advantage aprice gave it which prices, oil global rising and taxes federal lower from benefited also ethanol but fuel, the of 83 for accounted Brazil and States United the in production Ethanol of the global total. global the of 69 Not only did low global sugar prices favour production production favour prices sugar global low did only Not 58 The Directive also places a 7% cap on the share of share of the on cap a7% places also Directive The 66 68 % The top five importers of US ethanol were Brazil, were Brazil, ethanol US of importers five top The 55 Synergies exist with state-level initiatives initiatives state-level with exist Synergies

56 In Brazil, the RenovaBio initiative has has initiative RenovaBio the Brazil, In 63 The next-largest producers were producers next-largest The 64 59 67 65 Ethanol production production Ethanol While demand for for demand While 61 70 60 In China, the the China, In 62 Ethanol Ethanol 57 demand. to increase helping provinces, in additional was introduced blend ethanol a10% grain stocks, excess of make and use imports oil In Argentina, biodiesel production fell 15% to 2.8 billion litres, litres, billion to 2.8 15% fell production biodiesel Argentina, In litres). billion (1.9 Netherlands the and litres), billion 2.2 of a total (whichFrance produced alsoProduction in declined other major European producers: (8%) (5%). Germany (10%), Argentina and (13%), Indonesia Brazil (17%), States United were the producers country leading the and region, by producer biodiesel largest was the Europe litres. billion 1.5 to 23% increased production producer, fifth-largest the Thailand, In litres. billion 4.1 estimated an to 2018, during China in grew 25% production Ethanol was exported. some domestically, was used in Brazil produced ethanol the of most Although growth rate as in 2017 – to a record 5.3 billion litres. billion 5.3 – to a record in 2017 as rate growth –asimilar in 2018 13% increased in Brazil production Biodiesel litres. billion 6.9 record 14% to a rose production where States, United in the growth to mainly was due production in biodiesel increase global The Indonesia. and Argentina from imported biodiesel less-expensive from competition increased faced producers as to 2017 relative 6% was theAlthough production market down did not contract, in 2018. biodiesel of litres billion 15 some produced Europe litres. billion 41.3 to 5% around up in 2018, increased also biodiesel of production Global imports from Argentina andimports Indonesia. constrained which duties, anti-dumping US of impact the and RFS, in the biodiesel for opportunities increased crop, soya good 2018. in litres billion 1.4 reaching producer, sixth-largest the (70%), India Europe, but the country’s production fell 3% to 3.5 billion litres. billion to 3.5 3% fell production country’s the but Europe, produced from cassava in from cassava the south. produced although also the was fuel north-east, ofuse in corn the country’s biodiesel blending level in diesel from 8% to 10% in March 2018. in March to 10% 8% from in diesel level blending biodiesel in the an and increase harvest soya agood included factors countries in 2018 accounted for 53% of global production. global of 53% for accounted in 2018 countries five top The many countries. among spread is and priorities) (due to policy production ethanol than diverse geographically as a means to reduce oil imports. oil to reduce ameans as production biofuel boost to effort anational of part –as molasses of use greater allowing by –particularly in India production ethanol for used be can that feedstocks the surrounding 75 72 The growth was stimulated by changes in regulations in regulations changes by was stimulated growth The China’s ethanol production was based largely on the the on largely was based production ethanol China’s 80 Germany was again the largest producer in producer largest the was again Germany 74 83 Ethanol production also grew sharply in grew sharply also production Ethanol Factors behind this Factors included growth a 82 77 76 Biodiesel production is more Biodiesel 73 84 85 Contributing 71 To reduce 79 86 78 81

03 75 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

due in part to the US anti-dumping duties on biodiesel imports BIOENERGY INDUSTRY (Argentina’s largest market) and to uncertainties about whether Bioenergy requires a more complex supply chain than other the EU would re-apply similar duties to its imports of the fuel.87 renewable technologies, given the many potential feedstocks In Indonesia, production rose 30% to 4.1 billion litres in 2018.88 The and conversion processes for bioenergy and the need to collect, rise was due to higher domestic use following an increase in the process and convert biomass raw materials to fuels. With support blending levels in order to utilise surplus palm oil production. The from academia, research institutions and governments, the mandate for blending biodiesel with fossil diesel was increased to industry is developing and commercialising new technologies 20% for both the transport and power sectors.89 In addition, new and fuels, especially advanced biofuels for use in transport.99 mandates were introduced requiring 5% blending in fossil diesel used in the rail sector and 10% in the mining sector.90 Solid Biomass Industry After ethanol and biodiesel, HVO/HEFA accounts for most of the Many entities are involved in growing, harvesting, delivering, remaining biofuels consumed in the transport sector. The use of processing and using solid biomass to produce heat and HVO/HEFA is concentrated in Finland, the Netherlands, Singapore electricity. These range from locally based companies that and the United States.91 Global HVO production grew an estimated manufacture and supply smaller-scale heating appliances, to 12% during 2018, from 6.2 billion litres to 7.0 billion litres.92 regional and global players involved in the supply and operations Biomethane is used for transport mainly in the United States and of large-scale district heating and power generation technology. Europe. The United States is the largest producer and user of Bioenergy projects that produce electricity and/or heat often rely biomethane for transport, and domestic production of the fuel on solid fuels that are sourced locally – such as municipal solid has increased since 2015, when biomethane was first included wastei, residues from agricultural and forestry processes, and in the advanced cellulosic biofuels category of the RFS, thereby purpose-grown energy crops. The fuels also can be processed qualifying for a premium.93 US biomethane consumption grew and transported for use where markets are most profitable. For more than seven-fold between 2014 and 2017 and then increased example, the international trade in biomass pellets is growing another 13% in 2018 to some 22 petajoules (PJ).94 to meet requirements for fuels for large-scale heat and power In Europe, the other globally significant market for biomethane generation and to provide residential heating in markets where for transport, consumption increased 13% in 2017, to 7.8 PJ (latest the use of pellets is supported, notably in Europe but also 100 data available).95 Production and use were concentrated in increasingly in Japan and the Republic of Korea. Sweden (5.2 PJ), where methane production from food wastes is Global production and trade in wood pellets continued to encouraged as part of a sustainable waste reduction policy and expand in 2018, with production reaching an estimated where the use of biomethane in transport fuel is prioritised over 35 million metric tonnes.101 Wood pellets are used in industry its use for electricity production or for injection into gas grids.96 (mostly in power stations) and for heating residential and The next-largest European users of transport biomethane in 2017 commercial buildings. The United States was the largest producer were Germany (1.6 PJ), Norway (0.42 PJ) and the Netherlands and exporter of wood pellets in 2018 and had the capacity to (0.23 PJ). 97 produce 10.6 million tonnes (11.9 million short tons) annually in 102 Biofuels of all types have been used principally for road transport. 83 operating plants by year’s end. Actual US production in 103 The total quantity of biofuels used in aviation and shipping has 2018 was 7.3 million tonnes (8.2 million short tons). been very small (only 0.1% of all airline fuel in 2018), although US exports of wood pellets increased 16% in 2018 to these applications are seen as a long-term priority by both policy 5.4 million tonnes (6.1 million short tons).104 Most of the exports makers and the airline industry.98 went to Europe – primarily to the United Kingdom, although exports increased significantly to Denmark, Italy and the Netherlands.105 Canada exported some 2.7 million tonnes of pellets – a 60% increase from 2015 – primarily to the United Kingdom (1.6 million tonnes, representing 60% of Canadian 106 The United States produced exports) but also to Japan (0.6 million tonnes, or 24% of exports). The Russian Federation was a major producer and exporter of wood pellets as well: annual production capacity reached 3.6 million tonnes in 2018, although Russian plants were operating 7.3 107 at only a 50% load factor. Russian exports rose 30% for the million tonnes second year running and totalled 1.5 million tonnes.108 of wood pellets in 2018. In Europe, a number of biomass-fired CHP plants were commissioned or under construction during 2018, stimulated by measures designed to help achieve the EU’s Renewable Energy Directive targets for 2020 and 2030. For example,

