We figured IKEA might be on the right track when we first saw its blue and yellow buildings adorned with solar rooftops. It turns out that the second-largest private commercial solar owner/user in the United States (and the largest per square meter of rooftop space) is on schedule with its ambitious sustainability strategy unveiled a little over a year ago, People & Planet Positive.
The program dedicates over $2 billion–three times as much as originally planned–to clean energy investment through 2015. It’s designed to protect the company from price shocks related to energy and other costs and to tap into customers’ desire for a greener lifestyle.
On the program’s first anniversary, IKEA has released a 2013 Group Sustainability Report (FY 2013, covering the period between 9/1/2012 to 8/31/2013). As reported in Forbes, 34% of IKEA’s energy came from renewable sources last year. The company’s goals state:
“We want to have a positive impact on the environment, which is why by 2020 we’re going to be 100% renewable–producing as much renewable energy as we consume using renewable sources, such as the wind and sun. We’re also making our buildings more efficient, so we need less energy to run them.”
The world-class Swedish retailer of well-designed, functional home furnishing products, at prices low enough for most customers to afford them, has been in business for over 60 years. Almost half (47%) of its managers are women, compared to 17% on the American Fortune 500‘s boards. In FY 13, the IKEA Group had 135,000 co-workers, 684 million visitors to the stores, and 1.3 billion website visitors.
“Our mission has always been to give people with thin wallets a chance to furnish their homes in a beautiful and functional way. We call it “democratic design,” the 2012 sustainability report says.
IKEA’s 2013 analysis reveals the company’s overall progress in working with sustainability. Steve Howard, chief sustainability officer, leads these sweeping efforts at IKEA. Some details from the report:
• Since FY 2010, the company’s energy efficiency efforts in stores and warehouses have saved $54 million.
• 90% of IKEA’s locations in the US now use photovoltaic power. IKEA has also committed to own 137 wind turbines and has begun installing geothermal power at several locations as well. It now owns wind farms in six countries, has committed to provide electric vehicle chargers at all its 18 locations in the United Kingdom by January 2014, and will roll out home solar PV systems for sale there during the first months of this year.
• Following the company’s commitment to sell and use only LED lights in its products, IKEA has sold 12.3 million LED light bulbs and 12.1 other products that use LED technology. With this development, IKEA has saved each customer $9.45 in electricity costs per bulb, per year, compared with incandescent bulbs. In aggregate, lighting customers will save a combined total of $116.1 million per year from the company’s LED bulbs.
• Because furniture is one of IKEA’s signature products, the company is one of the world’s largest buyers of wood in the world. However, leading environmental organizations criticized the company in 2012 for its wholly owned subsidiary Swedwood logging and clear-cutting old-growth Russian forests with high conservation value. These boreal forests bind huge amounts of carbon dioxide and shelter many thousands of unique animal and plant species. IKEA’s new report says that almost 1/3 of IKEA’s wood in last year was either Forest Stewardship Council-certified or recycled–a start, at least.
• The share of cotton from sustainable sources that IKEA used in products last year more than doubled, increasing from 34% (FY12) to 72% (FY13).
“Everyone, including IKEA, has a part to play in tackling the expected shortages of resources and the impacts of climate change while providing people with a good quality of life. With our vision of creating ‘a better everyday life for the many people,’ I am convinced there is no other way of doing business than in a sustainable way,” said Peter Agnefjäll, President and CEO, IKEA Group.
Sandy Dechert Sandy Dechert covers environmental, health, renewable and conventional energy, and climate change news. She’s worked for groundbreaking environmental consultants and a Fortune 100 health care firm, writes two top-level blogs on Examiner.com, ranked #2 on ONPP’s 2011 Top 50 blogs on Women’s Health, and attributes her modest success to an “indelible habit of poking around to satisfy my own curiosity.”
Former head of US largest utility says regulations and business models will not change quick enough to save traditional utilities in face of solar.
Jim Rogers, the recently retired head of Duke Energy, the biggest utility in the US, has had some interesting things to say about the fate of the traditional utility, particularly with the proliferation of rooftop solar.
In an interview with Energy Biz Magazine, Rogers says there is no doubt that utilities are under fire from new technologies such as rooftop solar, and are in danger of losing customers to new players.
Indeed, if he were entering the industry now, that’s where he would want to be – in rooftop solar, attacking the market rather than defending it.
“The utility industry has been like the proverbial frog that’s been put in a pot of cold water, and the heat’s been turned up,” he said in the interview.
“And it’s been turned up slowly. The many challenges ahead are going to fundamentally change this industry.”
“Leaders in this industry in the future are going to have to run to the problems that they see on the horizon, embrace the problems, and then try to convert the problems and challenges they see into opportunities to create value for their customers as well as their investors.”
