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Transitioning to a Renewable Energy Future
Written by Donald W. Aitken, Ph.D., under contract to the International Solar Energy Society
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Contents
Executive Summary 3
Summary of Policy Options and Implementation Measures 6
Preface: Solar Energy from Then to Now and Beyond 7
Framework, Scope and Limitations of this White Paper 8
Definitions, terminology, and conversion factors 9
Introduction – 10 A Global Energy Transition, Steering the Correct Course
New Elements Driving Public Policy toward 12 a Renewable Energy Transition
Environmental warnings 12
Avoiding risks 13
Opportunities for governments 14
The Renewable Energy Resources: Characteristics, 15 Status of Development, and Potential
Bioenergy 15
Geothermal energy 18
Wind power and intermittent 20 renewable energy resources
Energy and power from the wind 20
Achieving high penetrations of energy from wind and other intermittent renewable energy sources 22
A few notes about the hydrogen transition 23
Direct use of the sun’s energy 23
Overview 23
Passive solar heating and daylighting of buildings 25
Solar water and space heating 27
Solar thermal electric energy generation 28
Solar photovoltaic electric energy production 30
National and Local Factors Supporting the Development and 34 Application of Renewable Energy Technologies
Meeting international greenhouse gas reduction commitments 34
Enhancing the productivity of energy expenditures, and the creation of new jobs 34
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Policies to Accelerate the Application of Renewable Energy 36 Resources
Overview 36
City policies can lead the way 37
The Sacramento Municipal Utility District 37
Los Angeles and San Francisco 38
National policies to promote new renewable 39 energy developments
Renewable electricity standards 39
Developing a balanced renewable energy portfolio 39
One especially successful policy instrument: “feed-in” tariffs 41
The developing nations 42
Market-based Incentives 43
Overview 43
Requirements for introducing fair market incentives 44 for renewable energy
Redressing inequities in market subsidies for the energy sources 44
Developing a consistent method for estimating energy costs 45
The Role of R&D in Supporting the Renewable Energy Transition 47
Two Comprehensive National Clean Energy Policy Models 48
The United States: Leadership from the states, and a 48 clean energy blueprint for an alternative future
Present (2003) status of renewable energy policies in the U.S. 48
A powerful clean energy blueprint for the U.S. 49
Germany: A significant long range renewable energy policy 51
Conclusion 52
Acknowledgements 54
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Executive Summary
This White Paper provides a rationale nal” energy resources. The White Paper Specifically, with regard to the renew- for effective governmental renewable argues that the attractive economic, able energy technologies, the White energy policies worldwide, as well as environmental, security and reliability Paper shows the following: sufficient information to accelerate effec- benefits of the accelerated use of rene- tive governmental policies. It is the thesis wable energy resources should be suffi- Bioenergy: about 11 % of world pri- of this White Paper that a worldwide eff- cient to warrant policies that “pull” the mary energy use at present is derived ort to generate the renewable energy changes necessary, avoiding the “push” from bioenergy, the only carbon- transition must emerge at the top of of the otherwise negative consequences neutral combustible carbon resource, national and international political agen- of governmental inaction. There is still but that is only 18 % of today’s esti- das, starting now. time left for this. mated bioenergy potential. Estimates for world bioenergy potential in 2050 In the history of human energy use, the The White Paper presents three major average about 450 EJ, which is more White Paper records that sustainable conditions that are driving public policy than the present total world primary resources were the sole world supply, toward a renewable energy transition: energy demand. Fuel “costs” for the even in nascent industrial development 1) newly emerging and better under- conventional resources become in- well into the 1800s, and that the world stood environmental constraints; stead rural economic benefits with will necessarily again have to turn to 2) the need to reduce the myriads of bioenergy, producing hundreds of sustainable resources before the present risks from easy terrorist targets and thousands of new jobs and new century is over. The fossil fuel period is from breakdowns in technologies on industries. therefore an “era”, not an age, and high- which societies depend; and ly limited in time in comparison with the 3) the attractiveness of the economic Geothermal Energy: geothermal energy evolution, past and future, of civilizations and environmental opportunities that has been used to provide heat for and societies. Accordingly, it is critical will open during the renewable energy human comfort for thousands of for governments to view what remains transition. years, and to produce electricity for of the fossil fuel era as a transition. the past 90 years. While geothermal The renewable energy transition will energy is limited to those areas with The White Paper reveals that policies accelerate as governments discover access to this resource, the size of now in existence, and economic expe- how much better the renewable energy the resource is huge. Geothermal rience gained by many countries to policies and applications are for econo- energy can be a major renewable date, should be sufficient stimulation mies than the present time- and re- energy resource for at least 58 coun- for governments to adopt aggressive source-limited policies and outmoded tries: thirty-nine countries could be long-term actions that can accelerate and unreliable centralized systems for 100 % geothermal powered, with four the widespread applications of renew- power production and distribution. more at 50 %, five more at 20 %, and able energy, and to get on a firm path eight more at 10 %. Geothermal ener- toward a worldwide “renewable energy Today, it is public policy and political gy, along with bioenergy, can serve transition”, so that 20 % of world electric leadership, rather than either technology as stabilizing “baseload” resources in energy production can come from rene- or economics, that are required to move networks with the intermittent renew- wable energy sources by 2020, and forward with the widespread application able energy resources. 50 % of world primary energy produc- of the renewable energy technologies tion by 2050. There can be no guaran- and methodologies. The technologies Wind Power: global wind power capa- tee this will happen, but the White Paper and economics will all improve with time, city exceeded 32,000 MW by the end presents compelling arguments that but the White Paper shows that they are of 2002, and has been growing at a show it is possible, desirable, and even sufficiently advanced at present to allow 32 % rate per year. Utility-scale wind mandatory. for major penetrations of renewable turbines are now in 45 countries. The energy into the mainstream energy and price of wind-produced electricity is The window of time during which con- societal infrastructures. Firm goals for now competitive with new coal-fired venient and affordable fossil energy re- penetrations of renewable energy into power plants, and should continue sources are available to build the new primary energy and electrical energy to reduce to where it will soon be technologies and devices and to power production can be set by governments the least expensive of all of the new a sustained and orderly final great world with confidence for the next 20 years electricity-producing resources. energy transition is short – an economic and beyond, without resource limitations. A goal of 12 % of the world’s electri- timeline that is far shorter than the time city demand from wind by 2020 appe- of physical availability of the “conventio- ars to be within reach. So is a goal of
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Executive Summary
20 % of Europe’s electricity demand gy. Data are mounting that demon- The White Paper stresses the impor- by 2020. This development pace is strate conclusively enhancements of tance of governmental policies that can consistent with the historical pace of human performance in daylit buildings, enhance the overall economic producti- development of hydroelectric and with direct economic and educational vity of the expenditures for energy, and nuclear energy. The 20 % penetration benefits that greatly multiply the ener- the great multiplier in the creation of jobs goal for the intermittent renewable gy-efficiency “paybacks”. The integra- from expenditures for the renewable energy resources is achievable within ted design of “climate-responsive” energy resources rather than for the present utility operations, without buildings through “whole building” conventional energy sources. Utilities are requiring energy storage. design methods enables major cost- not in the job producing business, but savings in actual construction, normal- governments are, supporting the need Solar Energy: The energy from the ly yielding 30 % to 50 % improvement for governments to control energy poli- sun can be used directly to heat or in energy efficiency of new buildings cies and energy resource decisions. light buildings, and to heat water, at an average of less than 2 % added in both developed and developing construction cost, and sometimes at National policies to accelerate the nations. The sun’s radiant energy no extra cost. development of the renewable energy can also directly provide very hot resources are outlined, emphasizing water or steam for industrial proces- Solar Energy Technologies: serious that mutually supporting policies are ses, heat fluids through concentration long-range goals for the application of necessary to generate a long-term bal- to temperatures sufficient to produce solar domestic water and space hea- anced portfolio of the renewable energy electricity in thermal-electric genera- ting systems need to be established resources. Beginning with important tors or to run heat engines directly, by all governments, totaling several city examples, the discussion moves to and produce electricity through the hundred million square meters of new national policies, such as setting renew- photovoltaic effect. It can be used solar water heating systems world- able energy standards with firm percent- directly to enhance public safety, to wide by 2010. A worldwide goal of age goals to be met by definite dates. bring light and the refrigeration of food 100,000 MW of installed concentra- The specific example of the successful and medicine to the 1.8 billion people ting solar power (CSP) technology by German “feed-in” laws is used to illus- of the world without electricity, and to 2025 is also an achievable goal with trate many of these points. provide communications to all regions potentially great long-term benefits. of the world. It can be used to produce Market-based incentives are described fresh water from the seas, to pump Photovoltaic (PV) solar electric techno- in the White Paper, to compare with water and power irrigation systems, logy is growing worldwide at an amaz- legislated goals and standards, and and to detoxify contaminated waters, ing pace, more than doubling every discussed in terms of effectiveness. It is addressing perhaps the world’s most two years. The value of sales in 2002 shown that various voluntary measures, critical needs for clean water. It can of about US$ 3.5 billion is projected such as paying surcharges for “green even be used to cook food with solar to grow to more than US$ 27.5 billion power”, can provide important supple- box cookers, replacing the constant by 2012. PV in developed and devel- ments to funding for renewable energy, wood foraging that denudes eco- oping nations alike can enhance local but that they cannot be sufficient to systems and contaminates the air in employment, strengthen local eco- generate reliable, long-term growth in the dwellings of the poor. nomies, improve local environments, the renewable energy industries, nor to increase system and infrastructure secure investor confidence. Reliable and Buildings: in the industrial nations, reliability, and provide for greater secu- consistent governmental policies and from 35 % to 40 % of total national rity. Building-integrated PV systems support must be the backbone for the primary use of energy is consumed in (BIPV) with modest amounts of stor- accelerated growth of the industries. buildings, a figure which approaches age can provide for continuity of 50 % when taking into account the essential governmental and emergency It is also shown in this White Paper that energy costs of building materials and operations, and can help to maintain the energy market is not “free”, that the infrastructure to serve buildings. the safety and integrity of the urban historical incentives for the conventional Letting the sun shine into buildings in infrastructure in times of crisis. PV energy resources continue even today the winter to heat them, and letting applications should be an element of to bias markets by burying many of diffused daylight enter the building any security planning for cities and the real societal costs of their use. It is to displace electric lighting, are both urban centers in the world. noted that the very methodologies used the most efficient and least costly for estimating “levelized” costs for ener- forms of the direct use of solar ener- gy resources are flawed, and that they
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are not consistent with the more realistic The White Paper concludes with the economic methodologies used by mod- presentation of two comprehensive ern industries. Taking into account future national energy policies to demonstrate fuel supply risk and price volatility in net the method of integration of various indi- present valuations of energy resource vidual strategies and incentives into sin- alternatives paints a very different pictu- gle, long-range policies with great re, one in which the renewable energy potential returns. resources are revealed to be competitive or near-competitive at the present time. All of those square meters of collectors and hectares of fields capturing solar Even though this White Paper empha- energy, blades converting the power of sizes the readiness of the renewable the wind, wells delivering the Earth’s energy technologies and thermal energy, and markets to advance the Governments need to set, assure waters delivering the and achieve goals to accomplish penetration of these energy of river flows, simultaneously aggressive efficien- resources to significant waves and tides, will cy and renewable energy object- levels in the world, an ives. The implementation mecha- displace precious and important component of nisms for achieving these goals dwindling fossil fuels any national renewable must be a packaged set of mutu- and losses of energy energy policy should be ally supportive and self-consistent from the worldwide support for both funda- policies. The best policy is a mix phase-out of nuclear mental and applied R&D, of policies, combining long term power. Sparing the use along with cooperation renewable energy and electricity of fossil fuels for higher standards and goals with direct with other nations in economic benefits, or incentive and energy production R&D activities to en- using them in fuel-saving payments, loan assistance, tax hance the global efficien- credits, development of tradable and levelizing “hybrid” cy of such research. It market instruments, removal of relationship with the is both significant and existing barriers, government lea- intermittent renewable appropriate that the dership by example, and user energy resources (sun European Commission education. and wind), will contribute has agreed to invest for to leaner, stronger, safer the next five-year period in sustainable societies and economies. And, in the energy research an amount that is 20 process, carbon and other emissions times the expenditure for the 1997-2001 into the atmosphere will be greatly re- five-year period. duced, now as a result of economically attractive new activities, not as expensi- ve environmental penalties.
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Summary of Policy Options and Implementation Mechanisms
National multi-year goals for assured Specific governmental renewable and increasing markets for renewable energy “quotas” for city and state energy systems, such as "Renewable renewable energy procurements; Energy Standards” (also called, in the U.S., "Renewable Portfolio Standards", Removal of procedural, institutional or RPS), or the EU Renewables Direc- and economic barriers for renewable tive, especially when formulated to energy, and facilitation of the integra- support balanced development of a tion of renewable energy resources diversity of renewable energy techno- into grids and societal infrastructure; logies; Consistent regulatory treatment, uni- Production incentives, such as “feed- form codes and standards, and sim- in” laws, production tax credits (PTC), plified and standardized interconnec- and net metering; tion agreements;
Financing mechanisms, such as Economic balancing mechanisms, bonds, low-interest loans, tax credits such as pollution or carbon taxes and accelerated depreciation, and (which can then be diverted as “zero green power sales; sum” incentives to the non-polluting and non-carbon technologies); System wide surcharges, or system benefits charges (SBC), to support “Leveling the playing field” by redress- financial incentive payments and ing the continuing inequities in public loans, R&D and public interest pro- subsidies of energy technologies and grams; R&D, in which the fossil fuels and nuclear power continue to receive Credit trading mechanisms, such as the largest share of support. Renewable Energy Credits (RECs) or carbon reduction credits, to enhance the value of renewable energy, to increase the market access to those energy sources, and to value the envi- ronmental benefits of renewables;
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Preface: Solar Energy from Then to Now and Beyond
Solar energy is not an “alternative ener- ses and cotton gins, and then turned So one way or another, civilizations have gy”. It is the original and continuing pri- the early (hydroelectric) generators to remained, to this day, powered by solar mary energy source. All life and all civili- bring electricity to cities. energy. (Of the two primary non-solar zations have always been powered by resources, nuclear energy contributed solar energy. Expanding the technical The solar energy released in burning 6.8 %, and geothermal energy 0.112 %, applications of solar energy and its other wood turned water to steam to greatly to world primary energy in the year renewable energy cousins to carry civili- advance industry and transportation, 2000.) Most often, though, we have zations forward is simply a logical exten- and to provide for human thermal com- used profligately and wastefully, and sion of its historic role, but also the fort in homes and buildings. Although taken for granted, the limited resource inescapable key to achieving sustainabi- the widespread use of coal developed in of fossil fuels. The fossil fuels are being lity for human societies. the second part of the 1800s, and oil steadily depleted, and they cannot was discovered in the be replaced on any From yielding the energy that The solar energy that is absorbed by the 1800s, wood was still the reasonable time scale powers the chemical, mechanical Earth and atmosphere drives the great primary energy used to and electrical functions of all living of human civilizations. cycles of weather and ocean currents, power industrial civiliza- things, and conditions their sup- While the lifetime of oil distributing the energy over the face of tions into the early 20th porting environment, the sun’s role and gas may stretch out the Earth. Solar energy provides the Century. in life and ecosystems has always through the first half of evaporation engine, lifting moisture to come first, and will continue to do this century, the transi- the atmosphere from where it can fall, It was only during this so for as long as life exists on this tion to sustainable alter- bringing clean, fresh water to plants most recent century that planet. Societies that accept this natives must happen principle will flourish, while those and filling the ponds, lakes, aquifers, human societies transit- well before the physical that try to evade this truth for their streams, rivers and oceans, spawning ioned to the fossil fuels or economic depletion own short-term economic benefit and supporting all forms of life. Solar for their primary energy will fail. of these valuable stored energy is tapped by plants through needs, forgetting, over energy resources. Civili- photosynthesis to energize the growth, time, that the energy in gas, oil and coal zation must begin to take seriously this directly and indirectly, of all life on Earth. is also solar energy that had been stored transition. The solar energy stored in wood and in living tissue (biomass) that did not get woody crops has been released by a chance to decay, but rather was sto- There is a readily available solution – the lightning in fire to renew wild ecological red, compressed, heated, and turned renewable energy resources. They are systems. More recently humans have into fossil fuels over the last 500 million non-polluting, inexhaustible, operate in released that stored solar energy in years. The cheap access to coal in new stable harmony with the Earth’s physical controlled fires to provide comfort and coal-mining settlements, and then the and ecological systems, create jobs and cooking. And the sun’s direct heat has convenience of oil and gas, caused the new industries out of expenditures that been adapted into shelters to warm widespread abandonment of passive previously had gone to purchase fuels, humans in cold climates for time eternal. solar, daylighting, and other environmen- contribute to physical and economic tal design features for buildings. self-sufficiency of nations, are available As human social groupings evolved into Although solar water heating was com- to both developed and developing cities, the sun continued to provide sup- mercialized and common in a number of nations, and cannot be used to make port with ever expanding uses of its areas at the beginning of the 20th centu- weapons. energy for life and commerce. Rivers ry, it, too, was replaced by the cheap filled by sun-provided water became convenience of gas and electricity. The We have turned to "yesterday's sun- transportation sources and locations for direct use of solar energy has been shine" stored in fossil fuels for about great cities. The solar-driven power of replaced by the indirect use of stored 100 years, after relying on “today’s sun- wind was tapped to grind grain in great solar energy. Yet solar energy it still is. shine” for all of human history before windmills, and to power the sails across that. Therefore, it is a thesis of this White the oceans carrying explorers, settlers, Paper that the world must emerge from and materials for commerce, and cross- this brief fossil-fueled moment in human fertilizing civilizations. Water falling over history with a renewed dependence on water wheels converted the sun’s ener- “today’s sunshine” for the entire portion gy of evaporation to power for machin- of human history yet to be written. ery, such as for the early printing pres-
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Framework, Scope and Limitations of this White Paper
Opening with a discussion of the new Existing hydroelectric power has great In keeping with the aim of this White elements that are today driving public potential to complement, level, and Paper – to accelerate the application of policy toward the renewable energy even store the energy from intermittent the presently commercialized renewable transition, this White Paper presents renewable energy resources, thereby energy resources – future possibly im- information on applications and policies increasing the value and utility of both. portant applications, such as ocean for those renewable energy resources So it will continue to be a valuable thermal energy conversion (OTEC), wave that are in great abundance worldwide, resource in the transition and beyond. energy, and tidal power, are also not but which have barely begun to be But on a worldwide scale hydroelectric discussed. But one can expect that developed to their full potential. The pre- power is nearing its maximum potential these, too, will sometime in the future sent status and rate of growth of each development already. take their places in the complete port- of the major renewable energy technolo- folios of opportunities to utilize nature’s gies is briefly summarized, to help inform Nuclear power is also not presented gift of renewable energies. the reader of their technical and market as a realistic policy option in this White maturity and to demonstrate the poten- Paper. Nuclear energy currently makes The following material presents just tial for renewable energy resource deve- a small but significant worldwide contri- enough about each of the selected lopment. bution (6.8 % of world resources to be read by The ultimate definition of “sustaina- primary energy – that is, busy decision-makers, bility” must accept as primary the The “baseload” renewable energy all energy consumed by maintenance and integrity of the to support the types of resources (bioenergy and geothermal end users – in 2000, and solar-driven ecological and physi- policies available to energy) are first presented, because of about 17 % of global cal systems, or human societies them, to support the their widespread historical contributions electric energy produc- and economies will surely perish. value of setting aggres- to meeting the energy needs of the tion, both figures still less sive goals which are world and their promise for future large- than those for renewable power and also realistic, and to suggest the kinds scale expansion. This is followed by the energy production). But it appears that of benefits that will accrue from those “intermittent” renewable energy resour- the pace of nuclear plant retirements will policies. This paper focuses on genera- ces (wind and direct thermal and electri- exceed the development of the few new ting and supporting the process of the cal applications of radiant solar energy). plants now being contemplated, so that renewable energy transition. nuclear power may soon start on a The next section delineates the various downward trend. It will remain to be This White Paper owes much to the policies that have been emerging to seen if it has any place in an affordable many informational resources, both peo- advance renewable energy technologies future world energy policy. And even if ple and publications, from which the and applications worldwide, to outline it does, it would be incredibly foolish to material for this paper has been drawn. the portfolio of options available today place all of the world’s hopes on just But this is intended to be a policy piece, for governments and nations. one resource, for if it fails, what then? not a research paper, so, with the As nature strengthens its ecological exception of the figures, the following Policies for the development of new systems through diversity, so must material is presented without specific large-scale hydroelectric power projects governments seek policies that support source attributions. The principal re- are not presented. Hydroelectric energy a diversity of energy resources. For sources are acknowledged at the end has been long commercialized. And an developing nations, the energy re- of this paper. argument can be made that, while hydro- sources of greatest importance are electric energy remains a very important those that are locally available, and worldwide renewable (and sustainable) which can be tapped and applied energy resource (producing about 2.3 % affordably by locally available human of world primary energy supply in 2000 resources. Nuclear power fails all of and 17 % of global electricity produc- these tests. The renewable energy tion), few large rivers remain to be tap- resources pass them. ped, and those that do are revealing ecological benefits from running free that exceed the benefits of being corralled behind dams to impound water and to produce electricity. Small hydroelectric applications (“micro hydro”) can still fill important local niches for power.