i Municipal solid waste consists of waste materials generated by households and similar waste produced by commercial, industrial or institutional entities. The wastes are a mixture of renewable plant- and fossil-based materials, with the proportions varying depending on local circumstances. A default value is often applied that assumes that 50% of the material is “renewable”.

76 bed boiler technology in Kanda City, Fukuoka Prefecture. Fukuoka City, in Kanda technology boiler bed fluidised circulating on based plant bio-power MW a75 building supplying surplus electricity to the grid. to the electricity surplus supplying to mill in addition to an animal feed steam and electricity heat, provide and waste wood city’s the on will run it completed, when in Duiven; construction was under plant CHP biomass power plant. power abiomass as to operate power Mikawa coal-fired the converted Toshiba in addition, in 2019; operation to start was expected that plant bio-power MW 44 anew to construct Prefecture Fukuoka of City Omuta with to collaborate an agreement announced reached financialreached close. – country in the projects biomass expected four of one and Energy Independent Power Producer Procurement Programme Renewable country’s the under supported project such first – the imported pellets. imported using indigenous both as and fuel resources being established, is projects of pipeline a large in bioelectricity, interest rising stimulated has FIT agenerous from support where Japan, In residues. waste of types manure some and made frombriquettes scrap lumber, crop forest debris, residues, as well as pellets biomass using stations, power thermal coal-based all its at of co-firing biomass to start intention its announced NTPC, producer, power largest country’s the India, In waste. forest sourced locally by fuelled Spain, Coruña, in La plant power biomass MW 50 anew for were announced plans 2018, In well. as source an energy as increasingly used are being products Forest grid. to the delivered power surplus the with plants, bottling nearby to and mill sugar a to steam and electricity of MW 50 supplying wastes, sugarcane by fuelled is and in 2018 was commissioned Piasa Grupo by owned Mexico in plant biomass anew example, For elsewhere. attention increasing attracting are Brazil, in power and heat produce to used commonly residues, agricultural other and Bagasse annually to generate energy. generate to annually waste shell peanut of tonnes 50,000 to use expected is which facility, bioenergy MW 10 its of operation commercial began Prodeman producer peanut major the electricity, renewable of use the to support Program RenovAr country’s the of part surplus agricultural residue in fields. of burning the by caused air pollution the to reduce is objectives as well as wood pellets from Asia and North America. North and Asia from pellets wood as well as forests local from residues wood use will which Ishinomaki, in mill paper its at plant abio-power operating started Industries Paper to meet growing demand. to meet China in rapidly expanding is capacity Ethanol production 113 In South Africa, the Ngodwana Energy Biomass Project Project Biomass Energy Ngodwana the Africa, South In 119 Meanwhile, Sumitomo Heavy Industries was Industries Heavy Sumitomo Meanwhile, 117 Among the developments in 2018, Nippon Nippon in 2018, developments the Among 114

112

116 Netherlands, a 15 MW MW a15 Netherlands, commissioned in Sand commissioned was wood, sourced locally with fuelled plant, CHP capacity (MW) megawatt a 27 Kingdom, United in the 50,000 homes. some and park science and business to anearby power and heat renewable delivering began and wich 110 115 111 In Argentina, as as Argentina, In One of NTPC’s NTPC’s of One 118 109 Toshiba In the the In 120 ­

