German renewable energy leaves coal behind

German renewable energy leaves coal behind | 06/12/14
Originally published at johnbrianshannon.com by John Brian Shannon John Brian Shannon

Germany, a thriving economic powerhouse under the Chancellorship of Angela Merkel, is also a renewable energy superstar and a country that is loaded with potential.

Lately, the Germans have taken a break from aggressively adding renewable energy to their grid by ending a lucrative feed-in-tariff (FiT) subsidy program that ramped-up the adoption of solar, wind and biomass installations across the country.

Not that these so-called ‘lucrative’ subsidies approached anywhere near what fossil fuel and nuclear power plant operators receive and have received since the postwar period began, as all energy in Germany (like most countries) is heavily subsidized by taxpayers but only the (much smaller) renewable energy subsidies get the headlines. Go figure.

Chancellor Angela Merkel made the courageous decision to accelerate the shutdown Germany’s nuclear power plants in the aftermath of the Fukushima disaster in 2011 after stress tests of German nuclear power plants showed safety concerns existed within their nuclear fleet. She ushered in meaningful FiT subsidies to speed the German Energiewende program towards its goal of transition to renewable energy and greater energy efficiency — which had received only sporadic subsidies prior to Merkel.

Snapshot of the German Energiewende program

  • A popular Germany-only program to move towards a highly industrialized, sustainable green economy
  • Full phase-out of nuclear energy by 2022
  • 80-95% reduction in greenhouse gases by 2050
  • Minimum of 80% renewables in the power sector
  • 50% increase in energy efficiency by 2050

Germany’s utility companies haven’t seen change like this since WWII. After a century of serving conventionally-generated electrical power to a captive electricity market — approximately 1/3 of all German electricity is now generated via renewable energy if you include nuclear, biomass and hydro-power. That’s historic change by any standard.

Germany-renewable-energy-power-capacity at October 29, 2014 Fraunhofer Institute image
Germany renewable energy power total installed capacity at October 29, 2014. This is not how much electricity Germany actually used — it represents how much total capacity exists in the German electricity grid when all power plants are running at their full rated capacity. Image courtesy of the Fraunhofer Institute. © Fraunhofer ISE

Although solar panel outputs are lower during the winter months, over the late spring and summer of 2014 renewable energy generated more than 75% of total demand on many of those days. Not bad, for 5 years of relatively minor renewable energy subsidy euros provided by a (now ended) Feed-in-Tariff!

Germany renewable energy generation for the first 10 months of 2014 courtesy of the Fraunhofer Institute
This chart shows how much electricity was actually produced by each type of energy in Germany for the first 10 months of 2014. Some of this energy was exported to nearby nations as a cash-on-delivery export. Image courtesy of the Fraunhofer Institute. © Fraunhofer ISE

Another benefit of the switch to renewable energy was the added billions of euros of economic activity generated annually by European solar panel and wind manufacturing companies like Vestas, SolarWorld, Siemens, ABB, and the jobs created for hundreds of SME renewable energy installation companies in the country.

Exports of German solar panels and wind turbines went through the stratosphere — once Germany proved to the world that solar and wind could replace lost nuclear power generation capacity at a much lower cost than building new, multi-billion euro, nuclear or coal-fired power plants with their massive footprint on the land and their obscene water usage levels.

Germany renewable energy power generation change (in absolute terms) for the first 10 months of 2014 compared to the first 10 months of 2013. Image courtesy of the Fraunhofer Institute
Germany renewable energy power generation change (in absolute terms) for the first 10 months of 2014 when compared to the first 10 months of 2013. Image courtesy of the Fraunhofer Institute. © Fraunhofer ISE

For Germany, installing their own solar, wind and biomass power plants proved to the world that large-scale renewable energy could add huge capacity to a nation’s electrical grid and that different types of renewable energy could work together to balance the over-hyped ‘intermittency problem’ of renewable energy.

It turns out that in Germany, during the long, hot days of summer when solar panels are putting out their maximum power the wind actually tapers off, but at night the wind blows at a very reliable rate. Karmic bonus! That about covers the summer months.

During the winter months in Germany, the wind blows day and night, adding significant amounts of reliable power to the national grid.