This is not the first time he has said such a thing, though not quite as dramatically. Last year, Rogers warned that “the progress in solar and storage means that customers may simply use the grid as a back-up some time in the future.”
Asked later in the interview what approach he would take if he were entering the industry now, Rogers initially replied that he would like to come back as David Crane, the CEO of NRG – the largest privately owned generator in the US – who has been extolling the virtue of solar and the transition that would likely create, and warning that customers were likely to disconnect from the grid if utilities did not evolve quickly enough
“Maybe I should take that back,” Rogers added. “I would come into the industry as someone who is an attacker, not a defender. I’d want the solar on the rooftop. I’d want to run that.”
“I’d want the ability to deploy new technologies that lead to productivity gains to the use of electricity in homes and businesses. I would go after the monopoly that I see weakened over the last 25 years.”
“My goal would be to take customers away from utilities as fast as I could, because I think they’re vulnerable. Regulations will not be changed fast enough to protect them. The business model will not be changed fast enough.”
Rogers said all utilities should be making decisions based on the assumption that there will – some day – be a price on carbon.
“Our industry needs to lead on environmental issues. We need to lead on productivity gains in the use of electricity. That’s a critical way for us to continue to reinvent ourselves as an industry.”
Nuclear supporters may be cheered by his outlook for nuclear, which he said would be centred almost entirely around China, and the development of Chinese technology, including modular reactors.
“They will lead the world in the building and operating of new nuclear plants over the next 30 years.”
“They will develop the supply chain and build nuclear plants in a modular fashion. We will have to change our rules and regulations and how we think about the Chinese. They’re going to bring us the nuclear technology to replace our existing plants at a lower cost and build new ones faster than we can.”
Giles Parkinson is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.
Last weekend, the New York Times took a look at changing GOP perspectives on solar – particularly rooftop solar – as more conservatives embrace renewables. The article highlights rooftop solar-supporting conservatives like Barry Goldwater Jr. and Tom Morrissey from Arizona, and Debbie Dooley from Georgia. The piece describes a shift in GOP attitudes toward rooftop solar, which represents a competitive threat to monopoly utilities:
“One would not expect to see Barry Goldwater Jr., the very picture of modern conservatism and son of the 1964 Republican nominee for president, arguing passionately on behalf of solar energy customers. But there he was last fall, very publicly opposing a push by Arizona’s biggest utility to charge as much as $100 a month to people who put solar panels on their roofs.”
Debbie Dooley of the Green Tea Party Movement emphasizes a point that should be integral to all energy discussions: “The [monopoly utilities] neglect to mention billions of dollars that the fossil-fuel industries have received.”
Yes – conveniently for utilities, they never talk about the tens of billions of dollars in permanent subsidies they’ve received over the past century. These fossil fuel subsidies are entrenched in the tax code.
For example, since the US began subsidizing energy, the average annual subsidy has been $4.86 billion for oil and gas and just $370 million for all renewable technologies (Source: “What Would Jefferson Do”).
One good example of these subsidies (there are many): Percentage depletion allows fossil fuel companies to take a substantial tax deduction (15% of gross revenue for oil and gas; 10% for coal) for using up reserves of natural resources. This costs the American taxpayer about $1 billion per year.
The Alliance for Solar Choice (TASC) advocates for maintaining successful distributed solar energy policies, such as retail net metering, throughout the United States. Retail net metering (NEM) provides fair credit to residents, businesses, churches, schools, and other public agencies when their solar systems export excess energy to the grid. The Alliance for Solar Choice (TASC) was formed on the belief that anyone should have the option to switch from utility power to distributed solar power, and realize the financial benefits therein. The rooftop solar market has been largely driven by Americans’ desire to assert control over their electric bills, a trend that should be encouraged.
For now it remains large, investor-owned utilities, and ostensibly locally-focused rural cooperatives and municipal utilities. But the energy landscape of today gives me uncomfortable reminders of the Athenian tragedy by Sophocles – the Oedipus tale.
John Farrell, ILSR’s Director of Democratic Energy, gave this panel presentation at the 23rd annual conference of the Society for Environmental Journalists in Chattanooga, TN, on Oct. 4, 2013.
For those who don’t recall their college or high school English class, that’s the tale of the man who grows up to murder his father the king and marry his mother. And in this 21st century version, the utilities are the king and Little Oedipus is represented by rooftop solar panels, wind turbines, and other ways that utility customers can produce their own energy. I won’t speculate who is the mother.
Earlier this year, the Edison Electric Institute (the daddy’s club of the investor-owned utilities) released a report suggesting that Oedipus has grown up and his daddy may not be prepared for the climax of this play. It’s summarized in two headlines from the clean energy press this summer. In Grist: “solar panels could destroy U.S. utilities” and in GreenTechMedia, “adapt or die.”
