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Of all the sectors of global energy use, renewable energy currently contributes the least to the transport sector. Renewables account for only 2.5% of energy consumption in the transport sector as a whole and 3.3% for road transport in 2010.

Virtually all of renewables contribution to the transport sector today comes from conventional biofuels derived from grains, oil crops or other feed crops. Advanced biofuels – which are not dependent on volatile food-related feedstock prices like conventional biofuels – are just starting to be produced at commercial scale and have tremendous potential. Plug-in hybrid and battery eletric vehicles are also just being deployed in commercial quantities, but the signs are encouraging and with additional deployment costs will come down.

As a result, despite the early stage of deployment for advanced biofuels and electric vehicles, IRENA’s costing study, Road Transport: The Cost of Renewable Solutions, finds an increasingly positive outlook for the use of renewable energy in road transport to 2020 and beyond. The analysis shows that plug-in hybrid and pure electric vehicles, advanced biofuels, and biomethane for transport could be competitive against fossil-fuel transport options by 2020 in an increasing number of market segments, as long as support policies are enhanced and expanded.

  • Road Transport: The Cost of Renewable Solutions: Executive Summary | Full Report
Advanced biofuels to be competitive with fossil fuels by 2020.       Solar PV module prices of around USD 0.75/Watt makes PV the economic solution for 1.3 billion people.       Electric vehicle battery packs to fall 40% to 55% by 2020 to cost USD 300-400/kWh in 2020.       Some of today's first-of-a-kind commercial plug-in hybrid and battery electric vehicles are economic today.       Road transport accounted for 76% of total transport demand in 2010.       Biodiesel consumption grew 42% per year between 2000-2010.       Feedstock costs account for 60-80% of total conventional ethanol production costs.       The levelised cost of electricity of wind, solar PV, CSP and biomass is declining.       Electricity from hydropower, geothermal and biomass where good resources remain are the cheapest way to generate electricity.       Renewables are increasingly the most economic solution for new grid connected capacity.       Wind turbine prices have been declining since 2009.       Renewables are becoming the economic choice for off-grid and mini-grids.       Wind turbine prices in China in 2012 were USD 620/kW.       The installed cost of wind is typically lower than coal-fired power plants in OECD countries.