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Definitons, terminology, one’s head while reading, to allow energy is roughly equivalent to the ener- and conversion factors thought in the units to which the reader gy obtainable from the transformation of is most accustomed. A mental error of 52 million tonnes of dry wood biomass. An attempt has been made in this White only 5.5 % is made that way, and it can Paper always to put stated numbers in easily be corrected when thoughts are a relative context, to reveal their policy put to paper or computer.) meaning. Nevertheless, it is helpful here to relate energy units from the two major A unit in widespread use is million-ton- systems presently in use worldwide, or nes-of-oil-equivalent (Mtoe), which is, by to other convenient measures, to reveal definition, 41.868 Petajoules (PJ, or 1015 values used throughout this White Paper, joules). The energy content of a billion as well as to provide definitions appli- tonnes, or Gigatonne, of oil (Gtoe, or cable to this paper and in common use 109 tonnes) is therefore about 41.9 EJ. in reports. One kWh is also 3.6 million joules Work performed at the rate of 1 Joule/ (3,414 Btu) of energy, allowing a conver- second is one watt of power. sion from customary electrical energy Conversely, the energy produced by to thermal energy units. In order to keep 1 watt of power over an hour is one descriptions of both electrical and ther- watt-hour. Power usage is normally mal energy in a common energy nota- measured in the more applicable unit of tion, which of those is being discussed kilowatt hours (kWh, or the energy pro- is sometimes made explicit by notating duced by 1,000 watts of power over a kWhe for kilowatt-hours of electrical period of one hour). energy, or kWht for kilowatt-hours of thermal energy. For societal energy reporting, larger units must be used. The most common for How much energy is available from the the outputs of power production facilities renewable energy resources? The bright and societal energy statistics is mega- overhead sun can deliver energy to a watt hours (MWh, or one million watt- square meter of surface area on Earth hours), or gigawatt-hours (GWh, which directly facing the sun at the rate of is one billion, or 109, watt-hours). For about 1,000 watts (1kW – this is the national or world annual energy con- “standard sun” used to evaluate the effi- sumption, the unit of Terawatt-hours is ciency of solar energy systems, which the most convenient (TWh, which is one are consequently rated in terms of “peak trillion, or 1012, watt-hours, or one billion watts” output under a 1kW/m2 illumina- kWh). tion, or Wp). If the solar collector surface could absorb 100 % of the solar radia- The most useful unit for cataloging ener- tion that strikes it and if it could convert gy use by nations and the world is the that energy with 100 % efficiency then Exajoule (EJ), which is a billion billion it would produce 1kWh of energy each (109 x 109, or 1018) joules. Since the hour. Of course, it is not perfectly effi- energy content of 1,055 joules is equal cient, so the energy delivered by the to the energy content of one Btu (the solar energy system is less – usually in energy needed to heat one pound of the range of 5 % to 15 %. The power water one degree F), it is apparent that content of an 11 m/sec (25 mph) wind 1.055 EJ is therefore equal to one qua- is also about 1 kW/m2 perpendicular to drillion (“Quad”, or 1015 Btu) of energy. the wind direction, but wind turbines (For confused decision-makers reading cannot extract that with complete effi- this, it is sufficiently accurate to first ciency, either – they usually range from order to just equate EJ and Quads in 25 % to 35 %. And an Exajoule (EJ) of
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Introduction – A Global Energy Transition, Steering the Correct Course
During the recent development of human As this White Paper will substantiate, The continuing political clout of nuclear civilizations, societies and industries, the renewable energy resources had power advocates is leading to renewed experience has shown that it takes about emerged by the year 2000 into sufficient investments of public funds in some 60 years for the world to transition from technological and market maturity to be- countries (e.g. the United States and primary dependence on one resource of gin to affect global primary energy pro- France) to support that technology in energy to a new resource or set of re- duction, even though still very modest in amounts that greatly exceed invest- sources. It took about 60 years for us to total percentage terms. If this is indeed ments of public funds in renewable ener- transition from our dependence on wood the tip of the next great energy transi- gy resources, possibly delaying the tran- to coal, and by then we were already tion, then our own history suggests that, sition to a diversity of stable and reliable in the beginning of the 20th century. It by 2030, we should be deep into the energy sources even more. This is a took perhaps another 60 years or so emergence of the next age of energy huge gamble by those few govern- (from 1910 to 1970) to transition fully resources. ments. The majority of world govern- out of dependence on coal to a domi- ments are turning away from this form of nant dependence on oil and natural gas, We have stalled the start of that transi- energy because it is such a complex although coal has continued to be tion for at least the last 30 years. Fossil technology, expensive, vulnerable to ter- important for electricity production. fuels have continued to dominate a high- rorists or to misuse as a source of mate- ly distorted and artificial energy market. rial for weapons of mass destruction, Much of the world has seemingly settled Today’s low fossil fuel prices result in potentially dangerous in its own right into fossil fuels as though they will be part from the continuing benefits of very (e.g. Three Mile Island, and Chernobyl), forever available, or as though any fur- large government subsidies, and in part and dependent on waste storage solu- ther energy transitions will be the tasks from having no value assigned to the tions which have yet to be perfected. of future generations, not of the present. great chemical “feedstock” potential of And yet environmental limits to the unli- these rich hydrocarbons in comparison Nuclear power will never hold its own in mited use of fossil fuels, with potentially with simply burning them. No economic free energy markets, that is, without hugely negative economic implications value is assigned either to future resour- massive public subsidies in assuming for all nations, are now apparently emer- ce availability or to costs assigned to the risks of owner default or accidents ging, and these limits are indeed being the environmental and human health with consequences possibly orders of taken seriously in policy formulations by impacts of their use. The money to be magnitude more expensive than private most of the developed world’s govern- earned by the finders and sellers of fossil insurance companies can afford to ments. fuels, and the political power that has cover, or be affordable to developing come with that, has further delayed any nations. The lifecycle of nuclear power, serious beginnings of the next energy from plant construction to decommis- transition. sioning, and including the environmental consequences of the complete fuel cycle, leads to a significant emission of the very greenhouse gases that the use of nuclear power is touted to avoid.
Other 0.5% Tide 0.004% Fuel for nuclear power plants is also an Nuclear Hydro 2.3% Wind 0.026% element from the Earth’s crust that is in Gas 6.8% Solar 0.039% 21.1% limited abundance. And there are already far less expensive ways to make hydro- Oil Renewables Combustible Renewables gen from renewable energy than from 34.8% 13.8% Geothermal and Waste 0.442% nuclear energy, removing yet another Coal (CRW) 23.5% 11.0% presumed economic justification for the construction of new nuclear power plants.
Fig. 1: Fuel Shares of World Total Primary Energy Supply, Year 2000. The growth of wind-electric installations between 2000 and 2002 has increased wind’s share of world total primary energy supply to 0.042 %. Wind is 0.7 % of world installed electric power capacity in nameplate rating, but closer to 0.2 % in power produced, because wind operates only about 30 % of the time at its full rating. This demonstrates how far the non-hydro renewables must go in order to assume a larger share of the world’s total energy and electricity production. Source: IEA,”Renewables in Global Energy Supply”, an IEA Fact Sheet, November, 2002
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Nuclear energy may Stalling a serious, large scale For example, Canada already known to derive from these first therefore be practical worldwide effort to launch the full- will not be able to pro- steps, and to compare and evaluate the only for a time limited by scale renewable energy transition vide more exports of policies that are emerging as the most fuel resource availability will produce a more dangerous natural gas to meet the effective to accelerate the application and technical, security, world, gamble away any hope anticipated natural gas of renewable energy resources. environmental, economic for equity between nations of the shortfall in the U.S. But world, and also gamble away the and ethical considera- since natural gas is the The elements of that transition have al- future opportunities of our own tions. While it may pro- children and grandchildren. And choice for multiple new ready appeared, and been tested both vide some useful energy what are the governments of electric power plants for technical feasibility and in world ener- during the transition, tomorrow to say to them? We’re being built or planned gy markets. Governments don’t have to nuclear energy will most sorry? It was the past govern- in the U.S., suggestions start something new – they only need certainly not be a long- ments that blew it? are now surfacing that the political will to expand that which is term survivor of the tran- Or, even worse, our past govern- the U.S. growing need already developed, studied and tested, sition. Other resources ments really didn’t care about you, be met by liquefied and which now stands ready to burgeon must be developed and and used economic criteria that natural gas imported into a new life-supporting industry for discounted your rights while also applied on a global scale. and stored, which will the world – the renewable energy acting on the assumption that saving the world was uneconomic? greatly raise the price resources. Continual postponement of electricity, increase of a serious worldwide initiation of the U.S. dependence on foreign sources, It is a thesis of this White Paper that a renewable energy transition is a preca- increase the deficit in balance of pay- worldwide effort to generate the renew- rious gamble, potentially jeopardizing our ments, and yield yet a new convenient able energy transition must emerge at ability to launch it at all as the clock to set of targets for terrorists – LNG tankers the top of both national and international accomplish it in economically attractive and storage facilities political agendas, starting now. It is the ways winds down. Further stalling the expectation that this White Paper can renewable energy transition also gam- It is the purpose of this White Paper to serve as the basis for the adoption with bles the world’s security and stability, reveal the enormous momentum now confidence by governments of policies as present centralized energy systems being generated worldwide in renewable that will launch an orderly worldwide become vulnerable terrorist targets, and energy applications and policies, to renewable energy transition. dependence on economically critical underscore that the ingredients are resources from politically unstable areas now in place for the renewable energy of the world continues to increase. transition to begin, to reveal the benefits
12 % annual growth rate60 % New Renewables
10 50 52.1%
9.4% 8 40 Fig. 2: Annual growth of renewable energy supply from 1971 to 2000. Growth in total renewables kept 6 30 32.6% up, in percentage terms, with growth in Total Primary Energy Supply(TPES) during that almost 30-year period, which means that total installed renewables 4 20 increased considerably, but renewables installations have not been gaining on total world supply increase. (The very high annual percentage growth rates for 2 2.7% 10 the “new renewables” of solar and wind result in 2.1% 2.1% part from the very low level of applications at the 1.8% 8.8 % 8.4 % beginning of this reporting period.) Source: IEA,”Renewables in Global Energy Supply”, 0 0 an IEA Fact Sheet, November, 2002 Hydro (TPES) Combustible Total Primary Total Waste (CRW) Waste (Wind 52.1%) (Solar 32.6%) Energy Supply New Renewables Renewables and Total Renewables Total (Tide, other 8.4%) (Geothermal 8.8%)
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New Elements Driving Public Policy toward a Renewable Energy Transition
Environmental warnings from all sources. Smaller countries with potential impacts that warming can have bigger ambitions have taken over the on the energy flows on the Earth’s surfa- For years scientists, governments, and world leadership in the development ce, which are expressed in perturbations people have considered the potential and sales of renewable energy techno- to the Earth’s climates. A scientific con- of renewable energy resources for pro- logies, clearly already to their own eco- sensus is emerging, as expressed by the viding society with efficient and environ- nomic benefit. Chairman of the IPCC, as he warned in mentally responsible energy. In parallel, the 2001 Assessment that “The over- enormous strides have been made in The world scene is now dramatically whelming majority of scientific experts, renewable energy technologies and mar- altering from the past. Of particular whilst recognizing that scientific uncer- kets. But until recently most of those significance are the impacts of climate tainties exist, nonetheless believe that have all taken place at a leisurely pace, change from global warming that are human-induced climate change is already generally with no particular sense of apparently emerging with already percei- occurring and that future change is urgency. vable negative economic consequences inevitable.” for most nations, and projections of This was not always the case. For ex- very serious costs in the future. While A UN-sponsored report (by Innovest ample, U.S. President Jimmy Carter was present heat spells cannot be scienti- Strategic Value Advisors) further conclu- the first world leader to announce, as he fically attributed to global warming, ded in October, 2002, that “Worldwide did in 1976, that energy policy would be the 19,000 deaths in Europe from the losses from natural disasters appear to his highest priority. He launched vigo- August 2003, heat wave reveals omi- be doubling every ten years … the cost rous programs to advance energy effi- nous potential consequences. The initial of climate change could soar to US$ ciency and solar energy, and to lead the cautious pronouncement by the Inter- 150 billion a year within the next ten United States on an “Energy Indepen- governmental Panel on Climate Change years.“, and “The increasing frequency dence” path. But his programs soon (IPCC) of a “discernible” evidence of of severe climatic events … has the po- mired in politics, and he was scorned for human contributions to global warming tential to stress insurers and banks to his famous televised talk wearing a swe- was advanced in their 2001 Assessment the point of impaired viability or even ater in front of a fireplace. The U.S. sub- to “There is new and stronger evidence insolvency.” The projections are far sequently turned its policy back to the that most of the warming over the last graver and more basic for the low-lying conventional energy resources, and is 50 years is attributable to human activi- and developing nations, as seas rise and now the unfortunate world leader in the ties.” rains dry up, yet they alone cannot con- profligate use of oil in inefficient vehicles trol their environmental destinies. They and in producing the world’s largest sin- It is not the warming per se that is of must appeal to the developed nations to gle share of greenhouse gas emissions such great concern so much as the alter policies to reduce the risks for all nations.
300 Billion US dollars 1500 Exajoules Surprise Geothermal 250 1250 Total economic losses Solar 200 Insured losses 1000
Biomass 150 750 Wind Nuclear 100 500 Hydro Gas
50 250 Oil + NGL
Kohle tradit. Bio. Decade 1960-69 1970-79 1980-89 1988-97 Year2000 2050 last ten years
Fig. 3: The increasing impact on the U.S. economy from major weather and Fig. 4: A very well known scenario for a possible renewable energy transition, flood catastrophes, expressed in constant dollars. Already the share repaid by prepared by Shell International in 1996. World energy growth would increasingly the insurance companies is excessive, causing a reduction in the scope of storm be met by renewable energy resources, until, by about the middle of this centu- insurance coverage, and leaving the American public increasingly exposed to the ry, more than half of the world’s energy needs would be met by the clean ener- economic consequences of climate change. This is the basis for making the avoi- gy resources. This scenario shows that, to accomplish such a transition, contri- dance or mitigation of the impacts of climate change a matter of public policy butions by renewable energy sources, even though small, must begin to emer- and governmental action. ge onto the world scene very early this decade. Source: Munich RE Group, 1999 Source: Shell International Limited
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Avoiding risks losses from this two-day event are work vulnerability. While we don’t know expected to be about US$ 5-6 billion. exactly when the world demand for oil It is risk, and risk avoidance, that is the will exceed daily production, when it dramatic new driver of public policy The American President’s response was does (certainly sometime in the early part emerging into public discourse today. to call for upgrading the nation’s aging of this century) it will forever alter the Climate change is perceived as a seri- utility grids, but more enlightened obser- economics of world energy resources, ous future ecological and economic risk. vers recognized this as a sign of the and promote an intensive international So is terrorism. Power plants, transmis- fundamental failure of interconnected, competition for those resources. We sion lines and substations, and gas and centralized systems, and a call for have already seen how readily nations oil pipelines, are all attractive and acces- governments to start diversifying the are willing to go to war to protect regions sible centralized targets for terrorists who grid with distributed energy sources. rich in oil resources. And the world is wish to bring the working of a society to This was echoed just four days later in experiencing risks to peace and political a quick and decisive halt. The distrib- a front page story, “Energizing Off-Grid stability by nations with the potential to uted renewable energy technologies, on Power”, in the prestigious American utilize nuclear fuel to create weapons of the other hand, operate in smaller units, business newspaper The Wall Street mass destruction. Without the leader- often building-by-building, yielding tar- Journal. The U.S. Congress has shown ship of the developed nations in turning gets too widespread and small to be its unwillingness to invest anything like away from these destructive paths, the of interest to terrorists. Energy security US$ 6 billion in the development and de- world will become more dangerous still. comes from the integration of these ployment of distributed energy systems, many sources of energy into the grid. yet the failure to do so has been graph- The destruction of one will have little ically shown to lead to the risk of losses impact on the others, or on the energy of equivalent amount. network as a whole. A few bombs could not bring a society based upon distrib- Just one month later it happened again, uted energy resources to its economic but this time in Italy! Before this second knees. blackout was over 58 million Italians were without power. Once again, a problem Risks to a nation’s energy systems also in a central, interconnected grid took arise from within, from the very design down an entire electricity system for an of the systems and the potential unreli- entire country. The case for a distributed ability of their components. This was system of diversified resources could not illustrated in remarkable fashion by the have been better emphasized than by enormous blackout in the United States these two massive outages. in August of 2003. A sequence of gene- ration plant and transmission line “trips”, Which policy is better for the economy? one leading to another, like falling domi- Losses diminish an economy. New noes, began at 2 in the afternoon on technologies strengthen it. Continuing August 14. Within two and one-half hours to invest in old ways of producing and five major transmission lines, three coal- distributing energy does not reduce the fired powerplants, nine nuclear power- systemic risks from massive, centralized plants, and an important switching sta- systems. Investing in new ways of pro- tion, had all tripped off. ducing and distributing energy in smaller scale, decentralized systems can greatly Before it was over 100 power plants, reduce the large risks, and the possibility including 22 nuclear plants in the U.S. and of future economic losses from system Canada, had gone off line. The power failures. The safety and reliability attri- failures spread through eight states and butes of distributed energy resources two Canadian provinces, leaving 50 mil- need to be taken explicitly into account lion Americans and Canadians, living in when evaluating relative costs of energy portions of the United States from New supply systems. York City on the East to Detroit in the Midwest, and Toronto, Canada, to the Yet the risk to the very fabric of society north, completely in the dark. Economic extends beyond terrorism and utility net-
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New Elements Driving Public Policy toward a Renewable Energy Transition
Opportunities for governments These factors have been a driving force for policy development by the European The risks of failing or outmoded national Union. The EU appears to be doing well energy policies can do great harm to in holding firm to greenhouse gas re- national economies. Energy costs are duction targets, although meeting the embodied in everything – day-to-day emission cuts is proving difficult to some costs for the energy essentials to sup- member nations. The EU is already ex- port lives, embodied energy in all that periencing energy productivity gains, we make, consume, and eat, and em- and a steadily increasing share of locally bedded energy expenditures in the available renewable energy resources in costs of all goods on the domestic and their energy mixes, all in the interest of world markets. Societies that can make providing for risk avoidance, price and and sell products with less invested supply stability, and enhanced job pro- energy costs will get a very large advan- duction and other economic benefits tage on the world market – and soon. throughout Europe. Many members of Those societies that can stabilize their the EU continue to recognize that, in long-term energy costs, and isolate their order to realize these benefits, strong internal and external market activities financial incentive policies, coupled with "There is nothing more difficult from cost increases and supply instabili- firm national goals, are still needed to to plan, no more dangerous to ties of conventional fuels, will have an pull the renewable energy resources manage, than the creation of a even larger advantage. And those socie- along so they can compete on the new system. For the creator has ties that transform the expenditures for (unevenly subsidized) playing field with the enmity of all who would profit fuels, which must be imported, into sup- conventional energy resources. by the preservation of the old port for useful and productive employ- system and merely lukewarm ment for their own people in their own If the “external” costs of the impacts of defenders in those who gain by energy efficiency and renewable energy developing and using conventional ener- the new one." Machiavelli, 1513 industries, will convert an energy cost to gy resources are taken into account, an economic stimulus. and if “risk adjusted portfolio manage- ment” is adopted for energy resources, When governments consider all of the whereby the future price uncertainties of risks, the potential benefits to be enjoy- conventional energy resources are facto- ed by energy-efficient societies that rely red into a net present evaluation of long- increasingly on their own available and term costs, a good argument can be inexhaustible environmental energy re- made to governments that several of the sources, in locally and regionally distri- renewable energy resources are already buted applications, become persuasive. less costly on a net present value basis, Indeed, one can probably say with con- and far more beneficial to societies and fidence that it will be those nations that economies, than the conventional ener- will be the safest, most secure, and eco- gy resources. Energy efficiency measu- nomically strongest by the middle of this res that save enormous amounts of century. Or, one can state that the eco- money are still waiting to be adopted nomic and policy risks of inaction in the world wide, and renewable energy tech- aggressive adoption of energy efficiency nology applications have scarcely begun and the renewable energy resources are to tap into their full potential. Yet both far greater than any economic risks or turn costs for fuels into support for new impacts of such programs. jobs and more robust economies while, at the same time, dramatically reducing the climate risks to all nations as a bonus, at no extra cost.
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The Renewable Energy Resources: Characteristics, Status of Development, and Potential
Bioenergy values, including direct heating, cooking, cycles, and therefore does not contri- and the production of electricity or che- bute to climate change and greenhouse Biomass is the result of the photosyn- mical products. Except for the desert warming problems. Analysis has shown thetic conversion of solar energy and regions of the world (abundantly en- that the greenhouse warming potential carbon dioxide into the chemical and dowed with direct solar energy) or Arctic of biomass combustion is lower than physical components of plant material. and Antarctic regions (abundantly en- that of all of the fossil fuels, including These, then, become storage mecha- dowed with wind energy), biomass is gas, even with carbon sequestering. nisms, enabling that solar energy to be a resource found worldwide. Analysis has further revealed that, with transferred through plant and animal the sole exception of carbon monoxide, ecosystems, humans, and industrial While bioenergy has remained critically the combustion of biomass produces systems. The useful work produced important to the life support systems of substantially lower emissions than the by the conversion of biomass is there- developing nations, and continues in combustion of coal. fore still “solar powered”. This is true that importance today, in the industrial whether the biomass was produced nations bioenergy as a percentage of Energy derived from biomass can offer over a 500 million year period, and hea- national primary energy has actually important benefits for modern industrial ted and compressed by geologic pro- reduced significantly since the 1800s. societies. For example, the stored solar cesses to become fossil fuels, or wheth- For example, 85 % of the primary ener- energy can be released continuously er newly grown plant material is used to gy of the United States came from bio- when used as a fuel in vehicles, or for produce “bioenergy”. This includes the energy in 1860, a figure that had been the production of “baseload” electricity. functioning of human bodies and minds, reduced to 2.5 % by 1973. In 1860 the This feature allows bioenergy to serve as powered by the stored solar energy re- dominant energy resource for residential an energy “leveler” when used in hybrid leased in food consumption. (“Biomass” use and industrial development of the systems that also get energy from the as used today and in this White Paper United States was fuel wood, but by intermittent renewable resources – e.g. does not refer to fossil fuels, but only to about 1910 it had been supplanted by sun and wind. Ownership of bioenergy material produced by present growth coal, and later by the addition also of plants by operators of the intermittent processes on Earth.) oil and gas. Bioenergy faded from our resources also provides for important industrial economies for a time, but it economic counterbalances of the reve- Energy produced in various ways from is starting an extremely important re- nues from the intermittent resources. It biomass for societal and industrial use is surgence, for a variety of reasons all was reported that half of the Germany termed “Bioenergy”. Reasonable projec- relevant to the economic development wind power developers are diversifying tions accord the largest share of future and environmental protection of indus- into biomass and bioenergy. renewable energy to bioenergy, justifying trial nations. its position as the opening renewable Biomass can be mixed with coal to energy resource in this White Paper. Biomass is the only combustible carbon reduce environmental emissions in the This is partly because of its great and resource that is “carbon neutral”. production of coal-fired electricity, it can accessible uses in both developing and Bioenergy conversion of biomass oper- be converted directly to liquid fuels, and industrial nations, and for its multiple ates within the Earth’s natural carbon it can greatly enhance rural economies
Fig. 5a: Bioenergy from wood refuse and chips Fig. 5b: Community combined heat and power (CHP) plant, fueled by wood chips, Source: U.S. National Renewable Energy Laboratory (NREL) for 300 families in Denmark Photograph by Dr. Donald Aitken
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The Renewable Energy Resources: Characteristics, Status of Development, and Potential
through its production and harvesting. electricity, with the remainder of the (This White Paper will demonstrate that It has been estimated, for example, that thermal energy going first to buildings, this is true for all of the renewable ener- tripling U.S. biomass energy use by and then, at even lower output tempera- gy resources.) 2020 could produce US$ 20 billion in tures, to greenhouses to promote food new income for farmers and rural areas. production in the cold climate at that With all of this promising economic and And the creation and conversion of bio- 61 degree North latitude. Analysis has environmental potential, where does bio- mass to bioenergy, biofuels and biopro- verified that the natural replenishment of energy stand at present, and where ducts can be a significant source of new wood in the nearby forests exceeds the could it be with more vigorous govern- jobs. It has also been estimated that, in extraction rate for the plant. mental support? Three recent estimates the U.S., 66,000 new jobs and US$ 1.8 put the present global primary energy billion in new income were created from Economic, environmental and social derived from biomass at about 46 Exa- the production of electricity from bio- considerations are leading biopower joules (EJ), with 85 % of that in “traditio- mass during the 1980-1990 period, an production into new, more efficient tech- nal” uses (firewood, dung), and 15 % in industry that also attracted US$ 15 bil- nologies, such as gasification, with the more industrial uses, such as fuel, com- lion in new investment capital. biogas then used in integrated gas com- bined heat and power (CHP), and elec- bined cycles (IGCC) systems. Finland tricity. Put in perspective, the world pri- The efficiency of utilization of the bio- has produced the world’s pioneering mary energy use for the year 2000 was energy resource is just as important as biomass gasification plant, which has about 417 EJ, so 11 % of world primary the absolute amount of bioenergy that is been operational for over energy use at present is The current bioenergy resource utilized. Technical efficiency is dramati- six years. A governmen- derived from bioenergy. potential is significantly greater cally enhanced when bioenergy is used tal subsidy program has than present use, offering an This is about 18 % of an in combined heat and power (CHP) helped India to install attractive opportunity for new estimated world bioener- applications, whereby the top energy multi-megawatts total governmental incentives and policy gy resource potential of from biomass or biogas combustion is of small gasifier internal initiatives to increase the economi- about 250 EJ at present. extracted for the production of electrici- combustion engines cally and environmentally beneficial ty, and the lower grade heat is used for (ICE). uses of this resource, without con- To what extent could thermal applications, such as the district cern that these programs would bioenergy serve as a be resource limited. Aggressive heating of buildings. This is also an Brazil continues to be the significant contributor governmental programs to tap into example of what the Europeans term world leader in the pro- to a renewable energy the advantages of bioenergy will “cascading” of energy. duction of Ethanol fuel also help to set future societal transition? The sources from biomass (sugar priorities and reduce some techni- of biomass material for The Danish, for example, responded to cane), but the U.S. etha- cal and social uncertainties, hence bioenergy conversion a new governmental policy to promote nol production (from assuring that bioenergy can conti- are from wood or forest CHP at a time in which essentially none corn), at about 70 % of nue to meet its potential for world residues, agricultural of the Danish electricity was produced that of Brazil, may soon economies well beyond the renew- crop residues, energy in CHP systems. In only ten years (by catch up as a result of able energy transition. crops from surplus crop- 2000) 40 % of all Danish electricity pro- governmental require- land or from degraded duction had been converted to CHP ments (Clean Air Act) for cleaner-burning land, and waste from animals or humans, (along with 18 % more to wind power). (higher oxygen content) fuel mixtures. including the uniquely human energy Oil burners were bypassed in homes in The European Union, which is promoting resource of municipal solid waste. While which the hot water from the new local the energy efficiency of diesel engines, the future technical potential of bioener- (and locally owned) district heating plant, is the world leader in biodiesel produc- gy resources can be estimated with using locally-grown feedstocks, such as tion (from oil seeds), also leading to some degree of confidence, there are straw, was piped in. cleaner burning engines and a reduction a combination of uncertainties in the of contamination from accidental spills. multiple ways in which bioenergy re- In 2001 20 % of Finland’s energy came Expenditures both for fuels and for emis- sources can be gathered or developed, from the bioenergy conversion of wood sion control devices that would other- and uncertainties about future societal residues and its use in CHP applica- wise have gone for energy resources policies and priorities, that will profound- tions. A remarkable example of “cas- imported from outside the region or ly affect the actual extent of this renew- cading” of bioenergy is in Jyväskylä, country are instead diverted to the crea- able energy resource. Finland, where a 165 MW wood-cofired tion of employment and the enhance- power plant produces about 65 MW of ment of local and regional economies.
