G20 Foundation Publications China 2016 | Page 49

they require innovative thinking in policy design and implementation. The cost and value considerations of integrating wind and solar into the electricity system will likely become even more challenging as penetration grows. Appropriate market design that accounts for the value of variable renewables to the grid remains important for maintaining momentum. On the back of the Paris agreement, the G20 economies in particular have a crucial role in ensuring that appropriate policies are implemented and maintained. Collectively they account for 75% of global energy demand and 80% of energy-related CO2 emissions. This means they can make the difference in removing uncertainties, individually and collectively, if they share best practices and learn from experience. The IEA stands ready to support G20 action in this area, including through our recently expanded work programme on grid integration of variable renewables and electricity security. China reached a new high of nearly US$ 100 billion, making up 60% of its total generation investment, with wind investment for the first time surpassing hydropower. We are moving through a crucial period for those with a stake in low-carbon electricity. For the first time, renewables have seized the top spot in global power market growth and are set to dominate the emerging power systems of the world. But this is hardly time for complacency: while governments now realise that, even in the context of lower fossil fuel prices, renewables can provide affordable win-win solutions for enhancing energy security and reducing local pollution while mitigating global climate change, economic uncertainties and wavering policy commitments risk undermining investor confidence and slowing growth. I truly believe that while variability of renewables is a challenge that energy systems can learn to adapt to, variability of policies poses a far greater risk. The G20 economies hold the keys to ensure this does not happen and that, in contrast, we see even greater efforts to accelerate the deployment of low-carbon electricity to get us on track to meet climate change goals. ■ 49