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Global Futures Report 2013 - Box 8

50 Along with China and India, Brazil and South Africa are members of the so-called “BRICS” group, distinguished by large, fast-growing economies. Although per-GDP investment in renewable energy in Brazil and South Africa is still far behind China, targets and sce- narios point to high-renewables futures in these countries. Brazil already receives more than 80% of its electricity from renewables, virtually all of that hydropower. And over half of pas- senger vehicle fuels come from ethanol, by far the highest share in the world, as a result of continuous policies dating back to the 1970s. Over the past decade, many renewable energy policies, such as public competitive bidding under the country’s PROINFA program, spurred nascent renewables markets for wind and bio- mass power, and a growing share of small hydro (plants less than 30 MW). Also, policies at the local level in some cities have spurred solar hot water markets. In the coming decade, scenarios and forecasts show a major wind power market emerging in Brazil, including a government projec- tion that wind capacity will increase from 1.5 GW in 2011 to 16 GW by 2020. (For comparison, the annual market in 2011 was 0.6 GW.) By 2030, Brazil’s national energy plan (2009) shows small hydro capacity doubling, biomass power quadrupling, wind power increasing almost 20-fold, and large hydro almost doubling (all relative to 2010). Taken together, the plan projects more than 100 GW of added renewables capacity between 2010 and 2030. For biofuels, at least one projection (EPE, 2012) shows a tripling of ethanol production from 2011 to 2020. In 2012, South Africa introduced a 20-year resource plan call- ing for renewables to represent 38% of all new power capacity added through 2030. This would mean 22 GW of new renew- able capacity, most of which is planned to be wind and solar PV power, with smaller amounts of hydro (2.6 GW) and CSP (1.2 GW). The resource plan would lead to a 43% share of electricity from renewables by 2030, which compares with a 50% share by the same time projected by Greenpeace (2011). In the longer term, South African experts believed that renew- ables could supply up to half of the country’s energy by 2050. They also emphasized the importance of CSP in South Africa’s future, and foresaw much higher capacity than in the resource plan, perhaps to 20 GW by 2035. They believed that South Africa could become a world leader in CSP, with high local manufacturing content and competitive costs. Experts also noted that solar PV “grid parity” was coming to parts of South Africa, and that PV markets were heading “off the charts,” citing both rural uses and emerging net metering policies for urban uses. (See solar PV in Chapter 6 for more discussion of grid parity.) And experts pointed to domestic policies supportive of solar water heating and foresaw major market advances, such as most new buildings constructed with solar thermal. Source: See Endnote 36 for this chapter. Box 8 | Brazil and South Africa RENEWABLES GLOBAL FUTURES REPORT 05 Futures at the National and EU Levels n Diesel generator replacement. Experts stressed the large markets emerging for replacing existing diesel generators with renewable-hybrid alternatives, in countries with large existing diesel capacity. The use of renewables for off-grid and island-grid infrastructure (including urban power grids) will become increas- ingly competitive with diesel generators, asserted experts, and with increasingly favorable economics. Many cited the use of hybrid wind-diesel systems or biomass power for replacing conventional diesel power systems.42 n Settlement patterns and population expansion. Developing countries will face a number of development pressures in the future that renewable energy can address, said experts, noting that popu- lation growth and settlement expansion to new areas will require new energy services. For example, in lieu of costly grid expansion to these new areas, some African experts envisioned new mini-grids and renewable energy “islands” across the African landscape that allow small villages to be productive and support larger populations. One Egyptian expert saw the need to establish new areas of settle- ment outside of the Nile delta and valley to accommodate popula- tion growth—and saw those new areas served with renewables.43 n Power market regulations. Almost all electric utility systems in OECD countries have undergone some process of restructuring or liberalization in past decades, including “unbundling” of generation, transmission, and distribution. Experts envisioned many develop- ing countries going through this process in the coming decade, with consequently improved conditions for renewables, along with competitive markets for grid balancing services. Utility regulatory changes would also usher in net metering for distributed renew- ables, experts foresaw, bringing a new era of two-way power flows on local distribution systems, requiring new policies, new power dis- tribution infrastructure, “smart grid” controls and meters, and inte- gration of rooftop renewables into building codes, said experts.44 n Energy efficiency. Experts noted that large improvements in the efficiency of energy use are possible, which will reduce the need for more supply additions, thus allowing renewable energy to attain higher shares. As one example, the IRENA (2012) study on the prospects for the African power sector shows an improvement in energy efficiency of 20–30% by 2050 (compared to the reference scenario), which accompanies the growth of renewables to a 73% electricity share. The Greenpeace (2011) scenario for South Africa shows 50% less energy consumption by 2050 due to efficiency, relative to the 2050 reference case.45 n Regional cooperation frameworks. Experts noted that many developing countries are too small by themselves to create large market opportunities and attract high levels of investments. They noted that regional frameworks and projects for infrastructure development incorporating renewables will be important for some countries, and that such frameworks can lower transaction costs, mitigate risks, and attract larger investments from multilateral development institutions or private investors. They also noted that such frameworks can aid cross-border transfers of renewable power.46 n Research, education, and manufacturing. Experts expected to see new research and manufacturing centers in develop- ing countries, reflecting a shift to local knowledge and industry. They expected this shift to lower costs and make technologies more accessible. Experts also pointed to ongoing plans for future

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