MAINSTREAMING RENEWABLES:

GUIDANCE FOR POLICY MAKERS

The universal nature of energy was emphasised in the international
political sphere in 2015. In September 2015, the United Nations
General Assembly adopted the Sustainable Development
Goal on ensuring access to sustainable energy for all (SDG
7). Furthermore, 195 countries adopted the Paris Agreement
to address climate change in December 2015, committing to
increasing renewables and energy efficiency as part of the goal
to limit global temperature rise to 2 degrees Celsius above preindustrial levels.
There is a clear link between environmental protection, poverty
reduction, economic growth and technology development, and
this work on cross-cutting issues cannot be done in silos.
In order to meet the agreed targets, it will be necessary to work
across the various domains, including increasing dialogue, using
multi-stakeholder approaches and cross-cutting educational
programmes, and supporting interministerial collaboration.
National budgeting structures also must contain cross-cutting
aspects, and finance (and potentially other) ministries must
be included in climate and energy decision-making processes
alongside energy ministries.
Outside of the political sphere, civil society demonstrated its
overwhelming support for a transition to renewable energy,
including through the Popes environmental encyclical and the
Islamic, Hindu and Buddhist declarations on climate change, all
of which called on communities of faith to commit to a zero- or
low-carbon future. Pressure also is being placed on the morereluctant energy sector players. Even shareholders in fossil
fuel companies increasingly are pushing for the companies to
become greener. The private sector is taking advantage of the
falling costs of renewable energy technologies, and new initiatives
have emerged that include both public and private sector actors,
acknowledging that all have a role to play in the energy transition.
In parallel, increasing energy access for the 1.2 billion people
without access to electricity is an international priority. In order
to meet the target of limiting global temperature increase to
below 2 degrees Celsius, while at the same time increasing
energy access, remaining fossil fuel reserves will have to be
kept in the ground, and both renewable energy and energy
efficiency will have to be scaled up dramatically.

LEVEL THE PLAYING FIELD

Fossil fuel subsidies have to be phased out, as they distort
the true costs of energy and encourage wasteful spending and
increased emissions. Fossil fuel subsidies also present a barrier
to scaling up clean energy by: decreasing the costs of fossil
fuel-powered electricity generation, thereby blunting the costcompetitiveness of renewables; creating an incumbent advantage
that strengthens the position of fossil fuels in the electricity
system; and creating conditions that favour investments in fossil
fuel-based technologies over renewables.i Fossil fuel subsidies
were estimated to be over USD 490 billionii in 2014, compared
with subsidies of only USD 135 billion for renewables.iii
16

Policy design should financially discourage investments

in fossil fuels and nuclear, while also removing risk from
investments in renewable energy. This is crucial for scaling
up renewables, which can help close the energy access gap.
Although there has been some divestment from fossil fuels and
advances in renewable energy investment, fossil fuel and nuclear
investments continue to be favoured over clean energy in many
instances, particularly when short-term gains are the primary
consideration and long-term thinking is discounted. This can
occur when politicians think only in terms of the next election
cycle, or when companies attempt to provide shareholders with
quick returns. Furthermore, fossil fuels are more institutionalised
and have long-standing, well-financed lobbies.
Conversely, renewables are still less known and often suffer from
negative images and messages that are widely communicated,
such as the idea that incorporating large shares of renewables
is unrealistic due to variability, or that renewables are too
expensive. Simultaneously, renewable energy policy changes
and uncertainties undermine investor confidence, inhibiting
investment and deployment in some markets. Investors consider
all of these factors in their decision making, as do insurers
(demonstrated by the increasing presence of insurance addressing
climate change risks). Likewise, policy makers should think on
a long-term basis in order to increase investment in clean
energy and advance the energy transition in their countries.

THINK BEYOND THE POWER SECTOR

More emphasis needs to be placed on strengthening the role
of renewable energy in the heating and cooling and transport
sectors, as well as on sector coupling. Policy support for the
use of renewables in these sectors has advanced at a much slower
pace over the past 10 years than it has in the power sector; currently
renewable heat obligations exist in only 21 countries and biofuel
mandates exist in only 66 countries, compared to 114 countries
with renewable energy regulatory policies in the power sector. Not
only should policy support for renewables increase in general, but
interaction among the three sectors also needs to increase, and
national policies should strengthen local capacity, particularly in the
heating and cooling sector due to its distributed nature and to its
large reliance on local resources.
Policy makers need to remove barriers that are preventing
the increased share of renewables in heating and cooling
and transport. Current policy initiatives in both sectors are not
sufficient to drive the transition from fossil fuels. Policies in the
heating and cooling sector, in particular, have not progressed,
although heat represents nearly half of annual final energy
consumption. To resolve a structural problem of this magnitude,
both supply- and demand-side barriers to increasing the use of
renewables in both sectors must be addressed, such as lack of
trained personnel, costs to retrofit or upgrade, lack of awareness

