Executive Summary

01 GLOBAL OVERVIEW

Positive developments show that the renewable energy transition is possible, but advances so far are uneven across sectors. The year 2017 was another record-breaking one for renewable energy, characterised by the largest ever increase in renewable power capacity, falling costs, increases in investment and advances in enabling technologies. Many developments during the year impacted the deployment of renewable energy, including the lowest-ever bids for renewable power in tenders throughout the world, a significant increase in attention to electrification of transport, increasing digitalisation, jurisdictions pledging to become coal-free, new policies and partnerships on carbon pricing, and new initiatives and goals set by groups of governments at all levels.

Increasingly, sub-national governments are becoming leaders in renewable energy and energy efficiency initiatives. At the same time, many developing and emerging countries are expanding their deployment of and investment in renewables and related infrastructure. The private sector is also increasingly playing a role in driving the deployment of renewable energy through its procurement and investment decisions.

As of 2016, renewable energy accounted for an estimated 18.2% of global total final energy consumption, with modern renewables representing 10.4%. The number of countries with renewable energy targets and support policies increased again in 2017, and several jurisdictions made their existing targets more ambitious.

Strong growth continued in the renewable power sector, while other renewable sectors grew very slowly. Solar photovoltaic (PV) capacity installations were remarkable – nearly double those of wind power (in second place) – adding more net capacity than coal, natural gas and nuclear power combined.

In the transport sector, the use of biofuels is still held back by sustainability debates, policy uncertainty and slow technological progress in advanced fuels, such as for aviation. Similarly, renewable heating and coolingi continues to lag behind. Both sectors receive much less attention from policy makers than does renewable power generation. However, lack of policy attention does not reflect relative importance, as heating and cooling account for 48% of final energy use, transport for 32% and electricity for 20%.

The interconnection of power, heating and cooling, and transport in order to integrate higher shares of renewable energy gained increased attention during the year, in particular the electrification of both heating and transport.

HEATING AND COOLING

There is slow progress in renewable energy uptake in heating and cooling. Modern renewable energy supplied approximately 10.3% of total global energy consumption for heat in 2015. Another 16.4% was supplied by traditional biomass, predominantly for cooking and heating in the developing world. While additional bio-heat, geothermal direct use and solar thermal capacities were added, growth was very slow.

Energy demand for cooling is growing rapidly, and access to cooling is an issue for health and well-being. Renewables currently play a small role in providing cooling services, although there is considerable potential.

TRANSPORT

Renewable energy progress in the transport sector remains slow. Biofuels provide most of the current renewable energy contribution, although electrification is gaining attention. The renewable energy share of transport continues to be low (3.1%), with more than 90% provided by liquid biofuels.

Electrification of the transport sector expanded in 2017 – with electric vehicles (EVs) exceeding 1% of global light vehicle sales – and a number of countries announced plans to phase out sales of petrol and diesel vehicles. There are signs that the shipping and aviation sectors also may become open to electrification. Further electrification of the transport sector has the potential to create a new market for renewable energy and to facilitate the integration of higher shares of variable renewable energy, provided that the policy and market settings are suitable.

POWER

The electricity transition is well under way, due mostly to increases in installed capacity and in the cost-competitiveness of solar PV and wind power. Renewable power generating capacity saw its largest annual increase ever in 2017, raising total capacity by almost 9% over 2016. Overall, renewables accounted for an estimated 70% of net additions to global power capacity in 2017, due in large part to continued improvements in the cost-competitiveness of solar PV and wind power.

Solar PV led the way, accounting for nearly 55% of newly installed renewable power capacity in 2017. More solar PV capacity was added than the net additions of fossil fuels and nuclear power combined. Wind (29%) and hydropower (11%) accounted for most of the remaining capacity additions. Several countries are successfully integrating increasingly larger shares of variable renewable power into electricity systems.

Renewable-based stand-alone and off-grid single home or mini-grid systems represented about 6% of new electricity connections worldwide between 2012 and 2016.

1 Investment data are from Bloomberg New Energy Finance and include all biomass, geothermal and wind power projects of more than 1 MW; all hydropower projects of between 1 and 50 MW; all solar power projects, with those less than 1 MW estimated separately; all ocean energy projects; and all biofuel projects with an annual production capacity of 1 million litres or more.

2 The GSR strives to exclude pure pumped storage capacity from hydropower capacity data.

3 Solar PV data are provided in direct current (DC). See Methodological Notes in this report for more information.

4 Solar hot water capacity data include water collectors only. The number for 2017 is a preliminary estimate.

5 A country is counted a single time if it has at least one national or state/provincial target.

6 Biofuel policies include policies listed both under the biofuel obligation/mandate column in Table 2 (Renewable Energy Support Policies)and in Table R7 (Renewable Transport Mandates at the National/State/Provincial Levels, End-2017.)

7 Data for tendering reflect all countries that have held tenders at any time up through the year of focus.

Note: All values are rounded to whole numbers except for numbers <15, biofuels and investment, which are rounded to one decimal point.Where totals do not add up, the difference is due to rounding.

FAME = fatty acid methyl esters; HVO = hydrotreated vegetable oil.