Germany solar and wind energy are complementary, helping to stabilize the German electricity grid without adding pollution to the air. Image courtesy of the Fraunhofer Institute
Germany solar and wind energy are complementary, helping to stabilize the German electricity grid without adding any pollution to the air. Chart shows actual output for the first 10 months of 2014. Image courtesy of the Fraunhofer Institute. © Fraunhofer ISE

And now, all of that renewable energy capacity is operating without FiT subsidy — quite unlike the coal, nuclear, and oil and gas power generation in the country which require huge and ongoing subsidies every day of the year to continue operations. That’s every day since 1946, meine Freunde!

Also a factor with coal-fired power plants are the massive healthcare spending to combat the adverse health effects of fossil fuel burning/air pollution on humans and animals, on the agriculture sector. And the hugely expensive security infrastructure necessary to preclude theft of nuclear materials and nuclear related terror attacks.

While the rest of Europe (with the exception of notables like Norway, Sweden and Luxembourg) wallowed in recession or near-recession since 2008, the German economic powerhouse not only set global export records year-on-year, it bailed-out numerous other EU economies like Greece, Spain, Portugal, Italy and others, and began an unprecedented domestic renewable energy program. And now, Germany is an electricity net exporter.

That’s heady stuff, even for this industrious nation of 82 million.

Germany imports and exports of electricity 2001-2014. Image courtesy of the Fraunhofer Institute
Germany imports and exports of electricity 2001-2014. Germany exported a record 33.8 TeraWatt hours of electricity in 2013 for truckloads of cold, hard cash. Image courtesy of the Fraunhofer Institute. © Fraunhofer ISE

Where to next?

Not only has Germany added many TeraWatt hours (TWh) of clean, renewable energy to its electrical grid to replace lost nuclear power generation, it is now an electricity net exporter — raking in millions of euros per year at present — and make that an electricity exporting superpower if they ever decide to revive their now defunct Feed-in-Tariff subsidy for renewable energy.

Replacing coal with renewable energy in Germany:

If Germany revived the previous FiT regime for 5 years, *all brown coal electrical power generation* could be eliminated within 10 years.

If Germany revived the previous FiT regime for 10 years, *all brown coal and black coal electrical power generation* could be eliminated within 10 years.

Replacing coal with renewable energy in Germany would save millions of Germans, Polish, Swiss, Austrians and others living downwind of German smokestacks from breathing toxic coal-fired air pollution. Think of the health care savings and the taxes involved to support this. Some people believe that the health care savings alone could far exceed the cost of any FiT subsidy.

Not only that, but as a result of leaving coal behind, historic buildings, concrete bridges and roadways would require less maintenance to repair the spalling caused by the acid rain from coal burning. Additionally, Germany would save the millions of litres of water consumed annually by the coal industry.

Replacing coal with renewable energy in Germany would create thousands more jobs for solar, wind, and biomass manufacturing and construction, the agriculture sector would begin to show ever-improving crop outputs and importantly, leave clean air to breathe for tourists, expats and German citizens!

A note about (renewable energy) Hybrid power plants

So-called Hybrid power plants offer the best of both worlds in the renewable energy space by providing plenty of electricity day and night. This Hybrid power plant uses solar panels and wind turbines, while others can incorporate biomass or hydro-electricity dams, along with wind or solar, or both.
Hybrid power plants offer the best of both worlds providing balanced electricity generation, day and night.

An energy policy stroke of genius for Germany could come in the form of a new subsidy (a FiT or other type of subsidy) that could be offered to promote the installation of Hybrid power plants — whereby 30% of electricity generated at a given power plant site would come from solar and the balance could come from any combination of wind, biomass, or hydro-electric generation. (30% solar + 70% various renewable = 100% of total per site output)

As long as all of the electrical power generation at such a site is of the renewable energy variety and it all works to balance the intermittency of solar power, then it should receive automatic approval for the (hereby proposed) Energiewende Hybrid Power Plant subsidy.

When all the different types of renewable energy work in complementary fashion on the same site, energy synergy (the holy grail of the renewable energy industry) will be attained.

More jobs, billions of euros worth of electricity exports to the European countries bordering Germany, lower health care spending, less environmental damage and better agricultural outputs — all at a lower subsidy level than coal and nuclear have enjoyed every year since 1946 — are precisely why Germans should renew their commitment to renewable energy.

