RETD Perspectives on the Role of Renewable Energy in Global Energy Scenarios

1. Ryan Katofsky Representing the Renewable Energy Technology Deployment Implementation Agreement of the IEA Parallel Session 9: Power Generation 2009 International Energy Workshop 17-19 June 2009, Venice, Italy RETD Perspectives on the Role of Renewable Energy in Global Energy Scenarios

2. Yogiisms “It's tough to make predictions, especially about the future.” “The future ain't what it used to be.” “If you don't know where you're going, you'll wind up somewhere else.”

3. What is the RETD? The RETD seeks to significantly increase the use of renewable energy in RETD member countries. • Formed after the International Conference for Renewable Energies in Bonn, Germany, June 2004 • Goals: • Improve cooperation between participating countries on deployment issues • Fund projects that encourage technology deployment by public-private partnerships • Inform and facilitate ongoing international dialogue and public awareness of renewable energy • Encourage international deployment of renewable energy through improved policies

4. Evolution of the Global Energy System Changes to the global energy system call for new modeling approaches. Historical Paradigm Current & Future Trends Incremental demand growth met with existing technologies; Little concern for CO2 emissions Rapid change to meet the challenge of climate change (decarbonization of incremental and existing demand) Large, centralized infrastructure Mix of centralized, dispersed, and more remote infrastructure, including more customer-sited capacity Gradual, predictable evolution of established technologies New technologies arise; Technology cost & performance change rapidly; More potential for disruptive breakthroughs Energy security focuses on oil supply and price Multiple security considerations: energy supply, infrastructure vulnerability, and geopolitical risk associated with oil dependence and climate change impacts

5. Summary of RETD Activities In late 2007, the RETD began a project to address the role of renewable energy in global energy scenarios. Project rationale: • Global energy scenarios – especially those of the IEA – are crucial for guiding the development of energy policies and investment decisions. • In the view of the RETD, IEA scenarios are too conservative with respect to renewable energy (RE) deployment and learning rates. Key activities • Established positive working relationships with members of the WEO and ETP analytical teams: • Provided input to the ETP 2008, WEO 2008 and WEO 2009 • Developed a detailed position on the role of RE in global scenarios • Initiated development of its own RE-intensive scenario

6. RE Market Projections RE market estimates in the WEO 2008 appear conservative relative to industry trends. Historical and Projected Solar PV Markets – Total Installed Capacity Annual growth at 1/2 of historical Annual growth at 1/3 of historical • 2000-2008 historical annual growth: ~37% • Projected 2009-2013 annual growth:36-40% Source: Navigant Consulting Inc (NCI) PV Services Program, February 2009; WEO2008; Navigant Consulting analysis. Note: Navigant Consulting forecasts only go to 2013, and have been converted from DC to AC for comparison with the WEO data. Data is extrapolated beyond that date as shown.

7. RE Market Projections RE market estimates in the WEO 2008 appear conservative relative to industry trends. (continued) Historical and Projected Wind Power Markets – Total Installed Capacity Annual growth at 1/2 of historical Annual growth at 1/3 of historical • 2000-2008 historical annual growth: ~27% • Projected 2009-2020 annual growth:17-18% Source: GWEC; BtM Consult; WEO2008; Navigant Consulting Inc (NCI) analysis. Note: Navigant Consulting forecasts only go to 2020. Data is extrapolated beyond that date as shown

8. Other Key Observations on Scenarios The IEA should include a more complete assessment of economic costs and benefits. This conclusion is based on the information available in the WEO 2008, Chapter 19. Additional energy costs savings will accrue beyond 2030 for the investments made prior to 2030. This assumes that the 450 Policy Scenario has the same investment savings over the Reference Scenario (due to higher efficiency) as the 550 Policy Scenario ($3.7 trillion). The actual value was not provided in the WEO 2008. • The WEO 2008 showed that climate change mitigation is economically equivalent, or even superior, to taking minimal action.1 • This excludes other economic benefits, such as: • Job creation & rural economic development • Improved energy security & reduced energy price volatility • Reduced climate change adaptation costs

9. Improving Future Scenarios The RETD is developing its own RE-intensive scenario.

10. Conclusions Renewable energy is a key component to climate change mitigation. Renewable energy, along with energy efficiency, offer the lowest risk solutions to climate change. The scenarios of the IEA are critical for understanding the role of RE in the global energy system. Accurate representation of the potential of RE is therefore critical. The RETD looks forward to future collaboration with other parts of the IEA on this important topic.

11. THANK YOU For Additional Information on the RETD: Online: www.iea-retd.org Contact: IEA_RETD@ecofys.com Ryan Katofsky rkatofsky@verizon.net +1.781.307.7460 (M) Matthew Stanberry matthew.stanberry@navigantconsulting.com +1.781.270.8362 (O)

12. Notice RETD Notice The RETD is comprised of ten countries: Canada, Denmark, France, Germany, Ireland, Italy, Japan, the Netherlands, Norway, and the United Kingdom. Hans Jørgen Koch, Deputy State Secretary, Ministry of Climate and Energy, Danish Energy Agency, serves as Chair of the RETD. The RETD Implementing Agreement is one of a number of Implementing Agreements on renewable energy under the framework of the International Energy Agency (IEA). The creation of the RETD Implementing Agreement was announced at the International Renewable Energy Conference in Bonn, 2004. The IEA Implementing Agreement functions within a framework created by the IEA. Views, findings and publications of the RETD do not necessarily represent the views or policies of the IEA Secretariat or all of its individual member countries. Navigant Consulting Inc. Notice This presentation was prepared by Navigant Consulting, Inc. (NCI) on behalf of the RETD Implementing Agreement of the IEA. This presentation represents NCI’s best judgment in light of information made available to us. The reader is advised that in certain cases, NCI has not independently verified all the information contained therein. The reader understands that no assurances can be made that all financial liabilities have been identified. This presentation must be read in its entirety. This report does not constitute a legal opinion. Any use the reader makes of this presentation, or any reliance upon or decisions to be made based upon this presentation are the responsibility of the reader. NCI does not accept any responsibility for damages, if any, suffered by the reader based upon this presentation.