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For example, the greatest potential for And a recently released “Vision for Bio- significance and economic and environ- future bioenergy resources is expected energy and Bio-based Products in the mental benefits of the results. to come from production on surplus United States” sets goalsfor 2020 of agricultural land. But whether there is 5 % of U.S. electricity and industrial heat The actual percentage of world primary any “surplus” land depends on the way demand from bioenergy, 20 % of all energy demand in 2050 that 450 EJ of agriculture is conducted in the future transportation fuels from biofuels, and for bioenergy might meet depends therefore (that is, whether it requires high chemical bio-based products to represent 25 % on assumptions for world energy growth and energy inputs, or progressively e- of U.S. chemical commodities. over the next 50 years. One scenario volves toward more sustainable meth- would have 450 EJ of bioenergy be 15 ods with low environmentally degrading New biopower plants in the 30 MW to % of the requirement in a world in which inputs), and on the competition for food. 40 MW range have been announced global primary energy demand over the The latter depends both on world popu- for Australia and Thailand. The United next 50 years has increased 500 % lation growth and on world average diet. Kingdom is examining new biomass above today’s values. The vision of this These variables can lead to a range of crop plantations and forest residue White Paper is of a renewable energy projections that vary from significant resources for CHP applications. The transition that leads to over 50 % of land available for bioenergy crops to no Finnish government in 2002 raised in- world primary energy from renewable land at all. vestment subsidies for bioenergy by energy by 2050, which suggests that, 40 %, opening the way for small-scale perhaps at a minimum, bioenergy might Careful recent analyses have been made biofuel-fired CHP plants to be profitable. produce about one-third of that require- to try and determine, under conservative- This has the secondary benefit of en- ment. ly optimistic but also realistic assump- hancing the profitability of sawmills as tions, the world bioenergy potential that their energy costs are stabilized. Bioenergy development, as well as all of could be achieved by 2050. An average the other renewable energy resources, estimate of about 450 EJ (10.8 Gtoe) For bioenergy – or any of the renewable will also accelerate when many of the is emerging, although, as suggested energy resources, for that matter – to “costs” are recognized to be “economic above, this could go from zero to over make meaningful contributions to the benefits”, contributing to the economy, twice this amount. Remarkably, this renewable energy transition, and beyond, rather than just taking away. In bioener- untapped bioenergy potential is more requires considerably greater efficiencies gy this is certainly true, for example in than present total world primary energy. in energy end-use utilization than today. the development of new jobs to enhan- A large absolute contribution of bioener- ce rural and farming communities. A Major worldwide bioenergy goals are gy to a huge world energy appetite 1992 analysis showed that already by being set, and governments are suppor- might be relatively small, whereas that then 66,000 jobs in the U.S. were being ting new bioenergy activities. A recent same amount could be highly significant supported by income from the wood estimate suggests that the biopower to an efficient world. Government policy and biomass industries, and that the generation alone in Europe could grow toward both bioenergy and energy effi- potential could be as high as 284,000 to 55,000 MW (55GW) by 2020. ciency will be driven by the expected new jobs by 2010 if energy crops and
Fig. 6a: A farmer planting an energy tree plantation. Fig. 6b: Community combined heat and power (CHP) plant, fueled by waste straw Source: NREL grown in the near vicinity, for 300 families in Denmark Photograph by Dr. Donald Aitken
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The Renewable Energy Resources: Characteristics, Status of Development, and Potential
advanced technologies are commerciali- Geothermal energy to chemical providing electrical power zed in the U.S. Most of these jobs would plants and many villages in the Tuscany be in rural areas. They would also pro- Humans have always wanted to be region of Italy. Today the Larderello geo- vide sufficient extra income to help far- comfortable, and have always been thermal field produces 400 MW of elec- mers to keep their lands. clever in their use of natural resources, trical energy. so it is no surprise that archaeological Bioenergy also works within the Earth’s evidence suggests that for possibly Because fossil fuels were already the carbon balance (e.g. avoiding future car- 10,000 years Native Americans enjoyed “new” thing, there was a lull of 45 years bon taxes), and can contribute to the the benefits of natural hot springs. It is before new geothermal power plants maintenance of biodiversity by offering well known that these benefits were also were built, first in New Zealand in 1958, near-urban ecosystems suitable for exploited by the Greeks and Romans then experimentally in Mexico in 1959, some species of birds and wildlife. When 2000 years ago. The world’s first geo- followed by the beginning of the deve- all such advantages are quantified on a thermal district heating system was con- lopment of the geothermal resource regional, state or country level, and structed in Chaudes-Aigues, France in in the Geysers area just north of San when energy “costs” are viewed from the 14th century, a system that continues Francisco, USA, in 1960. While geother- the overall balance of governmental prio- to operate today. mal energy resources are not available rities and societal benefits, bioenergy to all nations, 67 nations are now using and the other renewable energy resour- Minerals were extracted from geother- geothermal energy, with geothermal ces are much more economic than tra- mal waters starting in 1175, and chemi- electric power production in 23 nations, ditional and narrow energy cost analyses cals from the waters in the early 1900s, so it is at least a pervasive, if not uni- still seem to suggest. both leading to new industries in the formly available, resource. Following area of Larderello, Italy, subsequently bioenergy it is presently the second shown to be the hottest geothermal largest non-hydro renewable energy spot of the entire European continent. resource worldwide, so it is being pres- Prince Ginori Conti created the world’s ented as the second resource in first electricity from geothermal steam on this White Paper. July 15, 1904, in Larderello. The world’s first geothermal power plant, a 250 kWe But is it “sustainable”? The Geysers, still plant, was subsequently built, also in the world’s largest single geothermal Larderello, in 1913, and by 1914 it was electric power generation site, was
Fig. 7: Where world geothermal power production first started, Larderello, Italy. Site of the first experiment to use geothermal steam to produce electricity, on July 15, 1904, then site of the world’s first geothermal power- plant, 250 kWe, in 1914. Larderello, located on the hottest geothermal spot in all of Europe, today produces about 400 MW net of geothermal electric power. Photograph by Dr. Donald Aitken
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rapidly built up to 2,000 MW of power societies. But for the production of is in the Americas (North, Central and plants, which subsequently tapped the power from the heat energy of hot rocks South), collectively with 47.4 % or the steam wells at a rate faster than they much farther below the surface the worldwide total energy production, could be replenished by water flowing replenishment of the geothermal heat followed by Asia (including Turkey) at to the geothermal heat sources. This extracted from the rock may occur very 35.5 %, and Europe at 11.7 %. The forced a reduction of power production slowly, and hence may be “depletable” largest proportional use of direct geo- to just under 1000MW. on the time scale of human societies. thermal energy is in Asia (including Turkey), at 45.9 % of the world total, This has, however, also produced a very So where does geothermal energy stand followed by Europe at 35.5 % and the useful synergy, in which 340 L/s (5,400 today, and what is the potential for its Americas at 13.7 %. gpm) of treated wastewater is soon to expansion in the future that would war- be pumped 48 km from the city of Santa rant serious governmental policy and The size of the geothermal resource is Rosa to the geothermal fields and rein- financial support? Geothermal energy is huge. A U.S. Department of Energy esti- jected into the underlying aquifer. The used both directly, as a resource of use- mate is that the thermal energy in the Lake County effluent re- ful heat, and for electrical upper ten kilometers of the Earth’s crust cycling project is already Geothermal energy can provide power generation. is 50,000 times the energy of all known on line, and adding economically beneficial energy to With regard to the latter, oil and gas resources in the world. many countries of the world. It 70 MW back into the the latest estimate is Another estimate has it that the geo- produces little to no pollutants, system. The extra energy 8,000 megawatts (MW ) thermal energy potential for the western while contributing to energy self- e produced from the addi- sufficiency of cities, regions and of geothermal electric United States alone is fourteen times tional steam resulting nations. The 95 % availability fac- power capacity world- the proven and unproven U.S. coal re- from the water injection tor for geothermal electric power wide in 2002, producing serves. Reasonable projections suggest is greater than the ener- generation can enhance the value 50,000 gigawatt hours that at least a 10 % per year growth in gy needed to pump the of portfolios of several of the inter- (GWhe) of energy per geothermal energy applications should wastewater, so that two mittent renewable energy resour- year, primarily as base- occur through 2010, which would lead ces. Geothermal energy can benefits are achieved load power, to provide to 20,100 MWe and 39,250 MWt of directly contribute to the creation simultaneously: waste electrical service to 60 geothermal power worldwide by 2010. of new jobs, industries, and water disposal and en- million people, mostly Other projections suggest that between enhanced local and regional eco- hanced geothermal nomic activity. It is incumbent on living in the developing 35,000 and 72,000 MW of electrical power production. It is governments where geothermal nations. This saves 12.5 generation capacity could be installed a moneymaking opportu- resources are available to offer million tonnes of fuel oil using today’s technology, the higher nity both for the city and incentives to promote and acceler- per year (Mtoe). figure representing over 8 % of total for the geothermal devel- ate the application of geothermal world electricity production. opers. energy. The direct worldwide use of geothermal energy The Philippines has the largest propor- Nevertheless, the important lesson was estimated for 2002 to be 15,200 tion of geothermal-produced electrical learned from the experience at the MWt, delivering 53,000 GWht/yr. This energy in its portfolio at 27 % (2002) of Geysers is that while geothermal energy saves an additional 15.5 Mtoe per year. national electrical energy use. It is the is renewable, it is only sustainable when The end-uses for the direct use of geo- ambition of the Philippines to become the extraction of the heat energy is in thermal energy are extremely diverse, the number one user of geothermal equilibrium with the rate of replenishment including space heating, domestic water electrical energy. It has been reported, of the resource. It has been shown that and pool heating, geothermal heat however, that thirty-nine countries could for hot water and steam sources this pumps, greenhouse heating, aquacul- be 100 % geothermal powered, with occurs sufficiently rapidly to produce ture pond and raceway heating, agricul- four more at 50 %, five more at 20 %, truly sustainable geothermal power tural drying, snow melting, absorption and eight more at 10 %, demonstrating opportunities, provided that the resource cycle air conditioning, and a number of that geothermal energy can be a major is proven in amount and sustainability other smaller uses. The greatest single resource for at least 58 countries. before development, and then not over use is for space heating, which absorbs extracted. Extraction of geothermal about 37 % of the direct geothermal It is not necessary to have a geothermal energy from near-surface magma heat, energy worldwide. energy potential that could provide a as on the island of Hawaii or in Iceland, major percentage of overall national is most probably also a “sustainable” The greatest share of world geothermal energy consumption in order for geo- resource on the time scale of human electrical energy generation (GWhe/yr) thermal energy to be economically bene-
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The Renewable Energy Resources: Characteristics, Status of Development, and Potential
ficial. In Hawaii, the geothermal energy Wind power and intermittent with renewed acceleration of growth is concentrated on the “Big Island” renewable energy resources expected for 2003. The price of wind- (Hawaii), while the population center is produced electricity is now competitive on the island of Oahu. The production of Energy and power from the wind with new coal-fired power plants, and hydrogen from electricity produced by should continue to drop until it is the geothermal energy is about to be under- Wind Energy is solar energy once re- least expensive of all of the new electri- taken on Hawaii as well as in Iceland, moved. The energy to move air masses city-producing resources. heralding a model in which hydrogen comes from the unequal solar heating becomes the geothermal energy “car- of the atmosphere and the Earth’s sur- The wind industry is creating significant rier” transported from remote source face, resulting in unequal air pressure new economic opportunities. A realistic locations to population centers and for distributions. Nature’s attempts to re- world target for wind-electric installations multiple fueled end-uses. And geother- dress these inequalities produces the in 2007 is 110 GW, representing US$ mal energy where available even in great flows of air, from local micro levels 100 billion in investments, and equaling modest amounts, can, along with bio- to massive global levels. Some of the the installed capacity of all U.S. nuclear energy, provide a resource to help thermal energy of the sun is thereby power plants. By 2007 wind-power in- “level” a portfolio with large amounts of converted to the kinetic energy of the stallations could also represent 24 % of intermittent resources (sun and wind). air. Giant blades turned by the winds all new world bulk power installations. spin powerful generators, converting the By one estimate the wind industry could The geothermal industry creates jobs in wind’s energy into electricity. The power be worth US$ 25 billion a year by 2010, all aspects of geothermal energy pro- density of a 40 kmh wind (sweeping with over US$ 130 billion in cumulative specting, development, and application. through one square meter of intercepted installed system value. Geothermal facilities produce lease fees, area) is equivalent to the power density taxes, and production royalties to local of the bright sun (about 1,000 watts/m2). The Danish wind turbine manufacturer governments. The end uses of geother- The total energy carried by the winds on Vestas has, since 1979, built over mal energy produce more jobs, indus- the Earth, therefore, is huge. The energy 11,000 wind turbines that are installed tries, and revenues. The geothermal that can be extracted from winds acces- in 40 different countries. It is a major industry in the U.S., the world’s largest, sible to human development is also huge. source of in-country jobs and export is a US$ 1.5 billion per year industry. income for the country. It has been esti- Over the next 20 years geothermal Over 60,000 utility-scale wind turbines mated that the 12,000 MW of wind energy could become a US$ 20 billion are now operating in 45 countries, as energy installed in Germany by the end to US$ 40 billion worldwide industry. well as in 27 States in the United States, of 2002 has created 42,000 permanent with total installed global wind power jobs – one job for every 285 kW of in- capacity exceeding 32,000 MW (32 GW) stalled capacity. And it has been noted by the end of 2002. Wind-electric gen- that much of the support for wind de- eration by the 12,000 MW of installed velopment in Spain has come from the wind-electric capacity in world-leading “bottom up”, supported by regional gov- Germany produced about 20 billion kWh ernments wishing to build new factories (20 TWh) at the end of 2002 to meet and to create new jobs. 4.7 % of Germany’s national electricity needs, while 20 % of Danish electricity 30.000 Megawatts now comes from wind-electric genera-
tion. The Schleswig-Holstein area of 20.000 Germany had already surpassed its 2010 target of 25 % of the area’s elec- 10.000 trical energy needs from wind power by June 2003, with 26 % of the region’s electricity now from wind power. This 0 low-cost and readily available renewable 1980 1985 1990 1995 2000 energy resource, which is growing at a Fig. 8: The dramatic growth in world installed wind 32 % annual rate, has led to a rate of capacity, from 1980 through 2002. installation of new wind projects around The recent growth rate of 32 %/year could lead to an installed capacity of 110,000MW (110GW) at the the world for both 2001 and 2002 end of the next five years. valued at about US$ 7 billion per year, Source: Worldwatch Institute, updated by Earth Policy Institute from BTM Consult, AWEA, EWEA, Wind Power Monthly 20 WP komplett > pdf 17.11.2003 15:39 Uhr Seite 21
The wind turbines that are seen on The wind resource and its economic One result of this reassessment is that, farms and fields throughout Europe, the benefits are available regardless of eco- far more than just meeting all U.S. elec- U.S., and India are proving to be wind- nomic status of the country. India is tric generation requirements, wind power falls for the rural economies. Contrary to presently 5th in total wind power appli- could provide for all U.S. energy needs. the frequent assertion of the coal indus- cations, with 1,702 MW installed by the Other estimates suggest that wind try lobby that wind development “takes” end of 2002, and might have a total power could, in the future, meet all of massive amounts of developable resource of the electricity needs of the world and land, wind development The wind resource is not, and will 45,000 MW. The Ministry perhaps even all energy needs of the is fully compatible with not be, a limit to the development of Non-Conventional world. farming and ranching of wind energy worldwide. Energy Sources (MNES) activities. Wind turbines Experience has shown that goals in India encourages wind Even if these estimates prove to be overly placed on a farm or for wind-electric installations that as a means to diversify optimistic, a goal of 12 % of the world’s ranch might account for have previously seemed to be India’s energy economy electricity demand from wind by 2020 ambitious are being easily met, only 1 % of actual land and to begin to wean (equivalent to 20 % of the world’s 2002 and are consequently being re- taken out of agricultural India from oil, natural use of electricity) appears to be realisti- vised upwards for future years. production for the tur- Utility experience has demonstra- gas and coal. cally within reach. (This would be about bines, or only 5 % when ted that major percentage penetra- one and one-quarter million MW of in- allowing for access tions of wind power systems are Factories have been stalled capacity, producing a little over roads. This slight loss practical. Billions of dollars of new constructed in India that 3 billion megawatt-hours of energy each of agricultural use is industries, and thousands of new enable up to 70 % of the year.) The European Union’s goal of greatly offset, however, jobs, are being created for the components of the tur- 20 % of Europe’s electricity demand to by economic benefits benefit of the countries capitalizing bines to be made locally, be met by wind energy in 2020 is also on this globally-available resource. accruing to the land- and the entire system well within reach. This development sce- Costs for wind-electric power are owner. assembled and installed, nario for wind energy would be consis- now in the range for wind energy to be able to compete with fossil with local labor, produc- tent with the historical pace of develop- For example, a three- fuel-based power production (and ing important new jobs ment of hydroelectric and nuclear ener- turbine farmer-owned certainly below the costs of nucle- in a job-thirsty country, gy. and financed wind devel- ar power). Nevertheless, govern- and routing energy reve- opment in a good wind mental policies, firm governmental nue through the local It is important to realize, however, that regime, with 750 kW goals, and governmental incentives economies. Ownership the 32,000 MW of nameplate wind ca- turbines, could net the are necessary to provide assur- of locally-placed wind pacity installed worldwide at the end of farmer US$ 40,000 per ance to the financial community so turbines also addresses 2002 was 0.4 % of world electricity sup- that they will continue to invest in year while simultaneously the poor reliability of ply. If projections suggesting 177,000 the expansion of the wind industry, paying off the construc- and to capture the additional India’s electrical infra- MW by 2012 are realized, that might still tion loan in 10 years, unquantified societal benefits of structure, adding value only be about 2 % of world electricity leaving a net income in reliable, sustainable, clean and for factories or business- supply, but the growth is exponential, excess of US$ 100,000 locally-produced power. es, a factor in the de- so that the 2020 targets remain both per year after that. Even velopment of locally- reasonable and feasible. the revenue from leasing the space for owned “clusters” of privately owned the turbines to developers can double generators in India, rather than big- the farmer’s or rancher’s per-acre in- business or utility owned wind farms. come, adding an income source that is oblivious to droughts and fluctuating Estimates of wind power and energy commodity prices. This income can potential have recently been revised to make the difference between a small allow for the new wind turbine technolo- farmer having to sell his property or gies that operate more efficiently in lower being able to continue farming. wind regimes and are placed at greater heights above the ground, to take into account the rapid growth in size of wind turbines (the world average size of new turbines exceeded 1MW in 2002), and to include the most rapidly developing application – off shore installations.
