The projections of the International Energy Agency (IEA) for PV have proven to be unreliable in the past. The Energy Watch Group had discussed this in detail in September 2015. The analysis of the current World Energy Outlook (WEO) 2015 shows that the IEA apparently remains at its assessments for future energy scenarios. The following analysis demonstrates this fact on the concrete example of the projections for photovoltaics (PV).

In the recent years, the IEA has ignored the rapid market growth of renewable energies particularly the added capacity of PV and used outdated data in its scenarios. Thus, the IEA ignored the market growth in 2014 and the new added capacity record for the year 2015, which could be recognized already in September. In particular, the IEA makes the highly unlikely assumption that the market growth for PV drops in 2014 and the annual added capacity remains lower than in 2013 for the next decades. For a still young world market, these are highly unlikely assumptions, which could only be conceivable if political decisions would regulate solar power as undesirable worldwide.

Figure 1: Added PV capacity

Figure 1 shows the annual market volume for PV. The black solid bold line shows the real added capacities from 1990 to 2015. For 2015, however, at the end of September an estimate of international market research analysts suggests an annual added capacity of 55- 60 GW. In the WEO, no concrete added capacity numbers are mentioned. This insight can be counted back from total installed power capacity. Since the values in the WEO are only given in five-year steps the Energy Watch Group has calculated an adapted scenario, matching the cumulative installed power capacity of the WEO. For each time period, a constant added capacity rate was calculated to reflect the exact value for each year.

At least until 2035, the annual added capacity rate of WEO 2015 „New Policies Scenario“ remains below the level of 2013. The Energy Watch Group has made various assumptions in the calculations on the lifetime of the PV systems. With a lifetime of 30 years, a rapidly increasing proportion of old plants must get substituted starting from 2035. Taking this into consideration, assumptions of the IEA mean that the net added capacity starts to decline again from 2035.

Assuming a PV system lifetime of 25 years, the beginning of the substitution of old power plants shifts by 5 years. Taking this into account, the net added capacity rate till 2030 in the WEO remains below the already experienced real expansion rates in 2013. Thereafter, the gross added capacity rate must increase significantly. Table 1 shows for the respective periods the calculated gross expansion rates, leading to the installed power rates of the IEA scenario.

Table 1: PV market growth rate

The required increased added capacity rate of the last five-year interval against the trend of previous years is implausible. This leads to the assumption that the IEA has not taken into account the need for repowering.

In addition, the figure shows the added capacity rates, as they were used in the WEO 2013 and the WEO 2014. However, only the average net added capacity rate was calculated from the difference of the installed power. Nevertheless, it shows how the scheme of the IEA continues. In either scenario, it is assumed, that the market growth at the beginning of the scenario arrived at the maximum and will decline in the future.

There are other institutions dealing with market scenarios for solar power generation. One of the best known is the scenario energy [r]evolution created on the regular basis, which was jointly commissioned by Greenpeace, GWEC and SPE in 2015 and carried out by the renowned German Center for Aerospace. Figure 2 shows the IEA scenario together with energy [r]evolution 2015 and the forecasts of Bloomberg New Energy Finance (BNEF), published in the ‚New Energy Outlook 2015‘. Energy [r]evolution updates the empirically observed market growth in recent years. In previous reports of energy [r]evolution it was observed that the projections corresponded quite well with the real development. This is true not only for PV but to a similar extent for wind energy.

Misleading IEA scenarios can not be perceived as credible. It is hard not make any judgment of its intentions.

Figure 2: Added PV capacity – WEO 2015 (NPS) scenario and Greenpeace – energy [r]evolution 2015

The decline of added capacity in the Greenpeace energy [r]evolution scenario from 2040 is justified by the fact that an even nearly 100% renewable energy supply is reached. Therefore fossil and nuclear power plants are already substituted and thus there is only a substitution requirement for already built power plants, but it comes in use later in full volume due to the long technical lifetime of PV systems. It should be noted that other authors expect higher installation numbers around the middle of the century and in particular no decline, which is essentially based on the fact that it is assumed on the one hand, a higher proportion of PV in the energy mix an on the other hand, a higher worldwide energy demand.

The global political economic conditions point to an even faster growth of added capacities compared to the previous expansion rates: The cost of PV will continue to decline, as well as the cost of battery storage, which will further stimulate growth of PV installations. At the same time even more financial investors divest from financing fossil and nuclear projects. This is partly because political blockades in Europe hinder a fundamental reform of the electricity market design, therefore only poor financial returns can be expected. Moreover in many parts of the world climate change is finally being taken seriously by an increasing number of financial investors and private investors concerned about the incalculable risk of nuclear power. This liberated capital is increasingly being invested in renewable energies. Particularly in view of this very dynamic development for years, the IEA forecast for PV and other renewable energy sources appear incomprehensible.

New EWG study: International Energy Agency holds back global energy transition

Energy Watch Group and Lappeenranta University of Technology analysis shows that the IEA has consistently undermined potential of solar and wind energy in the last decade.

