Renewable energy gains momentum: Global markets and policies in the spotlight

Environment

Volumn 48, Issue 6, 2006, Pages 26-43

  Martinot, Eric ^a,b  

^a TSINGHUA UNIVERSITY   (China)

^b WORLDWATCH INSTITUTE   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

BIOFUEL; CARBON DIOXIDE; FOSSIL FUEL;

DEVELOPING COUNTRY; ENERGY RESOURCE; EXHAUST GAS; MARKET; POLICY; REVIEW; TECHNOLOGY;

EID: 33745684284     PISSN: 00139157     EISSN: None     Source Type: Journal    
DOI: 10.3200/ENVT.48.6.26-43     Document Type: Review

References (55)

1. There is no universally accepted definition of "renewable energy." Common definitions sometimes include large-scale hydropower ("large hydro"), traditional use of biomass for heating and cooking in rural areas of developing countries, and energy from municipal solid waste. Statistics, research, and policy discussions often do not specify clearly which of these categories are included or excluded, which can be confusing. The use of "renewable energy" in this article excludes all three of these categories, but covers solar, wind, "modern" biomass, geothermal, and small hydro. This coverage is similar to the meaning of the term "new renewables" found in the literature. The distinction "new renewables" is useful for a variety of reasons, including the fact that new renewables are growing at annual rates of 10-60 percent and present unique market and policy considerations, while large hydro is growing at rates of 2-3 percent and reflects more traditional power sector investment and policy. Referring to "new renewables" as "renewable energy" is common practice. British Petroleum (BP), in its annual Statistical Review of World Energy (London, 2005), excludes large hydro from its renewable energy statistics.
2. Similarly, the International Energy Agency book Renewables for Power Generation (Paris, 2003) excludes large hydro. Common practice is to define large hydro as more than 10 megawatts (MW) capacity, although small hydro statistics in this article include plants up to 50 MW in China and 30 MW in Brazil, as these countries define and report small hydro based on those thresholds. In 2004, there were 720 gigawatts of large hydro installed worldwide, and annual investment was about $20-25 billion.
3. This article is based primarily on E. Martinot et al., Renewables 2005 Global Status Report (Washington, DC: Worldwatch Institute, 2005); and an update for 2006 (forthcoming) by the same authors. The report was sponsored by the REN21 Renewable Energy Policy Network and is available at http://www.ren21.net/ globalstatusreport and http://www.martinot.info/re2005.htm. Full references for the material presented in this article, along with detailed analytical notes, are in the Notes and References Companion Document available on the same Web pages.
4. The 182 GW of renewable electric power capacity generates about one-fifth the power of nuclear because of much lower average capacity factors, meaning that renewables do not produce full power all of the time, while nuclear has very high capacity factors. For detailed calculations, see Martinot et al., Notes and References Companion Document, note 2 above, pages 3-4.
5. For general references on renewable energy markets, policies, and barriers, see International Energy Agency, Renewable Energy: Market and Policy Trends in IEA Countries (Paris, 2004);
6. European Renewable Energy Council, Renewable Energy in Europe: Building Markets and Capacity (Brussels, 2004), http://www.erec-renewables.org/documents/ RES_in_EUandCC/ExecutiveSummary.pdf;
7. F. Beck and E. Martinot, "Renewable Energy Policies and Barriers," Encyclopedia of Energy (San Diego, CA: Academic Press/Elsevier Science, 2004), http://www .martinot.info/Beck_Martinot_AP.pdf;
8. P. Komar, Renewable Energy Policy (New York: Diebold Institute for Public Policy Studies, 2004);
9. W. Turkenburg et al., "Renewable Energy Technologies," in UN Development Programme (UNDP), UN Department of Economic and Social Affairs, and World Energy Council, World Energy Assessment (New York: UNDP, 2000), http://stone.undp .org/undpweb/seed/wea/pdfs/chapter7.pdf;
10. T. Johansson and W. Turkenburg, "Policies for Renewable Energy in the European Union and its Member States: An Overview," Energy for Sustainable Development 8, no. 1 (2004): 5-24, http://www.ieiglobal.org/ ESDVol8No1/04overview.pdf;
11. st Century, Worldwatch Paper 169 (Washington, DC: Worldwatch Institute, 2004);
12. J. Sawin and C. Flavin, "National Policy Instruments; Policy Lessons for the Advancement and Diffusion of Renewable Energy Technologies Around the World," thematic background paper for Renewables 2004 Conference, Bonn, Germany, June 2004, http://www.renewables2004. de/pdf/tbp/TBP03-policies.pdf;
