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REN21 10 Years Report

42 Finance is key. Forecasts envisage the presence of new sources of financing such as insurance funds, pension funds, and sover- eign wealth funds, along with new mechanisms for financial risk mitigation. Numerous new business models will also emerge to support local energy services, utility services, transport, com- munity and cooperative ownership, and rural energy services. Some forecasts of annual investment in renewables by 2020 are in the range of USD 400–500 billion, up from USD 250 billion in 2013. Projections of average annual investment in the com- ing decades range between USD 300 billion and USD 1 trillion. Public support for renewables—in both direct and indirect forms as estimated by the IEA—stood at about USD 90 billion in 2011; this is expected to increase through the 2020s in a growing num- ber of countries. However anticipated amounts are expected to remain at levels significantly lower than public support for fossil fuels. With the dramatic growth of renewable energy markets over the past decade and economies-of-scale in the manufacturing sector, there have been dramatic technology improvements and cost reductions. Recent growth rates reflect a “take-off” phase that has seen many renewable energy technologies become mainstream investments and undergo dramatic advances in performance, cost, and scale. Hydropower, geothermal, and bio- mass power and heat are the most mature, and most projections show continued growth that reflects this status. Among other renewables, onshore wind power is closest to com- mercial maturity. There are numerous examples of unsubsidised wind power that are already competitive with conventional energy (in specific locations); additional projections of further technology and cost evolution have also been made. While off- shore wind power is more expensive than onshore, offshore has large—although uncertain—potential for cost reductions, not just for turbines, but also for logistics and long-term operations and maintenance costs. Solar PV has seen dramatic cost reductions in recent years. Projections show continued cost decreases, many possible technology advances, and full competitiveness with retail elec- tricity prices without subsidies. This so-called “grid parity” will occur in many jurisdictions soon—although according to some is already taking place—and will be more common worldwide by 2020. Concentrating solar thermal power (CSP) still has a large cost-reduction potential, with future opportunities for bulk power supply, for dedicated applications such as industrial heat supply and desalination, and for power grid balancing using multi-hour and multi-day embedded heat storage. While debates about the sustainability of so-called “first gen- eration” biofuels continue, many projections show large future markets for “advanced” biofuels from agricultural and forestry wastes, and from crops grown on marginal or otherwise unpro- ductive lands. A wide variety of new approaches to using biomass is also projected, such as growing international commodity mar- kets for wood pellets and bio-heating oil, greater use of biogas in a variety of applications, new types of “biorefineries” in agri- culture and forestry, and greater use of biomass in heat supply. Numerous experts point to the fact that future policies will evolve over time and will remain an essential part of renewable energy futures. The next decade will undoubtedly see a range of future policies to support renewable heating and cooling in buildings. New policies for electric power system integration will emerge, including market rules for balancing services, demand response, net metering, consolidation of grid balancing regions, transmis- sion planning and access, and others. Policies for transport, industry, and rural energy will be key to the future integration of renewables.

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