September 22, 2015, Berlin – Energy Watch Group makes the International Energy Agency responsible for consistently underestimating the potential of renewable energy and promoting conventional energy sources.

The new study by Energy Watch Group and Lappeenranta University of Technology, released today, comes to the conclusion that the International Energy Agency (IEA) annual reports World Energy Outlook (WEO) between 1994 and 2014 have been publishing misleading projections on solar photovoltaic (PV) and wind energy. The WEO has significant impact on both political and economic decisions of world governments regarding energy.

“The IEA has been holding back the global energy transition for years. The false WEO predictions lead to high investments in fossil and nuclear sector, hinder global development of renewable energy and undermine the global fight against climate change”, President of Energy Watch Group and former Member of the German Parliament Hans-Josef Fell said.

Although solar PV and wind have grown exponentially for the last decades and are expected to continue growing in the decades to come, the IEA keeps assuming linear growth for these technologies, meaning no growth of the annual installations. According to WEO projections, by 2030 renewable energy is expected to provide only 14% of global electricity supply, whereas assuming the average growth rates of the last 20 years the projection would be close to 60%.

“Despite the rapidly growing markets for solar PV and wind energy, the WEO dramatically undervalues their potential, which leads to fatal projections”, the study lead author and professor of Solar Economy at Lappeenranta University of Technology in Finland Christian Breyer said. “From a scientific point of view, these structural errors are incomprehensible, from a social perspective they are irresponsible.”

The WEO reports are being approved by OECD governments, some of which have high stakes in conventional industry. Therefore, the Energy Watch Group calls the scientific community and civil society to examine closer political and business dependencies within IEA.

The key findings of the study include:

  • The WEO 2010 projections for solar PV capacity for the year 2024 (180 GW) have been achieved in January 2015 and exceeded threefold the WEO projections for 2015.
  • Real wind capacity in 2010 exceeded 260% and 104% the WEO 2002 and 2004 projections respectively for this year. WEO projections for wind energy from 2002 for 2030 had been achieved 20 years earlier, in 2010.
  • Independent analysts have been more correct in their projections of the successful expansion of renewable energy than the WEO. Only forecasts of the conventional energy industry, including BP, Shell and Exxon Mobil, were similarly low as IEA projections.
  • WEO projections overestimate the potential of coal industry in the last years and do not reflect the latest trend of divestment of finance from the coal industry in the last years as well as China’s starting coal exit and increasing investment in renewables.
  • WEO from 2000 to 2006 highly overestimated oil-based electricity.
  • Despite a decline of nuclear energy in the last 10 years, WEO still projects an annual expansion of about 10 GW nuclear in the next decade. Given a few commissioned and financed nuclear projects and the 100-200% overruns over the planning costs in Europe and delays, WEO projections appear highly overestimated.

The full study (in English) is available here.

Press release in German is available here.

On October 2, 2015 the International Energy Agency (IEA) launched the Medium-Term Renewable Energy Market Report (MTRMR) 2015 on the sidelines of the G20 meeting in Istanbul.

The report demonstrates a certain effort by the IEA to recognize the relevance of renewable energies for power capacity over the medium term. It also points out that enhanced energy policies will give greater certainty about the long-term revenue streams of renewable projects and can foster their deployment.

The IEA figures reflect reality to a certain extend: in the OECD, renewables account for nearly all net additions to power capacity, compared to fossil fuels and nuclear. In the non-OECD, fossil fuels remain significant but there is large upside potential for renewables.

Yet, IEA projections of renewables expansion and costs remain largely conservative (Figure 34 and 65). Just like the IEA’s World Energy Outlook, this report makes the same error of assuming a linear growth for renewable energy despite the proved exponential growth track in the last decade. Read more on that in the last Energy Watch Group study.

The estimated 429.5 GW global solar PV capacity till 2020 are well below the estimates of Bloomberg New Energy Finance (BNEF) 589 GW, SolarPower Europe (SPE) 606 GW and Greenpeace 732 GW. The WEO 2014 projection on global solar capacity was only 364 GW. (see below 1)

Surprisingly, the report does not show the growth of the PV market in China and no significant market growth in India although both countries adopted 100 GW PV programs till 2020 and 2022 (See Figure 68). This year alone, China has raised its solar power installation target for 2015 by 40 percent.

IEA projects only 45 – 60 GW of global annual solar PV additions in 2020, whereas BNEF estimates 87 GW and SPE about 66 GW. (see below 2)  The same concerns the estimates of global cumulative renewable capacity: IEA projects around 700 GW whereas BNEF estimates 1004 GW and Greenpeace 1249 GW.

SUMMARY: The IEA Medium-Term Renewable Energy Market Report (MTRMR) 2015 goes in the right direction, but the wrong assumption of linear growth leads and conservative estimates result in undermining the global renewables energy market growth.

  1. The market outlook of SPE ends in 2019, therefore a market volume for the year 2020 according to the previous years had been added to get comparable installed capacities for the year 2020.
  2. The market outlook of SPE ends in 2019, therefore a market volume for the year 2020 according to the previous years had been added to get comparable installed capacities for the year 2020.