The problem is that customer power generation from local renewable energy reduces utility sales.*
(I asterisk this statement because there’s a robust debate about whether this distributed renewable energy brings other benefits to the grid not reflected on the balance sheet – for more information, read up on Minnesota’s value of solar process.) But if your utility (or state regulatory regime) has built its business model around growing energy sales, this creates what some are calling a utility death spiral. Falling energy sales force utilities to raise rates, which further enhances the attractiveness of generating your own energy from solar.
So Oedipus a growing threat, and the utility daddy is trying desperately to stave off the storybook conclusion.
The problem is that the energy daddies grew up in a very different era. In the early days of the electric system, you needed big capital to build big power plants and big power lines to bring energy to big cities. We gave them monopolies to facilitate that infrastructure development. And for decades, it worked.
But in the next 10 years, electricity from rooftop solar energy will be competitive – without subsidies – with utility energy prices in almost every state. The overlay of renewable energy standards and incentives for distributed renewable energy illustrates how the public interest, the energy model, and the economics have changed.
The way utilities respond will determine whether this Oedipus tale ends like the play. In Arizona, Wisconsin, and many other states, utilities are trying to gut the basic policies allowing people to generate their own energy. In some places, they are successful. But a recent story from Georgia should give them pause – a “Green Tea Coalition” of environmentalists and tea party activists successfully lobbied the public utility commission to require the state’s biggest utility, Georgia Power, to launch a large distributed solar program.
Utilities that try to maintain the status quo, to remain the energy daddy, are going to have a hard time. Their customers will fight them for the right to self-generate, especially if it costs less than utility power, and these local energy producers will also be energy voters.
What we need is to have the utility become the facilitator rather than the ruler, the kindly elder sibling rather than an energy daddy. Because even as utility customers look to their own options for electricity generation, they will still need the utility network…
1) to help them use their rooftop solar to power their electric vehicle.
2) to finance high-efficiency appliances, efficient lighting, insulation and other strategies to cut their energy use and energy bills.
3) to use existing on-demand energy sources (like natural gas) and future ones (like batteries) to keep power delivery smooth and high quality as the grid transitions to primarily renewable energy.
This won’t be easy. For one, utilities have a lot of money sunk into power plant and transmission infrastructure that may or may not be useful in this new era. For another, the regulatory system doesn’t necessarily reward this facilitation role rather than energy sales. But there’s no real alternative, because people are not likely to accept, nor should they, giving up this opportunity to have more control over their energy future.
John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.
Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World. John Farrell can also be found on Twitter @johnffarrell, or at email@example.com.
When the world thinks of countries that could go 100 percent renewable, the immediate thoughts go to islands with solar and storage, hydro and geothermal rich countries such as Iceland, or even wind and wave-rich countries like Scotland.
One of the last economies imagined going fully renewable would be India, the rising economic giant that is still yet to connect several hundred million people to its mostly coal-fired grid, and is expected to have the highest growth of electricity consumption. But according to environmental group WWF, India could reach a goal of 100 percent renewables by 2050.
The study examines the possibility of a near 100% Renewable Energy Scenario (REN) for India by the middle of the century against a reference scenario (REF) in which the economy is likely to be dependent primarily on fossil fuels – coal, oil and gas.
WWF says that to get there India must make some large-scale changes to get on the right track as soon as possible. According to the report, aggressive energy efficiency improvements alone can bring in savings of up to 59 percent (by both the supply and demand sides) by mid-century.
Biofuels are set to play a large role, especially in the transport sector accounting for nearly 90 percent of the industry’s requirements. According to WWF the third-generation biofuels in question are currently still in R&D phase and for the plan to go accordingly they must become commercially viable within the next two decades.
Overall, biofuels account for 23 percent of the total commercial energy supply, most of the transportation needs. Solar thermal accounts for much of industry’s heating needs, and the electricity supply increases nearly 8 fold, with wind contributing the largest component.
The report says the reference scenario depicts an unsustainable, polluting and relatively inefficient energy future in 2051. The renewable scenario, on the other hand, presents a modern, cleaner and highly efficient India and shows that it is, in principle, theoretically feasible to achieve close to 90 percent penetration of renewable energy sources in the energy mix by 2051.
“However, there are still many unresolved questions in the REN scenario related to resource potentials, availability, commercial viability of alternative options, policy and finance mobilization, barriers of cultural and technological lock-ins, etc,” it says.
“Several feasibility studies are, therefore, needed to lay the basis for moving toward the REN scenario; these have not yet been carried out. There are many interventions that would be necessary to remove various barriers and to achieve higher levels of renewable energy deployment in India.”
Concentrated solar thermal technologies, many of which are currently still in the research and development phase, will take on a large chunk of the nations electricity needs as well as meeting thermal demand in industries that require temperatures below 700°C.