PLAN FOR A DISTRIBUTED FUTURE

It is imperative to plan proactively for a future with a higher
amount of distributed energy generation. There is a growing
trend towards generation closer to the consumption point,
and the use of distributed renewable energy is rising in both
developing and developed countries. In developing countries, the
use of distributed renewables is primarily a tool for increasing
energy access, particularly in rural areas; in developed countries,
it is in response to a demand for self-sufficiency and a desire for
more-reliable electricity for those connected to the grid, with an
increasing number of prosumers emerging.
This change necessitates advanced planning that incorporates a
transition to new business models and several policy incentives,
while also taking into account the expansion of rooftop
solar, decreasing storage costs, increasing energy efficiency
measures, the development of community energy projects and
the involvement of a new smart technology industry. It also will
require a scaling up of infrastructure investments to maintain and
build out stable grid networks ready to integrate high shares of
variable renewables.
Comprehensive energy planning is needed to intensify
research, development and deployment of enabling
infrastructure for distributed resources,
including
strengthened electricity networks, energy storage, demand
response and flexible power plants. In industrialised countries,
a change in existing infrastructure needs to take place; in
developing countries, the concept of distributed resources
should be taken into account in planning and investment, rather
than defaulting to the traditional model of connecting everyone
to a centralised grid. To provide proper guidance to decision
makers, tools need to be developed that reflect these new
renewable energy realities and changing business models, and
that help to plan for the integration of distributed renewables in
developing and developed countries alike. Rather than resorting
to an either-or mentality, off-grid and on-grid solutions can be
pursued simultaneously.
The private sector also should plan for a decentralised
energy landscape, as the rapid and exponential growth of
renewable power generation and distributed resources comes
with both opportunities and challenges, resulting in both winners
and losers. In response to new competition and the disruption
of traditional business models, some utilities and electricity
suppliers are resisting change. Others, however, are repositioning
themselves and taking advantage of the renewables opportunity
by shifting more towards renewable assets and new markets and
embracing the idea of a much more decentralised future power
system, with less emphasis on fossil fuels.

ADAPT TO THE NEW, COMPLEX

ENERGY SYSTEM
Systemic, cross-cutting approaches are needed for scaling
up renewables. Policies often have focused on a single sector,
source or technology and were envisioned in the context of
centralised power (infra)structures, which no longer reflects the
reality of an increasingly complex energy system with increasing
crossover and decentralisation. Planning should occur across
sectors and across government departments and ministries;
policy design should be performed in close dialogue between
the public and private sectors; and policies at different levels of
government should be complementary and reinforcing.
Scaling up renewables is often less a problem of finance, and
more one of political will and of capacity; however, in many
developing countries, policies and government support still are
necessary to establish stable conditions, to ensure that finance
can reach projects and to enable private investors to engage.
In addition to robust policies that are adapted to the complexity
of the new energy system, strong leadership is necessary to
advance the energy transition, as ambitious policies require
political support, skilled direction and a vision for the future.
To support systemic, cross-cutting approaches to energy,
capacity needs to be built at both the political and the technical
levels. Training has to be made available for both current
and future decision makers, but also to build up the
technical workforce to expand technological and economic
solutions and to remove barriers that are standing in the way of
the energy transition. Such training could include streamlining
energy efficiency and renewable energy courses into university
curricula, and interdisciplinary/intersectoral internships that link
research, markets, business and the public sector.
Additionally, renewables should be considered alongside
energy efficiency and energy access. Just as the energy
transition cannot occur if all focus is on a single sector, it likewise
cannot be achieved without increases in both renewables and
energy efficiency. Greater synergies between the two are possible
in all sectors, and strengthening measures for one often will, in
turn, strengthen the other. To expand energy access, decision
makers also must make use of both renewable energy and energy
efficiency across all sectors. By building both renewables and
efficiency into energy access policies and programmes from the
beginning, available energy supply effectively can be increased,
and more-reliable supply can be provided at a lower cost.

i Richard Bridle and Lucy Kitson, The Impact of Fossil-Fuel Subsidies

on Renewable Electricity Generation (Winnipeg, Canada: International
Institute for Sustainable Development, December 2014), https://www.
iisd.org/gsi/sites/default/files/ffs_rens_impacts.pdf.
ii International Energy Agency (IEA) estimates include subsidies to fossil
fuels consumed by end-users and subsidies to consumption of electricity
generated by fossil fuels. IEA, World Economic Outlook 2015 (Paris: 2015),
p. 96.
iii The value of fossil fuel subsidies fluctuates from year to year depending
on reform efforts, the consumption level of subsidised fuels, international
fossil fuel prices, exchange rates and general price inflation, from
ibid. See also OECD-IEA analysis of fossil fuels and other support,
http://www.oecd.org/site/tadffss/, viewed 3 March 2016. Subsidies for
renewables in 2014 included USD 112 billion in the power sector and
USD23billion for biofuels, from IEA, op. cit. this note, p. 27.

RENEWABLES 2016 GLOBAL STATUS REPORT KEY FINDINGS

or knowledge of renewable alternatives, reluctance to change

and low consumer confidence. These barriers and others can
and should be tackled through a suite of programmes and policy
support options, including public awareness campaigns, training
programmes and renewable energy incentive policies.

17