Renewable Energy Closing In On Natural Gas As Second-Largest Source Of Electricity Worldwide

Renewable energy will soon beat out natural gas as the second-largest source of electricity worldwide, according to projections from the International Energy Agency.

Electricity from solar, wind, hydropower and other renewable sources will increase by 40 percent in the next five years, making up about 25 percent of the world’s energy sources by 2018. Renewables will provide the second-largest amount of global electricity by 2016, topped only by coal, the number one supplier of electricity around the world. Today, hydropower dominates the renewable energy mix, supplying 80 percent of the world’s renewable electricity, but IEA projects non-hydro sources of renewable energy will double over the next five years, comprising about 8 percent of the world’s energy sources by 2018.

Lower costs are a major contributor to the spike in renewable energy — in many developing countries in Africa and Asia (and some developed ones, like Australia) renewables like wind are actually cheaper than coal. These costs are helping drive higher levels of investment in renewable energy from developing countries looking to meet rising energy demands. Reports published earlier this month found developing countries invested a total of $112 billion in renewable energy in 2012, an increase of 19 percent from the year before. China led the way in this area, upping its investment to $67 billion — an increase of nearly a quarter compared to 2011. The total invested by countries in the Middle East and Africa was much smaller — about $12 billion — but compared to 2011, their investment surged upward by 228 percent.

But renewable energy investment isn’t growing everywhere — it’s actually dropping off in developed nations. The IEA notes that despite the renewable sector’s rapid growth, worldwide subsidies for fossil fuels are still six times higher than subsidies for renewables (the U.S.’s spending reflects the world’s average — in 2011, U.S. fossil fuel subsidies were $523 billion, about six times higher than the $88 billion spent on renewable energy). President Obama pledged in his climate speech Tuesday to double the country’s wind and solar energy and to allow enough private renewable energy development on public lands to powqer 6 million homes by 2020. But governments in Europe, meanwhile, are cutting renewable energy subsidies as austerity measures take hold

Obama also addressed coal’s role in the U.S. energy mix on Tuesday, announcing he would be imposing limits on carbon emissions from existing coal-fired power plants in the U.S., as well as stopping government financing of coal plants overseas. Despite new investments in renewables, coal still dominates the energy market in developing countries like China and India. But its hold on the market may slowly be slipping. In a draft energy strategy statement, the World Bank revealed Thursday that it would be cutting back on the number of coal plants it finances, limiting its support to “rare circumstances where there are no feasible alternatives available to meet basic energy needs and other sources of financing are absent.”

IEA: Renewable Energy Sources to Top Natural Gas by 2016

by Justin Loiseau, The Motley Fool Jun 28th 2013 4:29PM Updated Jun 28th 2013 4:30PM

QDOTS imagesCAKXSY1K 8Energy produced from renewable sources such as hydro, wind, and solar will exceed that from natural gas and more than double the outupt from nuclear by 2016, according to a recent International Energy Agency report, making it the second most important global electricity source, after coal.

According to projections, renewable power will increase by a whopping 40% over the next five years, despite what the report calls a “difficult economic context.” Renewables are currently the fastest-growing electricity source, and will make up almost a quarter of the global power mix by 2018, according to the IEA, up from an estimated 20% in 2011. Non-hydro sources (wind, solar, geothermal, etc.) are expected to double by 2018, reaching 8%, according to the Medium-Term Renewable Energy Market Report (link opens in PDF).

“As their costs continue to fall, renewable power sources are increasingly standing on their own merits versus new fossil-fuel generation,” said Agency Executive Director Maria van der Hoeven during a presentation. “This is good news for a global energy system that needs to become cleaner and more diversified, but it should not be an excuse for government complacency, especially among OECD countries.”

In 2012, global renewable energy generation exceeded China’s overall electricity consumption. Van der Hoeven pointed to increased investment in emerging markets and cost-competitiveness as the two main drivers behind renewables’ ramp up.

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