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Growth of Renewables &Economic Trends

During the five-years from the end of 2004 through 2009, worldwide renewable energy capacity grew at rates of 10–60 percent annually for many technologies. For wind power and many other renewable technologies, growth accelerated in 2009 relative to the previous four years. More wind power capacity was added during 2009 than any other renewable technology. However, grid-connected PV increased the fastest of all renewables technologies, with a 60 percent annual average growth rate for the five-year period.

Selected Global  Indicators 2004 2005 2006 2007 2008 2009 2010
Wind power capacity (existing) 48 59 74 94 121 159 198 GWe
Solar PV capacity (grid-connected) 7.6 16 23 40 GWe
Solar hot water capacity (existing) 77 88 105 120 130 160 185 GWth
Solar cell production (annual) 6.9 11 24 GWe
Investment in new renewable capacity (annual) 30 38 63 104 130 160 211 billion USD
Hydropower capacity (existing) 950 980 1,010 GWe
Existing renewables power capacity, including large-scale hydro 895 930 1,020 1,070 1,140 1,230 1,320 GWe
Existing renewables power capacity, excluding large hydro 200 250 312 GWe
Ethanol production (annual) 30.5 33 39 50 67 76 86 billion liters
Countries with policy targets for renewable energy use 45 49 68 79 89 98
Biodiesel production (annual) 12 17 19 billion liters

In 2008 for the first time, more renewable energy than conventional power capacity was added in both the European Union and United States, demonstrating a “fundamental transition” of the world’s energy markets towards renewables, according to a report released by REN, a global renewable energy policy network based in Paris. In 2010, renewable power consisted about a third of the newly built power generation capacities.

Global Renewable Power Capacity Excluding Hydro

According to a 2011 projection by the International Energy Agency, solar power generators may produce most of the world’s electricity within 50 years, dramatically reducing the emissions of greenhouse gases that harm the environment. Cedric Philibert, senior analyst in the renewable energy division at the IEA said: “Photovoltaic and solar-thermal plants may meet most of the world’s demand for electricity by 2060 — and half of all energy needs — with wind, hydropower and biomass plants supplying much of the remaining generation”. “Photovoltaic and concentrated solar power together can become the major source of electricity,” Philibert said.

Economic trends

A 2011 IEA report said: “A portfolio of renewable energy technologies is becoming cost-competitive in an increasingly broad range of circumstances, in some cases providing investment opportunities without the need for specific economic support,” and added that “cost reductions in critical technologies, such as wind and solar, are set to continue.” As of 2011, there have been substantial reductions in the cost of solar and wind technologies:

The price of PV modules per MW has fallen by 60 percent since the summer of 2008, according to Bloomberg New Energy Finance estimates, putting solar power for the first time on a competitive footing with the retail price of electricity in a number of sunny countries. Wind turbine prices have also fallen – by 18 percent per MW in the last two years – reflecting, as with solar, fierce competition in the supply chain. Further improvements in the levelised cost of energy for solar, wind and other technologies lie ahead, posing a growing threat to the dominance of fossil fuel generation sources in the next few years.

The International Solar Energy Society argues that renewable energy technologies and economics will continue to improve with time, and that they are “sufficiently advanced at present to allow for major penetrations of renewable energy into the mainstream energy and societal infrastructures”. Indicative, levelised, economic costs for renewable power (exclusive of subsidies or policy incentives) are shown in the Table below.

Power Generation Typical Characteristics Typical Electricity Cost(US Cents/KWh)
Large hydro Plant size: 10 – 18,000 MW 3-5
Small hydro Plant size: 1-10 MW 5-12
Onshore wind Turbine size: 1.5 – 3.5 MW 5-9
Offshore wind Turbine size: 1.5 – 5 MW 10-14
Biomass power Plant size: 1-20 MW 5-12
Geothermal power Plant size: 1-100 MW 4-7
Rooftop solar PV Peak capacity: 2-5 kilowatts-peak 20-50
Utility-scale solar PV Peak capacity: 200 kW to 100MW 15-30
Concentrating solar thermal power (CSP) 50-500 MW trough 14-18

As time progresses, renewable energy generally gets cheaper, while fossil fuels generally get more expensive. Renewable Energy technologies are declining in price for three main reasons:

  • First, once the renewable infrastructure is built, the fuel is free forever. Unlike carbon-based fuels, the wind and the sun and the earth itself provide fuel that is free, in amounts that are effectively limitless.
  • Second, while fossil fuel technologies are more mature, renewable energy technologies are being rapidly improved. So innovation and ingenuity give us the ability to constantly increase the efficiency of renewable energy and continually reduce its cost.
  • Third, once the world makes a clear commitment to shifting toward renewable energy, the volume of production will itself sharply reduce the cost of each windmill and each solar panel, while adding yet more incentives for additional research and development to further speed up the innovation process.