Crop Energies, were closed in 2018. were closed Energies, Crop and Vivergo by owned Kingdom, United in the plants production ethanol largest two the example, for permanently: or temporarily 2018. or going throughunder construction the approval in process were either litres million 8.4 producing of capable plants new 2017, of end and the at litres million 3.5 some totalled capacity to produce 530 million litres of ethanol annually starting in 2020. in starting annually ethanol of litres million 530 produce to expected is that in Sorisso plant million) ethanol 267 (USD corn 1billion BRL asecond, on ground broke also and Verde plant, Rio do Lucas litre million 265 its of capacity the to double plans announced Bioenergia FS Brazil’s in 2018. continued also corn meet its 10% blending mandates for ethanol and biodiesel. and ethanol for mandates blending 10% its meet country African the to help projects other three least at as well as facility production biofuel first Nigeria’s to develop aplan include companyThe memoranda signed of understanding with China that production to other high-value chemicals. slightly, shifting capacity ethanol its reduced meanwhile, ADM, in Indiana. plant anew building also and Ohio in Marion, facility a expanding began company the in and 2018 plants, ethanol 27 its of several at upgrades making by capacity its increasing is POET (ADM). Midland Daniels Archer and POET producers, ethanol largest two world’s to the home is States United The Liquid Industry Biofuels 76 million litre per year biodiesel plant in Sarnia, Ontario. Sarnia, in plant biodiesel year per litre million 76 anew to build plans announced Inc. Benefuel Canada-based 350,000 tonnes of straw and sweet sorghum. sweet and straw of tonnes 350,000 some and corn of tonnes year, 924,000 per consuming ethanol of litres 443,000 to produce capacity the with Mongolia in Inner plant million) 152 (USD million 960 aCNY to build plans announced Ltd industry. ethanol region’s the for markets future about to uncertainties have led biofuels” “food-based of role the limiting Directive Energy Renewable EU’s to the changes contrast, by Europe, In are low. prices sugar when and demand in increases to response in production in ramp-ups for room leaving capacity, below mills were operating sugar eight some however, in and 2018 utilised, fully not is capacity Production traditional ethanol feedstock. from sugar the country’s cane, fermentation on principally based is production ethanol Brazil, In biofuels continued in 2018, with the aim of producing fuels that that fuels aim producing of the with in 2018, continued biofuels advanced of use and production the demonstrate to Efforts year. per litres million 114 to litres million 45 from capacity production plant’s the doubled than more that project million 32 aUSD through in 2018 plant biodiesel Iowa Ralston, its upgraded and expanded Inc. Group Energy Renewable US-based America. North increasingly ambitious blending mandates in worldwide, especially to meet expanding been has capacity production biodiesel Global companies. Chinese of help the with in Nigeria projects biofuel several realise to 2018 in plans announced Corporation Petroleum National Nigerian the example, For world. in the elsewhere facilities production biofuel developing are also companies Chinese-based 2020. by in place to be expected is that mandate E10 a nationwide from including growing demand, in China to meet rapidly expanding is capacity production Ethanol 128 For example, China Beidahuang Industry Group Holdings Holdings Group Industry China Beidahuang example, For 125 This has led to some plants being shut down either either down shut being plants to some led has This 132 In response to rising demand in the United States, States, United in the demand to rising response In 123 The trend to produce ethanol from from ethanol to produce trend The 127 126 China’s ethanol production production ethanol China’s 122 129 133 To the north, 134 131 130 124 121

03 77 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

By year’s end, just five airports worldwide had biofuel distribution systems in place.

show improved sustainability performance.135 Some advanced In Europe, Eni (Italy) ramped up HVO production at its Venice biofuels can replace fossil fuels directly in transport systems refinery to 250,000 tonnes (320 million litres) in 2018 and aims to (“drop-in biofuels”), including in aviation and for blending in expand the facility’s capacity to 600,000 tonnes (770 million litres); high proportions with conventional fuels in road transport (such the company also expected its Sicily plant to come online in as HVO in diesel-fuelled vehicles).136 A number of different 2019.144 Total S.A. (France) received an operating licence for its pathways to produce advanced biofuels are under development La Mède biorefinery in the south of France, a conversion project and include bio-based fuels (from an array of feedstocks) in the that cost an estimated EUR 275 million (USD 315 million) and that form of ethanol, butanol, diesel jet fuel, gasoline, biomethanol and was scheduled to begin producing renewable diesel in 2019.145 137 mixed higher alcohols. There is increased emphasis on using non-food feedstocks to HVO/HEFA led the development of these new biofuels in 2018, produce HVO fuels.146 For example, Neste now produces its followed by ethanol from cellulosic materials such as crop HVO from 80% waste vegetable oils and residual materials residues and by fuels from thermochemical processes, including rather than from virgin feedstock.147 In 2018, UPM (Finland) gasification and pyrolysisi.138 Production of HVO/HEFA fuels undertook an environmental impact assessment for a proposed (based on feedstocks such as used cooking oil, tall oilii and second biorefinery, Kotka Biorefinery, that would produce some others) continued to increase to meet rising demand for both 500,000 tonnes (640 million litres) of advanced biofuels for road transport (especially for heavy-good vehicles) and aviation. transport using a different raw material base and technology than For example, “renewable diesel” based on HVO/HEFAiii supplied the tall oil used in the company’s Lappeenranta Biorefinery.148 The 10% of all diesel used for transport in the US state of California in renewable and sustainable feedstocks being considered include 2018, and HVO-derived fuels provided most of the biofuel used oil from Brassica carinata, a crop that UPM has been evaluating worldwide in aviation.139 in large-scale trials in Uruguay and that can be grown between harvests, thus complementing rather than competing with food In 2018, Neste (Finland), the world’s largest HVO producer, production.149 announced an investment of EUR 1.4 billion (USD 1.6 billion) to more than double its renewable diesel production capacity in The emerging cellulosic ethanol industry also saw progress in Singapore by adding a further 1.3 million tonnes (1.7 billion litres) 2018, with some of the technical and commercial difficulties of annual capacity.140 In the United States, where most of the of recent years being overcome and large-scale production remaining HVO expansion occurred, Renewable Energy Group increasing. However, only a small number of facilities was increased the combined capacity at its 13 biomass-based diesel operating successfully worldwide. In the United States, POET refineries to more than 2 billion litres per year, and began working and DSM’s Liberty plant in Emmetsburg, Iowa, which produces with Phillips 66 to build another large-scale renewable diesel ethanol from corn residues, was reported to be operating reliably 150 plant on the west coast.141 after the key issue of feedstock pre-treatment was resolved. Also in 2018, US-based World Energy acquired a biorefinery facility DuPont’s commercial-scale plant in Iowa, which was shut down in California from Paramount (formerly owned by Altair) that can temporarily in 2017 after the company’s merger with Dow, was produce 151 million litres per year of biojet fuel and renewable bought by Verbio (Germany), and production was expected to 151 diesel; in addition, the company announced a USD 350 million restart in 2020. investment over two years to increase total production capacity Elsewhere, the Chemtex cellulosic ethanol plant in Crescentino, to 1.15 billion litres per year.142 In Norco, Louisiana, the annual Italy, which was closed following the failure of the parent company capacity of the Diamond Green Diesel plant was expanded in Gruppo Mossi Ghisolfi (Italy) in 2017, was purchased at auction 2018 from 0.6 billion litres to more than 1 billion litres, and the by Versalis (part of Italy’s Eni).152 In Brazil, production was due company had plans for a further increase of 1.5 billion litres per to resume in early 2019 at GranBio’s 82 million litre per year year by late 2021.143 Bioflex 1 cellulosic ethanol plant.153 And in India, construction