Seriously, what’s not to like?

Bonus energy graphic shows the various kinds of energy extant in Germany at the end of 2014.

How goes the Energiewende, Germany? Es geht gut! Image courtesy of the Fraunhofer Institute.
How goes the Energiewende, Germany? Es geht gut! Image courtesy of the Fraunhofer Institute.

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Renewable Energy Supercedes the Utility Business Model

Originally published on Rocky Mountain Institute by Guest Contributor Amory B. Lovins

Renewables are making headway in Europe and bringing a low-carbon electricity system to the forefront. Renewables were 69 percent of new capacity added in 2012 in Europe and 49 percent in the United States.

Not surprisingly, this threatens utilities unwilling to let go of outmoded business models and fossil-fuel generation.

Renewable Energy. Electrical pylons as sunset.
Renewable Energy. Electrical pylons can carry any kind of electrical energy – either non-renewable, or renewable. One has high carbon/high subsidy/high health-care costs, while the other doesn’t have any of those. Image by ShutterStock.

Laments for Europe’s money-losing electric utilities were featured in an October 2013 cover story in the Economist. It said Europe’s top 20 energy utilities have lost over half their 2008 value, or a half-billion Euros—more than Europe’s banks lost.

Many utilities therefore want renewable competition slowed or stopped. Indeed, some European giants, like Germany’s E.ON and RWE, are in real trouble, and five of Europe’s top ten utilities have suffered credit downgrades.

So have some U.S. utilities—most recently Jersey Central Power & Light and Potomac Electric Power Co. – from the likes of Fitch, Moody’s, Standard & Poor’s, Credit Suisse, and others.

Should old, long- and often still-subsidized oligopolies be bailed out or shielded from competition when they bet against innovation and lose?

Those big European utilities were supposed, but failed, to prepare for renewables by reinvesting their hundreds of billions of Euros’ windfall from billing customers for the first decade’s tradable carbon emission credits they’d been given for free. Now they’re griping that disruptive technologies are upending their old models—just as innovators had warned them for the past few decades.

Disruptive technologies are meant to upset the status quo to bring worthwhile change. Should we have rejected mobile phones because they threatened to displace landline phones? Didn’t digital cameras make film cameras largely obsolete? Shouldn’t print newspapers have to invent new business models to confront the rise of the Internet?

Of course utility companies that refuse to let go of an archaic system are losing investors’ money. To be sure, some market reforms, like a well-designed, technology-neutral electric capacity market, could be worthwhile.

But botched investment strategy should not be rewarded. Nor should shareholders be surprised that utility stocks no longer perform like bonds when twenty-first-century technology and speed collide with twentieth- and nineteenth-century institutions, rules, and cultures.

Fortunately, those shareholders were already compensated for accepting well-known risks like new technologies, new environmental rules, and other regulatory and policy shifts—and they needn’t be paid twice.

Renewables Aren’t The Only Challenges To Incumbents

As the Economist acknowledges, those utilities’ financial crisis is due not only to renewables, which are often scapegoated for trends they reinforced but didn’t cause.

Overinvestment in fossil-fueled generation would have weakened utilities’ finances anyway as the global economic slowdown damped electricity demand growth and the efficiency revolution began to reverse it—on both sides of the Atlantic. U.S. weather-adjusted electricity use per dollar of GDP fell 3.4 percent in 2012 alone. In many regions, efficiency is outpacing service growth, shrinking utilities’ revenues.

U.S. shale gas has also displaced much coal-fired generation (though efficiency displaced nearly twice as much in 2012). Unsold American coal flooded European markets, temporarily displacing higher-priced gas.

Meanwhile, solar power took the utilities’ profitable afternoon-peak market and slashed its price premium.

And since Germany, among others, gave renewables both full grid access and dispatch priority (logically, because they’re cheaper to run than any fueled generator), low loads coinciding with high renewable supplies sometimes make wholesale markets clear at negative prices.

This further distresses utilities that must pay to keep their inflexible old plants running—much as they’d prefer to shift all the costs of adaptation to their new competitors. Their distress will rise as renewables keep getting cheaper and as old contracts to sell electricity at well above today’s prices expire.

