Global and regional development of renewable energy Fangzhu Zhang & Philip Cooke, Centre for Advanced Studies, Cardiff University, UK, email: [email protected]. 1. Introduction Renewable energy offers us effective technologies to tackle global energy challenges: climate change, the rising demand for energy and the security of energy supplies. Now, almost every country around the world has set its own renewable energy target and is enacting a set of policies to meet the goals. The countries around the world view it as potential industry to stimulate economic development and also improve their energy independence. Renewable energy (sources) derived from natural processes that are replenished constantly; include solar, wind, flowing water, biological processes, and geothermal heat flows. Neither fossil fuels nor nuclear power are renewable forms of energy (IEA, 2002). In 2006, renewable energy was estimated to supply about 18% of the world final energy consumption, counting traditional biomass, large hydropower and ―new‖ renewables. New renewable energy includes small hydropower (less than 10 megawatts as a common threshold), modern biomass, wind, solar, geothermal and biofuels, providing 2.4 percent and are growing very rapidly in the developed countries and in some developing countries (Figure 1) (REN21, 2008). Climate change and energy security drive nations to increase government support for the development of new renewable energy technologies. Renewable energy has a large future potential and many experts think it will ultimately increase the national competitiveness in the globalising, re-regulating economy. Figure 1. Renewable energy share of global final energy consumption in 2006. (Resource: REN21, 2008). Policies to promote renewables accelerate the development of renewable technologies. In 2007, over $148 billion was invested in renewable energy capacity, up from $33 billion in 2004 (Figure 2) (UNEP, 2008). The financial resources include investments from major commercial and investment banks, venture capital and private 1 equity investors; public markets; the investments in research and development by governments and corporations, asset backed finance and some small scale project investments by local investors. Some well-known big companies like BP, General Electric (GE) and Goldman-Sachs make large investments in renewable energy, leading to the coming age of renewable energy (REN21, 2008). With the advanced development of renewable technologies, the industry of renewable energy is predicted to continue growing in the future. Figure 2. Global investment in renewable energy during 2004-2007. (Source: UNEP, 2008). This report aims to review the overall level and location in development of renewable energy technologies by 2008. In the second section, different policies or approaches to promote renewable energy are discussed at the national or regional level. Then good practices for regional economic development are presented and how the green innovation system is established. This occurs through technology research and development, networking, market promotion, financing, policy advice and other technical assistant to support the growth of renewable energy industry. 2. Renewable energy technologies Among all renewable technologies, 43% of global investments were invested in wind power technology, followed by solar power (24%), biofuel (17%) and biomass (9%) technologies in 2007 (Figure 3). Global renewable energy capacity grew at annual rates of 15%-30% for many technologies during 2002-2006 (Figure 4) (REN21, 2008). Among these technologies, grid-connected solar photovoltaic (PV) is the fastest growing energy with a 60% annual growth rate. Off-grid solar PV and solar hot water/heating are other technology applications of solar sources with a growth rate between 15% and 20%. Wind power with an annual growth rate of 25% is considered as an economically viable renewable source. Biofuel as a potential renewable energy for transport also grew rapidly with a 40% growth rate for biodiesel and 15% for bioethanol. The development of renewable energy technologies varied among the countries around the world, depending on the history and new policy focus. 2 Renewable energy replaces conventional fuels in three distinct sectors: power generation, heating and transport fuels. Figure 3 Global investments by technology in 2007. (Source: UNEP, 2008) Figure 4 Annual growth rates of renewable energy capacity during 2002-2006. (Source: REN21, 2008). 