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The Global Status of Renewable Energy: Taking Stock

Dr John Constable: GWPF Energy Editor

In spite of decades of sustained government support at the global level, wind and solar, the modern renewables on which the future of current climate policy depend, are still only 1% of world Final Energy Consumption.

Renewables  The “Renewable Energy Policy Network for the 21st Century” (REN21), the secretariat of which is based in Paris, is a membership organisation counting industry associations, NGOs and other international organisations, and even national governments, including that of the United Kingdom and, at least for the time being, the Federal government of the United States. It is chaired by Arthouros Zervos, currently at the National Technical University of Athens, a very well-known figure in international renewables policy, having been President of the European Wind Energy Association (EWEA), the European Renewable Energy Council (EREC), the Global Wind Energy Council (GWEC), and for five years a scientific officer in the Renewable Energy Unit of DG Research at the European Commission in Brussels. REN21 publishes annually a Renewables Global Status Report (GSR). This year’s issue, which credits over 800 contributing authors and advisors, was funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), the German Federal Ministry for Economic Affairs and Energy (BMWi), UN Environment, and the Inter-American Development Bank (IDB). With all this behind it readers are entitled to take the results fairly seriously, though allowing for the fact that REN21 is closely aligned with many interested parties. When the news in the Renewables GSR is mixed, that it is extremely interesting. Mr Zervos writes in his preface, that on the one hand the study “reveals a global energy transition well under way”, but also that “the pace of the transition is not on track to achieve the goals established in the Paris Agreement”. The facts behind this puzzling contradiction are explained in more detail in the main text, where the authors write:

The overall share of renewable energy in total final energy consumption has increased only modestly in recent history, despite tremendous growth in the renewable energy sector, particularly for solar PV and wind power. A primary reason for this is the persistently strong growth in overall energy demand (with the exception of a momentary pull-back in 2009 following the onset of a global economic recession), which counteracts the strong forward momentum for modern renewable energy technologies. In addition, the use of traditional biomass for heat, which makes up nearly half of all renewable energy use, has increased, but at a rate that has not kept up with growth in total demand.

REN21 summarizes this data behind this curious state of affairs in the following figure:

Figure 1. Estimated Renewable Energy Share of Total Final Energy Consumption, 2015. Source: REN21 Renewables 2017: Global Status Report.

According to the endnote the figure has been based largely on 2014 data from the International Energy Agency (IEA) published last year, but with adjustments and revisions based on many other sources. (For readers who have been following Global Status Report for a number of years, it is interesting to note that this issue for the first time makes allowance for the renewable electricity energy sector’s auto-consumption, which REN21 estimates at 7%, a degree of realism that is to be welcomed.)

The first thing to observe here is that REN21 has chosen to analyse Final Energy Consumption (FEC), the energy actually supplied at the point of consumption, in a vehicle tank for example, or in an electrical appliance, so is net of losses in conversion in refineries and power stations and of losses in electricity transmission.

This choice has some merits, as compared to the Total Primary Energy input to the system, since it avoids the awkward technical problems raised by the need to properly account for the significance of Primary Electricity, such as nuclear and renewables, both of which have, or should have, a higher share of FEC. For example the IEA data shows that all renewables contributed about 14% of TPE in 2014 (see IEA, Key Renewables Trends (2016), but in REN21’s calculation of FEC this becomes just over 19% of FEC, which is plausible.

Properly calculated, then, there are real merits to the FEC approach, principally because it allows comparison with targets such as that of the EU Renewables Directive (2009) which specifies that 20% of EU Final Energy Consumption in 2020 should come from renewable sources. Indeed, at first blush that 20% target might seem more or less reasonable, since the world is currently deriving over 19% of its FEC from renewables. But then one sees that only 10% comes from so-called “modern renewables”, with over 9% coming from the “Traditional Biomass”, a euphemism for leaves and twigs and animal dung. And of modern renewables, some 3.6% comes hydropower, and 4% from modern renewables for heat, including biomass, geothermal and solar heating.

Electricity from modern renewables accounts for only 1.6% of global Final Energy Consumption. And of that, the super-fashionable areas, the poster children of Mr Zervos’ “global energy transition”, wind and solar,  provide only a fraction, though tact seems to have got the better of candour at this point in the study, since the no further breakdown is provided. However, one can make inferences from the IEA data for Total Primary Energy input, where it appears that wind and solar together account for 0.8% of TPE. That will form a slightly higher fraction of FEC, but not much higher, since modern biomass will account for a substantial part of that 1.6%. It is safe to say that roughly speaking, wind and solar energy are contributing about 1% of Final Energy Consumption at the most.

What is so shocking about this figure is not that simply that it is small. There is no intrinsic shame in diminutive stature; everything has to start somewhere, and great oaks only grow from little acorns. What is so remarkable is the disproportion between this 1% figure and the enormous global effort and cost that has gone into its making. For several decades now, governments all over the world, and nearly all of the richest and most sophisticated, have poured resources into the renewable energy sector, have shielded its investors from risks, have spared renewable generators from their system costs, and have coerced consumers to purchase renewable output at inflated prices. And in spite of all this, renewable energy is still not yet spontaneously attractive. Indeed, it cannot even keep up with the growth in demand for energy. There is no renewables “explosion”. This reaction is as yet still endothermic, and dependent on continued external input. When the subsidies stop, the sector will cool and die. And after years of major costs with only trivial results, the subsidies should stop before further wealth is destroyed.

The chemical analogies were not available to Horace, but he had words for this situation: “Parturient montes, nascetur ridiculus mus”. Roughly translated, When governments play at God they make only rats and mice.