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REN21 10 Years Report - Lessons Learned from Last Decade

36 Lessons Learned from Last Decade 5The past decade has shown that countries which put in place stable and predictable policy frameworks benefit the most from renewable energy deployment and related economic benefits such as increased employment, investment etc. Although there have been significant developments in the electricity sector, progress in the heating and cooling as well as the transport sectors needs to be further supported and galvanised. Policy Stability and Predictability are Key Globally, policies have largely driven the expansion of renewable energy. Since 2004, the number of countries promoting renewables through direct policy support has nearly tripled, and an ever-increasing number of developing and emerging countries is setting renewable energy targets and enacting supporting policies. However, recent years have also seen policy regression, with some countries reducing renewable energy support, at times retroactively, slowing market and industry development. Stability and predictability of policy frameworks are needed to underpin sustained deployment of renewable energy. The industry needs predictability of policy frameworks in order to build up production capacities, to develop new technologies and to expand skilled employees in many countries. The last decade has shown that those countries which developed stable and predictable renewable energy policy frameworks are those that were most successful in building a local renewable energy sector and workforce. Moreover there is a close correlation between supporting policies and the cost of renewable energy technology. The increase in the number of renewable energy policies saw the renewable energy market diversify into over 140 countries. As the number of countries with renewable energy policies and renewable energy markets increases there is a parallel decrease in risk for the technology. In 2004 the wind industry was in less than 10 countries; by the end of 2013 over 40 countries now have fully established wind markets. Bigger markets also result in economics of scale, lowering costs—especially for wind and solar PV—as was clearly seen over the last decade. As solar, wind, biomass, and other energy sources gain market share, the levelised cost of energy (LCOE) is becoming an important metric in the decision-making process for building new power generation. Strong policy signals from governments are essential to ensure that renewables are a cen- tral component of national energy supply chains. Renewable Power: First sector to be mainstreamed Renewable power generation technologies have arrived in the mainstream market. In 2004, when REN21 began operating, the global market share of new renewable-based power plants was only 8%; by 2013 this market share increased 29% (excluding large hydro) or 40% including large hydro. The Renewable Heating and Cooling Sector Lacks Progress To achieve the transition towards renewable energy, more atten- tion needs to be paid to the heating and cooling and transport sectors, as well as to integrated approaches that facilitate the use of renewables in these sectors. Globally, heating and cooling accounts for almost half of total global energy demand. However, this sector continues to lag far behind the renewable power sector when it comes to policies that support technology development and deployment. Experience has shown that well-designed sup- port policies have been highly effective in increasing the mar- ket expansion of renewable heating and cooling technologies. Mandatory regulations in the building sector can help increase the penetration of renewable heating and cooling technologies. Improving the accuracy of national data collection on heating and cooling supply and demand is also important. The distributed nature of heat supply and local demand make it difficult to know what sources are available and what is needed; this information is crucial for good policy development. Facilitating More-rigorous Adaptation of the Energy System to Increase Shares of Renewable Energy Today, the penetration of renewables is no longer a question of technology or economics but one of developing more flexible markets and smarter energy systems. Thus, the policy focus should be on transforming power grids to become more flexible, increasing demand-side integration, and integrating power systems with transport, buildings, industry, and heating and cooling sectors, with the support of regulations, business, and finance models.

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