3 2.1 Wind power Wind power is the conversion of wind energy into a useful form, such as electricity generation using wind turbines. By the end of 2008, worldwide capacity of wind- powered generators was over 120 gigawatts and is predicted to be around 190 gigawatts by 2010. Although only about 1.5% of world-wide electricity use is produced by wind power, it produces approximately 19% of electricity use in Denmark, 9% in Spain and Portugal, 6% in Germany and the Republic of Ireland (WWEA, 2009). Globally, wind power generation increased more than tenfold between 1998 and 2008 (Figure 5). Over the last decade, wind power has made impressive progress and has been growing globally at an annual rate of 25%- 30% (Figure 6 & 7). Wind power has become one of the broadest-based renewable technologies with 27 GW added in 2008 (Figure 6) (REN21, 2008). The increase of global wind power capacity in 2008 was concentrated in the top five countries: the US (2.6 GW), Germany (2.4GW), Spain (1.9GW) China (1.2GW) and India (0.9GW). Many other countries have been also very active, such as the UK and Italy. Figure 5 Global wind energy capacity and prediction 1997-2010. (Source: World Wind Energy Association, WWEA) The top wind companies globally are Vestas (Denmark), Gamesa (Spain), GE (USA), Enercon and Siemens (Germany), and Suzlon (India). Europe dominates the market both as consumers and producers of wind energy. This positive development is above all the outcome of highly dynamic policies in Denmark, Spain and Germany (Figure 7). Germany is the world's largest user of wind power with an installed capacity of 20 GW in 2006 and leading nation in terms of wind power technology. Over 64, 000 people are employed in this industry (WWEA, 2009). Denmark is another leading wind power nation in the world and today supplies almost half of the wind turbines sold around the world. The development of wind power in Denmark has been characterised by public-private financing collaboration in research and development in key areas. They also exported wind energy systems to the global market, including to the emerging market in China. 4 Figure 6 Wind power capacities of the top 10 countries added in 2007 & 2008. (Source: WWEA, 2009). Figure 7. Wind power installed in the EU by 2007. (Source: http://en.wikipedia.org) 5 Spain aimed to develop wind power technology as one of the technologies of the future. They established a stable regulatory framework, utilized the resource and improved technology to develop this industry. Iberdrola, the leading Spanish energy company, is the world‘s largest wind power producer. Its capacity outside Spain grew sevenfold in 2007. It entered the US wind market in 2005 and is now one of the largest and most active overseas players in the US. Iberdrola Renewables was spun off from the parent company, Iberdrola, in 2007. This raised the largest-ever clean energy IPO in Europe with a total of €4.07 billion public offering. With North American headquarters in Radnor, Penn., Iberdrola Renewables has obtained about 22,000 MW of US wind power, which is more than half its planned wind capacity worldwide. It pulled in about €950 million in revenue and turned a € 117 million profit in 2007 (Makower et. al., 2008). The UK has the best and most geographically diverse wind resources in Europe, Wind power in the UK reached the capacity of 2GW in 2007, ranked as 7th in the world. Currently, approximately 1.5% of UK electricity is generated by wind power. It is targeted as one of the main technologies by the UK government to meet the target that 20% of final energy is generated from renewable energy by 2020. Wind power is expected to rise dramatically in coming years in the UK with lots of new projects, including offshore wind power, are undergoing in onshore and offshore wind farms around the UK (Figure 8). Figure 8 Wind energy farm projects in the UK. (Source: BWEA). 6 The lists of wind farms which have been installed, under contract and proposed around the EU are shown in Table 1 & 2. More expensive and much larger wind farms with over 100MW capacities are planned to be built offshore in the UK by 2020. These mega-projects in the UK include Atlantic Array, London Array and Triton Knoll offshore wind farms. Meanwhile, Sweden planned to build one of Europe's largest interconnected onshore wind farm projects with a capacity of between 3 and 3.5 gigawatts (GW). This project is expected to be completed by 2020, the wind farm is planned to cover an area of 450 square-kilometers in Tavelsjo, in the municipality of Pitea in north Sweden. Table 1. List of wind farms installed or under construction with over 100 MW capacities in the EU. (Source: IEA) Farm Capacity (MW) Country Alto Minho Wind Farm 240 Portugal Arada-Montemuro Wind Farm 112 Portugal Black Law Wind Farm 124 UK CEZ Fântânele Wind Farm 600 Romania Crystal Rig Wind Farm 180 UK EDP Dobrogea Wind Farm 266 Romania El Marquesado Wind Farm 198 Spain Gardunha Wind Farm 106 Portugal Higueruela Wind Farm 161 Spain Horns Rev Wind Farm (offshore) 160 Denmark Lillgrund Wind Farm (offshore) 110 Sweden Lynn/ Inner Dowsing Wind Farm 194 UK Maranchon Wind Farm 208 Spain Nysted Wind Farm (offshore) 166 Denmark Pinhal Interior Wind Farm 144 Portugal Princess Amalia Wind Farm (offshore) 120 The Netherlands Robin Rigg Wind Farm (offshore) 180 UK Sisante Wind Farm 198 Spain Smøla Wind Farm 150 Norway Thanet Offshore Wind Project 300 UK Tomis Team Dobrogea Wind Farm 600 Romania Thorntonbank Wind Farm 300 Belgium Whitelee Wind Farm 322 UK Windpark Egmond aan Zee (offshore) 108 The Netherlands 7 Table 2 List of the proposed wind farms in the EU.