Energy efficiency is the world’s most important “fuel” according to a new report from the International Energy Agency (IEA). Investments in energy efficiency provide such massive savings that the energy saved actually completely eclipses the energy generated by most forms of generation. This “first fuel” is incredibly important to the world’s efforts to reduce fossil fuel use and carbon emissions and should be focused on even more, the new report argues.
The Energy Efficiency Market Report, as its known, states that “the scale of recent investment in energy efficiency worldwide makes it as significant in its contribution to energy demand as investment in renewable energy or fossil fuel generation.”
“Energy efficiency has been called a ‘hidden fuel’, yet it is hiding in plain sight,” stated IEA executive director Maria van der Hoeven. “Indeed, the degree of global investment in energy efficiency and the resulting energy savings are so massive that they beg the following question: is energy efficiency not just a hidden fuel but rather the world’s first fuel?”
The report notes that, worldwide, in 2011, energy efficiency schemes attracted about $300 billion in investment funds — which puts it on about the same level as global investments in fossil-fuel power generation or renewable energy.
Between 2005 and 2010, the IEA calculated that energy efficiency measures across 11 of its member countries (Australia, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom and the United States) saved the energy equivalent of US$420 billion worth of oil.
In these same countries, the IEA said that were it not for energy efficiency measures implemented in the past three years, consumers would be using and paying for two-thirds more energy than is the case. Overall, in 2010 energy savings from efficiency measures exceeded the output from any other single fuel source in these same countries, with the 11 IEA countries avoiding burning 1.5 billion tonnes of oil equivalent thanks to efficiency improvements developed since 1974.
The report notes that the driving force behind this huge increase in energy efficiency investment and adoption is, simultaneously, the implementation of effective policies and the rising price of energy, especially oil. With the price of fossil fuels rising, there really isn’t much choice for many governments/businesses/individuals but to be more energy efficient.
Brian Smithers, the strategic director for Northern Europe at the UK-based renewable energy products and services distributor Rexel, states:
It’s about time the role of energy efficiency was recognized on a global scale, so it’s great to see the IEA placing it alongside traditional as well as renewable fuels. However, if we are to shift the perception of energy efficiency from a ‘hidden fuel’ to the world’s ‘first fuel’ we need to invest in education.
In the UK, for example, there is a huge lack of awareness around energy efficiency, which is seriously hampering our progress against carbon reduction targets. To put it simply, to meet the UK’s carbon reduction targets by 2050, we need to improve one home every minute, equating to 26 million refurbished energy-efficient homes by 2050.
Nathan For the fate of the sons of men and the fate of beasts is the same; as one dies, so dies the other. They all have the same breath, and man has no advantage over the beasts; for all is vanity. – Ecclesiastes 3:19
Nathan For the fate of the sons of men and the fate of beasts is the same; as one dies, so dies the other. They all have the same breath, and man has no advantage over the beasts; for all is vanity. – Ecclesiastes 3:19
Natural gas is widely considered the bridge to take us from fossil fuel dependence to a clean energy future – but that bridge may be a lot shorter than anyone could have predicted.
The International Energy Agency (IEA) predicts power generation from renewable sources will exceed natural gas and be twice the contribution from nuclear energy globally by 2016 – just three short years from now.
Renewable energy is now the fastest-growing sector of the global power market, and will represent 25% of all energy generation worldwide by 2018, up from 20% in 2011. In addition, renewable electricity generation is expected to reach 6,850 terawatt-hours (TWh) and total installed renewable capacity should hit 2,350 gigawatts (GW), both by 2018.
Wind and solar photovoltaic generation is powering this jump, and non-hydro renewable power will double from 4% of gross generation in 2011 to 8% in 2018. IEA cites two main drivers for their incredible outlook: accelerating investment and deployment, and growing cost competitiveness versus fossil fuels.
Strongest Growth In Developing Countries
Even though government funding has been inconsistent, private investment has remained strong, especially in developing economies. Rural electrification, energy poverty, and rising demand have been major challenges for policymakers in these countries, and renewables have become an increasingly attractive option for diverse and non-polluting power.
Non-developed countries, led by China, are expected to contribute two-thirds of all renewable market growth between now and 2018, compensating for slower growth and market volatility across Europe and the US.