Wind is also set to push India towards its 100 percent goal. Currently India has no estimates of its offshore wind potential but the WWF predicts that it could have up to 170 GW installed by 2051.
Rural households will be forced to change their cooking habits, meeting their needs through improved cook stoves while urban households switch to electrical based cooking.
In 2010, fossil fuels accounted for 74 percent of India’s total energy consumed as well as being the world’s third largest emitter of carbon dioxide. India’s greenhouse gas emissions have also steadily risen by 2.9 percent each year between 1994 and 2007.
Much of the rural population still relies on biomass (such as firewood and agro-residue) for much of its basic cooking needs (around 24.6 percent of the primary energy supply) as well as using kerosene for lighting purposes.
Coal currently accounts for 42.4 percent of India’s total primary energy demand in 2010, with the national rail network being the largest coal consumer before 1975 – now overtaken by the power sector (87.7 per cent of total consumption).
Electricity alone plays a crucial role in improving levels of human development and the quality of modern life – with a strong positive link between human development, economic growth and growth in energy and infrastructure.
To sustain India’s own growth it requires large amounts of energy, with little oil reserves and much of its large coal reserves being inaccessible due to technological, social or geological factors, the country has many push factors to get its renewable base up and running. Due to the low oil reserves India has a high import dependence making it more economically vulnerable and well as supply issues.
India started its National Solar Mission in 2010 and is aiming to get 20 GW of grid connected solar power by 2020. As well as this, the Mission is promoting 2,000 MW of off-grid applications; including 20 million solar lighting systems and 20 million square metres of solar thermal collector area by 2022.
In general, India has a vast potential for solar power generation, with about 58 percent of the country’s total land area receiving an annual global insolation about 5 kWh/m2/day. These areas with 5 kWh/m2/day or above can generate at least 77 W/m2 at 16 per cent efficiency.
Rooftop PV is likely to play a major role in both rural and urban areas with residential, agricultural and industrial priorities reducing the amount of available land for solar programs.
It was estimated that almost 30 percent of industrial processes in India require heat below 250°C which can be supplied with heat from solar thermal concentrators. Temperatures below 80°C can be met through solar air heaters and solar water heaters. Industries – with the exception of iron, steel, cement and fertilizer – could in theory shift to CSP based heating.
Wind energy in India currently ranks second to hydro in renewable energy’s generating electricity. With 17,700 MW of installed capacity India’s rank in harnessing wind energy is fifth in the world after USA, China, Germany and Spain. Over the period of 1992-2010 the wind energy installed capacity in India witnesses an annual growth rate of 37 percent.
According to the Centre for Wind Energy Technology, most of India’s wind energy is concentrated in five states – Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra and Gujarat.
The WWF estimates that India’s total wind potential in megawatts stands at 49,130 at 50 metres, when taken up to 80 metres the reading more than doubles at 102,788 MW.
Hydropower is also being considered, with estimates around 148GW of energy potential. Two rivers, Brahmaputra and Indus, have the highest potential, with only 11 and 50 per cent respectively being utilized thus far.
India’s first tidal power project, with a 3.75 MW capacity, is being set up as well as the Kapasar project which involves building a 30 km-long dam. A recent study cited in the report suggested that also tidal power generation is feasible in certain areas it may not be commercially viable due to diesel costs. Currently, The Government plans to build 7 MW of grid-connected ocean tidal power plans in its 12thfive-year plan.
India’s geothermal potential is around 10,600 MW, distributed across various states and in 2009 the country’s geothermal power capacity stood at 10.7 GW. Although geothermal power development is restricted to tectonically active regions, and seeing as India lacks volcanic activity on its mainland, it also faces issues such as costs of drilling and transmission of energy.
Comparing the REF’s and REN’s final energy demands in 2050 highlights not only a stark mix of energy uses but also efficiency levels. In 2051 the REF is approximated to have increased the countries’ energy demand up to 2,545 Mtoe when compared to the REN sitting at 1,461 Mtoe – highlighting an overall energy savings of 43 percent.
Modeling done by the WWF has estimated that the total undiscounted technology investment cost for the renewables scenario is 42 per cent more than the reference (fossil-fuel) scenario, requiring 544 trillion Indian Rupees from 2011 to 2051. Although the figure sounds quite high it is only around 10 percent higher than if India was to stick to its reference scenario.
In the renewables scenario, India will have almost a quarter more electrical generation capacity (in GW) than if it continues along the reference scenario path. Furthermore, in 2051 the renewables scenario will yield less than one billion tonnes of carbon emissions, compared to the reference scenario with almost 12 billion tonnes.
WWF highlights that although the renewables scenario is preferred it will not be easy for government to get there, recommending various policy options available including; tax holidays for renewable energy uptake, creating incentives for new projects, enhancing R&D, increasing the budgetary allocation, pricing energy and technology for efficiency and strengthening policy and regulatory set-ups.