i Biomass pyrolysis involves the thermal decomposition of materials at elevated temperatures in an inert atmosphere, producing a mixture of gases, liquids (pyrolysis oil) and solid biochar. ii Tall oil is a mixture of compounds found in pine trees and is obtained as a by-product of the pulp and paper industry. iii In some markets HVO/HEFA fuels used as fossil diesel replacements are called renewable diesel.

78 IAF expects to begin using the biofuel in its fighter jets. fighter in its biofuel the using to begin expects IAF the succeed, trials flight additional if oil; jatropha using fuel biojet a10% with was flight-tested plane transport an AN-32 when time first the for biofuel blended with aircraft amilitary flew (IAF) Force Tacoma International Airport with access to biojet fuel. to biojet access with Tacoma Airport International Seattle- at operating all airlines to provide aplan on collaborate will – Airlines Spirit and Airlines Horizon Lines, Air Delta Airlines, Alaska –including 13 airlines that announced Seattle of Port the ii i fuels. the of year per litres million 0.13 produce to capacity the with Japan, in production such million); first the 54 is this (USD 6billion JPY of an investment on Yokohama based its at oil plant, cooking waste and algae from biodiesel and biojet of production mass (Japan)Euglena started the company with the airline Japanese In partnership ANA, to Zurich. Francisco San from flight 787 aBoeing powered fuel jet conventional 70% and oilseed carinata 30% of blend biojet a when to date journey biofuel transatlantic non-stop longest United Airlines the operated in theAmong milestones 2018, in 2018. fuel aviation of fraction asmall only replaced fuels these continued inDevelopments in the of use biofuels aviation, although Authority). andNetherlands the Port the of AkzoNobel France, of Liquide (along Air with Amsterdam of city Dutch in and the Minnesota of state US in the in China, projects technology, including waste on its gasification based projects potential of anumber on year. work (Canada) Enerkem continued during the further also developed as pyrolysis and gasification such Commercialisation of processes thermal biofuel advanced in 2018. Wisconsin in Stanley, facility their at plant ethanol based corn- and adual cellulosic of construction the announced States) United (both LLC Bioethanol Ace and LLC D3MAX production. lower-cost allow for can facilities and plants the of sharing The in 2018. expanded facilities ethanol corn-based at fibre, kernel as such residues, corn from ethanol cellulosic of production The feedstock. as straw rice of tonnes 200,000 using annually ethanol of litres million 30 produce to expected is facility million 135 USD Ltd’s Corporation Petroleum Bharat plants: ethanol cellulosic scheduled 12 of first the on in 2018 started Savannah, Georgia, to Van Nuys, California. Van to Nuys, Georgia, Savannah, from travelling biofuels, on kilometres 4,000 than more of distance arecord flew jet G280 its that announced Aerospace Gulfstream agreements. offtake long-term through future in the biofuel of litres 6billion of atotal to purchasing committed had worldwide airlines and in place, systems distribution biofuel had airports five biofuels, used had flights 150,000 than more end, year’s By gasoline blend-stock fuels using fuels Fischer-Tropschgasoline blend-stock and diesel jet renewable of litres) million (57 gallons million 15 than into more biomass waste tonnes) wood of metric (123,000 tons dry 136,000 some to convert plans which Oregon, Lakeview, in biorefinery LLC Biofuels Rock Red the on construction began forestry residues and residues other waste materials. forestry from fuels aviation renewable with airline the to supply Preem, company, oil largest Sweden’s with an agreement signed it 2018 in and 2030, by biofuel with flights domestic on used fuel jet its of

Equivalent 1.8% to annual about aviation of use. fuel Fischer-Tropsch gas to products. monoxide hydrocarbon synthesis hydrogen containing andcarbon are used to convert technologies 163 The Swedish airline SAS aims to replace all all replace to aims SAS airline Swedish The 156 IR1 Group (United States) States) (United Group IR1 164 161 In the United States, States, United the In And the And Indian Air i technology. 154 165 162 157 159 160 158 155 ii