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The Renewable Energy Resources: Characteristics, Status of Development, and Potential
Achieving high penetrations of energy one region will be off-set by wind avail- such a “backbone” can also draw to a from wind and other intermittent ability in another, or that low wind re- considerable extent on the “baseload” renewable energy sources source availability at any one time and renewable energy resources, such as place could be offset by a simultaneous hydroelectricity, bioenergy and geother- Experience gained to date in countries high solar resource from a different area mal, where they are available. Hydro- and areas with significant shares of wind (provided that the region or country has electric energy, for example, is already resources in their energy mix shows that exploited the opportunity to develop and widely available and quite conveniently intermittently available energy resources interconnect a diversity of complementa- adjustable in output over a short time within the present frameworks and ope- ry renewable energy resources). scale. Converting the hydroelectric re- rations of existing utility grids can meet Regional and international transmission source from baseload to “intermittency- at least 20 % of electrical energy requi- grids to allow for the import and export leveling”, in systems with high penetra- rements. Areas in Denmark, with a of renewable electricity across different tions of wind and solar energy, could countrywide average of 20 % of its elec- climate regions will therefore facilitate enhance both the reliability and renew- trical energy from wind power, gain at greater penetrations of the intermittent able resource capacity potential of the times 100 % of their electric energy from environmental energy resources. Such total electrical grid. regional networks of wind turbines. multi-country grids are being seriously The Schleswig-Holstein area of Germany considered to support a high renewable These stable locally available load-leve- has achieved an average penetration of energy penetration throughout Europe ling energy resources can sometimes 29 % of the area’s electrical energy and Scandinavia. also work in synergy with other national needs from wind power. The inter- energy efficiency goals, such as the national targets for wind development The ability to increase the penetration of conversion of 40 % of the nation’s com- by 2020 are therefore realistically and energy from intermittent resources into bustion sources of electrical energy in economically achievable within the the utility grids beyond the readily Denmark during the 1990s to combined presently installed utility infrastructure. accessible figure of about 20 % will heat and power (CHP). Many of these require additional technical and political new CHP systems are small, local bio- Wind and radiant solar energy resources features. For example, the availability of energy plants using biomass fuel from are meteorological phenomena that are a stable electrical “backbone”, such as nearby fields. This not only puts the fairly well predictable within a 24-hour Denmark enjoys in that country’s trans- waste heat to useful work, greatly in- lead-time, which should normally be mission line interconnection with creasing the overall efficiency of the sufficient to plan for and facilitate adjust- Germany, has enabled greater penetra- combusted fuels, but also provides ments to the energy flows in the grid. tion of Danish wind energy resources sources of power that could be regu- The larger the geographic scale of the into the grid, demonstrating that inter- lated locally to balance the production renewable energy interconnections national cooperation across national characteristics of local wind turbines through a regional transmission grid, the boundaries can enhance renewable or solar-electric “farms”. The farmers, more likely that a low wind resource in energy development. The reliability of biomass plant owners and operators,
Fig. 9a, b: Wind energy developments are compatible with ranching, as shown in Denmark, and farming, as shown in the U.S. Income from wind developments on ranch and farmlands are important new sources of rural revenue. Photographs by Dr. Donald Aitken
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and wind turbine or solar system owners The renewable energy transition, how- Direct use of the sun’s energy and operators, are all paid out of funds ever, does not need to wait for further that would otherwise have gone to the major new developments in other tech- Overview purchase of electrical energy powered nologies. Widespread and large-scale by imported fuels. application of energy The indirect uses of solar energy, such The synergy between hydrogen storage technologies will as hydroelectric, wind power, and bio- Nevertheless, in the development and the application of not be needed until after energy, together with the non-solar envi- future energy storage the renewable energy technologies 2020, and perhaps not ronmental energy resource, geothermal, mechanisms will also will be significant. Hydrogen, a until 2030. The devel- produce energy that presently dwarfs clean energy when burned, will be have to be developed opment of hydrogen fuel the combined outputs of all direct appli- produced by clean energy resour- and adopted. At present ces. And the energy from those and applications will pro- cations of radiant solar energy, and will serious work is being clean resources will be converted ceed independently of continue to do so for perhaps two more done on a number of to fuel for on-demand clean energy the renewable energy decades. But the value of renewable energy storage technolo- applications, fully decoupled from transition, pulled by the energy resources in future societal port- gies, such as capacitors, renewable energy source fluctu- attractive economic folios is not measured just by the kilo- batteries and fuel cells, ations. The economic and societal benefits of the hydrogen watt-hours that are produced. The great springs, flywheels, com- values of both the hydrogen and transition, and pushed economic advantages of many of the the renewable energy resources pressed air, or pumped by aggressive govern- uses of solar energy in direct end-use will be enhanced by that synergy. storage of water. For The parallel renewable energy and ment programs, so that and distributed utility applications, the example, a UK “flow hydrogen transitions will be mutu- by then the hydrogen great security value of many of those battery” has been con- ally supportive. technology and infra- applications, the high value-added eco- structed with a capacity structure can be ex- nomic benefits of several of the solar of 120 MWh, and a maximum rated pected to be sufficiently ready to sup- energy technologies and their related power output of 15 MW. Discharge can port higher penetration levels of the new industries, the availability of radiant be in minutes or hours (limited by the intermittent renewable energy resources. solar energy resources where the other maximum power delivery rate), and can resources are not also present (e.g. be cycled indefinitely. Advances in all of The corollary of this argument, though, deserts, areas with little wind, etc.), the other potential storage technologies is that the environmental success of the and the importance of developing a are also being made. hydrogen transition will depend entirely diverse “portfolio” of renewable energy on the utilization of renewable energy resources to provide for system stability resources instead of the conventional and resource reliability, all support the A few notes about the energy sources to produce the hydro- critical importance of direct solar energy hydrogen transition gen. This was emphasized by Romano applications and governmental policies Prodi, President of the European to accelerate those applications. The most likely long term candidate Commission, in a speech in June, 2003: for energy storage from the intermittent "It is our declared goal of achieving a The energy from the sun can be used renewable energy sources will be step-by-step shift towards a fully inte- directly to heat or light buildings, to heat hydrogen, which can convert electricity grated hydrogen economy, based on pools for the affluent or communities, or derived from renewable energy into a renewable energy, by the middle of the to provide domestic hot water to meet fuel, for its development will also be century." (Source: Renewable Energy basic thermal and hygienic requirements supported by its potential for transform- World, July/August, 2003.) for the rich and poor alike, in both de- ing transportation and stationary energy veloped and developing nations. The systems worldwide. Remote sources of sun’s radiant energy can also directly renewable energy in areas of attractive provide very hot water or steam for in- wind, solar or geothermal energy poten- dustrial processes, heat fluids through tial can become hydrogen factories. concentration to temperatures sufficient The transportation of that hydrogen for to produce electricity in thermal-electric use in local, distributed fuel cells (which generators or to run heat engines direct- are also CHP devices) will then allow the ly, and produce electricity through the original renewable energy to be deliver- photovoltaic effect. ed as power and heat on demand, and where needed.
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The Renewable Energy Resources: Characteristics, Status of Development, and Potential
The radiant energy from the sun can be energy that enters buil- It is today public policy and politi- tend to peak in the after- used directly to enhance public safety, dings during the day can cal leadership, rather than either noons, especially on hot, to bring light and the refrigeration of keep those buildings technology or economics, that are sunny days, so the “ca- food and medicine to the 1.8 billion warm and comfortable required to move the widespread pacity factor”, or output people of the world without electricity, through the night, while application of solar energy techno- on a 24-hour average, of logies and methodologies forward. and to provide communications to all well insulated water solar energy systems, The technologies and economics regions of the world. It can also be used tanks can store solar has little economic mean- will all improve with time, but they ing. to produce fresh water from the seas, to heated water for use at are sufficiently advanced at pre- The effective capaci- pump water and power irrigation sys- all times of the day or sent to allow for major penetra- ty factor of solar electric tems, and to detoxify contaminated night. People are most tions of solar energy into the main- energy production, that waters, addressing perhaps the world’s commonly at work stream energy and societal infra- is, the availability of solar most critical needs for clean water to during daytime hours structures. And significant goals electric energy produced drink and to grow food. It can even be when carefully shaded can be now set with confidence when it is needed, can used to cook food with solar box coo- daylighting can replace for major percentage improve- sometimes exceed 80 %, kers, replacing the constant wood fora- the electricity demand ments in energy efficiency and or even 90 %, and is increases in solar and renewable ging that mostly falls on the shoulders of and heat output of artifi- often 3 times the physi- energy applications for the next 50 women, and which also denudes ecosy- cial lighting, and daylight- years, at which time the world cal “capacity factor”, stems and contaminates the air in poor ing of buildings works should be receiving over 50 % of while other solar appli- shelters. well even when it is all energy needs from locally avail- cations, such as water, cloudy. Businesses most able environmental resources, with pool and space heating, It is this diversity of opportunities that commonly need industri- most of these being from direct can deliver their value by makes solar energy such an attractive al process heat during and indirect uses of solar energy. the heat collected during option for so many applications and with the daytime, and the There are no resource limitations the day and stored in the critically important potential for all cultu- major demand for elec- to this scenario. water or building, over a res, regions, economies and peoples of tricity is during daylight 24-hour period. the world. hours. Human behavior can also influence the Of course, these applications only pro- As a result, the effectiveness of solar effective capacity factor of solar energy duce energy during daylight hours, and energy production is a matter of its abili- systems. Washing clothes and bathing work better where there is more solar ty to meet the needs of the users, rather in the evening maximizes the benefit of insolation, both of which are often men- than only related to the time of its collec- water heated by the sun during the day. tioned as serious limitations to the use- tion. This is also true with regard to the fulness of solar energy. But with proper coincidence of radiant solar energy to design and choice of materials, solar the needs of the electrical grids, which
Fig. 10a, b: Solar energy in all of its diversity. The house, located in Boston, Massachusetts (designed by Solar Design Associates) features energy-efficient design, passive solar space heating, daylighting, active solar space heating, solar water heating, and solar electricity, all integrated to produce a “zero net energy” home. But equally impor- tant is the use of solar energy to bring the basic essentials, such as fresh water, light, and medicines, to developing nations, represented by the PV-powered fresh water pumping in India shown on the right. Fig. 10b: Photograph by Dr. Donald Aitken
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Similarly, in Denmark it was shown that Passive solar heating and daylighting Early Greek and Roman architects adap- people with PV systems alter their beha- of buildings ted the principles of natural energy de- vior to maximize the use of PV electricity sign to their homes and cities. Socrates when it is being produced. In California In general, in the industrial nations, from encouraged the use of what today is (USA), time-of-use metering of net-me- 35 % to 40 % of total national primary called “passive solar” design in homes, tered PV systems gives economic ad- use of energy is consumed in buildings, praising the value of letting the low win- vantage to just the opposite behavior, in a figure which approaches 50 % when ter sun penetrate the south side of buil- which the sale of PV-electricity back into taking into account the energy costs of dings, and the benefit of being able to the grid during peak times is maximized building materials and the infrastructure shade out the high summer sun. by minimal electricity use in the building to serve buildings. A recent analysis during those times, when the return to of energy use in buildings revealed that, the producer can be as high as 30 US when fairly including all energy costs cents/kWh. Low-cost electricity is then in and related to buildings, the U.S. 800 Mmt purchased by the customer during the buildings sector accounts for 48 % of
non-daylight hours. Since most of the primary energy consumption, 46 % 600 Architecture buildings are residential, they are often of all CO2 emissions, and is the fastest unoccupied during the day anyway, growing source of energy consumption Transportation when the owners are at work. and emissions. 400
Industry The annual solar resource is surprisingly In Europe, 30 % of national energy use 200 uniform, within a factor of about two, is for space and water heating alone, re- throughout almost all of the populated presenting 75 % of total building energy regions of the world. The lower end of use. In the United States 37 % of all 0 this resource availability would be an primary energy is used in buildings, and 1960 1970 1980 1990 2000 economic death knell if solar were only 2/3 of all of the electricity used in the feasible in desert climates, but the extra- country is used in buildings, with up to 60 QBtu Energy consumption ordinary applications of photovoltaic half of that directly or indirectly resulting Architecture energy technology in Germany (at lati- from artificial lighting and the thermal tudes parallel to southern Canada) and impacts of those fixtures. Buildings Architecture 50 Japan, the significant solar water heating can account for one-third of a nation’s (implementation) applications in Germany and Austria, greenhouse gas emissions, and one- and passive solar and daylighting appli- third of a nation’s production of waste. Architecture cations in Finland and Alaska, demon- (implementation + 10/20) 40 strate that economically attractive appli- From a thermodynamic standpoint, let- 2000 2005 2010 2015 2020 cations of solar energy are not limited ting the sun shine into buildings in the to just the sunniest climates. It is a suffi- winter to heat them, and letting diffused cient resource almost worldwide. daylight enter the building to displace Fig. 11a, b: In the U.S., “architecture”, which in- electric lighting, while providing for care- cludes all residential and commercial sectors, along Productive R&D programs, supported ful summer shading and interior glare with the portion of the industrial sector containing buildings and building materials, is the largest single both by industry and by governments, control, are both the most efficient and energy user (at 48 % of primary energy), as well as are continuing to advance the technolo- least costly forms of the direct use of the largest, and fastest growing, emitter of CO2. Aggressive but totally achievable (and affordable) gies, and address areas, such as energy solar energy. Such simple concepts are changes in buildings efficiency policy nationwide storage, to further the economic benefits rooted in prehistoric structures. Early could lead to a reduction in building energy use, and value of the application of solar Native Americans, for example, provided shown as the “implementation” trajectory in the lower graph. If the Union of Concerned Scientist’s energy. But in the meantime, houses for year-round comfort in harsh environ- “Clean Energy Blueprint” is also adopted (10 % and buildings are now ready to make ments with natural heating, cooling and of U.S. electricity from renewables by 2015 and 20 % by 2025) the energy impact of buildings in use of direct solar energy applications, ventilation designs. the U.S. could be further reduced as shown in the and, as presented earlier in this White “implementation + 10/20 portion” of the graph. Source: Edward Mazria, SOLAR TODAY, May/June, Paper, electricity grids are now well 2003, 48-51 positioned to allow for major penetra- tions of the intermittent renewable elec- tric energy sources.
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The Renewable Energy Resources: Characteristics, Status of Development, and Potential
Vitruvius took these principles further into controls, along with ever more user- All of these measured results demon- what is today called “climate responsive” friendly computer simulation tools to strate significant societal values that go design, noting that different climates help designers achieve the best result. well beyond the energy and climate require different designs for comfort. The reduction potentials of such “sustain- great European cathedrals of the middle Data are mounting that demonstrate able” building designs. One can argue of the last Millennium conclusively enhance- that expenditures to reap these econo- After efficiency in all areas, the used daylight in specta- ments of human perfor- mic benefits justify the energy-efficient most accessible, least cost, and cular fashion to illuminate economically beneficial starting mance in daylit buil- and daylighting designs on their own the interiors. Office buil- point for any national or local ener- dings, with direct econo- merits, so that the reduced energy use dings constructed in gy policy aimed at reducing the mic benefits that greatly and emissions of greenhouse gases great cities to almost the use of conventional energy resour- multiply the energy-effi- from such buildings are “free” benefits. end of the 19th century ces and lowering the production ciency “paybacks”. The integrated design of “climate- had to rely on careful of greenhouse gases is with buil- Office worker productivi- responsive” buildings through “whole daylighting design and dings. This includes upgrading ty and job satisfaction building” design methods enables major existing buildings, and designing natural ventilation for illu- have been shown to be cost-savings in actual construction, all new residential and commercial mination and comfort. improved in daylit buil- normally yielding 30 % to 50 % improve- buildings for maximum energy efficiency and the optimal use of dings, resulting in very ment in energy efficiency of new buil- These same techniques locally available environmental large “bottom line” bene- dings at an average of less than 2 % are available today, with resources for light and comfort. fits for the employers. added construction cost, and some- enormous worldwide Billions of US dollar equivalents Increases of up to 15 % times at no extra cost. Simple cost pay- potential to reduce the can be diverted in this way out of in sales in daylit shop- backs are in the range from immediate energy and climate unnecessary expenditures for buil- ping areas and stores to a maximum of five years. impacts of buildings on ding energy and lighting into pro- are leading to changes ductive economic uses, such as a short time scale. This is in design approaches to creating new jobs, or supporting aided by lessons learned these commercial estab- education and health. And billions from important pro- more can be earned as a direct lishments. And up to grams, like the passive result of the improved performance 25 % improvements in solar and daylighting of occupants and users of those learning rate and test tasks of the IEA (Inter- same buildings and schools. scores of children in national Energy Agency), daylit classrooms are and by important advances in building being recorded in careful statistical materials, specularly selective glazings, research. insulation, and lighting technologies and
Fig. 12a, b: The Real Goods Solar Living Center, a retail store in Hopland, California, USA (designed by Van der Ryn Architects). A complete “bioclimatic” design, the building features passive solar heating, daylighting, natural ventilation and cooling, PV electricity and native landscaping. Energy savings compared to a conventional design in the Hopland climate are 90 %. In-store sales are 50 % higher than projected because the interior daylighting and comfort are so good. Photographs by Dr. Donald Aitken
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Solar water and space heating power other more important elements at 0.8 m2 per person. In continental of the economy. The money that would Europe, Greece leads this measure Solar water heating is hardly a new have been spent for fuels to heat water of public acceptance at 0.26 m2 per technology, but even with the rapid becomes money spent instead, for capita, followed by Austria at 0.20 m2 growth presently being experienced in example, on jobs to produce, install and per person, and then, in order, Denmark, Europe, Israel and China it still falls short maintain the solar water heaters, and Germany and Switzerland. The overall of its potential. Gas-fired and electric those jobs also enhance the strength of EU average at the end of 2002 was water heaters are convenient and tech- local economies. The value to society 0.26 m2 per person. nically simple, but by using high grade of solar water heating, therefore, is far and high temperature fossil-fueled or greater than simple cost “payback” The European Union has set a goal of electric energy to heat water almost all calculations would suggest. And solar 100 million m2 of solar collectors instal- of the thermodynamic water heating can make led by 2010 in Austria, Belgium, Britain, “work” potential of those It is to the benefit of all economies a significant contribution Denmark, France, Germany, Greece, energy resources is to promote and accelerate solar to the meeting of targets Italy, the Netherlands, and Spain, which water heating on a large scale. wasted, potential which for the reduction of CO2 would require an annual rate of growth The overall economic benefit to could be put to much emissions, a social obli- of over 35 % (referenced to the year societies of solar water heating more productive econo- justifies serious promotional and gation not governed by 2000). The present European growth 2 mic use. And for many in incentive programs by govern- simple cost payback rate would produce about 80 million m , developing nations, solar ments. Serious long-range goals considerations. so the EU goal is for an even more water heating in simple for the application of solar do- ambitious installation rate. Still, these passive tank-type units mestic water and space heating Solar water heating figures pale in comparison with an is the only affordable systems need to be established today is a fully mature estimated EU countrywide potential source of hot water for by all governments, totaling world- technology. About 12.3 of 1.4 billion m2, which could generate wide at least several hundred mil- washing and bathing. million m2 of solar water 683 TWh of thermal energy per year. lion square meters of new solar heaters had been instal- water heating systems by 2010. Although hot water in the Governments will need to provide led in the EU member The increasing popularity of solar water home does not produce supportive political framework con- countries by the end of heating for “active” space heating in jobs and does not power ditions for this to be accomplished. 2002, with the annual Germany, Austria and Switzerland, as industries, the fuel now rate of installation at well as serious considerations being being used to heat that water certainly close to 1.5 million m2 per year in 2001, given to solar district heating, as pio- could. And shortages are already fore- but down to 1.2 million m2 in 2002. neered in Sweden, can help to drive up seen for gas-fired electrical energy pro- About 60 % of these, however, are in the sales of this technology. So can City duction. When that electricity is used for just three countries – Germany (with ordinances, such as the one adopted water heating, it is a particularly wasteful over 50 % of the EU sales of solar water in 1999 and implemented in 2000 in use of natural gas, since it takes twice heaters), Greece and Austria – which Barcelona that requires solar systems to as much gas for a unit of heat in the have the best-developed markets. be used to deliver at least 60 % of the water when the gas is burned in a Cyprus, with over 50 % of its Medi- hot water for homes and businesses. power plant to produce electricity than terranean hotels and 92 % of all homes Within 18 months the solar thermal it does if the gas is burned directly in having solar water heating, leads the collector area in Barcelona increased the water heater. But gas-fired water world in terms of square meters of 750 %, to 14,000 m2. This city require- heating also wastes all of the potential solar water heater installed per capita, ment is being introduced in Madrid and chemical benefits of natural gas, which could otherwise have high value-added applications.
It is a far better investment for society to let the sun provide a major share of the heat for the water, in order to recover the economic benefits of the displaced gas resources. The water is still reliably heated, but with a much lower propor- Fig. 13a: Solar Water Heating in China. Fig. 13b: Solar water and space heating in tion of conventional energy required. Source: Li Hua, RENEWABLE ENERGY WORLD, Kathmandu, Nepal. The solar-displaced gas is returned to July/August, 2002, p. 105 Photograph by Dr. Donald Aitken
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The Renewable Energy Resources: Characteristics, Status of Development, and Potential
Seville and other areas. And in order Solar thermal electric energy onto its own three-axis tracking helio- to revitalize a stagnating solar water generation stat. The technical target for the Stirling heating industry, the German govern- engines is to be maintenance-free for ment agreed in February, 2003, to raise When solar energy is concentrated by 50,000 to 100,000 hours of operation. the incentives for solar water heating reflecting surfaces, the energy density systems from 92 Euros to 125 Euros can be dramatically increased. This en- Dish-Stirling engine/heliostat combina- per square meter of collector surface, ables high temperatures to be achieved tions have been mounted and tested, which has noticeably improved the in fluids in “receivers” that can then be with development moving well on the 2003 Germany market. transferred to generate electricity in ther- way toward the anticipated 25 kWe mal-electric generators. This technology, modular units that could be so valuable The European figures (and population) generically referred to as “CSP” for in the future. (Until recently, a Dish- pale in comparison with China, which “Concentrating Solar Power”, falls into Stirling engine/heliostat combination held had 26 million m2 of solar water heaters three categories: parabolic troughs, the world record for efficiency in conver- installed by the end of 2000, and 1,000 power towers, and heat engines. ting solar energy to electricity of about manufacturers of solar water heating 35 %.) More work remains to be done components and systems by the end of Parabolic troughs are long parabolic- to assure the targeted long life and reli- 2001. The Chinese government goal is shaped mirrors mounted in rows to heat ability of the engines, and to produce for 65 million m2 of solar water heaters the fluid that flows in energy-collecting low-cost heliostats. The technical bar- by 2005. It has been speculated that, if receiver pipes maintained along their riers appear to be quite within range of homebuilding continues according to lines of focus by adjustment of the posi- economic solutions. Chinese government goals, and there is tion of either the mirror or the receiver. even a modest use of solar water heat- The hot fluid is then flashed to steam in The world’s largest set of solar-electric ing in those new homes, China could a conventional (but low-temperature) tur- generators, 354 MW of parabolic trough reach 3 billion m2 per year by 2010. This bine generator. Power towers represent technology in three fields, continues to is driven by the lack of availability of gas fields of mirrors (“Heliostats”) that focus operate in the United States in southern for water heating, so that solar water their energy onto the top of a tower, California. The first units were installed in heating competes with electric water where it is collected and sent by very the early 1980’s, and the completed heating, and is the cheaper alternative. high temperature fluid to the thermal system has been in full operation for the power generator. last 17 years. The Harper Lake plant is 160 MW, and the Kramer Junction plant Heat engines (Stirling engines) direct is 150 MW. Much has been learned solar energy with very highly focused from these significant projects, and they heliostats onto a piston, which then have proven the practicality and reliabili- drives an engine through air expansion. ty of this solar thermal electric techno- Each Stirling engine is directly mounted logy. Similarly, the 10 MW power tower,
Fig. 14a: A portion of the world’s largest solar thermal-electric generator (on the Fig. 14b: Solar I, the 10MW “power tower” in southern California. left), part of the 354 MW system in California. Shown also is the embedded gas- Source Fig. 14a: NREL fired generator for 25 % “hybrid” operation, to level the output of the solar system, Source Fig. 14b: U.S.D.O.E. demonstrating a useful synergy between renewable energy and conventional energy production.
