1. Keeping the door open for a two-degree world (Climate, Renewables and Coal) Philippe Benoit Head of Environment and Energy Efficiency Division International cooperation for the energy revolution Brussels, Belgium, 8th March 2013

2. © OECD/IEA 2012 Table of contents A. From Climate Change to Energy Emissions B. Getting energy emissions to 2 C: Role for Renewables C. Tools to promote renewables D. Need to address fossil fuels o

3. © OECD/IEA 2012 From Climate Change to Energy Emissions A Change in global temperatures... Source: (IPCC, 2007)IPCC, 2007

4. © OECD/IEA 2012 A Source: WEO, 2012 ~ 4 C ~ 6 C ~ 2 C Result from different GHG concentrations... From Climate Change to Energy Emissions

5. © OECD/IEA 2012 A Source: WEO, 2010 Result from different emissions profiles. ~ 4 C ~ 6 C ~ 2 C From Climate Change to Energy Emissions

6. © OECD/IEA 2012 A Total anthropogenic emissions Gt CO 2 Energy sector is a key driver as it represents over 60% of human generated emissions... Global energy emissions From Climate Change to Energy Emissions

7. © OECD/IEA 2012 Table of contents o A. From Climate Change to Energy Emissions B. Getting energy emissions to 2 C: Role for Renewables C. Tools to promote renewables D. Need to address fossil fuels E. Conclusions

8. © OECD/IEA 2012 Lowering energy emissions 4DS2DS 2 C o 15 Gt 29% 70% OECD Non-OECD 2035 Gt CO 2 4 C o Global energy emissions B efficiency CCS nuclear biofuels renewables Source: WEO 2012

9. © OECD/IEA 2012 Role of renewables in electricity generation 2DS TWh Annual electricity generation by technology Renewables need to supply > 45% of the generation by 2035 and > 55% by 2050 in 2DS > 55% B > 45% Renewables Nuclear Fossil Source: ETP, 2012

10. © OECD/IEA 2012 Table of contents o A. From Climate Change to Energy Emissions B. Getting energy emissions to 2 C: Role for Renewables C. Tools to promote renewables D. Need to address fossil fuels E. Conclusions

11. © OECD/IEA 2012 Continuing Policy Support: Necessary and Justified Policies need to continue to deliver energy security, environmental and economic benefits Need for economic incentives RE technologies not yet generally cost competitive under current pricing mechanisms (e.g. lack of global carbon pricing) Transitional support needed to stimulate learning and cost reduction and bring a larger portfolio of RET to competitiveness Address non-economic barriers that hamper deployment Access to market and administrative hurdles Access to finance Infrastructure barriers Lack of awareness and skilled personnel Public acceptance and environmental barriers Policies need to have highest impact at lowest costs C

12. © OECD/IEA 2012 Policy Types Economic Instruments Direct investments  Infrastructure investments  RD&D funding Fiscal / financial incentives  Feed-in Tariffs  Grants and subsidies  Loans  Guarantees  Tax reliefs  User charges Market – based instruments  Emission allowances  Green certificates Information and education Policy Development support Institutional capacity Strategic planning Regulatory instruments Auditing Monitoring Obligation schemes (RPS) RD&D

13. © OECD/IEA 2012 Overarching Best-Practice Policy Principles Predictable RE policy framework, integrated into overall energy strategy Portfolio of incentives based on technology and market maturity Dynamic policy approach based on monitoring of national and global market trends Tackle non-economic barriers Address system integration issues C

14. © OECD/IEA 2012 ‘Diff. Horses for Diff. Courses’ Hydro vs. Wind vs. Solar vs. Biomass Underlying economics (grid-parity vs. subsidized) Hydro On-shore wind Off-shore wind Solar Power vs. Transport vs. Industry Structure of Economy Role of Private Sector Role of Public Sector Role of state-owned enterprises C

15. © OECD/IEA 2012 Different Strokes for Different Investors RENEWABLES Private SectorState-Owned Enterprises

16. © OECD/IEA 2012 IEA medium-term projections Continued growth... MTMR projections C

17. © OECD/IEA 2012 Emerging Role for Emerging Economies China becomes deployment leader OECD Europe deployment growth slows OECD Americas growth tied to US policy uncertainties C

18. © OECD/IEA 2012 Looking Ahead C

19. © OECD/IEA 2012 Challenges to Growth Challenges of scale: Large scale renewables require different transmission lines (e.g., lines to remote sites) Requires different power system management (integration of variable renewables) Missed synergies of national vs. multi-country site optimization vs. national based preferences Interconnectors: Regional Integration Rising Electricity Prices and share of renewables and... C

20. © OECD/IEA 2012 Policy Uncertainties C Challenges to Growth

21. © OECD/IEA 2012 Table of contents o A. From Climate Change to Energy Emissions B. Getting energy emissions to 2 C: Role for Renewables C. Tools to promote renewables D. Need to address fossil fuels E. Conclusions

22. © OECD/IEA 2012 4 C o Role of Renewables vs. Fossil Fuels 2 C o 2035 D Renewables Fossil Fuels

23. © OECD/IEA 2012 2035 COAL 716 GW installed between 2000 and 2011 RENEWABLES 420 GW installed between 2000 and 2011 D Role of Renewables vs. Fossil Fuels 4 C o 2 C o

24. © OECD/IEA 2012 Power generation Industry Transport Other Room to manoeuvre “Lock-In” of 2 degree Emissions 5 10 15 20 25 30 201120152020202520302035 Gt 2 °C trajectory Lock-in of existing infrastructure 35 D Room to manoeuvre

25. © OECD/IEA 2012 Power generation Industry Transport Other Room to manoeuvre “Lock-In” of 2 degree Emissions 5 10 15 20 25 30 201120152020202520302035 Gt 2 °C trajectory Lock-in of existing infrastructure 2017 Planned fossil fuel production through 2017 will generate all energy emissions under 2DS through 2035 35 D

26. © OECD/IEA 2012 “Early retirement” (decommissioning) Fuel switching (changing dispatch rather than energy mix) Carbon Capture and Storage Remove fossil fuel subsidies Keys to ‘un-lock’ energy emissions include: ‘Un-locking’ strategies D

27. © OECD/IEA 2012 Market mechanisms ETS Carbon taxing Mandates – portfolio prescriptions /restrictions Policy directives (e.g. to state-owned enterprises) Influencing relative pricing Possible Policy tools to unlock: D ‘Un-locking’ Policies

28. © OECD/IEA 2012 Conclusions Renewables remain the key to a green future and they still require policy attention for scaling up But if we don’t address fossil fuel emissions, the 2- degree door will close Policies need both to promote renewables and un-lock fossil fuel emissions to achieve a 2-degree future Political Will/Motivation are key E

29. © OECD/IEA 2012 Thank you philippe.benoit@iea.org