cubic metres of biogas that will be upgraded to biomethane. upgraded will be that biogas of metres cubic 8 million to produce companies pharmaceutical nearby the from annually waste of tonnes 300,000 will use that Kalundborg of city in the plant abiogas of construction completed Denmark) was being added to an existing digester facility that uses garden garden uses that facility digester to an existing added was being system upgrading agas Beerse, of municipality Belgian the In greenhouse. anearby by used will be heat waste year, per the and (MWh) electricity of megawatt-hours 1.4 into some converted to be is biogas the energy; into renewable waste food and farm will and convert in 2019 operation start to in Yabu was expected that Japan City, facility production way waste-to-biogas anew on was under construction Asia, In prominent producer in beef Argentina. Energia, for project Arrebeef a digestion a waste-to-energy to develop million) contract 1.9 million(USD 1.7 awarded aEUR was States) (United Fluence company treatment wastewater the 2018, In countries. to more expanding now is it America, North and in Europe mainly deployed been has technology the Although producing biogas. were states US in all 50 sites 2,200 and in Europe digesters 10,000 than more in and 2018 practice, common increasingly an is heat and electricity to generate biogas of use The fuel. heating or transport a as used and pipelines into gas injected be can which fuel, biomethane to produce biogas of refining and production the on are focusing makers policy and deployed, widely and developed are Such technologies mechanisms. now wellother support FITs favourable by and was supported growth Industry plants. in CHP generation, often producing biogas for use in electricity was on sector biomass gaseous in the focus the recently, Until Industry Biomass Gaseous operation by the end of 2018. of end the by operation were in installations biomethane 500 than more Europe, In transport. for directly used being or heating for use for pipelines gas into natural injected being either biomethane refined the with deployed, widely being are now to biomethane biogas converting and producing for route sectors. to the heat and decarbonising transport important an as this view increasingly makers Policy pipelines. gas natural into injection its facilitating impurities, and dioxide carbon the removing by to biomethane upgraded be can Biogas also will be fed into the electricity grid in Buenos Aires. in Buenos grid electricity into the fed will be also electricity surplus and costs, lower to help own operations in its use will ArreBeef which heat, and to electricity conversion for biogas annually of biogas. of annually MWh 50,000 some of equivalent energy the will produce that Mindanao in Philippines Dole for facility a operate and build Ventures to design, million) 19 Biogas Surallah (USD with to work 1billion PHP pledged has Investments Pacific Metro Philippines, OMR 56 million (USD 146 million) in waste disposal costs. million) 146 disposal in million(USD waste 56 OMR estimated country’s the annually, to waste reduce helping food of tonnes 500,000 than more from electricity to produce expected million) 130 million (USD are 50 OMR of a cost at in Oman built 166 170 In the Middle East, four biogas plants to be to be plants biogas four East, Middle the In 173 Ørsted and Bigadan (both (both Bigadan and Ørsted 167 The system will produce will produce system The 168 172 169 Systems Systems In the the In 171 174

03 79 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

and vegetable waste In Europe, more than from local households GEOTHERMAL POWER as feedstock; the aim is to AND HEAT upgrade 25% of the gas 500 GEOTHERMAL MARKETS that is produced and to use 175 biomethane the rest in a CHP plant. Geothermal energy is harnessed for the generation of electricity installations The United States was and for various thermal applications, including space heating and home to numerous industrial heat input. Total geothermal energy output in 2018 was were in operation by the biomethane facilities in estimated at 630 PJii, with around half of this in the form of electricity end of 2018. 2018, and deployment (89.3 TWh).1 Estimates of thermal energy consumption (also known has been stimulated as “direct use”) are more uncertain than those for electricity, due to by the inclusion of biomethane in the RFS. Anaergia (Canada) data collection challenges. Some geothermal plants produce both was building an organic waste-to-energy facility in the city of electricity and heat for various thermal applications. Rialto, California that aims to process 700 tonnes of food and An estimated 0.5 GW of new geothermal power generating 300 tonnes of biosolids daily to produce biomethane (renewable capacity came online in 2018, bringing the global total to around i 176 natural gas , or RNG) and electricity. In Hawaii, the state’s gas 13.3 GW.2 Turkey and Indonesia remained the leaders for new utility commenced operations at a biomethane facility at the installations and accounted for about two-thirds of the new Honouliuli Wastewater Treatment Plant in Honolulu that converts capacity installed.3 Other countries that added capacity in 2018 177 biogas derived from sewage waste into pipeline-quality RNG. (ordered by scale) were the United States, Iceland, New Zealand, In China, where biomethane plants have been developed rapidly in Croatia, the Philippines and Kenya.4 (p See Figure 21.) recent years, some 140 plants were in operation countrywide by the At year’s end, the countries with the largest amounts of geothermal 178 end of 2018. The German company EnviTec began work on its power generating capacity were the United States, Indonesia, the fifth biogas project in China, a facility in Shanxi where the biogas will Philippines, Turkey, New Zealand, Mexico, Italy, Iceland, Kenya be converted to biomethane, compressed and sold locally from the and Japan.5 (p See Figure 22 and Reference Table R15.) plant premises.179 Elsewhere in Asia, 200 buses in Karachi, Pakistan, will be powered by biomethane produced from 3,200 tonnes of cow Turkey completed several geothermal power projects in 2018, 6 manure.180 And India’s Sustainable Alternative Towards Affordable raising its installed capacity by 21% (219 MW), to 1.3 GW. Turkey Transport initiative is expected to support the opening of 5,000 ranks fourth globally for cumulative geothermal power capacity, biomethane plants by 2023, which would use agricultural waste, having built up more than 1 GW of capability in only six years, 7 municipal solid waste and cattle manure as feedstock to produce between 2013 and 2018. 15 million tonnes of biomethane annually, helping to displace half of The largest single unit completed in 2018 was the 65.5 MW Unit 2 India’s imports of natural gas.181 at the Kizildere III plant, which became Turkey’s largest geothermal 8 Biomethane also is being used as a fuel for marine transport. power plant (165 MW) as a result. Other projects completed during Skangas (Norway) has supplied biomethane from its biogas the year include the 19.4 MW Baklaci, the 13.8 MW Buharkent, the 9 facility in Lidköping for use in a tanker ship.182 During 2018, 25 MW 3S Kale, and the 32 MW Pamukören Unit 4. A final addition, 10 the shipping company was building five more vessels that the 30 MW Alsehir Unit 3, joined Turkey’s fleet in November. can be fuelled by biomethane (when the fuel is available) as The majority of Turkey’s geothermal power plants use binary-cycleiii well as by liquefied natural gas.183 Norway-based cruise technology, as do all of the country’s plants under construction.11 operator Hurtigruten announced in 2018 that it plans to invest Conversely, most existing geothermal plants around the world EUR 742 million (USD 849 million) to power its ships with use flash- or dry-steam technologies, which are suitable for high- biomethane starting in 2021.184 temperature resources. Globally, binary-cycle technology has been the fastest-growing technology in recent years, due in part to rising use of relatively low-temperature resources.12 Indonesia continued to expand its geothermal capacity with 140 MW of additions – surpassing the Philippines by a small margin to rank second globally for installed capacity – and ended 2018 with 1.95 GW in operation.13 In North Sumatra, the third and final 110 MW unit of the Sarulla plant was commissioned in 2018, following completion of the first two units in 2017.14 The Sarulla