Indeed, non-hydro renewable power will make up 11% of gross generation in these countries by 2018, up from 7% in 2012. By itself, China will account for 310GW, or 40% of all global renewable power capacity increases over this time period.
Falling Costs, Rising Capacity
Solving energy poverty issues without harmful emissions is key to renewables growth, but the larger reason for IEA’s outlook is more likely falling costs. The report finds renewables now cost-competitive with fossil fuels across many countries and a wide set of circumstances.
IEA notes wind is competitive with new fossil fuel in multiple markets, including Brazil, South Africa, Mexico, and New Zealand, and solar is competitive both in markets with high peak prices and decentralized power needs.
“As their costs continue to fall, renewable power sources are increasingly standing on their own merits versus new fossil-fuel generation,” said Maria van der Hoeven of IEA.
IEA – Policy Uncertainty Is Public Enemy #1
However, the IEA warns renewables still face a challenging future. Global investment fell in 2012, and policy uncertainties loom over clean energy technology in several important markets. In addition, grid integration challenges have materialized in some regions as renewables penetration has hit new levels.
“Policy uncertainty is public enemy number one,” said Van der Hoeven. “Many renewables no longer require high economic incentives, but they do still need long-term policies that provide a predictable and reliable market and regulatory framework.”
Earlier this month, G20 leaders meeting in St Petersburg, Russia decided to phase out the use of HFCs. This got a lot of attention (at least among green media), and rightfully so. However, another big decision made in St Petersburg seems to have bypassed most radars. The G20 leaders also agreed to phase out “inefficient” fossil fuel subsidies. Such a move would cut approximately $500 billion in annual governmental expenditures while also reducing greenhouse gas emissions (compared to business-as-usual emission projections) 10% by 2050.
All the G-20 leaders agreed to phase out inefficient fossil fuel subsidies. Building on the commitment they made at the Pittsburgh G-20 Summit in 2009 to phase out these subsides, G-20 Leaders today agreed on the methodology for a new peer-review process of fossil fuel subsidies, an important step in combating climate change.
The International Energy Agency estimates that eliminating subsidies – which amount to more than $500 billion annually – would lead to a 10 percent reduction in greenhouse gas emissions below business-as-usual by 2050.
As part of the St. Petersburg Declaration released today at the close of the summit, the G-20 leaders stated;
“We reaffirm our commitment to rationalise and phase out inefficient fossil fuel subsidies that encourage wasteful consumption over the medium term while being conscious of necessity to provide targeted support for the poorest.”
“We welcome the development of a methodology for a voluntary peer review process and the initiation of country-owned peer reviews and we encourage broad voluntary participation in reviews as a valuable means of enhanced transparency and accountability. We ask Finance Ministers to report back by the next Summit on outcomes from the first rounds of voluntary peer reviews. Recognising the importance of providing those in need with essential energy services, we ask Finance Ministers to consider, in conjunction with the relevant international institutions, policy options for designing transitional policies including strengthening social safety nets to ensure access for the most vulnerable.”
Now, personally, I’d consider all fossil fuel subsidies to be inefficient, but I’m guessing that G20 leaders have some fossil fuel subsidies in mind that they would consider efficient. Otherwise, why the dubious language?
Also, I imagine they aren’t going to include externalities – even though they should — and I’m not seeing a timeline for the phase-out. I assume that isn’t yet set.
We’ll see what comes of all this, but it looks like a step in the right direction.
Zachary Shahan is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.
Renewable energy is a kind of energy, one that is automatically replenished by the environment, such as the rainfall which is collected behind hydroelectric dams and can be used to produce hydroelectric power.
It may surprise you to know that there are only two kinds of energy; Renewable and Non-Renewable. All the different types of energy are categorized under those two kinds of energy.
The Sun’s light and heat is employed (directly) to produce solar power and (indirectly) for wind power production, and heat in the Earth’s crust is used to generate geothermal energy. Another type of renewable energy used around the world is biomass.
Please view the graphic below, to see the world’s total available energy from all sources.
We can see that in 2009, the total world energy demand from all sources, including all forms of transportation worldwide, amounted to 16 Terawatt years of energy — including all forms of transportation which itself accounted for one-third of all energy demand on the planet.
By 2050, it is expected that worldwide energy demand (including transportation) will reach 28 Terawatt years of energy.
We can see from the graphic that the Renewable energy from solar power has the most potential and by itself, could have produced an amount of energy 1437.5 times the total world energy demand of 2009 (including transportation).