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also in southern California, Solar I and rantied life of the plant, free of the highly The Nevada 50 MW parabolic trough II (the second representing a rebuild of volatile and unpredictable costs and system is particularly interesting in that it Solar I to accommodate the introduction availability of conventional fuels well into is the direct result of new state govern- of liquid sodium heat transfer and stor- the future. mental policy. The Nevada legislature age into the project), met all research adopted in 2001 an aggressive renew- objectives for performance and reliability. The economics become more attractive able portfolio standard (RPS) which will and on a shorter time scale when CSP require the State’s investor owned utili- Even though CSP plants can be built provides solar energy to supplement gas ties to provide 5 % of their energy sales today which produce energy at about energy in an Integrated Solar Combined from renewable energy (geothermal, half of the present cost Cycle System (ISCCS). wind, solar and biomass) in 2003, ram- for photovoltaic-pro- Concentrating Solar Power (CSP) The solar energy dis- ping up over the next ten years to 15 % duced electricity, the is a valuable component of the places some of the fuel in 2013. In order to promote the devel- renewable energy portfolios of CSP technologies in par- as well as some of the opment of a “portfolio” of renewable countries with a sufficient solar ticular have been slow to resource, and warrants inclusion in combustion emissions, energy resources in a State that already be extrapolated to larger governmental policies aimed at sti- improving both the fuel has geothermal power plants and in scale and world markets. mulating and developing balanced economics and environ- which wind energy will be competitive, The slow acceptance of resource portfolios of the renew- mental performance, Nevada added an explicit “solar” com- CSP has been due to able energy technologies. A world- while the marginal cost ponent to their RPS, in which 5 % of all various financial and wide goal of 100,000 MW of of the solar components new renewable energy development institutional barriers. The installed CSP technology for 2025 adds proportionately less must be in the solar energy technolo- primary one is that buil- is an achievable goal with poten- to the overall cost of the gies. This will require about 60 MW of tially significant long-term benefits. ding a solar plant is like gas-fired system. Smaller solar-electric generation over the next building a fossil fuel plant and more versatile CSP ten years. and paying for 30 years worth of fuel all plant designs are being developed for at the same time. Consequently, the the 100 kW to 1 MW range, with the The Nevada utilities elected to build a plant must be fully financed up front, application flexibility that this would pro- 50 MW solar thermal parabolic trough with an attractive return to investors. In vide compensating in local benefits for power plant, with expansion possibility addition, the physical plant is generally the higher kWh production costs. And to 60 MW, as a one-shot response to taxed, while fuels for conventional power storage techniques that are being devel- the solar RPS requirement. The system plants are not. This unfairly penalizes the oped to provide up to the economic will be constructed by Duke Power, and solar plants for the “free” fuel. optimum of 12 hours of energy storage, is to come online in 2005. The Nevada which would yield maximum utility for utilities will buy the power output of the These barriers can be addressed by pro- the received solar energy, will also system over a 20-year sales contract viding subsidized low-cost loans, redres- enhance the economics of CSP. period, guaranteeing the income neces- sing the tax inequities, providing energy sary to support the financing of the con- production incentives, and continuing to World interest in CSP is picking up, with struction and operation of the system. support R&D that can lead to more effi- significant projects planned in many The system is expected to produce an cient reflectors, components and thermal countries, and valuable GEF funding average of 102.4 thousand MWh each systems. CSP is also extremely sensitive being provided for more. New CSP pro- year, enough to meet the 1,000 KWh to the solar resource, needing to be built jects are underway in the U.S. (Nevada) monthly average needs for 8,400 where it is the sunniest and clearest, and and Spain, and nearly so in Israel and Nevada homes (large homes in a very most economic when built in systems up South Africa. GEF funding of US$ 50 hot climate, requiring significant air con- to 400 MW in size. million each has been given to Mexico, ditioning). Egypt, Morocco and India, for CSP pro- If the barriers are all addressed, and the jects presently under development. Iran, The experience gained with this new best physical conditions can be met, Algeria and Jordan are considering parabolic trough system should help to projections suggest that, after the instal- ISCCS projects. Economic projections lead to cost-reducing developments, lation of a few thousand megawatts of suggest the viability of CSP also for and the further revival of solar thermal CSP power plants, the costs without Greece, Italy, Portugal, Australia, Brazil, electric systems in the United States, subsidies could come down to be com- Liberia, Tunisia and China, and a poten- demonstrating the value of government petitive with fossil fuels. But in contrast tial for a cumulative world total of over policy in accelerating the development to fossil fuels, CSP plants will provide 100,000 MW of CSP electricity genera- and application of the renewable energy economic certainty for the 30-year war- tion in place within the next 25 years. technologies.
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The Renewable Energy Resources: Characteristics, Status of Development, and Potential
Solar photovoltaic electric energy transmission lines will vanish within cities PV sales in 2002 of about US$ 3.5 bil- production that produce and distribute their own lion is projected to grow to more than power on-site. Similarly, a city with dis- US$ 27.5 billion in 2012. The most recognizable solar energy tributed energy systems that can be technology today results from the many "islanded" from the grid will be shielded Far from settling down on one major applications, considerable publicity, and from many of the problems caused when type of technology (like VHS beating numerous incentive programs in support a major transmission network collapses, out Beta in video recorder standards), of solar electricity production by photo- or central power plants suddenly go off- the PV industry continues to innovate in voltaic (PV) systems. Even though it is line, all of which occurred simultaneously many ways. The most popular PV tech- the most expensive of the solar techno- in the Northeastern U.S. in August of nologies are still monocrystalline and logies in terms of energy production, it 2003 and in Italy in September. polycrystalline (or multicrystalline) silicon is the most versatile, simplest to install cells (93 % of worldwide PV cell sales and cheapest to maintain, and provides Building-integrated PV systems (BIPV) in 2002), because they are the most effi- a highly valued product – electricity – with modest amounts of storage can cient, are proven by years of application generally at or close to the point of use, provide for continuity of essential and operation, and are very stable. avoiding the cost and risk of failure of governmental and emergency opera- Silicon is the most abundant element on infrastructure. tions, and help to maintain the safety the surface of the Earth, and it is non- and integrity of the urban infrastructure: toxic. PV modules can be used to power tele- street lights and communication links will phones or traffic and warning signs, to continue to operate, and essential city The ability of thin films to be adapted reduce corrosion in metal bridges, to and safety services will continue to be so easily to building materials, such as power water pumps and wells, to pro- available from civic and administration glass facades and windows, along with vide light and power for remote houses buildings with their own energy systems. the potential for high volume mass pro- and villages, to refrigerate medicines, to This should be a basic element of se- duction of films on glass or on flexible reduce purchased energy in grid-con- curity planning for all cities and urban substrates, is leading to new PV cell nected homes and commercial esta- centers in the world. compounds that are also being devel- blishments, to provide both power and oped and marketed, such as single- shade in parking lots, to charge electric PV is an industry that is growing world- or multi-junction amorphous Silicon cars, and for many more applications. A wide at an amazing pace. Over 560 MWp or mixed-phase microcrystalline silicon, designer can readily specify PV roofing of PV modules were manufactured and Copper Indium Diselenide (CuInSe2, or shingles, standing seam roofing with sold worldwide in 2002. The average CIS) and Cadmium Telluride (CdT). Still, “stick-on” PV, PV shading overhangs, rate of growth of the industry in the close to 99 % of worldwide solar cell PV curtain wall glazing, and PV skylights. beginning of this Millennium has been production in 2002 was silicon-based, Flat hotel and commercial roofs are 36.6 %, representing more than a doub- which supports an apparent emerging being decked over with PV without re- ling every two years, and it increased trend away from products requiring quiring any roof penetrations and provi- by 44 % in 2002. The value of worldwide scarce or toxic materials. ding for insulation and shading at the same time, producing electricity and
reducing the cooling load for the building. 400 Megawatts World Photovoltaic Shipments 100 US$(2001)/Wp PV module price The provider of half of the commercial PV rooftop systems in the United 300 States has seen their average system 200 10 size grow from 94 kWp in the year 2000 to 260 kW p in 2002, and to close to
100 22.000 MWp 350 kWp in 2003. This includes several installations of 1 MW or more. 0 1 1.50$ 1970 1980 1990 2000 1 10 100 1.000 10.000 100.000 PV systems integrated throughout the Cumulative shipments (MWp) grid in a “distributed utility” structure can Fig. 15a The dramatic increase in world photovoltaic Fig. 15b: PV experience curves for 1976-2001 and make it impossible for a terrorist to bring module shipments. It surpassed 500 MWp in 2002. projection to a breakeven price of US$ 1.50/Wp, down a city by destroying its energy Data source: Paul Maycock. demonstrating the importance of promoting high volume applications. sources. The convenient and centralized Slide source: Dr. John Byrne, targets of power plants, substations and data by Paul Maycock (2002)
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The ability to layer films to capture the to electricity of 36.9 % was achieved in The Japan and German policies are also full solar spectrum potentially allows thin 2003 in a compound cell designed to be driven by long-range national goals to film solar cells to achieve efficiencies used in a tracking concentrator. Mirrors increase the penetration of renewable equivalent to the crystalline devices. are less expensive than solar cells, so energy for its societal and economic such developments should aid in re- benefits. This policy has vaulted Japan And PV is sold by the watt, not by the ducing the costs of central-station types into a position as the world’s leading square meter, so lower-efficiency appli- of PV powerplants. manufacturer of PV modules, producing cations directly applied to convenient almost half (49.1 %) of the world pro- building materials with ample surface The energy potential of such solar appli- duction in 2002. Just one manufacturer areas (walls, roofs, glass) can often be cations is huge. In the U.S., for example, in Japan has outdone all of the other the most economic choice. Neverthe- a fairly small fraction of the government- regions of the world in producing 123.07 less, the reliable and proven crystalline owned Nevada Test Site land in Southern MWp of PV in 2002, while a second has and polycrystalline modules will probably Nevada could, in theory, provide enough announced plans to produce over 100 continue to dominate the PV field for the solar electricity to meet the needs of the MWp annually by 2004. All of Europe next two decades. entire United States (in quantity – this produced 135 MWp (24 %) of the world’s ignores the difficulty of transporting that PV modules in 2002, while the United Measuring the value of PV in cost per energy all the way across the country, States produced 120.6 MWp (21.5 %), kWh produced undervalues many of the but it does illustrate the resource poten- and the rest of the world produced attributes of this versatile technology. For tial). 55 MWp (9.8 %). example, when PV is used to power roadside emergency phones, the cost of The most popular application of PV The three most significant national PV the produced energy by the small PV today, however, is on roofs. The world programs are the “Residential PV System panels on the top of the poles may well leaders today in rooftop installations Dissemination Program” in Japan, the be over $ 1/kWh, but the cost of the tele- are Japan and Germany. In Japan, a “100,000 Roof Solar Electric Program” in phone is US$ 5,000 less than it would be generous subsidy from the government Germany, and the “Million Roofs” solar if wires had to be run underground from since 1994 has promoted this market, program in the United States. But while phone to phone. So the use of PV can while, in Germany, the costs of incentive the Japanese and German programs are often enable a lower overall project cost. supports are spread to the whole elec- heavily subsidized by credit or production trical system customer base through the incentives, to assure that the goals are Equally important is the value of PV in “feed-in” payments made to the produc- met, the U.S. program is voluntary. meeting some of the most essential ers of PV electricity. These policies, in Pledges in the U.S. that exceed one needs of humanity. In India, by the end turn, enable their own manufacturers million solar (thermal or electric) systems of 2002, 5084 solar PV water pumps to reduce costs by volume sales and to by 2010 have been announced, but the had been installed in rural areas, with a become more competitive in the world actual installation of that many is not at all certain. Meanwhile, installations by the total capacity of about 5.55 MWp. And market. 2,400 villages and hamlets had been electrified in India with PV. This barely taps into the potential for bringing fresh water and light to the poor and remote populations in India, but it certainly con- firms the feasibility and benefits.
Large, ground-mounted central PV powerplants in sunny areas may well become important in the future. Such applications become ever more feasible as the efficiency of PV cells continues to improve. A solar-to-electric energy Fig. 16a: A residential solar roof application in Japan. Fig. 16b: A multifamily building in Freiburg, Germany, conversion efficiency of 20 % for large Source: Photo from Japan Photovoltaic Association using the roof for solar water heating, and the south wall for solar electric energy production. area crystalline silicon cells for module production was reached by a Japanese manufacturer in 2003. A world record efficiency for the conversion of sunlight
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The Renewable Energy Resources: Characteristics, Status of Development, and Potential
thousands are continuing in Germany each with about 10 % or so of Germa- When subsidies or volume sales and and Japan, as well as in other European ny’s installations. But when taking the experience, or both, bring the costs to countries. population numbers into account, purchasers down to US$ 3.00/watt for Switzerland actually leads the EU instal- fully installed systems, the effective cost Applications in 2002 for what was to lations at 2.8 Wp per capita, followed of the electricity amortized over 30 years be the final year (2003) of the Japanese by Germany at 2.3, and the Netherlands will be from 8 to 12 US cents/kWh, program exceeded 32,000 for private at 1.1. making PV not only fully competitive with housing alone, with a total of 40,000 utility provided electricity, but probably applications for the year. This brought It is important to note that the measured the cheaper option as future electricity their "70,000 roofs" program to average daily energy production from costs from conventional fuels continue 117,500! Total Japanese government the German rooftop PV systems is about to rise. And the cost of that PV-pro- expenditures on this program over its 2.33 kWh/kWp of instal- duced electricity will five fiscal years (1999-2003) have been led capacity (averaged It is appropriate and important for remain fixed for the life- all governments to include firm US$ 739 million. The program is so over the entire year), time of the PV system, solar electric energy goals, geared popular that the government agreed scarcely half of the out- to specific targets for specific yielding at least one cost to continue it for 3 more fiscal years (to put that can be achieved years, in their policies. This is more figure for people and 2006). This will certainly aid the Japan in the sunnier climates of than just encouraging “Renewable businesses that will not government’s near-term goal of manu- the world. This demon- Portfolio Standards”, for the renew- grow in the future. (PV facturing 500 MWp of PV annually, with strates that the value of able energy transition will require modules are currently 250 MWp for internal consumption and aggressive solar energy the development and deployment warrantied for 20-25 the rest for export. They are also sup- programs to governments of the full spectrum of solar energy years, but should last porting this goal with an FY 2003 invest- and economies does not technologies, not just the least for twice that long.) expensive of the renewable energy ment of US$ 218.6 million for PV R&D require the “best” solar technologies (e.g. wind). Specific and “promotion”, which even includes climate but, again, simply One forecaster sees provision to encourage photovol- support for “grass roots” activities. a “sufficient” one. taic applications and to advance these very low cost photovoltaic technologies must be achievements by the end The rate of growth in PV applications For some time PV has part of any renewable energy poli- of this decade, at which in Germany since 1999, driven by the been the low-cost option cy, in order to assure the benefits point he expects to see “100,000 roof” program, has been im- for many remote and unique to this technology, and the world market reach to continue to provide the market mense. Total installed PV system power modular applications, 10,000 MWp in annual pull that will bring the costs down in Germany grew from about 68 MWp needing no further eco- shipments. An average further. in 1999 to 278 MWp by the end of 2002, nomic justification. But PV production growth producing, in 2002, 190 gigawatt-hours the apparent high cost of 25 % from 2000 to of electricity. By the end of 2002, 55,000 for urban PV applications has remaineda 2010 would lead to annual production rooftop PV systems had been installed deterrent (again the problem of effective- of 2,500 MW p by 2010, while an average in Germany, with 98 % of those grid-con- ly buying the hardware and the lifetime growth rate of 50 % would lead to annual nected. The total power of the accepted of energy production all up front). production of 16,000 MWp by 2010, applications for PV roofs in 2002 in Fortunately, the cost of PV modules and so the 10,000 MWp estimate lies some- Germany was over 78 MWp, up from systems continues to reduce dramatical- where between these growth rates. 60 MW p just the previous year, and ly. Factory prices for PV modules are bringing the total installed power just on now from US$ 2.00 to US$ 3.00/ watt A recently published estimate shows residential roofs to 200 MWp. Financial and complete operational systems can that even if costs are reduced to incentives and low-interest loans for now be installed in the United States for US$ 1.50 per Wp for the modules and FY2003 are expected to continue to sup- between US$ 5/watt and US$ 7/watt, US$ 3.00 per Wp for installed systems port the installation of 95 MWp more of depending on the size of the systems, by 2010, the PV industry would still rooftop systems, but with the support without subsidies. Prices for fully instal- need to expend from US$ 25 billion to shifting more to production (feed-in) led systems in Japan were at US$ as high as US$ 114 billion during the incentives. 6.50/Wp in 2002, before the government 2000-2010 period to support PV factory subsidy, showing a dramatic price de- investment, working capital and end-user The result of these policies is that over cline as a direct result of the govern- financing. Gaining investor confidence 60 % of the PV systems installed in the ment's multi-year buy-down program to assure these capital investments will EU countries were installed in Germany. and the tens of thousands of installed therefore be extremely important, poten- This is followed by Italy and Switzerland, systems that resulted from it. tially greatly aided by long-term govern-
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ment PV-purchase programs along with annually growing and long-term legisla- ted system-wide or country-wide goals for PV applications (e.g. part of a “solar RPS” component). The reward will be enhanced economic activity for the host region or country, more than returning the governmental incentive investments.
For example, a 1992 input-output analy- sis by the U.S. Department of Energy of the potential economic impact of a new 10 MWp PV fabrication plant planned for Fairfield, California (near San Francisco) showed that the sum of direct and indi- rect sales would be about US$ 55 million per year, while adding in the “induced” economic activity related to the location of the plant and its employees and the direct and indirect sales activity could exceed US$ 300 million per year. State and local income taxes could be en- hanced by US$ 5 million per year, and local sales tax revenue could be another US$ 3million per year.
Solar photovoltaic technology, in concert with energy efficient and sustainable design of buildings and integrated into the electrical grid, can make a substantial contribution to the energy needs of almost all countries of the world. But the societal value of PV, and hence the worthiness of public support and governmental stimulus, goes well beyond just the kWhs produced by the PV systems. PV in developed and develo- ping nations alike can enhance local employment, strengthen local economies, improve local environments, increase system and infrastructure reliability, and provide for greater security. The PV industry is already a multi-billion dollar new industry, growing worldwide by almost 40 % per year, with opportunities for economic advancement and inter- national marketing competitiveness by those nations, such as Japan and Germany, that make a concerted effort to draw the industry to within their boundaries.
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National and Local Factors Supporting the Development and Application of Renewable Energy Technologies
Meeting international greenhouse of emissions has been proposed for Enhancing the productivity of gas reduction commitments Germany by 2050, the latter as a conse- energy expenditures, and the quence of their long-range efficiency creation of new jobs The major driving force for the expan- and renewable energy policy (more sion of renewable energy applications in about this below). The policy rationales for renewable ener- countries other than the United States gy applications go well beyond just envi- has been national commitments to meet Long term carbon reduction goals ronmental. The opening language of the greenhouse gas reductions adopted are powerful long-term drivers for the the “Directive 2001/77/EC of the Euro- in the Kyoto Accord (the Kyoto confe- renewable energy industries, leading to pean Parliament and of the Council of rence of parties to the Climate Conven- ambitious goals for renewable energy 27 September 2001” states: tion in 1997, COP-3). Even without the development beyond 2010, such as that U.S. participation, the of England, for 20 % of The Community recognizes the need The evidence is that, when re- 55 states representing newable energy development is its energy from renew- to promote renewable energy sources 55 % of the world CO2 accompanied by aggressive ener- able energy by 2020; as a priority measure given that their emissions produced by gy efficiency goals and programs, Scotland, for 40 % of its exploitation contributes to environmental developed nations in the committed reduction of green- energy from renewables protection and sustainable development. 1990, required for formal house gas emissions can be by 2020; and Germany, In addition, this can also create local ratification of the accord, accomplished in the industrial for about 40 % of its pri- employment, have a positive impact on will be reached when nations at little to no net long-term mary energy and 65 % social cohesion, contribute to security Russia signs on. cost to their economies. On the of its electricity from of supply… contrary, a number of studies have renewable energy sour- shown that short term increases in The European Commis- expenditures will be balanced by ces by 2050. In support of the stimulus of local em- sion ratified its participa- long-term energy cost savings, ployment by renewable energy, an tion in the Kyoto Accord, and new efficiency and renewable Goals are only goals, analysis by the U.S. Public Interest Re- and set firm targets, in energy industries and jobs will lead though, unless suppor- search Group calculates that an invest- support of the Accord’s to a flow of new monies through- ted by implementing ment to increase the use of renewable objectives, for renewable out society, stimulating all sectors legislation and actions, energy in the U.S. to 20 % of the nation’s energy percentages of of the economy. Avoidance of with sufficient financial electricity supply would create “three to 12 % EU-wide energy greenhouse gas emissions is there- backing. Long-term five times as many jobs as a similar fore expected to be a stimulus for from renewables by goals for the reduction investment in fossil fuel.” The U.S. net positive economic benefits for 2010, and 22.1 % pene- countries over the longer term. of greenhouse gas emis- Worldwatch Institute estimated that solar tration into the electricity Renewable energy development sions create a rational thermal systems would generate from sector by renewables in and implementation will be a major framework for govern- 2 to 2.5 times as many jobs as coal or 2010. This will be policy component of these programs. ments within which nuclear. Global employment in the wind whether or not the treaty energy supply and effi- industry alone by 1999 was estimated to enters into force. Japan has taken the ciency policies and programs may be have contributed directly and indirectly same stand, introducing in 2003 a new established and justified, and annual to the creation of 31,000 new jobs, and “environment tax” to continue to raise national financial commitments set to world applications have doubled since the funds necessary to reduce emis- implement these goals. Without these, then, creating thousands of additional sions down to their Kyoto Accord levels. the goals will not be met. jobs.