i In some markets, notably in North America, biomethane is called renewable natural gas. ii This does not include the renewable final energy output of ground-source heat pumps. (p See Systems Integration chapter.) iii In a binary-cycle plant, the geothermal fluid heats and vaporises a separate working fluid (with a lower boiling point than water) that drives a turbine to generate electricity. Each fluid cycle is closed, and the geothermal fluid is re-injected into the heat reservoir. The binary cycle allows an effective and efficient extraction of heat for power generation from relatively low-temperature geothermal fluids. Organic Rankine Cycle (ORC) binary geothermal plants use an organic working fluid, and the Kalina Cycle uses a non-organic working fluid. In conventional geothermal power plants, geothermal steam is used directly to drive the turbine.

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plant is the country’s first geothermal combined-cyclei unit, investment, due largely to drilling delays by developers (p see combining technologies from two manufacturersii to utilise both Geothermal Industry section).17 Although the country’s geothermal steam and extracted brine from the geothermal field to increase power potential is estimated at 29 GW, less than 7% of that has the plant’s efficiency.15 Indonesia also started operation of its been developed due to high resource risk and high drilling costs.18 30 MW Karaha Unit 1 in April 2018.16 Geothermal power supplies around 5% of the country’s electricity.19 In the latter half of the year, the Indonesian government noted Many of the challenges facing Indonesia’s geothermal industry that it was not reaching its targets for accelerated geothermal are universal, namely economic risk stemming from long project

i A geothermal combined-cycle unit uses a binary system to extract residual energy from the steam exiting the high-pressure flash turbines, maximising energy extraction and overall plant efficiency. ii These are Toshiba (Japan), which manufactures conventional steam turbines, and Ormat Technologies (United States), which manufactures binary-cycle turbines (for energy extraction from brine).

FIGURE 21. Geothermal Power Capacity Global Additions, Share by Country, 2018

42% 27% Turkey Indonesia MARKET AND INDUSTRY TRENDS

Next 4 countries

New Zealand 5% 11% 9% 12% Croatia 3% United States Iceland Philippines 2% Kenya 2%

Note: Total may not add up due to rounding. Source: See endnote 4 for this section.

FIGURE 22. Geothermal Power Capacity and Additions, Top 10 Countries and Rest of World, 2018

Megawatts

3,000 Added in 2018 +58 2,500 2017 total

+140 2,000 +12

1,500 +219 +25 +18 1,000 +45 +11

500

0 United Indonesia Philippines Turkey New Mexico Italy Iceland Kenya Japan Rest of States Zealand World

Source: See endnote 5 for this section. A89)K LF<@ G<10-) <*>506)@ 9F) 98; "! >80*9-<)@ ,>>8-6<*1 98 9F) M)@9 ,N,<5,M5) 6,9, ,9 9F) 9<+) 8G ;0M5<>,9<8*O

81 RENEWABLES 2019 GLOBAL STATUS REPORT

Turkey and Indonesia accounted for around two-thirds of new geothermal power capacity in 2018.

lead-times, resource and exploration risk, and overall high from a set of low-temperature, binary-cycle power modules.31 development cost.20 Due in part to such industry-specific barriers, Historically, Iceland has been a major producer of geothermal some of the countries that pioneered geothermal energy use – energy (heat and power) from high-temperature sources; however, such as Italy, New Zealand and the United States – have not seen this project was designed to harness low-temperature resources of significant growth in recent years. Nonetheless, both the United around 100 degrees Celsius (°C).32 Iceland’s 753 MW of operating States and New Zealand completed new projects in 2018. geothermal power capacity (26% of total power capacity) – some The United States remains the global leader for installed of which also provides thermal co-generation for district water geothermal power capacity by a wide margin. In 2018, the and space heating (see below) – accounted for around 31% of the 33 country brought online at least 58 MW (net) in three facilities, country’s electricity generation in 2018. for a total of 2.54 GW of net operating capacityi.21 One addition Croatia completed its first geothermal power plant in 2018, was the 48 MW third phase of the McGinnis Hills geothermal ranking sixth worldwide for new capacity. The 17.5 MW Velika complex in Nevada, which is said to use two new-generation Ciglena plant generates electricity from a medium-enthalpyii binary units – increasing plant efficiency and availability – where resource. The thermal reservoir was discovered in 1990 during an three units would have been required with earlier technology.22 unsuccessful exploration for oil deposits.34 Croatia plans further Also in Nevada, a Chinese technology developer repowered the development of geothermal resources in an effort to boost the Wabuska plant with 4.4 MW of capacity.23 share of renewables in its energy mix.35 In the US state of New Mexico, a 14 MW binary power plant was The geothermal sector of the Philippines has seen little deployed to repower an existing 4 MW facility with improved and development in recent years, but in 2018 the country completed its more-efficient binary technology.24 Geothermal power capacity in first new geothermal capacity since 2014, the 12 MW Maibarara-2 the United States generated 16.7 TWh in 2018, a notable 5% increase extension.36 The Philippines ended the year with a total of over 2017, representing 0.4% of US net generation.25 1.93 GW in operation.37 New Zealand has seen only modest growth in its geothermal In 2018, Kenya had a modest upgrade to its geothermal facilities, power capacity in recent years, due mostly to stagnant electricity with the last 11 MW stage of phased expansion of the Olkaria III demand and limited need for any new power generating capacity.26 complex, boosting the plant’s capability to 150 MW.38 The In 2018, the country commissioned the 25 MW Te Ahi O Maui country’s total installed capacity at year’s end was 0.68 GW.39 binary-cycle plant. This relatively small power plant, like others Africa’s geothermal activity is concentrated along the East of its kind, must move large quantities of geothermal fluid: three Africa Rift System, extending from Djibouti on the Gulf of Aden production wells and two reinjection wells retrieve and return up to south through Ethiopia, Kenya and Tanzania to Malawi, where 15,000 tonnes of fluid from the geothermal reservoir each day.27 the great lakes of Tanganyika and Lake Malawi outline some of Originally considered a 22 MW project, it was subsequently uprated the rift features that make the region rich in geothermal heat.40 to 25 MW, which has reduced the project cost per megawatt to Several projects were under way in Kenya and Ethiopia during USD 5.45 million.28 Geothermal power contributed 17% of New 2018.41 However, development of geothermal resources in Zealand’s electricity production in 2018.29 Eastern Africa, as in other geothermally rich regions, has been Iceland followed the United States for new capacity brought online hampered by high cost and project risk. Other challenges include during the year. The 90 MW Þeistareykir geothermal power plant inadequate finance and grant support for exploration, inadequate was completed in 2018, with commissioning of the second of two trained human capacity, and a lack of clear and coherent policy 45 MW stages.30 Iceland also saw initial electricity production and legislation across the region.42

