POWER January 2016 - 8

IEA: World's Power Mix
Is Seeing Unprecedented
Transformation
A significant transformation of the global
power mix is under way, noted the International
Energy Agency (IEA) in its newly
released World Energy Outlook (WEO-2015).
Renewables are getting subsidized boosts
from a growing number of countries-and
that is posing challenges and requiring
changes to electricity markets. Nuclear
and coal face wavering support in others,
hampered by environmental rules or
economics. Natural gas-fired generation,
which has been constrained by supply or
cost issues, is seeing a resurgence worldwide,
surfing on the recent dip in oil-indexed
prices.
The annual report notes that an unprecedented
number of countries are pursuing
integrated policies to meet economic,
security, and environmental goals-ambitions
driven in part by the United Nations
Framework Convention on Climate Change
conference in Paris held in December
2015.
In the U.S., three key factors are shaping
the power sector: federal rules (including
the Clean Power Plan, the Mercury and
Air Toxics Standards, and new plant carbon
standards); renewable portfolio standards,
which are in flux in many states; and the
decline in natural gas prices, which has
prompted more coal-to-gas switching and
even made some nuclear units uneconomic
to run.
In the European Union (EU), meanwhile,
changes will be determined by
the bloc's newly announced binding
target to reduce greenhouse gas emissions
by 40% below 1990 levels by
2030. The EU strategy seeks greater
coordination of capacity markets so as
to facilitate more investment in renewables
and low-carbon technologies, the
agency said.
Other countries in transition include
nuclear-heavy Japan, which has accelerated
deployment of renewables in power
generation, authorizing 1.7 million mostly
solar projects through feed-in tariffs.
Meanwhile, 41 of the country's nuclear reactors
remain offline, with 25 waiting for
licensing assessments.
Emerging economies, too, are crafting
policies to meet energy security and environmental
goals in tandem. China has
set strict efficiency standards for new
coal power plants (equivalent to 43% efficiency),
and the nation has ambitious
targets for wind (200 GW by 2020), solar
(100 GW by 2020), hydropower, and
nuclear power. India, determined to significantly
expand its generation capacity
to provide electricity for all its citizens,
also has remarkable renewable targets:
100 GW for solar, 60 GW for wind, 10 GW
of bioenergy, and 5 GW of small hydropower
by 2022.
Southeast Asian countries, which are
leading the charge in new coal plant installations,
are also seeking to diversify
their energy supply. And Brazil, which
is in the midst of a severe, devastating
drought, has been forced to curtail
the hydropower output on which it has
1. World electricity generation by source. Under the International Energy Agency's
central scenario, non-hydro renewables are slated to make up 18% of the world's power
generation (TWh) by 2040 compared to 6% in 2013. Meanwhile, coal's share will drop from 41%
in 2013 to 30% in 2040. In comparison, coal will fall from 31% of total capacity (GW) in 2014 to
23% by 2040, as renewables capacity rises from 30% to 44%. Source: IEA
■ Coal ■ Gas ■ Oil ■ Nuclear ■ Hydro ■ Other Renewables
overwhelmingly depended in the past
and is relying on auctions to contract
new power sources to meet soaring
power demand.
All in all, the share of low-carbon technologies
in the global power mix will increase
from about 33% in 2013 to 47%
in 2040 (Figure 1), the report predicts in
its central scenario, which assumes that
policies and measures announced as of
mid-2015 have been adopted. However, it
notes that the nature and speed of this
evolution will vary by region.
Cumulatively, the global investments
needed to facilitate these transformations
are estimated at $19.7 trillion over 2015-
2040, averaging $760 billion per year. Almost
two-thirds of the total investment is
in emerging economies, the report notes.
Meanwhile, investment in power plants
account for 58% of the total (more than
half which will go to renewables, with less
than a fifth to coal), while the rest will be
dedicated to transmission and distribution
networks.
Finally, the report forecasts that the
transformation will be moderately expensive.
In the central scenario, as the supply
of power shoots up by 70%, the average
cost of generation will rise from $67/
MWh to $71/MWh. That increase factors
in power plant efficiency gains and higher
fuel costs.
Statoil to Build World's
First Floating Offshore
Wind Farm
Nearly five years after the world's first
large-scale floating deepwater wind turbine
was erected 11 kilometers (km)
offshore Karmøy, southeast Norway, Norwegian
energy firm Statoil has made a
final investment decision to build the
world's first floating wind farm.
The 30-MW Hywind pilot farm is to be
2000
15,431 TWh
2013
23,318 TWh
2020
27,222 TWh
2040
39,444 TWh
installed on floating structures at Buchan
Deep, 25 km offshore Peterhead in
Aberdeenshire, Scotland. Owing to key
technical innovations, Statoil will spend
a relatively modest $235.8 million on
the project-which it says is a stunning
60% to 70% cost reduction per megawatt
compared to the single Hywind
floating turbine demonstration project
erected in 2009.
Construction is expected to begin in
late 2017. The " pilot park, " as Statoil calls
it, will occupy 4 km2
8
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atop water depths of
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POWER January 2016

Table of Contents for the Digital Edition of POWER January 2016