Within this EU-wide goal each EU nation It has been estimated that, over the has been assigned a specific carbon- 12 years (1991-2002) following the emission reduction target (in percent, Bundestag’s 1990 approval of the compared to 1990 levels), based on “Electricity Feed-in Law (EFL)”, which their past accomplishments and re- gave producers of solar and wind ener- source availability as well as their current gy in Germany a wholesale price guar- economic strength. But some EU mem- antee of 90 % of the retail price of elec- ber states have set longer and more tricity, leading to a 5 % share of German ambitious targets, such as the proposal electricity from those technologies in by the British Prime Minister for a 60 % 2002, approximately 40,000 new jobs reduction in UK greenhouse gas emis- were created. In contrast, the German sions by 2050. An 80 % reduction nuclear industry, which supplies about
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30 % of Germany’s energy, employs rect sales would be about US$ 55million These kinds of regional economic analy- 38,000 people, suggesting that renew- per year. Adding in the “induced” eco- ses provide ample justification for the able energy industries are ten times nomic activity related to the location of expenditure of State funds, supported more efficient in producing jobs than the plant and its employees and the by all energy users in the State (through the nuclear industry. It has been further direct and indirect sales activity could a System Benefits Charge, or SBC – a estimated that meeting the German tar- exceed US$ 300 million per year, yiel- small surcharge on each kWh sold) to get of a 100 % increase in renewable ding a 500 % multiplier in local and support the higher-cost electricity from energy (from 6 % to about 12 %) by regional economic benefits. State and locally available resources, because it 2010 could create 25,000 more jobs in local income taxes could be enhanced generates more net money and new all of the renewables. by US$5 million per year, and local sales jobs for the State. The same arguments tax revenue could be hold for the benefits of the feed-in laws In the United States, The economic impacts from the another US$ 3 million per of Germany, Spain and Denmark, where 25,000 new jobs have development of new renewable year, further increasing the higher costs for electricity created by been created in, by and energy sources, and the local the regional benefits. renewable energy resources is spread from the PV industry, application of the technologies, over all utility bill payers in the country. which has developed to offer important ancillary benefits for An input-output analysis an annual production societies, not the least of which is by the State Department While much of this discussion has enhancement of economic diversi- and sales in 2002 of of Administration in Wis- centered on the United States and Ger- ty and security, the creation of 100 MWp. A U.S. new jobs, and greater local and consin (USA) in 1995 many, both wealthy industrial states, Department of Energy national economic productivity of revealed that the impact the same arguments can be made for estimate is that this money spent for energy. It is also of the spending of US$ the economic efficiency of keeping ener- could increase to 68,000 clear that energy resource policies 6 billion by Wisconsin for gy money flowing in the local economy, jobs (direct, indirect and are appropriate to governments, out-of-state fossil fuel rather than sent away for imported fuels induced) by the time the not the utilities, for the utilities are energy resources (coal or electricity, for all cities, States and U.S. is producing 480 not in the job-producing business, and oil) was equivalent countries. This is of particular meaning MW of PV each year. and governments are. to sending support for for the developing nations, where the Another recent estimate 175,000 jobs out of the creation of jobs is critically important. is for 300,000 jobs in the U.S. PV indus- State. This represented a significant loss Every opportunity to convert expendi- try by 2025. These values make the PV of economic productivity for Wisconsin. tures for necessities into meaningful industry in the U.S. equivalent at present That same analysis showed that an employment needs to be exploited. to major computer industries, such as alternative scenario for the development Relying on locally produced energy Dell Computer, or Sun Micro-systems, of 750 MW of new electric generation from local energy resources also con- and it could become as large as General capacity within Wisconsin from locally tributes greatly to economic security Motors. This is also equivalent to the available indigenous resources (mostly and reliability. estimate (284,000 jobs) that would be biomass), compared to the conventional produced in the biomass power industry fossil fuel scenario, would have increased in the U.S. when it reaches a level of the cost of electricity in the State by annual activity of about US$ 6 billion. about 1 US cent/kWh. This would be And it has been estimated that the more than offset, though, by the benefits German long-range energy model pre- to the State economy from the new jobs sented later in this paper could lead to created by the new local renewable 250,000 to 350,000 new jobs by 2050. energy industries, which would be equi- valent to putting about 2.5 US cents/ When new jobs are created, the “eco- KWh back into the overall State econo- nomic multiplier” goes into effect, greatly my. The higher cost for electricity from expanding the economic benefits of the local renewable energy resources the direct expenditure on the jobs. For would consequently still produce a large example, a 1992 input-output analysis net benefit for the State’s economy. by the U.S. Department of Energy of Added up over 30 years of operation, the potential economic impact of a new this could yield several billion US dollars 10 MWp PV fabrication plant planned for of net disposable income and net gross Fairfield, California (near San Francisco) product to the State. showed that the sum of direct and indi-
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Policies to Accelerate the Application of Renewable Energy Resources
Overview Credit trading mechanisms, such as Regulations Renewable Energy Credits (RECs) or – exceptions from building regulations All of the foregoing considerations pro- carbon reduction credits, to enhance – energy and building standards vides sufficient justification for serious the value of renewable energy, to – obligations efforts by governments to provide policy increase the market access to those Organizational measures and financial incentives for the acceler- energy sources, and to value the envi- – centralized information centers ated application of the renewable energy ronmental benefits of renewables; – DIY groups resources, and for serious legislated Removal of procedural, institutional – free/cheap advice goals for ever-increasing amounts of and economic barriers, and facilitation – long-term agreements renewable energy in the primary power of the integration of renewable energy – approved financing plans and electricity mixes. A myriad of mech- resources into grids and societal infra- anisms and policies to accomplish this Other structure; have been adopted by different coun- – project financing tries, some intended to “push” the appli- Consistent regulatory treatment, uni- – exceptional financing cations through laws and binding com- form codes and standards, and sim- – approved funding policy mitments for percentages of renewable plified and standardized interconnec- – information/solar campaigns energy in the energy and electricity tion agreements; – demonstrations projects mixes by certain dates, and some inten- – solar prices Economic balancing mechanisms, ded to “pull” the technology and appli- such as pollution or carbon taxes; Source: ASTIG 2001, quoted from cations through funding for R&D and Marion Schoenherr in REFOCUS, various incentives schemes. These inclu- “Leveling the playing field” by redres- Mar/Apr 2003, p. 33 de the following generic policy frame- sing the continuing inequities in public works and elements: subsidies of energy technologies and There have been varying degrees of R&D, in which the fossil fuels and success by the various policies, and National multi-year goals for assured nuclear power continue to receive the much has been learned. And although and increasing markets for renewable largest share of support. some policies (e.g. the ”electricity feed-in energy systems, such as Renewable laws“ of Germany, Denmark and Spain) Energy Standards (also called Renew- Within these generic policies, though, appear to have been much more effec- able Portfolio Standards – RPS – in are many sub-options that must be tive in leading to significant expansion the United States), Renewables Obliga- carefully selected to insure the best of renewable energy production than tion, or the EU Renewables Directive, program for any particular technology others that have been tried and then especially when formulated to support appropriate to country and locale. rejected (e.g. the “quota” policy of the balanced development of a diversity For example, in the promotion of solar UK), the European Commission is al- of renewable energy technologies; thermal energy in Europe, the following lowing the diversity of mechanisms in listing of potential funding instruments Specific governmental renewable member states to advance renewable and incentive systems has recently energy “quotas” for city and state energy to continue through 2005 before been put forth: renewable energy procurements; attempting to implement a Community Fiscal measures framework. Production incentives, such as “feed- – tax relief, exemption, write off in” laws, production tax credits (PTC), – low-interest credit A recent report by the Lawrence and net metering; – energy/CO2 taxes Berkeley National Laboratory (Berkeley, System wide surcharges, or system – reduced VAT California, USA, as reported in REFO- benefits charges (SBC), to support – exceptional write-offs CUS, Jan/Feb. 2003) examined case financial incentive payments, R&D studies in the United States of the Investment support and public interest programs; impacts and effectiveness of “clean – national energy funds” on utility scale projects. Financing mechanisms, such as – regional The mechanisms examined included up- bonds, low-interest loans, tax credits – local front grants (actual support for projects), and accelerated depreciation, and – energy suppliers forgivable loans (to support early expen- green power sales; – special foundationseco-bonus ses, and paid back only if the project is for sustainable building completed), production incentives (pay- – support for bottom-up initiatives ments per kWh of actual production),
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power-purchase agreements, and re- City policies can lead the way an energy service provider (ESP), either newable portfolio standards. They con- for lower cost service, or to meet more cluded that long-term power purchase Countrywide programs with the support stringent requirements set by the city agreements (at least ten years) for the of national governments for the develop- for conservation, efficiency and meeting outputs of renewable energy systems ment of renewables will clearly have the renewable energy standards greater are critical, but investor confidence to greatest impacts. But often creative initi- than those imposed on their previous support those agreements comes first atives can be generated by progressive- utility service provider. The first of these from stable long term policies, such as minded city governments, leading to was the "Cape Cod Agreement", in renewable energy standards, supple- major advances in public perception of which 21 towns on Cape Code, (Massa- mented, but to a lesser extent, by green new technologies. This seems to be par- chusetts) aggregated and wrote a new power markets. ticularly true with regard to PV technolo- and lower-cost contract for electrical gies, since so many of the building-inte- energy. Working capital requirements for the grated grid-connected PV systems can renewable energy industries must also be applied within cities, and the distribu- Rural-electric cooperatives, which can be met. An analysis of PV financing ted benefits from those PV applications either represent individual cities or small recently concluded that 80 % to 90 % of can be especially advantageous for regions, are also governed by elected the PV market would need to have enhancing the reliability and safety of city Boards, and are hence answerable to financial assistance for the end-user. It services and infrastructures. the people they serve. This gives them was also reported that end-user credit some leverage in promoting the local with reasonable terms can increase the City governments can take responsibility economic welfare when they elect to market demand for PV by ten times. for the decisions of their utilities in at build and own locally-sited renewable Similarly, in developing nations the least two ways. Certainly Cities can be major players in sti- energy resources, or acquisition of PV systems could increase the simplest is a city- mulating the market and lowering support farmer-devel- from a 2 %-5 % level without financing owned utility, or a “mu- costs for the renewable energy oped local renewable to possibly 50 % with financing. Not to nicipal” utility, as it is resources for all countries of the electricity sources with be ignored are also the capital require- termed in the United world. And because they are long-term power pur- ments for factories and sales distribu- States. While the munici- cities, where people live and work, chase contracts. tion, including inventory and receivables. pal utility is governed by public confidence and support for All of these can be facilitated by govern- an elected Board of the renewable energy transition In the following, three can be spurred. City programs mental buy-downs of interest rates, Directors, they are citi- U.S. (California) examples can be replicated throughout the along with tax and investment incentives, zens of the city, and the world, tailored to local cultures, are offered, all of which to facilitate the infusion of funds into the workings of the utility economies, and renewable re- are large enough to have renewable energy industries. are integrated into the sources. some influence on the financial and administra- world PV market. The tive structures of the city. Utility resource first two are municipal electric utilities, decisions that can benefit other city eco- while the third, San Francisco, is a city nomic sectors, such as the production which does not own its own utility, but of new jobs, can be made. But cities which has nevertheless made a major that are served by large, investor-owned financial commitment to efficiency and utilities can also take it upon themselves PV applications. All three demonstrate to finance energy efficiency and renew- the enthusiasm of city residents to par- able energy applications that provide ticipate in a city’s energy future, and in favorable environmental, economic and the renewable energy transition, as well reliability benefits to the city. as the power of cities to accelerate that transition. An intermediate framework that is just now raising interest in the United States, The Sacramento because of recent enabling legislation, Municipal Utility District is "Community Aggregation". This per- mits all utility customers in a city, or in Perhaps the world’s most consistent, multiple cooperating cities, to write famous and exemplary city renewable power purchase agreements as one sin- energy policy has been the PV programs gle customer. The contract can be with of the Sacramento, California, Municipal
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Policies to Accelerate the Application of Renewable Energy Resources
Utility District (SMUD). The new renew- MW. More particularly (and realistically), work of the “Sustained Orderly Develop- able energy programs were initially stimu- they found that 14 % of their customers ment” of PV systems over the years, a lated by the city’s decision to shut down would be willing to pay 15 % more, and framework in which guaranteed multi- a very expensive and poorly-operating 8 % would be willing to pay 30 % more, year bulk PV purchases and numbers of 800 MW nuclear powerplant. That shut- still representing over 35 MW of poten- new installations would contribute to a down forced the city to purchase 25 % tial PV customer base. reduction in costs. They held their sup- of its power from the market, leading to pliers to this cost-reduction timetable as several rate increases. A very progres- By the year 2000 SMUD had installed a condition of signing multi-year con- sive new SMUD administrator, David 650 systems within the city for about tracts. Freeman, vowed that within three years 7 MW of new, distributed PV power, SMUD could make up the power short- including 550 homes, as well as SMUD’s program has not been without fall with energy efficiency, become the churches, schools, businesses, and setbacks. For example, their primary nation’s leading solar utility, and recover parking lots. Their largest city-owned contracted supplier failed to meet the the previous low electricity rates. system was a 500 kW array that also SMUD purchase needs, forcing the provides shading in their hot climate District to purchase replacement PV That promise was fulfilled. SMUD be- for cars in the County Fairgrounds modules at higher costs. And a few came the world’s leading solar-electric parking lot. other obstacles appeared that have utility during the latter half of the 90s. slowed, but certainly not stopped, their Today, the electricity rates in the city, As the SMUD District launched their ambitious programs. Nevertheless, well- without the nuclear plant and with in- PV Pioneer II program in 1999, another earned widespread publicity has been creased energy efficiency and the solar survey showed a market potential of lavished on this program, and worldwide and other renewable energy sources, 10,000 to 36,000 new customers who awards bestowed on its creators. It is a are about the same as they would have wanted to own their own systems, re- courageous effort – one city determined been if those changes had never been presenting an opportunity for between to affect the development of a world introduced. The lessons learned by the 30 MW and 100 MW of additional PV. market and world PV prices. SMUD experience have been presented Under the PV Pioneer II program SMUD and praised worldwide. buys down PV system costs of its cus- Los Angeles and San Francisco tomers to US$ 3.00/watt, fully installed, The SMUD PV program was based on representing about a 50 % contribution Stimulated by the Sacramento prece- an early vision by the SMUD program from SMUD to the customer. On the dent, the Los Angeles, California Depart- officials of the potential of PV nationwide basis of long-term (5-year) contracts ment of Water and Power, the world’s and worldwide. They could foresee with their suppliers, the aim was to largest municipal utility, now offers up to 15,000 MW of PV installed in the U.S., have the SMUD contribution gradually US$ 5.50/watt cost buydown incentive and 70,000 MW installed worldwide, by diminish, and to have the actual installed for PV systems in its territory. This is 2020. Simultaneously, they anticipated cost of the later Pioneer II systems be increased to a US$ 6.00/watt rebate if that with such aggressive installation reduced to a total of US$ 3.00/watt AC. the PV is manufactured in a plant locat- rates PV costs could be driven down to When US$ 3.00/watt costs for PV are ed within the city limits (because of the US$ 3.00/installed watt (realistic AC out- placed on a 30-year home mortgage, economic “multiplier” benefit from locally put rating), including operations and this produces PV electricity for those produced components). In 2002 maintenance (O&M) costs, by 2010, and Sacramento customers at from 9 to 2.3 MWp of PV systems were installed. further lowered to US$ 1.50/installed 12 US cents/kWh, making it fully eco- In 2003 Los Angeles reaffirmed its 10 AC watt output by 2020. SMUD officials nomic for the home owning customers year, US$150 million incentive program then set SMUD’s own goals for partici- to opt for the PV installations. for PV. Incentive programs for energy pation in this overall vision: 10 MW of PV efficiency and “Green Power for a Green within the city by 2003, and 25,000 in- SMUD justified their own expenditures in LA” purchasing options complement this stalled city systems (about 50 MW) by the start-up of the program by explicitly program. 2010. quantifying not just the value of the elec- tricity produced by the PV, but also the In 2001 the voters of San Francisco, The SMUD District conducted a survey, primary and secondary voltage support California, without a municipal utility and and discovered that 24 % of their cus- benefits of PV introduced into the distri- dependent on the regional investor- tomers would be willing to pay more for bution grids, as well as other tangible owned utility for its power, approved PV-produced electricity, representing a and real “distributed utility” benefits from a US$ 100 million bond issue to serve city PV market potential of over 200 PV. And SMUD adopted a policy frame- as a public loan fund to buy down the
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costs for new energy efficiency projects National policies to promote new a simple policy to implement, one which and the installation of 50-60 MW of new renewable energy development uses market forces within the spectrum PV electricity within the City. After being of renewable energy resources to meet shown that neighborhoods within this Renewable electricity standards the scheduled applications goals at the city, which is famous for its summer lowest renewables market cost. Only fogs, actually have 85 % of the radiant The policy of setting renewable electricity those renewable technologies that are solar energy potential of Phoenix, standards (often in the literature called- market ready and proven can compete. Arizona, and with the endorsement of Renewable Portfolio Standards, or RPS) business, labor, public health and en- is now expected to be the primary policy Developing a balanced vironmental groups, the San Francisco that drives the development of renewable renewable energy portfolio voters approved the bond measure by energy in the United States, and the con- a vote of 73 % in favor. cept is emerging as fundamental to the Merely setting goals, or adopting multi- assured development of renewable ener- year standards, however, does not The San Francisco PV and efficiency gy worldwide. Every country that sets assure anything. Government-sponsored bond program combines energy savings firm goals for an incrementally increasing implementation programs and further with the new solar energy applications, percentage of renewable energy that incentives are absolutely necessary to so there will be no net new cost to San must be introduced into the country’s back-up those goals. Germany’s feed- Francisco taxpayers. It is expected that energy mix by certain dates, with inter- in laws, for example (see the next sec- this will increase reliability of city services mediate goals for intermediate dates, tion of this White Paper), are aimed at and safety, displace fossil-fueled genera- has in effect set “A Renewable Energy achieving specific long-range goals for tion that would otherwise have to be Portfolio Standard” (or a Renewable the addition of renewable energy to the constructed to meet growth within this Energy Obligation, as it country’s energy mix. highly-developed and beautiful city, and is called in the UK). This An adopted renewable electricity The funding mechanism create new businesses and jobs for the is now true for the entire standard gives great flexibility to of the feed-in law ap- European Union and all city. Already the cities of San Diego, electricity providers. They can elect pears to be providing of its member states. Denver and New York have contacted the least expensive means to meet sufficient incentive for the standard’s time and percen- San Francisco to understand how they the market to respond tage requirements by generating might accomplish the same objectives Because there are no with enough new re- the renewable electricity them- in their cities. firm federal targets for selves, or by purchasing it from newables to meet the renewable energy de- someone else, or through buying German goals. But Procedural requirements will delay the velopment in the United credits from other providers. The German government issuance of those bonds for a year or States, 13 states (as result is the greatest amount of spending programs and more. But instead of waiting, the city of August, 2003) have new renewable energy generation loans form the basis proceeded to fund and construct its adopted some form of at the least cost, and a continuing for this. first major project on its own, combining a renewable electricity incentive by renewable energy providers to drive the costs down an energy efficiency conversion with a standard. State-by- One of the strengths of still further. 650 kW rooftop PV array on the City’s state renewable energy the renewable energy Moscone Convention Center. This will programs are extremely important to standard can also be one of its potential lower the city’s energy bill for their con- generate momentum and confidence in weaknesses. The very free market vention center by US$ 200,000 per year. the new renewable energy industries. But method the adopted standard inures Many more projects are to follow. individual state programs become poor can preclude development of any but substitutes for a nationwide policy if an the least cost renewable energy options. This is to be followed by the installation entire country is to make meaningful pro- At current prices, wind is the big winner, of 100 more rooftop PV systems, in gress toward the renewable energy tran- while solar, geothermal and bioenergy order to develop the infrastructure and sition. cannot compete equally. simplify the city's procedures in prepara- tion for a massive intrusion of PV once Adopting firm goals for incremental year- Yet, ultimately, the final, great, world the bonds have been issued. These by-year renewable energy development energy transition will require utility-scale projects are all being developed in a provides the framework for confident applications of all renewable energy tech- “revenue neutral” way, which will allow multi-year investments in new busines- nologies, to promote large-volume pro- the city to recover its costs for these ses, stimulating the economy while also duction and large-scale applications that projects. assuring that the goals will be met. But can drive prices down, and to enhance the renewable electricity standard is also system reliability through resource diver-
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Policies to Accelerate the Application of Renewable Energy Resources
sity. A multi-year renewable electricity stalled photovoltaic systems are offered is the customer cost, since building- standard works in the best long-term by many states and municipal utilities, integrated PV systems do not require interests of any country, therefore, when even in those states that have adopted expenditures for transmission and distri- it is included within a package of policy aggressive renewable portfolio standards. bution. The result is that, within a pack- instruments intended to support the In California, the state with the largest age of governmental incentives, PV elec- development of a balanced portfolio of renewable electricity standard in the U.S. tricity can indeed compete with lower- renewable energy technologies tailored (20 % renewable electricity by 2017), a cost but remote resources developed to the state of development of each of rebate of US$ 4.00/ watt is provided in under a national set of renewable elec- those technologies. 2003 for PV systems of tricity standards. In up to 30 kWp in size. The conclusion reached here, and California, as well as in The renewable energy standard can be (The incentive amount again and again in this White Germany and other “fixed” to accommodate a diversity of re- will gradually be reduced Paper, is that governments need European countries, this newable energy resources. For example, for new systems installed to develop energy efficiency and has led to major new renewable energy policies that are the standard can be divided into “tiers”, in subsequent years, to commercial rooftop and appropriate to the specific coun- such as introduced in both the States of track expected reduc- parking lot PV systems. tries, and that maximize the overall Arizona and Nevada when they specified tions in PV system costs.) economic “value” of balanced and that a certain percentage of the renew- Larger commercial-sized diverse policy portfolios. The lar- A market-indicator able electricity resources developed to PV systems received a gest segment of a renewable elec- showing the benefit of satisfy the state RPS standards must significant multi-year tricity standard might well be deli- the California state be from the solar energy technologies. financial boost when the vered by the most competitive or government PV incen- This complicates the application of the California Public Utilities least costly form of renewable tives is that the provider standard somewhat, but has been shown Commission authorized electricity production, but supple- of half of the commercial to be quite feasible. US$ 125 million per year mentary incentive programs add PV rooftop systems in diversity to pure market responses, for five years (2004-2009) the United States, inclu- increase the development of new The standard itself can be somewhat to support incentives industries and the creation of new ding most of those in “self-fixing” if a large enough standard of US$ 4.50 per Wp for jobs, and provide greater assur- California, has seen their is adopted. Analytical appraisals by the systems over 30 kWp ance of reliability in a future, inte- average size for new Union of Concerned Scientists demon- in size. And commercial grated energy network. installed PV systems strated that, with a standard of 10 % establishments in grow from 94 kWp in or less, a modest amount of geothermal California can also add federal solar and 2000 to 260 kWp in 2002, and to nearly energy and landfill gas will still be able investment tax credits to the utility cre- 350 kWp in 2003, with several installa- to compete. But if the standard is as dit, allowing them to install PV systems tions of 1 MWp each. high as 20 % by 2020, a considerable that will deliver electricity for around amount of new biomass also becomes 9 US cents/kWh, a fully competitive Geothermal and biomass-derived energy competitive, and near the end of the price, and one that won't increase over are also more expensive than wind forecast period so do the solar techno- the years. systems today. But both can be used logies. It is important, though, to pro- in combined heat and power applica- mote the parallel development of the full Similarly, Japan's “70,000 (PV) Roofs” tions (CHP), with potential end-use effi- spectrum of renewable energy resources program, reliably announced and funded ciencies for the conversion of energy to early on, rather than waiting for market from 1994 to the present (and extended useful work of up to 80 %. Twice the dynamics to open the competitive door, to 2006) led to 424 MWp of installed usable energy outputs, even at twice the for governments and utilities will want to systems (117,500 roofs) by the end of cost of other competing heat-only or know that the technologies are mature 2002, dropping the cost to the consu- electricity-only energy resources, can still and reliable, and markets and electricity mer by 41 % from 1995 to a 2002 price be cost-effective. And both geothermal customers will be rewarded if prices of US$ 6.50/Wp. As the price dropped, energy and bioenergy can provide stable have already been brought down by so did the government subsidy, from supply “backbones” with very high vigorous incentive programs. 50 % in 1994 to 15 % in 2002, but the capacity values to enhance the useful popularity of the program continued to cost effectiveness of the intermittent A “package” of policies can include direct grow. renewable energy resources, thereby financial incentives for those technologies further increasing the value of the that cannot yet compete to fulfill the The PV electricity cost is still higher than renewable energy network. standard’s obligations. For example, in electricity delivered wholesale into grids the United States, major rebates for in- by wind systems, but the PV output cost
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In similar fashion, solar thermal-electric One especially successful policy The EEG in Germany remains flexible, energy generation is today also more instrument: “feed-in” tariffs subject to change as experience dictates. expensive than the conventional forms For example, in order to redress the ad- of electric energy production. But the It is illustrative to examine one quite vantages of wind systems placed in the often near-coincidence of the electrical successful policy application in some windiest regions with the relative disad- output from solar plants with the expen- detail – the "feed-in" laws (a fixed vantages of those placed in regions of sive peaking power periods of local governmental incentive payment for lower wind velocities, the German feed-in and regional grids can greatly enhance each kWh produced). The Danish incentive for wind production is now the value of the produced electricity. In feed-in incentive was the driver for the dependent on the strength of the wind California, for example, homes and busi- widespread adoption of resource at the site of nesses with time-of-use meters pay wind energy in Denmark. No single renewable energy sup- the turbine. port or incentive policy will be able about 30 US cents/kWh during the Other countries followed to stand alone in assuring the de- 12:00 - 6:00 PM peak demand times, suit. It appears to be no acci- sired acceleration of renewable dent that the adoption of a period almost completely spanned energy development. It will always the “feed-in” law policy in by the available solar energy resource. Germany first instituted be necessary for governments to Germany, Denmark and All of the renewable electric generation “feed-in” financial in- formulate a package of policies options can beat this price! And even centives in 1990, which that provide a combination of Spain has placed those greater economic benefit and reliability were subsequently im- goals, incentives, removal of bar- three countries in posi- can be produced with hybrid solar/gas- proved in the Renewable riers, and further enabling actions, tions of preeminence in wind and solar energy fired power plants, assuring that the Energy Law (EEG) that to advance the development of the renewable energy resources. applications. But the peak demand schedules will always be went into effect on April very success of such met, while (as revealed by the California 1, 2000. Under the EEG, laws can also lead to unacceptable solar-thermal electric experience) up to solar generated electricity in Germany burdens on government finances. 75 % of the energy can be met by solar is subsidized by a payment of up to The Germans therefore finance the energy. 45.7 Euro cents/kWh, to a maximum direct production incentives, as well as program total of 1,000 MW . The tariff p accumulate the resources for low-interest continues to be paid for 20 years, but loans for renewable energy producing the payment for new systems diminishes facilities, from surcharges placed on the by 5 % per year on the assumption sale of electricity to all customers (this that costs will decline over time. In Spain is called a Systems Benefits Charge, the tariff for PV power production is or SBC, in the United States). Spread 40 Euro cents/ kWh for systems smaller around this way, the surcharge is a very than 5 kW, and 20 Euro cents/kWh for small percentage of the monthly utility systems up to 25 MW in size. France bills. This demonstrates the synergy of began in 2002 to offer 15 Euro cents/ having multiple policies, including both kWh for electricity produced by PV. guaranteed payments to renewable ener- gy producers and the passing of the Similar (but, of course, lower) “feed-in” financial responsibility onto all energy incentives are offered in Germany for users of the country through a small wind energy, as well as for other renew- surcharge. able energy resources. The difference in feed-in incentives is designed to balance the differing financial needs of the various This does not imply that simply adopting renewable energy resources according feed-in laws will guarantee a rapid esca- to their state of market emergence, so lation of renewable energy applications. that a true “portfolio” of renewable ener- Portugal, Greece and Italy, for example, gy resources is developed. This is an also adopted feed-in laws, but did not excellent policy that is especially impor- support them sufficiently with other tant for the solar energy resources, as implementing legislation, such as simpli- they presently produce more expensive fying planning permits, providing low- power than wind energy. cost loans, or guaranteeing grid access. As a result, they have not been effective.
