Renewable energy (RE) is growing worldwide, with a six-fold increase in non-hydro renewables over the last decade from 85 to 657 gigawatts (GW). This report reviews the key trends that explain growth in RE, and highlights how they are challenging decision making in countries such as Brazil, China, India, and Kyrgyzstan.

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Key Findings

Growth in renewables can be attributed to 5 key market trends:

  • Unprecedented growth and cost improvements in renewable energy sources
  • Improvements in new technologies and energy efficiency
  • Growing instability in fossil-fuel supply and prices
  • Growing support from governments and investors
  • Electricity generation by new and different entities

These trends are creating uncertainty in the electricity sector and new challenges forcing decision makers to think about how best to respond to them. Regulators, grid operators, planners, and utilities must now contend with technology changes evolving on a sub-annual basis, while also balancing conventional, pre-existing pressures to increase electricity access, increase the amount and reliability of the electricity provided, and improve the quality of services rendered. Generally, the report finds that there are 3 key challenges that need to be responded to by decision makers in order to build a future grid that delivers clean, reliable and affordable energy:

  • Technology and Infrastructure: There are increased complexities and physical constraints to the grid due to the adoption of new, intermittent technologies and distributed generation. The traditional electricity grid is evolving into a more complex network that is becoming more challenging to design, operate, and manage.
  • Institutional Arrangements: The conventional, central utility model is being challenged by quickening trends toward distributed, on-site, and self-generation. The centralized, top-down approach to operating the grid is being tested and the role of the conventional utility is being brought into question.
  • Electricity Pricing And Equity: Electricity pricing and equity concerns are arising, as the scale-up of new generation and grid technologies, and shifts toward new generation models, are raising questions about proper and equitable tariffs, cross-subsidization, and cost burdens.

Executive Summary

Changes in the sector, driven in part by objectives such as energy security, socio-economic development, increasing sustainable energy, environmental protection, climate change mitigation, public health, and increased public choice, are causing a number of trends: new and disruptive technologies, including variable renewable energy, small distributed generation and storage, are being deployed; new players such as individual homeowners and communities, are arising as legitimate electricity generators; and overall market dynamics are changing with the introduction of policy support mechanisms for clean energy, and increased competition. With these changes a new set of questions are arising regarding technical, institutional, and economic restructuring necessary to integrate these changes, and turn potential system wide threats into opportunities.

These changes are not only happening in developed countries but developing countries such as India as well. This report reviews how these trends are challenging the current state of play and how system planners, electric utilities, regulators, consumers and policy makers in Brazil, China, India and Kyrgyzstan can proactively start to plan for the transition towards the future grid.