Project

Implications of the decrease of RES-E and battery cost projections for long-term energy planning and climate protection

This project analyses how falling cost projections of renewable energies and batteries can inform the energy planning and NDC update of selected countries (Argentina, Indonesia and Mexico).

 

The current commitments of the parties to the Paris Agreement in their nationally determined contributions (NDC) were defined in the run-up to the Paris Climate Summit 2015, COP21.  The discussion paper "Bringing climate policy up to date – decreasing cost projections for renewable energy and batteries and their implications" (Wachsmuth et al. 2018, available here) commissioned by the German Environment Agency, has shown that certain key mitigation technologies, i.e. power generation from renewables (solar PV and wind energy) and lithium batteries, will become substantially cheaper by 2025/2030 than expected when NDCs were prepared. In this new situation, the same investments that were foreseen for the NDCs in 2015 can potentially lead to increased technology uptake and allow for higher targets.

Parties to the Paris Agreement are now in the position to review and strengthen their NDCs by 2020 and in future revisions, also based on the updated cost projections. In this context, the project aims at supporting selected countries in assessing the implications of the decrease of RES-E and battery cost projections for the upcoming revision of their NDCs and for their long-term energy planning.

Countries of scope are Argentina, Indonesia and Mexico.

The project is carried out in collaboration with NewClimate Institute, based in Berlin and Cologne, Germany. In a different project, NewClimate has already applied the methodology to Chile and Canada. Publications are available online (download available for Chile, Canada)

 

 

The study analyses the influence of falling cost projections of renewable energies and batteries on the energy planning and the NDC update of selected countries. Following the estimate of cost projections from literature, we calculate possible quantitative increases in renewable energy uptake and subsequent emission savings. We then aim to have these preliminary results contested by stakeholders in the countries and receive feedback on the analysis. The analysis and the feedback serve as a discussion starter on the topic for the second objective, in which we are looking to understand the assumptions and processes underlying the current update of NDCs and the relation to energy planning in the countries.

 

UNFCCC SB50 session

The project was first presented at the UNFCCC SB50 session in Bonn in 2019. In the side-event 'Increasing NDCs in 2020 - analytical inputs', results of the underlying discussion paper by Wachsmuth et al. were presented, as well as results from the case studies on Chile and Canada. The slides shown at the side-event can be obtained here. The project team was present to gather feedback on the project idea from country stakeholders.

Global NDC Conference

The project was presented at a side event at the Global NDC Conference, which was held from June 12 to 16 2019 in Berlin, Germany. The project team was again present to gather feedback from country stakeholders.

REEW 2019

The project and results from the case studies on Chile and Canada were presented in the session 'NDC Implementation in the Energy Sector – A Reality Check' at the Renewable Energy and Efficiency Week (REEW) in Berlin on October 8, 2019.

COP25 in Madrid, Spain

In a dedicated UNFCCC side-event organized in collaboration with NewClimate Institute and the Renewable Energy Institute based in Tokyo, Japan, the project was presented at COP25 in Madrid on December 13, 2019. Preliminary results from the studies on the three countries of scope (Argentina, Indonesia and Mexico) were shown in two presentations, complemented by a presentation of the state of renewable energies in Japan. More information on the side-event and the presentation can be obtained here, video stream is available here.

We also offer the slides for download directly for Argentina and Mexiko and Indonesia.

© Jose Ordonez
© Jose Ordonez

At the end of February 2020, the project team was in Indonesia for close to two weeks to discuss and review results with input from stakeholders and gather insights. In the first week, we met stakeholders of different institutions bilaterally. The second week started with a workshop on Monday afternoon, which was followed by more bilateral meetings. Discussions of all events and meetings revolved around the following questions:

  • Are energy planners aware of the cost progressions and is it being considered in the energy plans and the NDC update?
  • Is Indonesia locking itself into higher costs by disregarding the dynamic cost progression of key renewable technologies?
  • What are the perspective of different stakeholders towards energy planning and how do costs play a role for them?
  • In view of these cost reductions, is Indonesia planning to increase targets with more RE or EVs?
  • What processes determine these plans? What processes and assumptions determine the update of the NDC?

Workshop

On Monday of the second week we invited relevant stakeholders to a workshop on the project, in which we presented and discussed results and implications of our quantitative analysis. The workshop was held in the afternoon of March 2, at the Hotel Wyndham Casablanca in Jakarta, from 3 p.m. to 6 p.m., followed by a networking dinner. Many thanks to all who participated and made this event insightful!

