1. © OECD/IEA 2015 Business Models and Smart Policies for Scaling Up Renewable Energy Dr. Paolo Frankl Head, Renewable Energy Division International Energy Agency Vienna Energy Forum, High Level Panel III, Vienna 18 June 2015

2. A Decade Of Renewable Energy Growth Surpassing Expectations Projected levels of renewable energy for 2020 were already surpassed by 2010. Global installed capacity and production from all renewable technologies have increased substantially. Significant cost reductions for most technologies. Supporting policies spread throughout the world. REN21 Renewables 2015 Global Status Report

3. © OECD/IEA 2015 Renewable power capacity to scale over 40% from 2014 to 2020 Still, policy uncertainties, grid and system integration issues and non-economic barriers remain challenges to deployment in both OECD and non-OECD Non-OECD markets face particular constraints accessing low cost finance Renewable electricity expansion remains robust Global renewable electricity annual capacity additions, historical and projected

4. © OECD/IEA 2015 Recent progress in RE electricity generation costs © OECD/IEA 2015 4 Combination of technology cost reduction, better resources, appropriate regulatory framework attracting financing Long-term PPAs and price competition effective drivers for reducing costs Utility PV Recent long-term remuneration contract prices (e.g. auctions and FITs) STE India 88 $/MWh Chile 87 $/MWh USA 75 $/MWh South Africa 65 $/MWh Brazil 81 $/MWh Dubai 60 $/MWh Morocco 160 $/MWh South Africa Base 124 $/MWh Peak 335 $/MWh South Africa 51 $/MWh USA 48 $/MWh China 80 - 100 $/MWh Brazil 54 $/MWh Turkey 73 $/MWh Germany 67-100 $/MWh Ireland 69 $/MWh Australia 65 $/MWh Egypt 41 $/MWh Germany 96 – 106 $/MWh

5. © OECD/IEA 2015 Changing Policy Priorities Key Objective Critical MassReduce CostsSystem Integration KEY PRIORITIESClear regulatory framework Cost convergence with international benchmarks Develop flexible system Secure financial support Introduce competition Market reform

6. © OECD/IEA 2015 Policy implications: Enabling environment becoming more important than financial support Providing financial support Cost reduction through Technology development Scale up Learning before 2013 Enabling policy and market framework which allows low cost financing and generation Competition Predictable long-term income stream Short-term market value signals Portfolio development System Integration Cost reduction through Technology development Financial innovation New markets with best resources 2014-2020 Main Policy Key Characteristics Cost reduction 1) Distinguish - Large-scale systems - Small-scale distributed generation - Off-grid / energy access 2) Focus more on Renewable Heat 3) Do not forget biofuels for transport 4) Develop Energy Service Business Models