13. H. Geller, Energy Revolution: Policies for a Sustainable Future, (Washington, DC: Island Press, 2003);
14. L. Fulton, T. Howes, and J. Hardy, Biofuels for Transport: An International Perspective, (Paris: International Energy Agency, 2004);
15. and E. Martinot, R. Wiser and J. Hamrin, "Renewable Energy Markets and Policies in the United States" (San Francisco, CA: Center for Resource Solutions, 2005), http://www.martinot.info/Martinot_et_al_CRS.pdf.
16. For renewable energy markets in developing countries, see E. Martinot et al., "Renewable Energy Markets in Developing Countries," Annual Review of Energy and the Environment 27 (2002): 309-48, http://www.martinot .info/Martinot_et_al_AR27.pdf.
17. Depending on the methodology for how large hydropower and other renewable power generation technologies are counted in the global energy balance, renewables' total contribution to world primary energy can also be reported as 13-14 percent rather than 17 percent, and fossil fuels as 80-81 percent rather than 77 percent. This point can also be confusing, and there is no international consensus on the methodology. The basic issue is whether to count the energy value of equivalent primary energy or of the electricity. In the figures used here, primary energy attributed to electricity supply is adjusted to reflect fossil fuel energy required to produce an equivalent amount of electricity. This type of adjustment is made in some but not all published global energy statistics. The adjustment is made in BP's annual Statistical Review of World Energy, note 1 above. In BP statistics, "the primary energy value of hydroelectricity generation has been derived by calculating the equivalent amount of fossil fuel required to generate the same volume of electricity in a thermal power station, assuming a conversion efficiency of 38% (the average for OECD thermal power generation)." Statistics by the International Energy Agency make this adjustment for nuclear power but not for hydro, which puts nuclear power's share of global primary energy three times higher than hydro, even though both forms of energy provide roughly the same useful electric power on a global basis. That methodology distorts the relative useful contribution of these two energy sources. BP (2005) suggests that hydropower was 634 million tons of oil equivalent (MTOE) in 2004, 6.2 percent of global primary commercial energy. Other statistics not using this methodology may claim that hydropower was only 2.4 percent of global primary commercial energy. In addition, this correction makes total primary energy higher, with BP's figure of 10,224 MTOE commercial primary energy in 2004 higher than some other published figures. In addition, most figures for global primary energy exclude traditional biomass. Martinot et al. (2005), note 2 above, used a figure of 1,010 MTOE in 2004 for traditional biomass (see the report for further details on sources). Using that number, total world primary energy in 2004 was 10.224 MTOE (commercial) + 1,010 MTOE (traditional biomass) = 11,234 MTOE (total). Renewables share of 1,876 MTOE is 16.7 percent, including large hydropower and traditional biomass.
18. Data on environmental insults for this section come from J. Goldemberg and T. Johansson, eds., World Energy Assessment Overview: 2004 Update (New York: UNDP, UN Department of Economic and Social Affairs, and World Energy Council, 2004), Table 4, page 41, available at http://www.undp.org/energy/docs/ WEAOU_full.pdf.
19. A good comparison of environmental impacts between renewables and fossil fuels can found in A. Serchuk, "The Environmental Imperative for Renewable Energy: Update," (Washington, DC: Renewable Energy Policy Project, 2000), http://repp.org/repp_pubs/pdf/envImp.pdf. The Executive Summary has the most useful comparison tables, which are not found in the main report: http://www.crest.org/repp_pubs/articles/envImp/earthday.exec.summ.pdf.
20. European Commission, External Costs: Research Results on Socio-Environmental Damages Due to Electricity and Transport, (Luxembourg: Office for Official Publications of the European Communities, 2003), http://europa.eu.int/comm/research/energy/pdf/externe_en.pdf.
21. All costs are economic costs, exclusive of subsidies and other policy incentives. Typical energy costs are under best conditions, including system design, siting, and resource availability. Some conditions can yield even lower costs, for example, down to 2 cents per kWh for geothermal and large hydro and 3 cents per kWh for biomass power. Less optimal conditions can yield costs substantially higher than the typical costs shown. Typical solar PV grid-connected costs are for 2,500 kWh per square meter per year, typical for most developed countries. Costs increase to 30-50 cents per kWh for 1,500 kWh per square meter sites (such as Southern Europe) and to 50-80 cents for 1,000 kWh per square meter sites (such as the United Kingdom).