The workshop started out with two presentations. The first presentation showed how costs have fallen globally and in Indonesia and what implications this could have on renewable energy targets of Indonesia. The second presentation highlighted how financing of renewable energy differs from that of conventional energy projects. In the session following the coffee break, we had prepared some insights from our bilateral meetings and discussed implications of falling costs of renewables on energy planning and the climate change mitigation strategies.

Many thanks again for your attendance, the lively discussion and the insights you provided! The slides are available for download here.

Follow-up

If you wish to get involved, provide feedback or additional thoughts, our visit to Indonesia was not your last chance. Please reach out to the contacts provided to the right. We will be happy to continue the discussion!

 

Argentina is one of a few countries that have revised their NDC after COP21 in 2015. The current version was submitted in 2016 and is based on an updated methodological approach for the GHG inventory and a more comprehensive set of mitigation measures in key sectors. The current NDC presents unconditional and conditional absolute emissions targets of 483 MtCO2e and 369 MtCO2e in 2030, respectively, including the forestry sector. To reach the proposed targets, Argentina developed sector action plans for six key mitigation sectors: Energy, Transport, Forestry, Industry, Agriculture and Land-use, and Infrastructure and Territory. These sector action plans present strategies to implement Argentina’s NDC. We argue that a reduction in investment costs of key mitigation technologies should not lead to savings, i.e. implementation of the same sector action plans at a reduced cost, but ideally would be used as a stepping-stone towards increased ambition. [See project summary]

A preliminary analysis of renewable energy targets and investment cost reductions in Argentina shows that the absolute emissions level of Argentina's conditional NDC target could be reduced from 369 MtCO2e to 351-356 MtCO2e in 2030, based on technology cost progressions alone. [See preliminary analysis]

Stakeholder engagement

We aim to work closely with country stakeholders throughout the project to verify the data, strengthen our results and inform discussions around the NDC revision process. Due to COVID-19, we are not able to host an in-country workshop, as planned. However, we will carry out virtual bilateral meetings and a joint webinar in the second quarter of 2020 to discuss our findings and their implications in more detail.

Take Part!

We would like to invite interested people from the three target countries and beyond to provide valuable expertise and feedback on our research activity by sharing their comments on the draft analysis for Argentina via email or by participating in the bilateral meetings and/or webinar. The following questions are of interest for us:

  • Are there gaps in the data underlying our analysis? How realistic are the assumptions?
  • Are energy sector planners aware of cost progressions and are these being considered in energy sector planning and RE target setting?
  • Is your country planning to increase RE targets? If not, what are the main barriers? At which stage is your country in th NDC revision process? Are cost progressions considered in the NDC revision process?

To get involved, please do not hesitate to contact us!

Marie-Jeanne Kurdziel, m.kurdziel@newclimate.org

Leonardo Nascimento, l.nascimento@newclimate.org

For additional information, please also visit the NewClimate project website

We are analysing the impact of the massive cost reductions that renewable energies in the power sector have experienced on Mexico´s energy planning and NDC. We have prepared a preliminary analysis on the implications which falling costs could have on the current revision of the NDC (see preliminary analysis).
We are aiming to have these results contested, receive feedback and discuss implications. In addition to an estimate of a possible increase in the ambition level of the NDC in the energy sector, we are also investigating the assumptions and processes underlying the NDC in specific and long term energy planning in general. We are looking forward to a discussion revolving around the following questions:

  • Are stakeholders aware of the cost progressions and is it being considered in the energy plans and the NDC update?
  • Is Mexico locking itself into higher costs by disregarding the dynamic cost progression of key renewable technologies?
  • In view of these cost reductions, is Mexico planning to increase targets with more RE or EVs?
  • What processes determine these plans? What processes and assumptions determine the update of the NDC?

Get involved!

Within the project, we are aiming to discuss the findings with relevant stakeholders of Mexican energy- and climate policy. We had planned a personal visit to Mexico, but the worldwide restrictions due to Covid-19 are forcing us to move to a virtual engagement.
Together with NewClimate Institute, we are currently looking for and reaching out to pertinent stakeholders to engage in bilateral interviews. In addition, we will also be organizing a webinar on the topic. The date will be announced here and advertised through different networks.
To get involved and stay tuned, please do not hesitate to contact us!

Duration

08/2019 - 09/2020

Client

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and

Federal Ministry for the Environment, Nature Conservation and Nuclear Safety