The Potential for Renewable Energy to Deliver in Large Energy Economies (22-Oct-07)
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Renewable Energy -- As the launch of our joint special coverage on the issue, we have our partners Ren21 explore the feasibility of renewable energy technologies and their ability to meet the global energy demands
The debate on climate change has clearly entered a new phase. There is no longer a doubt about the real threat of a human-induced climate catastrophe and that action to avert this threat is urgent. And this year’s Nobel Peace Prize laureate, the UN Intergovernmental Panel on Climate Change, has raised the bar again: by the middle of this century, global greenhouse gas emissions must be at least halved.
A major share of the potential for climate change mitigation lies in the energy sector. In the short term, energy efficiency (EE) and renewable energy (RE) technologies are the major options that are ready and available now and which, when sustainability criteria are applied, do not have adverse effects.
And the tides are turning. Current annual global investment in RE power production assets is surpassing that in nuclear and most fossil technologies, even when large hydropower – an already established RE technology – is excluded.
Twenty large economies consume 80 percent of the world’s primary energy and produce a similar share of the world’s greenhouse gas emissions. An increase in the use of RE and EE technologies in these countries will pave the path to a low-carbon world.
The term “renewable energies” includes resources as diverse as biomass, hydro, geothermal, wind, solar, marine or ocean energy. Renewables produce energy carriers and services as versatile as electricity, heat, and fuels for transport.
The overall technical potential for renewable energy is huge and is several times the current total energy demand.
Quite contrary to common belief, the overall technical potential for renewable energy – i.e. the total amount of energy that can be produced taking into account the primary resources, the socio-geographical constraints and the technical losses in the conversion process – is huge and is several times the current total energy demand. Among experts this is undisputed.
This is particularly true for electricity generation. Solar photovoltaic (PV) technology can be harnessed almost everywhere. The solar PV potential alone is many times higher than global electricity consumption of around 35000 TWh/year by 2050. Concentrating solar power (CSP), onshore wind, ocean energy and biomass also have enormous potentials, each above the order of magnitude of future electricity consumption. Hydropower, geothermal power and offshore wind can contribute significantly but are more site-specific (Figure 1). A look at RE potentials and the expected demand for electricity reveals huge potential supply surpluses in regions with high solar yield like Africa and Middle East, Asia and Oceania as well as Latin America, whereas North America could rely more on wind as well as PV. Western Europe is blessed the least with RE potential, but it has enough to cover its electricity demand.
For heating and cooling the technical potential of RE sources is high, when all solar heat radiation and low-temperature geothermal heat are taken into account. Statistically, solar heating is only accounted for when it passes through a medium like solar water heating. Passive solar building design contributes, statistically, to energy efficiency. Even if we confine potentials to areas of human settlements, solar water heating, geothermal and ambient air or soil energy as well as biomass heat can cover the low-temperature heating and cooling energy services demand, provided that passive solar and other energy efficiency potentials are exploited to reduce energy requirements.
Unlike other RE sources, though, biomass can be used for all energy services, because it not only can be transformed into electricity and/or heat, but also into transport fuels. In assessing the potentials of RE for transport fuel, i.e. biomass from crops and agricultural residues, sufficient land and biomass resources for food production have been subtracted. The remaining technical potential is barely sufficient to cover the rising demand for transport fuels, let alone all energy demands. Here choices have to be made. While some countries may prioritise fossil fuel substitution in the transport sector for energy security reasons, others choose substitution in the electricity sector for efficient carbon mitigation - though it must be noted that not all current biofuel paths clearly contribute to mitigation.
Much of the huge RE potentials can be made available to provide electricity at cost below US$0.10/kWh
According the calculations, renewables energies have the technical potential to contribute significantly to the future energy mix. But at what cost? The common prejudice of high cost of RE does not hold true in the future.
As RE technologies mature, they become less costly and larger parts of their potentials reach lower cost categories (Figure 3) and hence become more competitive with other low-carbon technologies. Taking the entire technology portfolio, a significant part can produce electric power on site at low cost (below US$0.05/kWh). The bulk can provide far more electricity than the expected electricity consumption 2050 globally at cost below US$0.10/kWh on site.
Hydropower is already a matured and highly competitive technology, with significant undeveloped potentials remaining in Eastern and Southern Asia and in Africa.
Onshore wind energy is also well established and will have a very large low-cost potential. Significantly higher onshore wind potential exists in regions of Latin America, North America, non-OECD Europe and the former Soviet Union than in OECD Europe and parts of Eastern and Southern Asia, where the most dynamic wind development (outside the US) is currently taking place.
