Solar Energy Perspectives - IEA

Chapter 11: Testing the limits
growth of energy demand is inseparable from the assumption of a large substitution of
electricity for direct uses of fossil fuels. One can thus assume that the share of electricity in
the final energy demand would increase from slightly less than one fifth currently to at least
half, perhaps even two-thirds, by 2060-65. These shares would represent yearly amounts of
electricity of 70 000 TWh and 93 333 TWh, respectively. A rounded figure of 90 000 kWh
would result from a multiplication by a factor of 4.5 of current electricity generation of about
20 000 kWh in 2008 and 2009 – in 50 years. This represents an annual growth rate of
electricity consumption of 3%, still lower than the growth rate seen in the last 30 years. This
assumption is thus not extreme: it does not ignore energy savings in the use of electricity, but
combines them with displacement of fossil fuels by renewable electricity.
The necessary energy supply and use will be analysed first for electricity, then for non-electric
uses of energy resources, whether fossil or renewables.
Electricity
Solar electricity could provide half of the projected electricity demand of 90 000 TWh, that
is, 45 000 TWh, which could be broken down as follows: 18 000 TWh from solar PV,
25 000 TWh from CSP and 2 000 TWh from solar fuels (in this case, hydrogen). Required PV
and CSP peak capacities would be 12 000 GW and 6 000 GW, respectively.
Three problems immediately come to mind: the costs, the variability of the resource, and the
land requirements or “footprint”.
Costs
If appropriate deployment policies are conducted, the costs of solar electricity are expected
to come down to a range of USD 50/MWh to USD 150/MWh by 2030 (chapters 3, 6 and 8).
The low end is reached with utility-scale power plants in sunny countries, whether with PV
or base load CSP generation; the upper end is characteristic of small-scale systems in less
sunny areas such as central European countries. Most other energy sources by 2030, however,
will present a roughly similar range of costs – all around USD 100/MWh, or USD 0.10/kWh,
plus or minus 30%. On-shore wind is already 30% below, offshore currently 30% above.
Fossil-fuel electricity generation from new plants would face either CO 2 pricing or the need
to access more expensive resources if demand were not mitigated by energy efficiency and
the deployment of renewables. New coal plants face tougher regulations on pollutants,
nuclear power will face new safety requirements. Both have long lead times. The most likely
competitors for solar electricity in the long run will be hydropower, electricity from biomass,
and wind power.
If as projected the world is four times richer in 2060, but consuming only 50% more energy,
even if the cost of one energy unit were twice as much as today, the total energy expenditure
would be proportionally smaller than today. It is thus conceivable to prefer an energy future
that provides security, economic stability and preserves the sustainability of ecosystems and
the environment, even if it is not the least-cost option when such considerations are ignored.
It is important, however, to keep some sense of technical and economic realism. Options that
can be brought to competitive markets in a decade, perhaps two decades, could be deployed
thereafter on a massive scale, and play a large role by 2060. Options that are currently orders
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© OECD/IEA, 2011