Renewables Are Advantageous

The Economist article stated, “The growth of renewable energy is undermining established utilities and replacing them with something less reliable and much more expensive.” Undermining stubborn established utilities? Yes, to achieve important public benefits. But shifting to less reliable and much more expensive generators? Hardly.

Well-stoked fears of grid instability and unreliability due to renewable power are as widespread as evidence for them is unfindable. In the Central European grid, where pervasive electricity trading helps operators choreograph the ever-shifting mix of renewable and nonrenewable supplies, German electricity (23 percent renewable in 2012) and Denmark (41 percent) are the most reliable in Europe—about ten times better than in the United States (whose 2012 electricity was 6.6 percent hydro and 5.3 percent other renewables). Even on the edge of the European grid, Spain (48 percent in the first half of 2013) and Portugal (70 percent) kept their lights on just fine. This experience might help the puzzled Economist writer who claimed, “No one really knows what will happen when renewables reach 35 percent of the [German] market, as government policy requires in 2020.” Answer: probably nothing except lower emissions and lower prices.

The “much more expensive” claim, too, evaporates on scrutiny. In the U.S., new Midwestern windpower now sells at a 25-year fixed nominal price (thus a declining real price) as low as $22/MWh, and new Western solar power at below $70, both net of subsidies generally less than nonrenewables get. In many states, wind and solar beat efficient new gas-fired power plants. In countries like Brazil and Chile, unsubsidized wind and solar power routinely win power auctions. In Europe too, they have a strong business case; cloudy Germany has installed 35 GW of photovoltaics but hasn’t subsidized them since 2004. The Economist agrees that German solar power now costs less than residential tariffs (which are half taxes), and less than the feed-in tariff it still receives (because it still costs more than wholesale prices)—so solar power could keep growing even without the tariff.

“Much more expensive” is a more apt description for much nonrenewable generation, especially as the misdesigned European carbon market gets repaired so emissions are no longer nearly free. Exhibit A is the Hinkley Point nuclear plant that the British government wants 84-percent-state-owned Électricité de France to build, supposedly with part-Chinese financing, to generate 7 percent of U.K. electricity. To get ÉDF to agree, the British government had to offer a 35-year inflation-adjusted fixed power price twice today’s wholesale market level, plus a 65-percent loan guarantee, plus other concessions, many still secret.

Even if this extravagance survives EU scrutiny as “illegal state aid,” the project may not win private construction financing. Investors may reason that nuclear electricity costing seven times the unsubsidized Midwestern-U.S. windpower price (the U.K. has Europe’s best wind resources) or 3–4 times the unsubsidized western-U.S. solar price, both falling, is so ridiculous that a subsequent U.K. government could wriggle out of the deal, putting private capital at risk—or simply that forcing the market to absorb so much extraordinarily costly electricity could prove unworkable. If the British government let all options compete at transparent prices, it could find such cheap efficiency, demand response, renewables, and cogeneration that this year alone in America, five old operating nuclear plants have been terminated as uneconomic just to run, even though their high capital cost was paid off long ago. New reactors’ capital costs are so prohibitive that eight years of 100-plus-percent construction subsidies have failed to make them privately financeable, and nine proposed new units were also terminated this year.

Calls for more nuclear power have largely abated in Europe, where flagship nuclear projects in Finland and France are at least twofold over their budgeted cost and time. Nuclear diehards still pull most policy levers in France, but its national utility isn’t charging enough to cover its nuclear repair costs, is about a trillion Euros underfunded for decommissioning its aging reactor fleet, can’t afford to replace it, and needs to consider what to do instead. Hint: renewables leader Germany, moving off nuclear and beyond coal, is the only consistent net exporter of electricity to three-fourths-nuclear-powered France.

Renewables Are Winning

Utilities’ dwindling profitability is the flip side of renewables’ benefits to customers. As renewables burgeoned, Germany’s wholesale electricity prices fell nearly 60 percent in the past five years. This enriched many German industries—thousands of which also shifted billions of Euros’ annual costs to German households via tripled exemptions from paying grid fees and renewable surcharges. (Only 15 percent of the German renewables surcharge is actually households’ share of premium prices for renewables, mostly for old contracts at higher prices; the other 85 percent reflects falling wholesale prices and industrial exemptions.) But the wholesale price drops are reaching most German households too in 2014, stabilizing their bills.