Even with the increasing energy demands of our civilization by 2050, solar power by itself, could provide 821.4 times the world’s total energy demand, including all transportation.
Of course, wind power could do the same between now and 2050, or even up to 2100 with its much higher level of demand. The Renewable energy available worldwide from wind power alone is equal to the energy required to power our entire civilization, including all forms of transportation.
Other types of Renewable energy such as Biomass, Ocean Thermal Energy Conversion, and Hydroelectric power, are important, but even when exploited to their maximum potential they are nowhere near being able to satisfy world energy demand — nor do they need to. They can complement solar power and wind power, adding to national electricity grids during times of the day with low wind activity and at night, when solar power is not adding power to the grid.
Another type of energy which can be considered renewable energy, (when the proper production processes are used) is the energy we get from from fuels such as gasoline, (when made from algae + water) or ethanol/methanol, (when it is made from a combination of organic waste material + enzymes + water).
Some biofuels are made from green plants, but require more inputs of water, fertilizer, and pesticides to grow them, than the final product is worth — which is why it is very important to select the right plants to create biofuel or it isn’t a sustainable energy solution. If the optimum plants are not selected for biofuel processing, government subsidies must then be employed to make the process affordable for farmers and biofuel producers.
Algae, switchgrass, jatropha, millettia and camelina, are sustainable choices for biofuel production, as is organic waste when processed with enzymes.
Due to the fierce competition in solar panel manufacturing since Chinese manufacturers entered the market, solar (PV) panels have dropped in price — so much so, that electricity produced at solar power plants can now be sold at comparable rates to the electricity produced at conventional power plants.
Wind turbines also have fallen in price dramatically and now compete against conventional energy around the world — with or without subsidies.
To compare Renewable and Non-renewable energy, it is important to examine two different variables; Subsidies and Externalities.
Both Renewable energy and Non-renewable energy benefit from various subsidy schemes around the world.
The U.S. federal government subsidizes energy producers with vastly different subsidy rates for each energy type.
The various U.S. state governments subsidize energy producers with vastly different subsidy rates for each energy type AND subsidy rates vary considerably between the different states.
Sometimes a subsidy in country “A” (to promote extraction of petroleum for example) will have another subsidy added to it in country “B” which imports that petroleum (one subsidy on top of another subsidy) which helps bring down the price at the gas pump.
To make biofuel from corn (a poor choice of plant for biofuel production) farmers and producers were subsidized until January 1, 2013, by the U.S. government at $0.60 per litre.
Over time, subsidies can add up to many billions of dollars per year.
Please see the chart below, which shows the yearly subsidies enjoyed by the different energy producers in the U.S.
From the chart, we see that Oil and Gas receives $4.86 billion per year, from the U.S. government.
From the chart we see that the Nuclear power industry receives $3.5 billion per year, from the U.S. government.
How were these numbers arrived at?
In the case of Oil & Gas, DBL Investors took the grand total of subsidies paid to the Oil and Gas industry from 1918 – 2009 and divided it by 91 years, which equals $4.86 billion per year.
In the case of nuclear, DBL Investors took the grand total of subsidies paid to the nuclear power industry from 1947 – 1999 and divided it by 52 years, which equals $3.50 billion per year.
Similar calculation methods are applied to Biofuels 1980 – 2009 and Renewables 1994 – 2009.
Whatever the kind of energy, there are always externalities to deal with.
In the case of wind turbines, they can create noise, and for some people the noise is uncomfortable. And, they are either a source of wonder or an eyesore — depending on your viewpoint.
Hydroelectric dams dramatically lower fish stocks in rivers, although there have been some notable programmes designed to mitigate this in some river systems.
In China, the externalities from burning fossil fuels cause 410,000 deaths per year.
“China faces a number of serious environmental issues caused by overpopulation and rapid industrial growth. Water pollution and a resulting shortage of drinking water is one such issue, as is air pollution caused by an over-reliance on coal as fuel. It has been estimated that 410,000 Chinese die as a result of pollution each year.” – Common Language Project
This problem does not stop at the borders of any one country, for it is a worldwide externality.
The polluted air in China does not stay in the country, but circulates around the northern hemisphere, taking between 5 to 7 days to reach the western coastline of North America.
