Energy supply and climate change are probably the biggest challenges and most contentious issues facing the infrastructure industry this century. The renewable energy movement in its many guises (often competing ones) is well established, but where are we on this journey? No sooner does one commentator cast dire warnings that we’re running out of oil fast, than another comes along claiming that some of the world’s oil reserves are unlimited (reference US Transportation Secretary, Ray LaHood). And the biggest question of all: is the cost of delivering renewable energy just too high, both in terms of carbon and commercial sustainability? Gail Taylor investigates…
Given the passionately opposing expert opinions out there, it’s probably fair to surmise that we don’t fully know the extent to which human activity is contributing as yet. But perhaps even the sceptics would agree that if there’s so much as a risk that we’re helping to bring on Armageddon because of our voracious appetite for burning oil and gas without alternatives, surely we should be busy investing in a really good Plan B? Which leads us to ask, “Is renewable energy efficient enough to reduce our dependence on fossil fuels? Is it working?” It’s an extremely complex question, often country or region-specific, but here’s a brief snapshot of green energy progress around the globe to date…
The ‘Renewables 2013 Global Status Report’ by REN21 – a global renewable energy policy multi-stakeholder network – states, “Given the world recently passed 400 parts per million of atmospheric CO2 – potentially enough to trigger a warming of 2 degrees Celsius compared with pre-industrial levels – meeting growing energy needs in a climate-constrained world requires a fundamental shift in how those energy services are delivered. Renewable energy, coupled with energy efficiency measures, is central to achieving this objective.”
At least on the face of it, most governments seem to agree that investment in renewable energy infrastructure is a vital element in assuring our future survival and prosperity. All members of the United Nations (excepting Andorra, Canada, the USA and South Sudan) and the European Union are signed up to the Kyoto Protocol which aims to legally control CO2 emissions. The European Union also has its own legally binding targets. And yet despite all the expressions of commitment to change, there does appear to be some quite strong anti-green energy feeling out there, certainly according to the UK press.
A question of cost
As always, money is an issue. According to a recent report by European energy giant, RWE npower, the average UK household energy bill could rise by £240 to £1,487 by 2020 “driven by the impact of unprecedented investment in new infrastructure and the cost of improving energy efficiency in people’s homes”. The infrastructure referred to relates to new power plants and transmission networks that the government will be investing in over the coming years to help lower carbon output. Other policies said to contribute to soaring fuel bills include government subsidies to renewable energy initiatives.
In response to RWE npower, Greg Barker, Minister for Energy and Climate Change commented, “npower’s report makes an important contribution to the debate and it is right that we have a grown-up discussion about the impact of energy investment. However, global gas prices not green policies have been primarily pushing up energy bills. That is why it is vital we crack on with securing investment in a diverse energy mix that includes renewables and new nuclear, as well as gas.”
Also in defence of green energy, a report issued in March 2013 by Edward Davey, Secretary of State for Energy and Climate Change states the opposite: “Today’s householders are paying on average £64 or 5% less for their gas and electricity bills as a result of energy and climate change policies compared to if no policies had existed, and in 2020 the net saving against the do-nothing scenario will reach £166 or 11%.”
We asked the Department of Energy and Climate Change to comment on these contrasting views on household bills and a spokesman told us, “Edward Davey’s comments relate to our projection that overall, if we invest in low carbon energy sources and energy efficiency, overall, bills will be lower than they otherwise would be. This is primarily because UK consumers will be cushioned from the impact of fluctuating fossil fuel prices.
“It’s vital that we strike a balance between encouraging investment in renewable energy and ensuring value for money for consumers. Subsidies vary for renewable energy technologies largely due to their maturity and the overall cost of the technology. For example, we subsidise onshore wind and solar PV less than offshore wind because the costs of the technology have come down in recent years. Because offshore wind industry in the UK is still in its relative infancy (compared to long-established industries like nuclear) and costs of the technology are higher, offshore wind developers receive larger subsidies than for example, onshore wind.”
