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Global Futures Report 2013 - Executive Summary

8 Executive Summary The future of renewable energy is fundamentally a choice, not a foregone conclusion given technology and economic trends. The context for that choice includes the present situation—high levels of current investment and more than a decade of dramatic market growth, proliferation of support policies, and cost reductions for renewable energy. The context also involves a growing diversity of motivations, such as energy security, climate and environment, industrial and economic development, financial risk mitigation, flex- ibility, and resilience. Cost comparisons between renewables, fossil fuels, and nuclear, and the role of future policy for all technologies are of course key elements of the context for future energy choices. However, choices also depend on how cost comparisons are made, and on changing paradigms for energy systems and services, mobility, and buildings. This report paints a mosaic of the possibilities ahead, grounded in the opinions of 170 leading experts and the projections of 50 recently published scenarios. Many existing energy companies, especially those with a vested interest in the status quo, project conservative future shares of renewable energy and emphasize cost hurdles and variability chal- lenges. These companies continue to believe that the future will be dominated by fossil fuels. Such “conservative” outlooks project the share of renewable energy in global energy supply remaining below 20% in the future, not much higher than today. “Moderate” outlooks by experts and scenarios project renewable energy shares of 30–45% by 2050, including electricity, heating/ cooling, and transport. In such outlooks, renewable electricity is integrated into power grids at high shares (i.e., 50–80%) using a variety of options such as demand-response, balancing with natural gas, new market structures for balancing services, and some energy storage. Transport employs modest but growing amounts of bio- fuels, along with electric vehicles and plug-in hybrids, partly charged from renewable electricity, and some modal shifts of freight to more-electric options. “High renewables” outlooks project 50–95% energy shares by 2050. Such shares were cited by many experts, and are projected in several scenarios, typically those of public advocacy organiza- tions, but also in recent scenarios of the International Energy Agency (IEA), which has traditionally published more conservative projections. High-renewables projections typically show some combination of significant and continued renewable energy cost reductions, along with aggressive and long-term support policies for renewable energy, and major transformations in energy markets and infrastructure. “High renewables” projections show up to 100% shares of just renewable electricity alone (not counting heating or transport). These high shares come from a portfolio of renewable technologies, along with balancing and grid-strengthening measures, energy stor- age, and evolved electricity market rules. In transport, large shares of biofuels and electric vehicles are projected, even for freight trans- port, such as biodiesel and electric trucks and electric rail. The use of electric vehicles for grid balancing purposes is enhanced through smart-grid interactions and “vehicle-to-grid” (V2G) and “vehicle- to-home” (V2H) concepts. Buildings are designed, constructed, and heated/cooled in a different paradigm. The use of renewables- integrated building materials becomes ubiquitous, “low energy” or “passive” buildings with high energy efficiency and low heating requirements become the standard, and many forms of renewable heating and cooling are used, including solar thermal, geothermal, and biomass. One common attribute of many high-renewables scenarios is a future carbon emissions constraint. Such high-renewables carbon- constrained scenarios typically model aggressive energy efficiency improvements, sometimes model carbon capture and storage for fossil fuels, and typically model little or no nuclear power. Such scenarios may also include some type of carbon price incorporated into energy markets. According to some views, the challenges of integrating renewable energy into utility power grids, buildings, transport, and industry are not fundamentally a technical issue—although a variety of tech- nical issues certainly need to be worked out. Rather, the challenges relate to practices, policies, institutions, business models, finance, aggregation, and cross-sectoral linkages, along with changes in professional practices, education and training. The finance challenge is key. Many new sources of finance are pos- sible in the future, such as insurance funds, pension funds, and sov- ereign wealth funds, along with new mechanisms for financial risk mitigation. And many new business models are possible for local energy services, utility services, transport, community and coopera- tive ownership, and rural energy services. Some projections of annual investment in renewables by 2020 are US$400–500 billion, up from $260 billion in 2011. Projections of average annual investment in the coming decades range between $300 billion and $1 trillion. Public support for renewables, in both direct and indirect forms, estimated by the IEA at about $90 billion in 2011, is also projected to increase through the 2020s in a growing number of countries, although it is also projected to remain much lower than public support for fossil fuels. Strong visions for the future of renewable energy are proliferating at the local/city level. Many regions, cities, and towns around the world are planning renewable energy futures. In addition to a variety of planning approaches, specific support policies for renewable energy can be found in hundreds of cities. Such policies can include targets, subsidies, public investment, innovative financing, bulk pro- curement, green power purchasing, building codes, transport fuel mandates, municipal utility regulation, and many others. Local governments and stakeholders are creating new approaches to urban planning that incorporate renewables, including low- energy buildings, heating and cooling infrastructure, district heat- ing networks, “smart” approaches to both electricity and heat, and innovations in urban mobility that integrate renewables. Growing numbers of regions, cities, towns, and communities are envisioning “100%” renewable energy futures for themselves in the long term.

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