Costs for concentrating solar power, a rapidly maturing RE technology for electricity generation, are expected to come down by more than 50% relative to current demonstration projects. The potential below US$0.10/kWh would then amount to many times the current electricity consumption. However, the production would be concentrated in areas with very high intensity of sunlight, such as Africa and the Middle East, parts of Eastern and Southern Asia, Oceania, the south-western US, Central America and the southernmost parts of Europe. By 2050, large parts of the abundant solar photovoltaic potential will be available at costs below US$0.10/kWh in regions beyond Africa, the Middle East and Oceania. This would be cost-competitive when consumed on site.
For geothermal power generation most of the potential is in geologically active regions and the cost is expected to be below US$0.10/kWh. The costs for ocean power are still more uncertain, as the most promising technologies are still at an early stage of development. It is expected that some portion will be available at costs below US$0.15/kWh and even lower in places with strong tides and regular waves.
Modern biomass sources offer a high technical potential for electricity generation at low cost, in particular when applied in combined heat and power plants. Residues offer large low-cost opportunities in Asia, North America, Latin America and Africa, whereas the low-cost potentials from biomass crops are several times greater in non-OECD Europe, Oceania, North America and Africa.
Most of the RES power is produced relatively far from consumption centres and production profile over time does not necessarily match the demand curve over time, in particular the demand for electricity. These misalignments, however, do not pose insurmountable obstacles nor cause extreme cost additions. Grid interconnections, storage systems, mix of RE sources and better management of transmission and storage capacities as well as demand side management provide a wide scope of options to reduce the need for backup generation capacity. The additional system cost to supply electricity from RES and align supply and demand are in the order of magnitude of US cents per kWh and do not alter the competitiveness of RES significantly. Thus, another prejudice will be laid to rest through intelligent engineering.
It must be noted in the discussion on energy in a low carbon economy that renewable energy sources are competing with such technologies as fossil power stations with carbon capture and sequestration and nuclear energy. Neither of these technologies is currently available at an acceptable level of risk or technical feasibility.
The competitiveness of bio fuels depends largely on the future oil price. Ethanol from biomass will cost between US$0.25 and 0.35 (sugarcane) to US$0.6 (lignocelluloses, the next generation technology) per litre equivalent to gasoline. Biodiesel is expected to cost between US$0.4 (animal fats and vegetable oils) and US$0.65 to 0.8, when produced from residues or fast growing wood in a complex Fischer Tropsch synthesis process. They are increasingly competitive with gasoline and diesel, when oil prices pass the US$ 45 per barrel threshold.
Renewable energy can meet a high proportion of incremental energy need in the short and medium-term when combined with energy efficiency to reduce demand. This puts RE on the path to attaining high market shares by 2050.
Based on the technical potentials and their prospective costs, REN21 asked experts to assess the long-term potential share of renewable energy in each large country and major markets.
In the case of the electricity generation market renewable energy could, by 2050, contribute at least half of all electricity generation in each of the large economies. And even with significantly higher electricity demand there are cases where renewables could contribute over 90 percent.
Unlike today, the picture for 2050 will include a wide variety of RE resources contributing to power generation. Wind, biomass, CSP and solar PV – even taking into account intermittency – are expected to become equal to hydro in their importance (Figure 4). Australia may concentrate on solar and wind, Canada on hydro and wind, Russia on hydro and biomass, UK on wind and ocean energy, Indonesia, Mexico and Italy may add considerable amounts of geothermal power.
For the heat and cooling markets RE technologies can realistically achieve very high market shares by 2050. Apart from biomass, solar water heating can contribute significantly, and geothermal will be a leading resource (Figure 5). However, the large market shares can only be achieved when very energy-efficient heating and cooling systems are utilised. More than in any other sector energy efficiency works hand in hand with renewable energy in building and industrial heat energy. Combined heat and power from biomass, or biogas additions to the gas supply systems, may jointly serve electricity and heat markets.
The 2050 potential of RE is more limited in the transport fuel markets than in the electricity and heat sectors (Figure 6). In large economies when only domestic biomass is used and preferably for heat and electricity because of its higher mitigation impact, bioenergy will not be able to cover more than 5 to 45 percent of the transport fuel demand, with Brazil at the high end. Availability of biofuels for transport, of course, depends on how much of their biofuel resources countries choose to allocate to the other possible markets, i.e. electricity and heat.
Renewable energies have the potential to substantially mitigate climate change and to contribute to energy security, industrial development and employment.
With increasing scope and scale, and R&D, the costs of renewable energy technologies will come down, allowing RE to make major contributions to electricity generation, heating and cooling, and transport. From now on, RE technologies should be given priority in incremental and replacement investment.
- Source: eGov Monitor
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