Moreover, German citizens can choose to microinvest as little as $600 in renewables, locking in a stable and attractive return for 20 years. Most German renewable capacity—investments largely spurned by big utilities—was bought instead by citizens, communities, or cooperatives. And Germany’s 382,000+ new renewable jobs, welfare relief, corporate and export earnings, tax revenues, and wholesale price drops yield not just long-term but current macroeconomic net benefits to the national economy.

The Need For New Business Models

Rather than lament that traditional utilities aren’t the low-risk investments they once seemed, and asking how we can protect their profits, we should be seeking to help progressive utilities and disruptive upstarts shape a new electricity system powered increasingly by clean, distributed renewables, doing exactly what they were meant to do: provide reliable, resilient, safe, clean power at moderate prices. That is the way the world market is trending.

Not only Germany but also in two more of the world’s top four economies—China and Japan, as well as India—non-hydro renewables now outproduce nuclear power. In 2012, China’s windfarms outproduced its nuclear plants (the world’s most aggressive program), and coal plants were run less: China added more generation from non-hydro renewables than from nuclear plus fossil sources. In the first ten months of 2013, 54 percent of China’s capacity additions were renewable (a third of those non-hydro). The coal-fired fraction of China’s electricity could drop by two percentage points in 2013 alone. Globally, in each of the years 2011, 2012, and probably 2013, renewables won a quarter-trillion dollars of private investment and added over 80 billion watts of capacity. Solar additions are now overtaking windpowers, scaling even faster than cellphones.

To adapt to these epochal shifts in both supply and demand, electricity providers everywhere, not just in Europe, need new business, revenue, and regulatory models, being developed in efforts like RMI’s e-Lab industry forum. For example, buildings using zero net electricity (an increasingly widespread practice) pay zero net revenue to utilities selling electricity by the kWh. That requires a different revenue model—perhaps like the Fort Collins (Colorado) municipal utilities’ proposed new approach, where the utility can provide a range of services and investments on the customer side of the meter, helping the customer navigate efficiency and distributed generation investments while providing low-cost finance and on-bill repayment. This e-Lab-aided innovation may offer a sound and scalable path beyond net metering, which breaks at scale.

An 80-percent-renewable, half-distributed, nearly decarbonized, highly resilient U.S. grid could cost virtually the same as business as usual, but could best manage its risks—security, technology, finance, climate, health, fuel, and water—and, uniquely, prevent cascading blackouts. Such transformative benefits justify transitional growing pains—not protection for incumbents already paid to accept the known competitive risks they got wrong.

Clinging to and investing in antiquated business models should be neither rewarded nor celebrated. After all, it’s not as if their authors didn’t know big changes were coming. Ordering new coal plants in the face of renewable mandates and emerging carbon trading is akin to buying up carriage-makers just as automobiles began to relieve London’s horse-manure crisis.

Image courtesy of Shutterstock.

This article, Renewables’ Disruption Of The Utility Business Model Is A Good Thing, is syndicated from Clean Technica and is posted here with permission.

Progressive EU Climate Policy a definite ‘Maybe’

by Guest Contributor Sonja van Renssen

Moving forward on climate and energy for 2030
Many believe that a ‘40% emissions reduction target by 2030’ will prevail. If there is one at all, it will likely be non-binding and less than 30%. Which, according to the Commission’s own 2013 reference scenario, is nothing more than business as usual.

Originally published on Energy Post

Behind the heated debate in Brussels about climate and renewable energy targets, what is really happening is that concern over high energy prices has taken precedence over climate concerns in Europe. Competitiveness has caught up with climate policy. Indeed, the two issues have become so intertwined that when the European Commission will present its new climate and energy policy on 22 January, it will at the same time launch a new industrial policy. Similarly, EU leaders, who were to meet twice in February and March to discuss energy prices and climate policy separately, have merged these meetings into a single summit to address both issues at the same time. Our correspondent Sonja van Renssen digs behind the climate and energy headlines.

EU climate commissioner Connie Hedegaard and energy commissioner Günther Oettinger still don’t agree on what greenhouse gas emission reduction target the EU should adopt for 2030. Hedegaard wants 40%, Oettinger 35%.