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Policies to Accelerate the Application of Renewable Energy Resources
The developing nations inhabitants still without electrical power, The most urgent needs in Africa are and putting it all on a fast track. The first access to clean water and detoxification Although the importance of the renew- 20 MWp of PV, along with small hydro of dirty water to promote public health, able energy transition to developing and PV-diesel and PV-wind hybrids, are and at least a little light in each dwelling, nations was acknowledged at the begin- to produce village power systems in office and school to enhance living quali- ning of this White Paper, it has focused 1061 villages and to be completed in ty and productivity and to aid in advan- heavily on policies appropriate to the only 20 months, by the end of 2004. cing education. The PV technologies, developed nations. The leadership in the This is to be extended to another which are admirably suited to meet development of the renewable energy 20,000 villages during the 2005 - 2010 these needs and to mitigate the pro- technologies and in the large-scale period. This will make China a major blems of the poor centralized energy applications that will bring prices down player in the world PV market, with a systems, are now being applied by the for all nations must necessarily fall on program sponsored solely by the thousands, but they are still only a tiny the developed nations. The urgency is Chinese government, but fraction of Africa’s garg- therefore for those nations to commit relying for technical and The benefits of the renewable antuan need. Africa’s to the renewable energy transition as training assistance on a energy transition will accrue to all countries are mostly nations of the world. But it is the soon as possible. On the other hand, number of international struggling to meet more governments that can afford to the developing nations have the oppor- institutions, including basic needs, and relying take the first steps that must do tunity to move directly into the renew- the U.S. Department of so. Governments that can afford on outside countries and able energy transition, skipping many Energy. aid to the developing nations in the agencies to bring rene- of the large-scale centralized power form of renewable energy techno- wable energy applica- systems that are now becoming obso- India launched a serious logies must provide it. The renew- tions to them lete and dangerously unreliable in the wind-electric program in able energy transition must take developed countries, and maximizing the 1990s, and is now place everywhere. Applications of renewa- their energy expenditures for the benefit one of the world leaders ble energy resources in of the creation of new jobs and local in the application of that technology. the developing nations can help to meet industries. Even though India imports critical com- the most basic of human needs and ponents of their wind systems, they are enhance the quality of life for billions of In this paper it was noted, for example, capable of manufacturing up to 70 % of people. From the sheer numbers of that China is supporting the develop- the components in India and, of course, potential applications, millions of small ment of millions of solar water heaters, installing and maintaining the systems renewable energy systems in developing stimulated by the lack of natural gas with local labor. India has also intro- nations can contribute in major ways to infrastructure and the high cost of elec- duced a few thousand solar-electric the lowering of costs and the expansion tricity. The San Francisco-based Energy water pumps. of the renewable energy transition Foundation has a Bejing Office and is around the world. But, with the possible providing technical and policy expertise Although India has sought to bring cen- exception of China and, perhaps soon, to the Chinese Government toward the trally-produced electricity to all of its also of India, firm long-range national introduction of energy efficiency and the communities and, especially, to its far- standards and governmental policies in renewable electric energy sources into mers, the electric distribution networks the developing nations are generally not China’s utilities. There are highly quali- are generally inefficient, unreliable and yet evident in forms helpful for discus- fied engineers and scientists in China, have huge losses (including major power sion in this White Paper. Their lack of a huge pool of potential labor, and very theft). As with China, India has qualified financial resources and need for techni- serious air-pollution and resulting public scientists and engineers, a huge pool of cal and economic assistance from out- health problems caused by fossil fuel potential labor, poor air quality and dirty side often outweighs all else. use, all of which provide the necessary sources of coal, again setting the stage underpinnings for serious Chinese gov- for an aggressive turn away from the It is those governments that can afford ernment policy developments in the unproductive centralized systems and these first important steps that are the application of the renewable energy toward the new renewable and distri- primary audience of this White Paper, resources. buted systems. India is just now consi- explaining the emphasis on policies dering adopting renewable energy devel- appropriate to the developed nations. China is instituting its first large-scale opment as a major new and permanent renewable energy application with a energy “core” policy. US$ 340 million electrification program to bring PV electricity to the 30 million
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Market-based Incentives
Overview renewable energy generated by the sell- A similar emissions credit trading system er of the certificates. This enhances the is well established in the United States One of the strengths of the renewable value of the green energy for the pro- for various environmental pollutants electricity standard is that it is market- ducer, potentially making it more profit- (SO2, NOx, and VOCs). But emissions based, but it depends first on govern- able to produce and sell the energy and trading is just one option, and cannot be ments adopting and implementing the attracting investors at an earlier stage implemented simultaneously with renew- long-term goals, and regulating and in the renewable energy market develop- able energy credit (REC) trading, or enforcing compliance. Investors see it ment. And it greatly enhances the po- green power sales, to avoid “double as a beacon of confidence. But others tential for the successful fulfillment of counting” of renewables benefits. see it as bad policy, requiring what national RPS goals. they think is heavy-handed government Emissions and credit trading policies intervention in what they feel should be The difficulty with these schemes has do not on their own carry the economic a fully free energy market. Various been in the loss of certainty for invest- power to accelerate and maintain renew- alternative “market-based” incentive ors, since they cannot predict market able energy markets. Successes, such schemes have been introduced for the demand or price for certificates, so as in Texas (USA), where wind energy promotion of renewable energy, partly to the renewable energy generators can has been installed at a rate well in ex- satisfy a political philos- no longer reliably pre- cess of intermediate goals toward a Credit-trading mechanisms and ophy by some legislators exploitation of the green market dict revenue. When the 2010 RPS, have resulted from the suc- who would prefer to see should supplement, and be imple- Danish government cessful combination of certificate trading market mechanisms mented in combination with, the recently switched from (RECs) within a policy framed by a signi- determine winners and more powerful policy instruments, the fixed feed-in tariffs to ficant RPS, and aided by the U.S. losers than to rely on such as renewable electricity stan- the CTM, their renewable Production Tax Credit (PTC – equivalent government coercion or dards and feed-in laws. In this cir- energy industries came in concept to the European feed-in incentives. These include cumstance the trading of renew- virtually to a halt. And incentives). able energy credits and the finan- Quotas, the “Certificates Britain’s introduction of cial bonus of the green markets Trading Model (CTM)”, the “Renewable Obliga- The REC portion of the Texas policy could play a major role in develop- “green power” sales, and ing and supporting renewable tion Certificate” (ROC) as covers about 10% of the cost of the the international trading energy markets. part of the April 2002, wind power generation, but that fairly of “green certificates”. UK “Renewables Obliga- small increment can often be an impor- These have been operating with varying tion Order”, has not, in its first year, tant contribution toward paying the degrees of success (and also failure) in been very successful. This is due in part marginal extra costs of green power several European countries. from a disparity between too many sell- production. That also depends on the ers and too few buyers, but there are value of the RECs. In cases, such as the The idea of certificate trading is that other structural issues emerging as well. UK, the “ROC” (Renewable Obligation support for the renewable energy tech- Monies that might have gone into the Certificates) has been introduced in such nologies will come from having two construction of new wind systems, for a way as to yield prices of up to US$ markets, one for the power produced example, have instead been buried in 100 per MWh. So the rules by which the and the second for the value of the cer- ROC financial transactions. And different RECs (or ROCs) are introduced have a tificates generated and traded. That market rules in different countries can profound affect on their ultimate market value can either be set by the free mar- cloud the operation of an international value. ket, or, better, supported by govern- certificate trading market. mental policies in which firm targets for “Green” power surcharges and certifi- carbon emission reduction or renewable Emissions credit trading is another po- cate sales can also be very effective in energy development have been imple- tentially important market-based policy tapping into the interest of those mem- mented with explicit requirements and option, to ”internalize” societal costs bers of the public seeking to participate penalties for non-compliance. These of emission impacts. Europe will soon directly in affecting better energy poli- targets can be met either by acquiring begin carbon emissions trading. So cies, and hence raising at least some renewable energy directly, or by develop- most probably will Canada. And, as with funds for renewable energy from outside ing new on-site renewable energy gen- renewable energy policy, several U.S. the normal governmental revenue stream. eration, or by the acquisition of equiva- states are developing their own carbon The potential total financial resources to lent generation through the purchase of emissions credit-trading program, in the be gained by this approach are limited green certificates, e.g. one Renewable absence of a national U.S. commitment to that segment of customers who are Energy Credit (REC) for each MWh of to targeted greenhouse gas reductions. willing to pay more, for social returns
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Market-based Incentives
(estimated, for example, to be a maxi- Requirements for introducing fair these averages to the first 25 years of mum of 8 % of utility customers in the market incentives for renewable commercialization of each of these tech- United States). And high marketing energy nologies reveals even longer-term subsi- costs for green power products can eat dies for nuclear power of 66 US cents/ up much of the green premium before it Redressing inequities in market kWh, for solar energy of 51 US cents/ can be invested in new or existing re- subsidies for the energy sources kWh, and for wind energy of 4 US newable energy production. The result is cents/kWh. that economies of scale probably cannot The biggest problem of any “market be reached with funds raised from green based” program is that the present This inequity was not redressed by 1999, power surcharges alone, so that this markets for the conventional energy even though support for renewable would remain a relatively expensive way resources are highly distorted by energy had grown to the US$ 1 billion/ to raise support for renewable energy. continuing governmental subsidies. year level by then (with 75 % of that in “Subsidies” of any kind for an energy tax subsidies for Ethanol fuels). Fossil The Netherlands green power program, technology must be created and imple- fuels received US$ 2.2 billion in subsi- however, offers an example of the kind mented fairly. Unfortunately, policy dies in that same year. Nuclear energy in of framework in which green power mar- makers only look at (and the U.S. was in its 52nd keting can be raised to a level of signifi- often complain about) A consistent imbalance of subsi- year in 1999, and it still cance. In that country, 1.3 million custo- new proposed subsidies dies creates a false message in received US$ 640 million mers, or 20 % of the population, had, for new renewable ener- the marketplace about the viability in direct subsidies. by the end of 2003, signed up for green gy resources, forgetting of renewable energy resources. Equalizing subsidies to all energy power, exceeding the capacity of that the conventional Recent consideration by sources must include recognition Netherlands producers to deliver, and energy resources have of risks and price volatility factors, the U.S. Congress of hence requiring out-of-country purcha- received, and are contin- and should also include an explicit guaranteed loans for the ses of green power to meet this new uing to receive, massive accounting of social and environ- construction of six to market. This success has been driven subsidies that have mental costs and benefits. eight new nuclear power by the implementation by the Dutch produced fully artificial plants would represent government of a countrywide and prices for fossil fuels and nuclear power a public exposure of potentially US$ 13 almost income-neutral “ecotax”, increas- alike. This makes it impossible for the billion in liability against potential default ing the cost of conventional power by renewable energy resources to compete by the plant owners. And extension of 6 eurocents/kWh, and hence allowing on the open market, as many policy the Price Anderson Act, which limits the some green power to be offered at a makers would like to think, since there is liability of insurance carriers in the United discount. The World Wildlife Fund has no such thing at present as a fair market States to US$ 9 billion in the event of aided the Netherlands in supporting a for the conventional energy resources. a nuclear accident, exposes the U.S. major media campaign to stimulate public to up to US$ 300 billion in un- customers to accept these attractive For example, a report by the Renewable recoverable costs in the event of a green power contracts. Energy Policy Project (REPP) estimated major nuclear power accident, such that out of US$ 150 billion spent by the as happened in Chernobyl, or almost It is clear, in parallel with the conditions U.S. government on energy subsidies happened at Three Mile Island in the necessary to make RECs into important from 1947 to 1999, nuclear power re- U.S. financial policy instruments, that with ceived 96.3 %. Nuclear energy and wind additional supporting governmental energy in the United States each pro- No accident could conceivably happen policy and public education the power duced about the same amount of energy at a renewable energy power plant that of a green market can be substantially in the first 15 years of the application of would expose the public to economic enhanced. Again, it is the combination those technologies, but during that liability of these massive proportions. of policies and financial instruments that stage in their development the subsidies And the impact of shielding the public produce effective results. were US$ 39.4 billion for nuclear and from these very great financial risks, US$ 900 million for wind, a difference and using public funds to support that of a factor of 40. More telling, the first “shield”, gives completely false market 15-years of subsidy amounted to US$ signals. 15.30/kWh produced by nuclear power, US$ 7.19/kWh produced by solar ener- gy technologies, and 46 US cents/kWh produced by wind power. Expanding
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Developing a consistent method The failure of market analyses to proper- models used by energy planners hearken for estimating energy costs ly evaluate costs and prices for conven- back to the Model T days, and have tional energy resources goes even deep- been discarded in other industries. Yet Another difficulty in market-based er, though, into the very mathematical they continue to be used for projections schemes for the promotion of renewable frameworks of the analyses. For exam- of relative costs of energy. energy is the highly distorted method ple, the pioneering of estimating “levelized” prices for the works of Dr. Shimon Proper social accounting of costs The conclusion from risk- conventional energy resources, against Awerbuch show convin- and benefits of energy sources, based economic analy- which the “competitiveness” of the re- cingly that energy secu- econometric analyses that follow ses is that biomass, newable energy resources is determined. rity will be more greatly the relative economic efficiency of hydroelectric energy, It is well known, for example, that the affected by fuel price expenditures for energy in terms of wind, and geothermal, all failure to estimate the environmental volatility then by fuel larger societal benefits (e.g. new show lower net present costs of energy production, and to inter- supply disruptions. His industries and jobs produced), and value costs today than correctly applied risk-adjusted and nalize those in some way to be reflected analyses further demon- all of the conventional volatile-price economic theory, in the cost of conventional energy pro- strate that the volatility fuels, including boiler- paint a dramatically different pic- duction, leaves the consumers paying of conventional fuel pri- ture from conventional economic burned and IGCC coal, for energy resources simultaneously out ces adds a “risk” ele- analyses, one in which the renew- turbine-burned and com- of different pockets – direct purchases, ment to an estimation able energy sources are quite evi- bined cycle gas, and indirect taxes and health costs. If these of discount rates that dently the safest, securest, and nuclear energy. Solar social costs could be made explicit, or dramatically raises the probably even today the cheapest, thermal and PV also have explicitly tied to the decision to buy net present value of the alternative risk-adjusted costs that energy produced by a particular re- costs of conventional are shown to be lower source, the disparity between the costs fuels, while at the same time lowering than conventional estimates, but are still of the conventional energy resources the net present value of the costs of the higher than the other renewable energy and the non-polluting renewable energy renewable energy sources. Related resources. resources would be greatly reduced, analyses by the Lawrence Berkeley if not, in many cases, completely elimi- Laboratory (U.S.) quantify this “gas fuel Furthermore, the entire concept of nated. price hedge” from gas price volatility “levelizing” energy costs over a long as adding 0.3 to 0.6 US cents/kWh for period totally ignores the impact that Good arguments can be made that if in gas, or reducing the cost for the fuel- rising energy costs will have on future the U.S., for example, the costs of mili- free resources by the same amount. decision makers. Whereas the cost of tary measures taken to protect access Awerbuch concludes that the cost gas “levelized” over 30 years may to foreign sources of oil were factored into the direct cost of oil, the price at the gas pump would probably double, 0,16 US$ Levelized Market-Based Electricity Cost and Price Estimates – Historic Fuel Price Risk bringing the cost of American oil and 0,14 Traditional Price Cost gas up to the levels now experienced in Europe, and perhaps causing Americans 0,12 to rethink the benefits of fuel efficient 0,10 vehicles.
0,08
0,06
0,04
0,02
0 Coal Coal Gas Gas Nuclear Bio Hydro Wind Solar Geo PV PV Boiler IGCC CC GT conv Max Insol.
Fig. 17: Risk-Adjusted Cost of Electricity Estimates Based on Historic Fuel Price Risk. Source: Dr Shimon Awerbuch, RENEWABLE ENERGY WORLD, Mar-April, 2003, p. 58, with PV data added from other Awerbuch work.
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Market-based Incentives
appear to be lower today than the cost of geothermal energy, or biomass ener- gy, when the costs for gas begin to escalate (from the squeezing of domes- tic and world gas markets) while the costs for geothermal and biomass ener- gy continue to be reduced, there will be a time when all of those costs cross over, leaving gas as clearly the more expensive immediate resource. Future governments and decision makers will be dismayed to then find that they are trapped into 20-year purchase agree- ments based upon the unreal “levelizing” of what is really a dynamically changing market. The renewable energy sources will look ever more favorable in future markets and to future governmental decision makers, while the conventional energy resources will become more and more costly.
0,20 US $ Levelized Costs
0,16
0,12 PV 0,08
0,04 Gas CC 0 2000 2005 2010 2015 2020 2025 2030
0,20 US $ Projected Annual Generating Costs
0,16
PV 0,12
0,08 Gas CC
0,04
0 2000 2005 2010 2015 2020 2025 2030
Fig. 18 a, b: Levelized costs mask important inter- temporal information. Customers after 2015 may be displeased with the year 2000 choice of gas CC. Source: Dr. Shimon Awerbuch
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The Role of R&D in Supporting the Renewable Energy Transition
Countries with the most advanced R&D Biomass gasification holds much pro- The largest single investment of the programs will become the technology mise for future clean energy production, European Union’s five-year Frameworks leaders. In the case of renewable energy but needs considerable further develop- has been energy research, spurred by the technologies are still improving and ment. More work also needs to be done the world oil shock of 1973. Energy re- developing while, at the same time, fully to improve the ability to co-fire biomass search was first seen “as a matter of market-ready applications of the techno- with coal. And, of course, much agri- survival” for the EU. By the late 1990’s logies are also being continuously im- cultural R&D remains to be done to the proportion of EU funding for R&D proved from experience gained in com- develop and optimize energy crops for in renewables had grown to 14 %, and mercial applications in An important component of any bioenergy production. 12 % for R&D in efficiency. the field. Continued R&D national renewable energy policy in solar energy has a very should be support for both funda- Building science has The European research focus today is important role to play for mental and applied R&D, along emerged as an impor- changing. Energy security remains a pri- years to come. with cooperation with other tant scientific and en- mary driver for EU R&D in renewables, nations in R&D activities to enhan- gineering discipline. but environmental protection and econo- For example, in the area ce the global efficiency of such Tools for “whole buil- mic competitiveness are now the impor- of PV it has been noted research. R&D can lead to new ding” design, to facilitate tant drivers. The focus of EU R&D fund- industries, and R&D breakthroughs that much fundamental systems integrations of ing has been to “help European firms to can produce new competitive R&D remains to be done advantages for nations, while con- compatible energy and capture a major portion of the growing that goes beyond just tributing to the advancement of architectural compo- worldwide market for renewable energy cell research to include the fields for the benefit of all nents, are being devel- technologies”. balance of systems com- countries. oped and refined and ponents and integrated made ever more “user As such, the EU R&D budget for renew- systems. Fundamental physics remains friendly”, in order to be useful in the ables has become more oriented toward to be done to increase efficiency and actual design process. The result is applied R&D, rather than to basic re- reliability of PV cells or films, but equally today that major energy savings can search. In this context it is highly signifi- important are continual improvements in be realized with relatively minor overall cant that the European Commission has the integration of PV into building com- cost impacts. In some cases energy effi- agreed to invest US$ 2 billion in sustain- ponents and systems and into distribu- ciency and renewable energy collection able energy research for the next five- ted energy supplies. Significant new in large buildings can be accomplished year period, an amount that is 20 times breakthroughs and new directions are within the same budget for a “standard” the expenditure for the 1997-2001 five- still possible. building without those features. year period. Japan combines support for R&D with the “promotion” of PV, with There is much R&D still to be done with These design tools need to be further budgets of US$ 302.4 million in 2002, the solar thermal electric technologies as developed and validated against measur- and US$ 218.6 million in 2003. well, in order to increase efficiencies and ed building performance. The monitor- reduce costs of mirrors, heliostats, col- ing of buildings must also be continued The G8 Renewable Energy Task Force, lectors and electric energy generators, and expanded to develop a data base in its July, 2001 Final Report, urged and to develop and refine thermal ener- from actual experience. And research on that “The G8 countries should continue gy storage systems that can give up to new building technologies, such as lights and expand support for R&D of renew- the critical 12 hours of thermal storage and glazings, is already producing huge able energy technologies that address that will greatly enhancing the econo- gains in efficiency and performance. all sectors of the energy economy – mics of solar thermal electric systems. buildings, industry, transport, and utility But equally important is research to energy services.” They also urged co- reduce the cost and increase the reli- operation on R&D with developing coun- ability of solar water heating compo- tries to help with technology transfer nents. tailored to developing country use.