Regardless of the size of subsidy, producers of renewable energy ultimately hope to achieve grid parity. Grid parity – or ‘the levelised cost of electricity (LCOE)’ – is the point at which a source of renewable energy can compete with conventional fuel providers on the open market without subsidies, and may well play an important role in keeping energy bills down when it happens. But when might that be? According to the autonomous inter-governmental International Energy Agency (IEA) which reports on all forms of energy (conventional and renewable) in some parts of the world it’s already happening. Its recent ‘Medium-Term Renewable Energy Market Report 2013’ tells us, “Hydropower and geothermal in areas with good resources are already generally competitive versus new fossil fuel power plants. Large-scale bioenergy plants are also competitive depending on feedstock prices and availability.”
The report concedes that “Levelised costs for other renewables generally remain higher than new fossil-fuel generation; as such, these sources often require policy support to remain economically attractive”, but goes on to state that “the most dynamic technologies – onshore wind and solar PV – have reached, or are approaching, competitiveness in a number of markets without generation-based incentives”.
REN21’s findings seem to echo this, “Renewables already play a major role in the energy mix in many countries around the world. In 2012, prices for renewable energy technologies, primarily wind and solar, continued to fall, making renewables increasingly mainstream and competitive with conventional energy sources.” Interestingly, the report also points out that subsidies to fossil fuels are currently far higher than those for renewables.
Solar shines a light
With regards to solar power, the IEA’s report continues, “…emerging competitive segments are linked to the concept of grid or “socket” parity – when LCOE of decentralised solar PV systems becomes lower than retail electricity prices that system owners would otherwise pay. Such markets are appearing in Spain, Italy, southern Germany, southern California, Australia and Denmark, and across residential and commercial segments. While this parity still requires support for the power system integration of solar PV, it is nonetheless a driver for increased investment in the sector.” REN21 paints a similarly positive picture, saying, “Globally, in just five years, solar PV soared from below 10GW in 2007 to just over 100 GW in 2012.”
A common misconception is that solar PV power requires sunshine. In fact it only requires daylight, evidenced by the fact that Germany is Europe’s largest producer. However, concentrated solar power (CSP) performs particularly well in the sunniest countries, such as Spain, which according to EnergyLive News magazine, is home to more than 99% of the European continent’s projects. CSP plants use mirrors or lenses to reflect the sun’s rays onto a single point where it is used to heat up a liquid, produce steam, and turn turbines to generate electricity.
Where the wind blows
While solar power clearly offers promise, nothing stirs up a hornet’s nest quite like a wind turbine. Opponents of wind power are many and vociferous. Taking the UK as a case in point, even the Prime Minister, David Cameron has expressed doubts over on-shore wind farms, with 106 MPs (101 of which are Tory) coming out in open opposition. The arguments against are that they are over-subsidised, ugly, noisy, and inefficient – typically producing 30% less than the oft-quoted theoretical maximum possible – and that they are anything but eco-friendly. They kill birds, they cost a lot to manufacture, and that manufacture involves fossil fuels.
And yet, in a survey conducted in 2012 by Ipsos Mori on behalf of wind trade body Renewable UK, 66% of the UK public said it supported wind power with just 8% against. Could it be because wind does work, at least in other parts of the world? According to the IEA’s 2013 report, “In Brazil, onshore wind competes well with new gas-fired plants. In Australia, wind is competitive versus the generation costs of new coal-and-gas-fired plants with carbon pricing, and the best wind sites can compete without carbon pricing. In Turkey and New Zealand, onshore wind has been competing well in the wholesale electricity market for several years.”
REN21’s report adds, “In China, wind power generation increased more than generation from coal and passed nuclear output for the first time [in 2012]”.
Smartening up connections
While both solar PV and wind power often come in for criticism for poor transmission to cities due to their intermittent nature, investment in developing technologies such as smart grids and more efficient ways of storing energy may be the key to overcoming this. Germany is Europe’s largest generator of renewable energy and provides a clearer idea of how smart grids can work. A press release issued by Siemens AG’s smart grid division states, “Fifteen years ago, only a few hundred energy producers were feeding power into the German grid. In the future, there’ll be millions.