Similarly, the polluted air from North America takes 4 to 6 days to reach Europe.
And then there is the depleting ozone layer and oxygen levels in the Earth’s atmosphere caused by the burning of fossil fuels and man-made chemical compounds — along with dramatically increasing CO2 (and CO2 equivalent) gases, which increase the solar insolation value of the atmosphere (trapping heat) and thereby increasing the average worldwide temperature.
Scientists say that for each 1 C degree of global warming, it costs governments, businesses and citizens, 1 Trillion dollars per year to mitigate those effects.
According to 97 percent of the climate scientists testifying under sworn oath in the United States Congress in April of 2012, most of the global warming measured since the beginning of the Industrial Revolution, is ‘anthropogenic’ — that is, caused by humans. Profoundly, it is in our best interest to make the switch to Renewable Energy.
Massive spending reductions for governments will be the result of switching to Renewable energy, as the costs to human health (national health care systems externality) and the costs of mitigating the damage caused by climate change (agriculture, property and emergency management externality), will drop dramatically.
Not to mention the billions of dollars of savings when conventional energy subsidies end.
The New Lens Scenarios Europe Shell report depicts two different energy policy scenarios, predicts that “photovoltaic panels will be the main power source by 2060 or 2070” (depending on which scenario) and “lower costs and state support will boost solar to about 600 gigawatts in 2035” – worldwide totals.
What might lie ahead 50 years from now… or even in 2100? We consider two possible scenarios of the future, taking a number of pressing global trends and issues and using them as “lenses” through which to view the world.
The scenarios provide a detailed analysis of current trends and their likely trajectory into the future. They dive into the implications for the pace of global economic development, the types of energy we use to power our lives and the growth in greenhouse gas emissions.
The scenarios also highlight areas of public policy likely to have the greatest influence on the development of cleaner fuels, improvements in energy efficiency and on moderating greenhouse gas emissions.
The first scenario, labelled “mountains”, sees a strong role for government and the introduction of firm and far-reaching policy measures. These help to develop more compact cities and transform the global transport network. New policies unlock plentiful natural gas resources – making it the largest global energy source by the 2030s – and accelerate carbon capture and storage technology, supporting a cleaner energy system.
The second scenario, which we call “oceans”, describes a more prosperous and volatile world. Energy demand surges, due to strong economic growth. Power is more widely distributed and governments take longer to agree major decisions. Market forces rather than policies shape the energy system: oil and coal remain part of the energy mix but renewable energy also grows. By the 2060s solar becomes the world’s largest energy source. – Shell
Since year 2000, an average of 10 gigawatts of PV solar, per year, has been very unevenly added to the world’s electrical grids, but if PV solar installations were to grow at the same rate as the 2000-2012 timeframe, just 450 gigawatts of PV solar would be installed by 2035 — not the 600 gigawatts predicted by the report. The growth rate for PV solar has been astonishing for a new kind of energy for utility companies — and additionally so, considering it is battling with the big boys of the energy world, oil & gas, coal and nuclear. Regardless of past challenges, strong growth in PV solar is forecast until 2100.
All of this means that PV solar is set to grow dramatically between now and 2035, let alone by 2070.
The report has PV solar power moving to number one position to provide at least 38% of worldwide energy supply (well up from today’s ranking of 13th place) to become the predominant kind of energy by 2100.
By 2100, energy from oil will account for only 10% of worldwide energy use and natural gas will account for just 7.5% of the worldwide total, Shell said.
Due to enhanced Carbon Capture and Storage, clean combustion technology and the use of CO2 gas for industrial processes by 2100, Shell sees “global emissions of carbon dioxide dropping to near zero by 2100”.
As all of the above plays out, natural gas demand is expected to surpass the historic demands seen for any other kind of fuel and the quote from the report’s main authour Jeremy Bentham, speaks volumes about the anticipated level of demand for the gas.
“The underlying pent-up demand for gas is very strong…we see it being sucked up, every molecule.”– Jeremy Bentham
The overall demand for energy will double in the next 50 years due to population growth and increases in living standards, and natural gas will eventually enjoy the highest level of fuel demand in history. But by 2100, the world will mainly run on PV solar, while other kinds of energy will contribute small percentages to the overall global energy mix.
It now appears that Shell would rather ‘switch than fight’ the move to PV solar. It is likely to be the first of many such switches in the global energy industry.