This is the news that emerged from a deadlocked meeting within the Commission on 10 January that was supposed to agree the 2030 proposals internally.

Many believe that 40% will prevail. If it does, it is also the only target the Commission is likely to propose: forget a new renewables target – if there is one at all it will be non-binding and less than 30%, which, according to the Commission’s own  new 2013 reference scenario, published over Christmas, is really nothing more than business as usual.

A new energy efficiency target long ago disappeared from the Commission’s agenda.

Thus, the famous 20-20-20 targets for 2020 will not get a proud sequel for 2030. This despite the European Parliament’s vote on 9 January in favour of three binding targets for greenhouse gas emissions (40%), renewables (30%) and energy efficiency (40%). Despite the fact that on 23 December, Ministers from Germany, France, Italy, Austria, Belgium, Denmark, Ireland and Portugal sent the two Commissioners a letter urging them to retain a renewable energy target in addition to a reduction target. Despite the letter by Germany, the UK, France and Italy last week urging a 40% climate target. Despite also pressure from the renewable energy sector and parts of industry to maintain an ambitious climate and renewable policy.

The truth is that at this moment many member states and industry fear that a strong climate and energy policy will be bad for their economies.

If in an interview with Energy Post last December, Hedegaard still insisted three binding targets were needed, today she is fighting to defend her 40% emission reduction target. The Commission’s 2050 low-carbon roadmap says this equates to the most cost-effective path to an 80-95% emission reduction in 2050. In contrast, 35% is only just above business-as-usual – a 32% decrease in emissions in 2030 – according to the Commission’s new 2013 reference scenario. The debate within the Commission is over an un-ambitious vs. very un-ambitious climate and package that ignores the findings of its own impact assessment, critics say.

D-Day for climate policy

The critics have a point. The truth is that at this moment many member states and industry fear that a strong climate and energy policy will be bad for their economies. Relatively high energy prices in Europe compared to the US which benefits from its shale gas boom plus the economic recession have forced their way into the heart of the 2030 climate and energy debate. Consider that EU leaders were due to meet twice early this year: in February, to discuss energy prices and competitiveness, and in March, to discuss climate policy. The two have now been merged into a single summit on 20-21 March in line with EU policymakers’ wish “to be coherent”, according to a Commission source. In addition, it now appears that on 22 January – long pencilled into energy journalists’ diaries as D-Day for the 2030 climate and energy package – the European Commission will also launch a new industrial policy for Europe. Indeed, it may launch the two with a single press conference!

Although policymakers recognise that competitiveness is not determined by climate policy alone, the fear is that EU climate and energy policy may be the straw that breaks the camel’s back. European industries have been claiming this for some time. Several of them were prioritised by the Commission for a “fitness check” or “cumulative cost assessment” to work out how much EU climate policy is actually costing them. The results are gloomy: EU climate and energy policies have raised the cost of producing a tonne of aluminum by as much as 11% (€228), reported the Centre for European Policy Studies (CEPS) last autumn. Just before Christmas, it announced that European steel companies pay twice as much for electricity and four times as much for gas as their US counterparts.

Energy prices report

These sector-specific conclusions appear to be borne out by a leaked draft of a report on energy prices seen by Energy Post. This paper is also due from the Commission on 22 January. Bearing in mind that the draft appears an early version, it nonetheless suggests that the findings for steel are on average true for all industrial and retail consumers in Europe. From 2005-12, European industrial consumers faced real price rises of 40% for electricity and 30-35% for gas, even as prices went down in the US and grew more slowly in other parts of the world.

EU climate policy has been an easy scapegoat.

But the report also points out that these are average figures that hide an extremely diverse picture across Europe. According to the report, prices in different European countries can vary by a factor of 3-4. In 2012, industrial electricity prices were below the weighted EU average in 18 member states, comparable to prices in Turkey, Mexico, Brazil and China. In Romania, electricity prices have actually decreased since 2007. In Germany, energy-intensive industries are exempted from carbon and renewable levies plus grid access fees; similar exemptions exist for industries in other countries.