Today’s consumers of electricity will also be energy producers. This fact – coupled with large fluctuations in grid feeds from renewable energy sources – will make smart grids indispensable.
“The IRENE Project in Wildpoldsried near Kempten in the Allgäu region of southern Bavaria offers a foretaste of what Germany’s power systems could look like in the 2020s. With the help of a large number of measuring stations, variable grid components and so-called software agents, a smart grid in the village maintains the balance between energy production and consumption and keeps the power grid stable. The energy pioneers of Wildpoldsried are already producing more than three times as much electrical energy as they consume.”
So much for solar and wind; what about biomass? This form of renewable energy also has its vocal critics. It is blamed for creating poor air quality and respiratory problems, and, of course, it produces the very thing we’re all supposed to be avoiding – CO2 emissions.
However, its proponents say that these unwanted side-effects can be mitigated with responsible growth and management of crops, conscientious replanting to reabsorb CO2 from the atmosphere, and investment in readily available technologies such as fluidized bed or gasification systems. They also point out that energy can be released from biomass without burning it to produce methane or ethanol which can then be converted to biofuels.
Conclusion by statistics
REN21’s report states that “by design” it does not provide analysis or forecasts. However, it relies on the most recent data available, provided by over 500 contributors and researchers worldwide. Within those parameters, the figures given are as follows, “Global demand for renewable energy continued to rise during 2011 and 2012, supplying an estimated 19% of global final energy consumption in 2011 (the latest year for which data are available), with a little less than half from traditional biomass. Total renewable power capacity worldwide exceeded 1,470 GW in 2012, up about 8.5% from 2011. Hydropower rose 3% to an estimated 990 GW, while other renewables grew 21.5% to exceed 480 GW. Globally, wind power accounted for about 39% of renewable power capacity added in 2012, followed by hydropower and solar PV, each accounting for approximately 26%.
“Renewables made up just over half of total net additions to electric generating capacity from all sources in 2012. By year’s end, they comprised more than 26% of global generating capacity and supplied an estimated 21.7% of global electricity, with 16.5% of electricity provided by hydropower. Industrial, commercial, and residential consumers are increasingly becoming producers of renewable power in a growing number of countries…The top countries for renewable power capacity at year’s end were China, the United States, Brazil, Canada, and Germany, followed by Spain, Italy, and India.”
The IEA does put its cards on the table by forecasting that in 2018 non-OECD countries (those outside the Organisation for Economic Co-operation and Development) are expected to comprise 58% of total renewable generation, up from 54% in 2012; that China is expected to account for 40%, or 310 GW, of the growth in global renewable power capacity over 2012-2018; that renewable electricity is expected to account for 60% of the increase in OECD gross power generation over2012-2018, and that despite slowing growth, OECD Europe should lead deployment within the OECD over the same period.
Both REN21 and the IEA outline the challenges facing renewables, and are in general agreement that developing economies are leading the way, while by contrast, investment in 2012 decreased in the developed OECD countries. Economic and political uncertainties and policy changes have been instrumental in this falling away, which in turn discourages investors. Consensus seems to be that a robust political framework is needed in the OECD region to keep momentum up and enable binding targets for 2020 and beyond to be successfully met.
Of course, there will always be vested interests on all sides, politicians will always have their preferences, and for every argument there is a counter-argument. Perhaps the reality is that in the grand scheme of things, renewable energy is a fairly new concept to us humans. We are at the vanguard – developing and improving new technologies, trying to achieve a well-balanced mix of renewables and fossil fuels to avert the disastrous consequences for the planet that are predicted if we don’t. There are also other compelling reasons to clean up our act, such as the effect that burning fossil fuels has on our health, on our immediate environment, and on our general quality of life.
Whichever way you look at it, the overall figures show that renewable energy is not only very much here to stay, but is in the ascendancy.