22. Of course, just as renewables' technology costs can decline, so can fossil fuel technology costs. For example, improvement in gas turbine technology lowers equipment costs and improves technical efficiency. Two good references on incorporating fossil-fuel price risk into economic comparisons with renewables are S. Awerbuch, "Determining the Real Cost: Why Renewable Power is More Cost-Competitive Than Previously Believed," Renewable Energy World 6, no. 2 (2003): 53-61, http://jxj.base10.ws/magsandj/rew/2003_02/real_cost. html;
23. and M. Bolinger, R.H. Wiser, and W. Golove, "Accounting for Fuel Price Risk: Using Forward Natural Gas Prices Instead of Gas Price Forecasts to Compare Renewable to Natural Gas-Fired Generation," LBNL-53587 (Lawrence Berkeley National Laboratory, Berkeley, CA, 2003), http://eetd.lbI.gov/ea/EMS/ reports/53587.pdf.
24. IEA, note 4 above, page 61.
25. See the references in note 4 above for discussion of market barriers.
26. See International Energy Agency, Experience Curves for Energy Technology Policy (Paris, 2000).
27. Brazil's transport fuels and vehicle markets have evolved together. After a sharp decline in the sales of pure-ethanol vehicles during the 1990s, sales were climbing again in the early 2000s, due to a significant decline in ethanol prices, rising gasoline prices, and the introduction of so-called "flexible fuel"cars by automakers in Brazil. These cars can operate on either pure ethanol or ethanol/gasoline blends. By 2003. these cars were being offered by most auto manufacturers at comparable prices to pure ethanol or gasohol cars. Sales increased rapidly, and by 2005. more than half of all new cars sold in Brazil were flex-fuel cars.
28. For further background see D. M. Kammen, "Bringing Power to the People: Promoting Appropriate Energy Technologies in the Developing World," Environment 41, no. 5 (1999): 10-15 and 34-41; and
29. Martinot et al., 2002, note 4 above. After fossil fuels, traditional biomass comprises some 9 percent of global primary energy. Traditional biomass means agricultural waste, waste from forestry and forest products, fuel wood collected manually by households, and animal dung. These sources are typically burned in stoves or furnaces to provide heat energy for cooking, heating, and agricultural and industrial processing. In rural areas of many developing countries, particularly in Africa, traditional biomass represents the primary energy source.
30. The environmental impacts of traditional biomass use are also very significant; see M. Ezzati and D. M. Kammen, "Household Energy, Indoor Air Pollution, and Health in Developing Countries: Knowledge Base for Effective interventions," Annual Review of Energy and the Environment 27, (2002): 233-70. Ezzati and Kammen state that "conservative estimates of global mortality as a result of exposure to indoor air pollution from solid fuels show that in 2000 between 1.5 million and 2 million deaths were attributed to this risk factor, accounting for 3-4 percent of total mortality worldwide." Although traditional biomass use is clearly a form of renewable energy, most literature on traditional biomass concerns environmental impacts or ways to displace consumption with more modern fuels or improve the efficiency of resource use, in contrast to literature on new renewables, which focuses on cost comparisons, technology development, and market acceleration.
31. See R. A. Cabraal, D. F. Barnes, and S. G. Agarwal, "Productive Uses of Energy For Rural Development," Annual Review of Environment and Resources 30 (2005): 117-44; in addition to a number of good references posted at http://www.martinot.info/productive_uses.htm.
32. For more details on subsidies for renewable energy, see Martinot et al., Notes and References Companion Document, note 2 above, 24-25.
33. The Earthtrack Web site (www.earthtrack.net) has a comprehensive set of references on energy subsidies. Total energy subsidies/support for fossil fuels on a global basis are suggested in the range of $150-250 billion per year, and for nuclear, $16 billion per year, according to the UN Environment Programme and the International Energy Agency, "Reforming Energy Subsidies" (Paris, 2002), www.uneptie .org/energy/publications/pdfs/ En-SubsidiesReform.pdf. Many advocate subsidies for renewables as "leveling the playing field" in the absence of political viability for removing subsidies to fossil fuels and nuclear.
34. See J. J. C. Bruggink, "The Next 50 Years: Four European Energy Futures," ECN-C-05-057 (Petten, Netherlands: ECN Policy Studies, 2005);
35. EUREC Agency, The Future for Renewable Energy: Prospects and Directions (London: James and James, 2002);
