IEA examines renewable energy policies, markets

Renewable energy shows potential to help resolve energy security issues and environmental challenges, but more attention needs to be paid to renewable energy policies and markets, the International Energy Agency (IEA) said.

June 8, 2004

3 min read

By OGJ editors

HOUSTON, June 8 -- Renewable energy shows potential to help resolve energy security issues and environmental challenges, but more attention needs to be paid to renewable energy policies and markets, the International Energy Agency (IEA) said.

Early this month, the IEA released its report, "Renewable Energy—Market and Policy Trends in EIA Counties," documenting the experiences of IEA countries since the oil crisis of the 1970s initiated investment in renewable research and development.

"Renewables could play a key role in the global energy mix with further commitment to research and development and technology innovation, but our study shows that, unfortunately, we still have a long way to go," said Claude Mandil, IEA executive director.

Significant market growth for renewable energy stems from combinations of policies, the report said. In Spain, various incentives support wind technology, including tariffs, low-interest loans, and grants. In Japan, photovoltaic technology has been supported by extensive research investments to increase the technology's competitiveness,

Energy supply mix
In 2001, the most recent year for which complete official data was available, the share of renewable energy in total primary energy supply of IEA counties was 5.5%. The rest of the energy supply mix was oil 41%, natural gas 21.4%, coal 20.5%, and nuclear 11.6%.

The share of renewable energy in the 1970 energy mix was 4.6% compared with 5.5% in 2001. IEA's report noted that most of the increase in renewables came by 1990, when renewables supply grew by 2.8%/year. Some renewables grew more slowly during 1990-2001, including hydropower, traditional bioenergy, and geothermal energy.

"As a result, renewable energy sources, which fueled 24% of total electricity production in 1970, accounted for only 15% by 2001," the IEA said. "Solar and wind electricity generation have increased significantly, growing by an average of almost 18%/year from 1970 to 2001, and the pace has quickened in the most recent decade to over 20%/year.

"But these renewables have started from a very low level and are concentrated in just a few countries. Therefore, their rapid growth does not compensate for the slower growth of mature renewables," IEA said.

In 2001, 86% of the installed and wind capacity was in Denmark, Germany, Spain, and the US. About 85% of the installed solar photovoltaic capacity was in Germany, Japan, and the US.

"Our commitment to renewables should be more widely shared," Mandil said.

Government-funded energy research
Meanwhile, renewable energy technologies accounted for 7.7% of total government energy research, development, and demonstration funding during 1987-2002. During this period, only three technologies received more than 1% of total spending: solar photovoltaics, 2.7%, wind 1.1%, and bioenergy 1.6%. Renewables have received less research funding since 1987 than during 1970-1986.

"The declining share of public funding for energy RD&D allocated to renewable energy appears to be inconsistent with the political intentions of many IEA countries to increase the share of renewable. . .," IEA said.