i In general, a power plant’s net capacity equals gross capacity less the plant’s own power requirements. In the case of geothermal plants, net capacity also may reflect the effective power capability of the plant as determined by the current steam production of the field and running capacity, as opposed to the total name- plate capacity of its generator(s). The total gross nameplate generating capacity of US geothermal power plants was 3.77 GW at the end of 2018. See endnote 21 for this section. ii Enthalpy refers to the energy potential of the geothermal resource, which is determined by three characteristics: heat, fluid (water) and flow (the last made possible by relative permeability of the sub-surface rock). Harnessing geothermal energy for electricity generation depends on the presence of both heat and water in sufficient quantities. A low-to-medium-enthalpy resource is characterised by temperatures below approximately 200°C. See, for example, US Department of Energy, “Geothermal: electricity generation”, https://www.energy.gov/eere/geothermal/electricity-generation.

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Several islands in the Caribbean also hold significant untapped (5.1 kilometres of vertical depth) that supply geothermal brine geothermal resources and have strong incentives to siphon the at over 150°C.55 heat, but they lack the economic leverage to do so. Among them On the outskirts of Munich, the second of six planned boreholes is the Commonwealth of Dominica, an island that is heavily reliant was completed for what is expected to be Germany’s largest on diesel generators for electricity and that has one of the highest geothermal plant at 50 MWth, enough to provide heat for 80,000 electricity rates in the world. Following a setback from Hurricane city residents.56 The borehole exceeded expectations, providing Maria in 2017, preparations for Dominica’s 7 MW geothermal water at 108°C from a vertical depth of 3 kilometres.57 This facility plant received renewed commitment of international support in and five existing geothermal plants around the city are meant to 2018 and early 2019. The plant was backed by a EUR 2 million help Munich achieve its goals of generating all district heating (USD 2.3 million) grant from the EU’s Caribbean Investment Facility, from renewable energy by 2040 and of becoming a carbon- a USD 27 million loan from the World Bank and other grants.43 neutral municipality by 2050.58 On the nearby island of Nevis, exploratory drilling undertaken in In France, geothermal district heating continued to expand in and 2018 revealed enough permeability and sufficient temperatures around Paris, drawing on an expansive low-enthalpy aquifer. In to suggest 10.5 MW of potential gross capacity.44 This is enough 2018, the communities of Grigny and Viry Châtillon celebrated to cover the island’s current peak power demand of 9 MW.45 the inauguration of a joint geothermal network that serves 10,000 In Central America, Costa Rica was nearing completion of homes and public buildings.59 In the Paris suburb of Cachan, two its 55 MW Las Pailas II plant by year’s end and anticipated new boreholes replaced existing wells.60 commissioning it in the first half of 2019.46 The national utility In the Alsace region of France, geothermal drilling had great expects that the plant will help decarbonise the country’s success in producing the hottest (200°C) well in continental energy sector and displace some of the imported power and Europe, outside of those in Tuscany.61 Located in the Strasbourg thermal generation that has replaced hydropower during recent, metropolitan area, the French well is the continent’s deepest MARKET AND INDUSTRY TRENDS unusually dry conditions.47 (4.6 kilometres) and is expected to provide electricity and enough Direct extraction of geothermal energy for thermal applications heat (via a district heating system) to supply 26,000 residents.62 – or geothermal direct usei – increased by an estimatedii Further drilling was planned for 2019.63

1.4 gigawatts-thermal (GWth) of capacity in 2018, for an estimated To the east, Hungary saw expanded capacity in geothermal 48 global total of 26 GWth. These applications span a diverse set district heating with the completion of a new well for a district of uses. Space heating (including via district heating networks) heating system that was established in 2017. The project’s three is one of the largest and fastest growing applications, while wells serve nearly 24,000 dwellings in the city of Győr.64 swimming pools and public baths are about equal in scale but growing less rapidly.49 Together, these applications represent an In China, efforts are under way to replace coal-fired heating with estimated 80% of both direct use capacity and consumption.50 renewable thermal energy – including geothermal energy – to 65 The remaining approximately 20% is for applications that include achieve “smokeless cities”. Those efforts are being implemented domestic hot water supply, greenhouse heating, industrial by energy developers such as China Petrochemical Corporation process heat, aquaculture, snow melting and agricultural drying.51 (Sinopec, China), which launched its Green Action Plan to become a low-carbon enterprise by 2023.66 While the emphasis Europe is one of the most active markets for geothermal heat, is on increased use of natural gas and the build-up of pipeline although this market is highly localised and not very large in infrastructure, the Plan also makes provisions for expanding absolute terms. At the end of 2018, Germany had 37 relatively the company’s geothermal heating capacity to serve 2.1 million small (each at 40 megawatts-thermal, MWth, or less) geothermal urban residents.67 Engaged in a joint venture (formed in 2006) plants, totalling 336 MWth of thermal capacity and 37 MW of with Arctic Green Energy power capacity.52 These facilities use low-to-medium enthalpy (AGE, Iceland) to advance resources (about 160°C or less), mostly for district heating, geothermal development although seven of the plants use binary technology to produce in China, the company Europe 53 electricity in addition to heat. announced in 2018 that is one of the most active New plants continue to come online in Germany. For example, it would replace energy markets for geothermal in the Bavarian community of Holzkirchen, south of Munich, a derived from coal with heat. 3.4 MW CHP plant started test operations in late 2018, supplying geothermal energy in heat to the local district heating system, with power production 20 cities nationwide by 68 expected to begin a few months later.54 The plant uses binary- 2023. cycle technology to harness energy from two deep wells