Felix Matthes the Öko-Institut recently argued that German industry pays about the same for electricity as in the US. In the aluminum sector, about a third of all plants still buy electricity through long-term contracts, which mean they have seen just one-tenth of the cost increase of plants exposed to market prices. (Though many of these are due to terminate soon and may not be renewable under EU competition law.) Finally, despite the clear price difference with the US, there is no sign of EU industry doing less well on EU and US markets, concludes the prices report.

Price differences

Yet energy is getting more expensive in Europe compared to the rest of the world and this threatens at least some industries. The question is what to do about it? EU climate policy has been an easy scapegoat, with much mudslinging at the EU Emission Trading Scheme (ETS), which makes industry pay for its carbon emissions. But the Commission has so far found no evidence of “carbon leakage”, i.e. industry leaving Europe for regions with looser carbon constraints. Yes, some industries are looking elsewhere, but this is “driven mainly by global demand developments, and input price differences”, according to yet another report from the Commission. And yes, says this report, energy prices are going up, but carbon costs are not a major factor. (This may also be because of the leakage protection measure – extra free allowances – in place so far).

The Institutional Investors Group on Climate Change (IIGCC), which manages €7.5 trillion in assets, wrote to European Commission president Jose Manuel Barroso on 9 January: “As shareowners in energy intensive companies, we have discussed with them the competitiveness risks of the EU ETS for their European operations and they have reported that this is not an issue.”

Instead, the biggest problem is the commodity price of fuel. The draft energy prices report shows that this typically makes up the bulk of energy prices, followed by taxes and network charges. The gas price is something policymakers can partly do something about, for example by working to complete the single European energy market. What they can do much more about however, is taxes. The share of tax in the total energy price for industrial consumers can be high in Europe, while in the US, China, and India there is no taxation on natural gas and electricity for industry. Moreover, the tax component increased by more than any other in recent years, says the Commission in its prices report. But taxes are primarily a national, not European, competence.

Leaving Europe

Untangling the causes of high energy prices does not answer the question of how to deal with them, however. Interestingly, in its draft prices report, the Commission suggests that European energy-intensive industry has been able to hold its own so far in part because it has decreased its energy intensity (defined by the Commission as the amount of energy consumed to produce a unit of value-added of one million Euros). In contrast, US industry has started consuming more with the arrival of cheap shale gas. It also says Europe has been helped by restructuring away from energy-intensive sectors, although it maintains an overall share of manufacturing in value added above that of the US.

It is alarming that industries that depend on energy efficiency legislation are apparently leaving Europe.

“In many cases decreasing energy intensity could mitigate the impact of increasing energy prices,” the Commission suggests. This suggests that a strong policy push for efficiency makes competitive sense. Greater efficiency and technological innovation are essential to a healthy European industry. The European paper industry, represented by CEPI, has become one of the first to embrace this with an innovation competition last year.

Viewed in this light, it is alarming that industries that depend on energy efficiency legislation are apparently leaving Europe. “If words were action in the field of energy efficiency, then I would be opening new factories in Europe but as they are not we have just closed a factory in Italy and are planning to open three new plants in the US, Asia and Turkey,” wrote the CEO of Knauf Insulation, Tony Robson, to Barroso on 9 January.

Competitiveness is also about preventing low-carbon leakage. It is also about maintaining an expanding cleantech industry. Policymakers cannot ignore high energy prices and the risk of carbon leakage of course, but a failure to maintain a strong climate, renewable energy and energy efficiency policy may not be the right remedy. It may hurt Europe’s growing green sector while doing little to reduce energy prices for industry.

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This article, Competitiveness Has Caught Up With Climate Policy, is syndicated from Clean Technica and is posted here with permission.

WWF says India could reach 100% Renewables by 2050

by Guest Contributor Emma Fitzpatrick

Originally published on RenewEconomy

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.

Electricity generation by resource - Renewable Energy Scenario (REN) for India
Electricity generation by resource – Renewable Energy Scenario (REN) for India

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.

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This article, India Could Reach 100% Renewables By Mid-Century, is syndicated from Clean Technica and is posted here with permission.

US Consumer Support for Renewables – Highest Level Since 2010

by Silvio Marcacci.