36. Global Wind Energy Council and Greenpeace, Wind Force 12: A Blueprint to Achieve 12% of the World's Electricity from Wind Power by 2020 (Brussels, 2005);
37. International Energy Agency, Energy to 2050: Scenarios for a Sustainable Future (Paris, 2004);
38. D. J. Treffers, A. P. C. Faaij, J. Spakman, and A. J. Seebregts, "Exploring the Possibilities for Setting Up Sustainable Energy Systems for the Long Term: Two Visions for the Dutch Energy System in 2050," Energy Policy 33, no. 13 (2005): 1723-43.
39. S. Dunn, "Micropower: The Next Electrical Era," Worldwatch Paper 151 (Washington, DC, 2000);
40. A.-M. Borbely and J. F. Kreider, Distributed Generation: The Power Paradigm for the New Millennium (New York: CRC Press, 2001);
41. and National Renewable Energy Laboratory. Plug-In Hybrid Electric Vehicles, (Golden, CO, 2006), http://www.nrel.gov/vehiclesandfuels/hev/plugins. html.
42. See Global Wind Energy Council and Greenpeace, note 17 above, and Martinot et al., note 2 above.
43. GWEC and Greenpeace calculate S634 billion cumulative investment from 2001 to 2020 (2002 dollars), but the per-unit costs cited are not turn-key costs and would need to be increased by 30 percent to compare with turn-key investment costs presented elsewhere in this article. See also M. J. Pasqualetti, "Wind Power: Obstacles and Opportunities," Environment 46. no. 7 (September 2004): 22-38.
44. See L. Fulton, T. Howes, and J. Hardy, Biofuels for Transport: An International Perspective, (Paris: International Energy Agency, 2004),
45. and Worldwatch Institute, "Biofuels for Transportation: Global Potential and Implications for Sustainable Agriculture and Energy in the 21st Century." (Washington, DC, forthcoming in 2006).
46. Many other countries are, of course, active. For a full breakdown of policies for all countries, see Table 4 of Martinot et al., note 2 above.
47. For current China development targets for 2010 and 2020, see E. Martinot, Renewable Energy in China, http://www.martinot .info/china.htm.
48. Sources of information for Martinot et al., note 2 above, are highly diverse.
49. The report drew from over 250 published references, plus a variety of electronic newsletters, unpublished submissions, personal communications, and Web sites. There is generally no single source of information for any fact globally, as most existing sources report only on developed (OECD) countries or on regional or national levels, such as Europe or the United States. Thus, global aggregates were built from the bottom up, adding or aggregating individual country information for most indicators and statistics. Developing countries in particular required country-by-country sources, as very little material exists that covers developing countries as a group. All of the information, graphs and tables in the report are built from multiple sources, often involving triangulation of conflicting or partial information using assumptions and growth trends. However, some key sources exist for certain topics. Solar PV data comes primarily from the newsletter PV News by Paul Maycock and annual summary articles, including P. Maycock, "PV Market Update-Global PV Production Continues to Increase," Renewable Energy World 8 no. 4 (2005): 86-99.
50. Solar hot water data comes from Chinese sources plus the IEA Solar Heating and Cooling Programme, most recently W. Weiss, I. Bergmann, and G. Faninger, "Solar Heating Worldwide: Markets and Contribution to Energy Supply 2006" (Paris: IEA, 2006), http://www.iea-shc.org/welcome/ IEASHCSolarHeatingWorldwide2006.pdf.
51. Wind power capacity data come from Global Wind Energy Council, Record Year for Wind Energy: Global Wind Power Market Increased by 43% in 2005, http://www.gwec. net.
52. A key source of material for installed capacity statistics for OECD countries comes from the International Energy Agency's Renewables Information and Electricity Information reports (updated annually). Other key sources include the U.S. Energy Information Administration's International Energy Annual, http://www.eia .doe.gov/iea, various UN agencies, the World Bank, the EurObserv'ER information series contained in the bulletin Systemes Solaires, (http://www.energiesrenouvelables.org); and other industry associations. Key sources of information for policies include the International Energy Agency's online databases;
53. see "Global Renewable Energy Policies and Measures Database," (Paris: IEA), http://www.iea.org/textbase/pamsdb/grindex.aspx. For the United States, the DSIRE database of state-level policies is the best source;
54. see "Database of State Incentives for Renewable Energy," (New York: Interstate Renewable Energy Council), http://www .dsireusa.org.
55. Martinot's "Renewable Energy Policy References" page at http://www.martinot.info/policies .htm contains more sources.