i Direct use refers here to deep geothermal resources, irrespective of scale, that use geothermal fluid directly (i.e., direct use) or by direct transfer via heat exchangers. It does not include the use of shallow geothermal resources, specifically ground-source heat pumps. (p See Heat Pumps section in Systems Integration chapter.) ii This estimate, based on extrapolation of 2014 and earlier data, is subject to high uncertainty.

83 RENEWABLES 2019 GLOBAL STATUS REPORT

GEOTHERMAL INDUSTRY The Asian Development Bank (ADB) set its sights on supporting geothermal energy development in China. The ADB signed In 2018, the global geothermal industry continued to express USD 250 million in loans to Iceland’s AGE and to Sinopec Green measured optimism for geothermal development, tempered by Energy (a joint venture of AGE and Sinopec) to support the ongoing concerns about various industry-specific challenges as development of geothermal district heating. Sinopec said that it well as by the perception of insufficient or wavering government hoped to replicate the collaboration across Asia.80 support. International agencies and development banks explored opportunities to overcome some of these challenges and to fund In addition to direct financial assistance, the availability of better new development. and more complete information about geothermal resources helps to attract new investment and to generate new successful Global investment in the geothermal sector in 2018 amounted projects that otherwise might not occur. To that end, several to an estimated USD 2.2 billion.69 This represents a very small international organisations and the World Bank joined forces to portion (less than 1%) of all renewable energy investment for apply the UNFCii Geothermal Specifications to generate a more the year, excluding large hydropower projects.70 holistic view of geothermal potential within a country.81 The first The Geothermal Development Facility for Latin America (GDF), effort of this collaboration was to share with the Indonesian founded in 2016 as the first multi-donor initiative to promote government and investors how the UNFC system can help geothermal energy in the region, announced a second round of classify geothermal fields on the island of Flores, underscoring funding in October 2018. The EUR 13 million (USD 14.9 million) the need to differentiate between the technical feasibility and the in grants will support surface studies and exploratory drilling in economic viability of a project.82 several countries.71 The hope is that these grants, which are a part Identifying region- or country-specific obstacles to geothermal of GDF's original fund of EUR 55 million (USD 63 million), will seed development was the topic of two studies published in 2018. new viable projects and catalyse additional investment in several While regional in scope, both studies identified common themes. hundred megawatts of capacity.72 For one study, on the opportunities and challenges for expanded In Mexico, the Inter-American Development Bank (IDB) approved a geothermal development in Latin America and the Caribbean, modification of a loan of nearly USD 109 million to stimulate private the key themes were: investment in geothermal development.73 The loan is targeted at n unmitigated geothermal resource risk in early project development; reducing investment risk at each stage of development, including exploration, drilling, field preparation, construction and operation. n unfavourable policy and regulatory frameworks and insufficient Over a 10-year period, the IDB’s goal in Mexico is to finance up market incentives; to 300 MW of geothermal power capacity and to leverage other n lack of institutional capacity in government and local technical public and private funds for a total of USD 4.2 billion invested in the capacity; development of proven geothermal reserves.74 n lack of financing and access to risk-mitigating grants, cost Also during 2018, the World Bank, in co-ordination with several sharing and insurance; and other development partners, initiated plans for the Indonesia n insufficient environmental and social safeguards and Geothermal Resource Risk Mitigation (GREM) Project, designed associated investment risk.83 to scale up investment in geothermal energy development in Indonesia.75 The World Bank plans to provide USD 650 million in The second study, focused on development barriers in Asian financing for risk mitigation of exploratory drilling in the country, markets, touched on the same themes but identified some and another USD 10 million for technical assistance.76 The Bank variability among countries. Technical barriers were found to be expects that the project will leverage around USD 4 billion of disproportionately large in the Republic of Korea, whereas in the commercial project finance by 2026, and that it will add around Philippines fiscal challenges were most prominent. Meanwhile, 1 GW of capacity by 2030.77 Japan faces significant environmental and social barriers to expanded use of geothermal energy, including concerns about In November 2018, the Green Climate Fundi approved potentially adverse impacts on traditional geothermal baths.84 USD 100 million in financing (92.5% as grants) for the first USD 410 million tranche of the GREM Project; this is to be Tangible evidence of such industry-wide barriers was evident in supplemented with World Bank loans of USD 225 million, with Indonesia in 2018. As noted earlier, the country is not meeting the remainder coming from private parties and the Indonesian its geothermal development targets, and the energy company government.78 A key feature of GREM is that it is designed such that Pertamina, which completed its 30 MW Karaha Unit 1 during up to 50% of any loan will be forgiven if a project fails to find sufficient the year, was circumspect about future developments.85 At a steam – a condition that reduces development risk considerably.79 total cost nearing USD 200 million (USD 6.7 million per MW),

i The Green Climate Fund is a global fund created to support the efforts of developing countries to respond to the challenges of climate change. In this regard, the Fund pays particular attention to the needs of highly vulnerable societies, including small island developing states. See endnote 78 for this section. ii United Nations Framework Classification for Resources.

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