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Two Comprehensive National Energy Policy Models
It is instructive to present two compre- The United States: Leadership By mid-2003, thirteen states had imple- hensive national energy policy models, from the States, and a clean energy mented minimum renewable energy to demonstrate the integration of poli- blueprint for an alternative future standards (RPS) which will produce over cies in a way that can produce major 14,230 MW of new renewable power by economic and environmental benefits Present (2003) status of renewable 2017 – a 105 % increase over 1997 simultaneously, while also leading coun- energy policies in the U.S. levels. Eight of those states enacted the tries into the renewable energy transition. RPS legislation as part of restructuring The United States is presently being The United States (2003) has no signi- their electric utilities. Wisconsin, a state led by State policies, so the following ficant national energy efficiency and re- that did not restructure their utilities, proposed national model is presently newable energy policy. Even though it enacted the RPS in support of “electric hypothetical, yet realistic, holding great was acknowledged in the 2001 National reliability”, explicitly incorporating one of promise for future U.S. federal govern- Energy Plan that, without the efficiencies the most important future benefits of ments more enlightened than the pre- introduced in the U.S. following the oil renewable energy into early governmen- sent one. The German model, on the crisis of 1973, the U.S. would be using tal energy policy. other hand, is an actual national frame- 30 % to 50 % more energy today than it work for German energy policy, taking does, the U.S. has no stable, long-term California will be the numerical leader Germany deep into the renewable ener- policies to continue to reap these bene- in U.S. development of new renewable gy transition. fits in the future. This is particularly true energy resources, requiring the State’s with regard to renewable energy, for the investor-owned electric utilities and ener- Administration’s prediction in the 2001 gy providers to increase their renewable National Energy Plan that renewable energy usage by not less than 1 % per energy use would grow from 2 % today year to a target of 20 % by 2017. The to about 2.8 % in 2020 is hardly what is additional 21,000 gigawatt hours per needed to energize investor confidence. year from renewable energy generation by 2017 amounts to a doubling of That is not to say that there is no federal California’s renewable energy usage, support for renewable energy applica- which will make serious inroads into tions. The production tax credit of 1.8 California’s dependence on natural gas US cents/kWh for energy produced by for electricity production. wind turbines and dedicated biomass plants, for example, has played a very The California Energy Commission re- important role in the renewed develop- leased an analysis in 2003 confirming ment of the U.S. wind-electric industry. that there would be sufficient renewable But even this support has been on-again electricity generation in the State to and off-again, voted in or out on a year- reach that target, with possibly 25,000 by-year basis, without the policy assur- gigawatt hours per year to come from ance needed to attract new business projects already under development in development and investments. 2003. That report also confirmed that abundant additional renewable energy Fortunately, a number of the state gov- resource capacity would still be available ernments have decided not to wait for a for development beyond the 2017 tar- lagging federal government, and have get. This report, in turn, confirmed the moved decisively to take responsibility for findings of the California Public Utilities the energy security and economic futures Commission that transmission line plan- of their states. Those state governments ning for California’s future will also need have enacted legislation to promote the to be targeted to support the State’s accelerated application of renewable major renewable energy development energy. Enough state programs have areas. been developed to confirm the feasibility of aggressive national renewable energy Nevada has the second highest new goals, and to begin to suggest a de facto U.S. statewide percentage goal, requiring national policy emerging from outside of 15 % of their electricity to come from the federal government. renewables by 2013, with 5 % of that to
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be produced by solar-electric technolo- energy generation had been added in and efficiency policies into a mutually gies. But Minnesota recently adopted Wisconsin by early 2003, for example, supportive package. Specifically, the an RPS requirement of 10 % of power aided by a State policy that allows un- following policies are proposed, and production from renewable energy by limited “banking” of renewable energy the integrated impacts appraised ana- 2015 for the State’s largest electric utili- credits, to meet their RPS goals through lytically: ty. When added to their previous Prairie 2011. Texas exceeded their 2002 RPS A renewable portfolio standard would Island Nuclear Plant waste storage “set- requirement by 150 % (installing 900 require utilities to increase the use of tlement” requirement of 950 MW of wind MW of new wind, while required only energy from wind, biomass, geother- and biomass energy, the utility will have to install 400 MW), and is likely to reach mal, solar and landfill gas from 2 per- a de facto RPS of 19 % by 2015. Texas their 2009 goal of 2000 MW several cent in 2002 to 10 percent in 2010, will be second to California in total in- years in advance of the legislated re- and 20 percent by 2020. It would be stalled new renewable energy generation quirement. Two states – Nevada and supported by tradable energy credits with a requirement of 2000 MW of new Utah – revisited their earlier conservative to help assure compliance at the renewables by 2009, signed into law by RPS legislated goals and dramatically lowest possible cost. then – Governor George W. Bush. increased their earlier standards. And Nevada will have nearly met their new A public benefits fund would be cre- Fourteen states have also legislated 2013 solar power requirement by 2005, ated by a 0.2 cent/kWh surcharge renewable energy funds totaling US$ when their 50MW solar thermal-electric on electricity, equivalent to about 4.5 billion by 2017. The combination of power plant goes on line. US$ 1/month for a typical household. all RPS and renewable energy fund pro- It would be used to match state grams will develop 15,215 MW of new A powerful clean energy blueprint funding for energy efficiency, renew- renewables, and protect 7,020 MW of for the US able energy, R&D, and low-income existing renewables, by 2017. This will customer protection. be equivalent in the reduction of CO The leadership provided by state govern- 2 Production tax credits of 1.8 US cents/ emissions to removing 7.4 million cars ments in the U.S. is extremely important, kWh for renewable energy would be from the road, or planting11.2 millions filling the policy vacuum left by the fed- extended to 2006 and expanded to acres (4.5 million hectares) of trees. eral government, but so much more cover all clean, nonhydro renewable These programs are complemented could be accomplished with a national energy resources, helping to level the by other legislated state programs in policy based upon national goals sup- playing field with fossil fuel and nucle- support of energy efficiency, totaling ported by facilitating legislation. To de- ar generation subsidies. US$ 8.6 billion by 2012, and for R&D, monstrate this, and to provide incentive totaling US$ 1.1 billion by 2012. and support for national legislation, the Net metering would be extended Union of Concerned Scientists (UCS) – nationwide, to treat fairly those grid- The development of distributed genera- a national member organization of scien- connected consumers who generate tion (primarily PV and small wind) in tists and those who support them in their own electricity with renewable the U.S. has been promoted by “net promoting the public interest in several energy systems of up to 100kW, loca- metering” legislation passed in 36 of fields, including clean energy – develop- ted on their own premises, by allowing the country’s 50 states. Most of the PV ed in 2001 a “Clean Energy Blueprint”. them to feed surplus electricity back systems allowed to be directly connec- Based upon realistic appraisals of both into the grid and spin their meters ted into the utility and to gain full retail technology costs and resource potential, backwards. credit by “running the meter backwards” the Clean Energy Blueprint reveals that a Research and development spending are restricted in size in various state poli- U.S. nationwide goal of 20 % of electricity on renewable energy would increase cies to 10 kW, or 25 kW, or a few up to from renewable energy by 2020 is feasi- 60 % over three years to US$ 652 100 kW. California, however, allows PV ble and would offer attractive economic million by 2005 (this is a little over systems up to 1 MW to qualify, leading and environmental benefits compared twice the 2002 renewables R&D bud- to a boom of many hundreds of kW in with the administration’s “business as get for Japan.) Energy efficiency R&D commercial rooftop and parking lot usual” policies. would grow by 50 % to US$ 900 mil- systems. lion by 2005. It has been stressed in this White Paper It is now being seen that experience in that accelerating the application of re- Combined heat and power: invest- constructing and operating renewable newable energy cannot result from just ment tax credits and shortened de- power installations builds confidence in one or two adopted policies. The Clean preciation periods would be provided, the utilities. Enough new renewable Energy Blueprint integrates many energy and regulatory barriers removed, for
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Two Comprehensive National Clean Energy Policy Models
power plants that produce both elec- Monthly electricity bills for a typical Their results showed a modest saving tricity and useful heat at efficiencies household would decline from about in national energy bills by 2020. Other of 60 % to 70 %. US$ 40/month in 2000 to US$ 25/ studies which included more realistic month in 2020. assumptions, and which combined ener- Improved efficiency standards: nation- gy efficiency measures with renewable al minimum efficiency standards The Blueprint’s efficiency and renew- energy development, showed billions of would be established for a dozen pro- able energy policies could reduce dollars of savings for U.S. consumers by ducts, generally to the level of good natural gas prices by 27 percent by 2020 compared with the Administration’s practices today. In addition, existing 2020, savings businesses and homes National Energy Plan. national standards would be revised another US$ 30 billion per year by to levels that are technically feasible 2020. This model, then, reveals the kinds of and economically justified. Demand for natural gas would be benefits awaiting governments that de- Enhanced building codes: states reduced by 30 % and for coal by cide to pursue an integrated set of poli- would adopt model building codes nearly 60 % (reducing the burning of cies leading toward the renewable ener- established in 1999/2000, as well as coal by 750 million tons per year) gy transition. In order to reap those be- new more advanced codes to be compared to business as usual pro- nefits, though, governments must be established by 2010 that would go jections for 2020. More oil would be prepared to take long-range policy views, well beyond today’s “best practices” saved in 18 years (400 million barrels and to be willing to invest in the early standards. per year by 2020) than could be implementation of those policies. The recovered economically from the development of renewable energy in Tax incentives would promote efficien- administration-proposed pipeline in Germany, for example, has shown an cy improvements for buildings, appli- the Artic National Wildlife Refuges almost steady growth over the past ten ances and equipment beyond mini- (ANWR) in 60 years. years, resulting from consistent policies, mum standards, through rebates and while the U.S. renewables industries investment tax credits. The need for 975 new power plants flounder from year to year in a mire of (average 300 MW each), out of a Industrial energy efficiency measures: an uncertain and inconsistent renewable projected 1,300 new plants under industry would improve its efficiency energy policy framework with a very short the National Energy Policy, could be by 1 to 2 percent per year through time horizon. avoided, and 180 old coal plants (aver- voluntary agreements, incentives, or age 500 MW each) and 14 existing national standards. The federal The next example therefore looks at the nuclear plants (1,000 MW each) could government would provide technical model for Germany’s long-range goals be retired. 300,000 miles of new gas and financial assistance, and increase and strategies that is “pulling” German pipelines and 7000 miles of electricity federal R&D and demonstration pro- renewable energy policy and govern- transmission lines, both called for in grams. mental investments toward a genuine the Administration’s National Energy renewable energy transition. Policy, would not have to be built. An economic analysis of the costs and benefits of the combination of all of Carbon dioxide emissions from power these policies, using the U.S. Energy plants would be reduced by two-thirds Information Administration’s National compared to business-as-usual pro- Energy Modeling Systems (NEMS) com- jections for 2020, and harmful emis- puter model, produced the following sions of sulfur dioxide and nitrogen results: oxides from power plants would be reduced by 55 percent. The United States could indeed meet at least 20 % of its electricity needs by How realistic are these conclusions and renewable energy sources – wind, bio- benefits? The impact of a national re- mass, geothermal and solar – by quirement (RPS) for 20 % of U.S. electri- 2020. city from renewable energy by 2020 was examined, using rather high cost U.S. consumers would save a total of assumptions for renewable energy and US$ 440 billion by 2020, with annual other conservative assumptions, by the net savings reaching US$ 105 billion U.S. Department of Energy’s Energy per year, or US$ 350 per year for a Information Administration (EIA). typical family.
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Germany: A significant long range These results also assume energy-saving created or conserved in the building renewable energy policy transformations in the buildings, trans- industry, and 250,000 to 350,000 new portation and heating sectors, with in- jobs created in the renewable energy Germany has adopted policies intended creasing reliance on renewable energy industries.) to dramatically reduce the emission of resources for all three. So, for example, greenhouse gases and, as part of that according to the model the total amount Finally, projecting the model still further, policy, to develop its renewable energy of electricity required by Germany would renewable energies could deliver 100 % resources on a fast track. The result has be only about 12 % lower in 2050 than of the power and energy required for been a jump to leadership in the world for the year 2000, because of the in- Germany by 2070, with a continuing of wind energy, with 12,000 MW instal- creasing share of electricity needed to aggressive program, or at least by the led in Germany by the end of 2002, and produce hydrogen fuels. end of the century with a more modest 3rd in the world in PV capacity. program. These changes would not come without Germany’s policies are being driven and costs, but they are also balanced by The Germany Advisory Council on Global formulated in part by long-range sustain- cost savings, such as in fuel and avoid- Change (WBGU), in a 2003 report, pro- ability models put forth by the German ed power plant construction. The esti- posed that these kinds of measures and Federal Environment Ministry, supported mate is that the discounted annual cost/ goals could move the world through the by the analytical work of the Wuppertal year for this transition would be perhaps transition to energy security with environ- Institute. The key elements of that Long- 3.8 billion EUR/year, or 48 EUR/year/ mental protection and energy equity be- term Scenario “Solar Energy Economy person, representing about 0.14 % of tween rich and poor nations. In addition in Germany” are, first, that energy pro- the gross domestic product. And these to the efficiency and renewable energy ductivity will improve by 3 to 3.5 % per figure do not take into account the eco- goals, though, would need to be com- year up to 2030. This means that, even nomic benefits from the new renewable mitments to cut all fossil fuel subsidies though the Germany economy will con- energy industries and jobs that would to zero by 2020, investment in grid infra- tinue to grow, total primary energy will accrue. (The same analysis suggests structure to support distributed genera- actually diminish by a little over 30 % by that 85,000 to 200,000 jobs would be tion, and increasing R&D for renewables 2030. This is the energy efficiency and by ten times. energy intensity policy underpinning of the renewable energy transition that Longterm Scenario ”Solar Energy Economy” in Germany – Final Energy by Sources makes the renewable energy contribu- tion into a significant factor. 10 100 80 67 58 100 = 9.2 EJ/year 9 By 2030, nuclear energy will have been completely phased out, and renewable 8 Electricity energy could contribute possibly 25 % 7 Import from RES of national primary energy. This figure Heat Fuels increases to 58 % by 2050, at which 6 from RES Electricity point Germany will essentially have engi- 5 from RES neered the renewable energy transition. Heat, Electricity, 4 Fuels from Gas The model further envisions a transfor- Heat, Electricity, 3 Fuels from Oil mation of the electricity sector by 2040, Heat, Electricity, when renewable energies exceed 50 % 2 Fuels from Coal of total electricity generation, expanding Nuclear 1 Electricity further to a 65 % renewable energy con- tribution by 2050. This transformation is 0 enabled by structural changes from cen- 19952010 2030 2050 tral power to heavy reliance on site-spe- 100 55 33 26 Energy-Intensity (1995=100) cific power generation, facilitated by 0,284 0,273 0,265 0,238 CO2-Intensity (fossil, kg/kWh) phasing in many of these changes be- 1,5 4,5 25 58 Share of RES (%) fore 2020, during the period when 70 % Fig. 19: A plausible long-term German plan to reduce energy use in an expanding economy, and to bring of Germany’s aging power plants would renewable energy use up to significant percentage levels otherwise have to be replaced. Source: Dr. Manfred Fischedick, Wuppertal Institute for Climate, Environment and Energy
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Conclusion
No single renewable energy technology All of those square meters of collectors It is encouraging to see the emergence can be proclaimed to be more important and hectares of fields capturing solar of region-wide renewable energy devel- than another in terms of delivering useful energy, blades converting the power of opment policies, and the setting of rules energy to society. Each has its place in the wind, wells delivering the Earth’s to assure accomplishing those targets the portfolio of technologies to meet thermal energy, and that apply across nation- societal needs and to provide societal, waters delivering the Energy policy should be a policy in al boundaries. The economic and environmental benefits. energy of river flows, support of those integrated, inter- proposed EU program, Just because PV is popular does not waves and tides, will connected pieces that define the “Intelligent Energy for make it always more important to socie- displace precious and energy systems on which society Europe”, is aimed at depends. It should steer the evolu- ty or economies than sustainable buil- dwindling fossil fuels consolidating various tion of those systems in the public ding design or solar thermal technolo- and losses of energy programmes from the interest, away from environmental gies. And using solar energy to displace from the worldwide and social destruction, and toward 1998-2002 framework other energy resources, including electri- phase-out of nuclear compatible and restorative rela- into a more efficient, and city, is every bit as important for econo- power. Sparing the use tionship with the natural world. better funded, 2003- mies and the environment as creating of fossil fuels for higher Energy policy must be predicated 2006 framework. The new electricity by solar energy. economic benefits, or on sustainability and opportunity name implies the “intelli- using them in fuel-saving for future generations or it will fail, gent” role of energy effi- One square meter of surface area can “hybrid” relationship with and bring economies and societies ciency and the renewa- deliver 100 AC watts of peak electrical the intermittent renewa- down with it. ble energy resources in power with PV technology. One square ble energy resources the larger well being of meter of mirror can also deliver about (sun and wind), will contribute to leaner, all of Europe. The EU Parliament has 100 watts of peak electrical energy stronger, safer societies and economies. also proposed a “European Intelligent through solar thermal electric technolo- And, in the process, carbon and other Energy Agency”, which would facilitate gies, and perhaps 200 watts of electrici- emissions into the atmosphere will be energy efficiency and renewable energy ty with Dish-Stirling heat engines. But greatly reduced, now as a result of eco- applications, and the replication of one square meter of intercepted solar nomically attractive new activities, not “best practices” learned by experience, energy can also deliver 300 watts of as expensive environmental penalties. throughout the EU. thermal power for heating domestic water or for active solar space heating, displacing 300 watts of electric water heating. And one square meter of inter- cepted solar radiation can deliver over 600 watts of heating energy, if the solar radiation is delivered directly into a buil- ding through a square meter of glass, displacing 600 watts of electric space heating. That same square meter of glass can deliver daylight with an effi- ciency of about twice the lumens/watt ratio of the very best interior artificial illumination technologies, displacing, with daylight-tracking lighting controls, 100 watts of electrical lighting energy.
Fig. 20: A story of a beginning. The Rancho Seco Nuclear Power Plant in Sacramento, Cal., was decommis- sioned because of excessive costs. Its power production has since been replaced by energy efficiency and the world’s largest utility collection of photovoltaic solar-electric generation. The utility rates came back down to where they would have been if this courageous first step had not been taken. The first step is always the hardest. Photograph by Dr. Donald Aitken
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When these proposals are added to the Governments need to set, assure and This White Paper demonstrates that the January 23, 2002 EU Commission’s achieve goals to accomplish simultane- renewable energy transition is not just a environmental liability directive based ously aggressive efficiency and renew- fantasy, but rather a real vision, which on the “polluter pays” principle, it is able energy objectives. The implementa- can be implemented by industrial becoming clear that, in a large part of tion mechanisms for achieving these nations with available technologies, in a the world, at least, “intelligent” energy goals must be a packaged set of mutu- reasonable time, and at reasonable efficiency and renewable energy policies ally supportive and self-consistent poli- costs. It is apparent that leadership ari- are coming of age in packages that cies. The best policy is a mix of policies, sing from people and their governments, explicitly include environmental emis- combining renewable energy standards combined with the adaptability of utilities sions reductions, protection of the envi- with direct incentive and energy produc- and societal institutions, will determine ronment, stimuli for regional economic tion payments, loan assistance, tax cre- which countries succeed and which fail. gains, removal of existing barriers, and dits, development of tradable market financing mechanisms. instruments, removal of existing barriers, The renewable energy transition must government leadership by example, and start now, or it will be too late. Governments should also become their user education. Governments, cities, companies, and own best customers. The largest owner people must cooperate in moving it of buildings is usually the government. Furthermore, the legislative and financial beyond the first difficult steps, knowing Governments should design and convert mechanisms to achieve these goals that great societal, environmental and their own buildings to be examples of must be consistently applied, from year personal rewards will come. Solar ener- efficiency and sustainability. Govern- to year. This will require the continuity of gy, the source of all life on Earth, will be ments need to stimulate bulk purchases political will through many administra- the underpinning of a sustainable, safe and cost reductions of the renewable tions and several generations. Achieving and sane future energy policy. energy technologies by applying them to that alone will be a stunning advance- governmental safety and defense opera- ment for society. tions. In these kinds of ways govern- ments can help to “pull” the solar tech- nologies into the market place, to com- plement the “push” of their firm goals, policies and laws.
The renewable energy transition will happen city-by-city, region-by-region, country-by-country. It will be a process generated in each locale when a “critical mass” of the application of a renewable resource has been reached. These turning points happen when people, governments, regulators, utilities, and the financial community have all become familiar with the technology. With wind, this appears to be when 100 MW have been installed. With PV, it happens when PV roofs, for example, become not only pervasive but sources of perso- nal pride. The City of Sacramento, California, with close to 1,000 PV roofs, has thousands of applicants for new ones. The same holds true for the Japanese and German solar roofs pro- Fig. 21: Children can now touch, feel, and experience the beginning of the renewable energy transition, which grams, except in those countries there will be so important to secure their own future well-being. Photograph by Dr. Donald Aitken are tens of thousands of applicants.
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Acknowledgements
This White Paper was assembled from Policies and policy examples Many written resources contributed to many sources, as well as from reviews Dr. Niels Meyer this White Paper. In addition to nume- and suggestions by many people. The (Technical University of Denmark) rous published journal articles and author of this White Paper (DWA) wishes Rick Sellers (IEA) reports, the following journals provided to acknowledge with gratitude some of Alan Nogee (UCS) continuing and invaluable updates and the principal sources for information and Steve Clemmer (UCS) information: REFOCUS (International comments utilized in this report. The fol- Jeff Deyette (UCS) Solar Energy Society, published by lowing lists those who were personally Elsevier Science, Ltd.), RENEWABLE contacted, who directed the author to European Union policies and ENERGY WORLD (James & James, other resources or persons, gave coun- resources Science Publishers, Ltd); SOLAR sel, and performed reviews of draft Rian van Staden (ISES) TODAY (The American Solar Energy material: Society); BIOMASS & BIOENERGY Germany sustainable energy (Elsevier Science, Ltd.) Bionergy case example Dr. Ralph Overend (NREL) Dr. Manfred Fischedick Particular thanks go to Edward Milford, Prof. Larry Baxter (BYU) (Wuppertal Institute) Publisher of RENEWABLE ENERGY WORLD, for helping the White Paper Geothermal energy German policies author to contact article authors and to Anna Carter (IGA) Burkhard Holder (Solar-Fabrik AG) receive digitized illustrations. Dr. John Lund Rian van Staden (ISES) Dr. Gary Huttrer The author’s professional colleague and Dr. Cesare Silvi China policies and solar installations wife, Barbara Harwood Aitken, provided Dr. Jan Hamrin substantive and helpful input, expert edi- Energy and power from the wind Dr. Li Hua ting, and great support for the writing Randall Swisher (AWEA) project. Jim Caldwell (AWEA) Japan policies and PV installations Dan Juhl Osamu Ikki Peter Asmus Takahashi Ohigashi Paul Gipe Cyprus solar installations Passive solar heating and Dr. Despina Serghides daylighting of buildings Edward Mazria Denmark policies Torben Esbensen Solar thermal electric Dr. Niels Meyer energy generation Preben Maegaard Dr. David Kearney (Folkecenter for Renewable Energy) Dr. Michael Geyer Dr. Gilbert Cohen (Duke Energy) India policies and renewable Dr. Frederick Morse energy installations Dr. V. Bakthavatsalam Photovoltaic energy generation S. Baskaran (IREDA) Paul Maycock Steven Strong Dr. John Byrne (University of Delaware) Dan Shugar (PowerLight)
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The International Solar Energy Society gratefully acknowledges Dr. Donald W. Aitken, former Secretary and Vice President of ISES, who drafted this White Paper with input from expert resources worldwide, and technical review and input by the Headquarters and the ISES Board of Directors.
© ISES & Dr. Donald W. Aitken 2003 All rights reserved by ISES and the author
Produced by: ISES Headquarters Design: triolog, Freiburg Printing: Systemdruck, March Printed on 100% recycled paper
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“The window of time during which convenient and affordable fossil energy resources are available to build the new technologies and devices to power a sustained and orderly energy transition is short...”
ISES International Solar Energy Society
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