Consumer approval of clean energy 2013 chart via Navigant Research
Consumer approval of clean energy 2013 chart via Navigant Research

Consumer attitudes toward clean energy technologies in America rebounded strongly in 2013 to reach their highest levels since 2010, countering several years of declines in favorability ratings between 2009-2012.

This good news comes from Navigant Research’s 2013 Energy and Environment Consumer Survey, and indicates clean tech may finally be established as a preferred option for consumers despite high-profile conservative attacks.

Overall support for clean energy swung from 2012’s low of 44% to a 51% average favorability in 2013. In fact, out of ten technologies ranging from clean energy to clean transportation to energy efficiency, only one – nuclear power – declined in popularity over the past year.

Consumer support for clean energy 2009-2013 chart via Navigant Research
Consumer support for clean energy 2009-2013 chart via Navigant Research

This Just In – Renewables Rule

Navigant’s survey is the latest in an annual series dating back to 2009, and surveyed over 1,000 people in representative samples across the U.S. during the fourth quarter of 2013. Respondents were asked to share their feelings about each technology and their replies were then compared to previous years to show trends.

Without a doubt, this year’s headline simply reads: renewables rule, especially solar. 79% of respondents favored solar energy, a 10% surge compared to 2012 and just under the all-time high of 81% in 2009. Solar energy also had the lowest unfavorable rating at 6% and the highest “very favorable” rating at 50% – not a surprise if you consider 2013’s record-setting pace for new US solar installations.

Wind energy ranked second overall out of all surveyed technologies, coming in just behind solar in overall favorability (72%), “very favorable” (42%), and unfavorable (7%), despite the controversy over renewing the Production Tax Credit. When combined, these two renewable energy technologies appear to have cemented themselves among Americans. “Consumers consider these renewable energies to be important pieces in the power generation portfolio of the future,” says the survey’s white paper.

Clean Transportation Pulls Ahead

But positive attitudes toward clean energy aren’t just limited to our power sockets – they also extend to our highways and byways. Clean transportation options pulled ahead of the pack in 2013, led by hybrid and electric vehicles.

Hybrid vehicles ranked third in overall favorability with 67% of consumers supporting them, up an incredible 13% from 2012, and third lowest with just an 8% unfavorable response rate. Interestingly, the bulk of unfavorable responses for hybrids came from those with a high school degree or lower education.

While electric vehicles came in just behind hybrids at 61% favorability, they jumped 12% from just a 49% approval rate in just one year, hinting the increasing number of EVs on US roads could be making them more attractive to drivers.

Lack Of Understanding = Lack Of Support

Ironically, the same trend of consumers equating more solar panels and more EVs on the road to higher approval ratings may be the reason smart grid and green building concepts continued to rank poorly.

The concept of a smart grid was viewed favorably by just 37% of respondents, but unfavorably by just 6% of consumers – the same negative rank as solar energy. 57% of consumers said they either didn’t have an opinion or were neutral on smart grid technology, meaning the potential for support exists but educational efforts are lagging by utilities.

Smart meters in particular also showed the same trend as smart grid in general, with 43% viewing them favorable and 10% viewing them unfavorable but 47% saying they were neutral or unfamiliar with the technology.

Consumer awareness of LEED certification chart via Navigant Research
Consumer awareness of LEED certification chart via Navigant Research

This trend was most apparent, however, when it came to LEED certification. A massive 72% of all respondents said they were either unfamiliar (41%) or had no opinion (32%) of green building. While this is somewhat surprising considering green buildings could be half of all US construction by 2016, the potential is still bright considering those who knew about LEED supported it at a 4-to-1 ratio.

Seeing Is Believing For Clean Energy

Navigant’s annual survey generates multiple possibilities in the evolution of consumer support for clean energy technologies, but the underlying story is clear: When people learn about clean tech by seeing it in their everyday lives, they support it in large numbers.

That’s a powerful message to throw back at fossil fuel proponents or poorly informed media reports that argue support for clean energy is a mistake, and is a good omen for our potential to decarbonize and build a sustainable future.

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This article, US Consumer Support For Clean Energy At Highest Level Since 2010, is syndicated from Clean Technica and is posted here with permission.

About the Author

Silvio MarcacciSilvio Marcacci Silvio is Principal at Marcacci Communications, a full-service clean energy and climate-focused public relations company based in Washington, D.C.

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