World Shifting Towards Renewable
The cost of electricity
from wind and solar power
plants has decreased over the years. In some markets renewable generation is now cheaper than coal or natural gas. Several companies are signing power purchase agreements for solar or wind at prices below that of natural gas. Recent analyses show that even without subsidies, alternative sources can often compete with traditional sources.
According to a study by world's leading financial advisory and asset management firm Lazard, the cost of utility-scale solar energy is as low as 5.6 cents a kilowatt-hour and wind is as low as 1.4 cents. In comparison, natural gas comes at 6.1 cents a kilowatt-hour on the low end and coal at 6.6 cents. Without subsidies, the firm's analysis shows, solar costs about 7.2 cents a kilowatt-hour at the low end and wind at 3.7 cents.
According to the Global Wind Report 2014 released by the Global Wind Energy Council (GWEC), Electricity generated through wind power will grow from the present 318 GW (2013) to 4,042 gigawatts by 2050 and wind power will satisfy 30 percent of the global demand for energy. The report was prepared considering that renewable energy would gain more importance arid carbon emission policies would become an international commitment.
Clean energy including hydro now produces 22% of world's electricity. Hydro and other green technologies could be producing 26% of the world's electricity by 2020, the International Energy Agency (IEA) said in its third annual Medium-Term Renewable Energy Market Report. Excluding large hydropower (over 10 megawatts) renewable now account for nearly a tenth of global power generation. On current trends they will make up a fifth by 2030. On the contrary nuclear energy's share of global power production has declined steadily from a peak of 17.6 percent in 1996 to 10.8 percent in 2013.
Technological advances that can convert higher percentages of sunlight into energy have made solar panels most efficient. Economies of scale have driven down their costs. Price of silicon became so low that from 2007 to 2014 the price of crystalline silicon modules dropped from $4 per watt to $0.50 per watt, ending the development of thin films. The cost of battery storage, a vital part of the future of the solar-power, has fallen by 60% since 2005. The overall cost of a solar-power system is down by 75% since 2000.
Global investment in clean energy increased by 16% in 2014. China was the leader, with investment rising 32% ($90 bn), with the US second, up 8% (%52 bn), and Japan up 12% ($4lbn). Canada, Brazil and India witnessed significant rises too to about $9 bn. But in Europe despite the increase in offshore wind, investment edged just 1% higher to $66 bn. Solar attracted over half the total funding for the first time, investment amounted to $150 billion. Solar investment rose by 25% in 2014. Wind power rose 11% to comprise a third of all investment. Much of the increase is accounted for by China. Wind energy investment rose to nearly $100 bn, while investment in so-called "energy smart technologies" rose 10% to just over $37 bn. On the other hand bio-fuels, biomass and waste-to-energy, and small hydro-electric projects saw investment levels fall. As clean energy gets ever cheaper, the money invested in 2014 bought almost double the clean electric capacity than in 2011. This development directly reflected in world carbon emission.
The IEA informed that in 2014 carbon dioxide emissions from the energy sector leveled off in 2014, first time in 40 years, without being linked to an economic downturn or recession. Global emissions of carbon dioxide stood at 32.3 billion metric tons in 2014, unchanged from the preceding year. According to IEA. changing patterns of energy consumption in China and OECD countries are the cause of this halt in emissions growth. Maybe this is hope against hope.
[At the end of 2014 hydro provides 301.83 GW. Wind 114.76 GW, Solar 26.52GW and nuclear I9.88 GW. http: www.statisia.com/statistics3()2l9l:china-powiir-generation-insialled-capaciiy-by-source]
China has an exceptional wind resource. It is estimated China has about 2.380 gigawatts (GW) of exploitable capacity on land and 200 GW on the sea. Northern and western China holds large potential for wind energy, especially in Xinjiang, Inner Mongolia, Gansu and Tibet. Wind power alone could provide electricity for all of China if the country overhauls its rural grids and raises the subsidy for wind energy. The windiest areas are sparsely populated regions where electricity demands are low. High voltage transmissions lines are needed to connect these areas with electricity consumers in rapidly growing eastern China.
In 2010, China became the largest wind energy provider worldwide. Researchers predict that the price of solar electricity will drop by half within 10 or 15 years, so that the relative industries will become more profitable. China has become the world's largest investor in solar and wind energy. China possesses significant wind and solar energy resources, so a power network based on renewable energy sources has the potential to become profitable very quickly.
China's wind power capacity will reach 200 GW, 400 GW and 1,000 GW by 2020, 2030 and 2050 respectively. Based on this target, by 2050 China's investment in the wind power sector is expected to reach about US$1.9 trillion and wind power projects are expected to address 17 percent of the power demand in China. Renewable energy will supply 40 percent of the energy market by 2050. Earlier the National Development and Reform Commission (NDRC) set a 2010 wind energy target of 5 GW, which the country surpassed in 2007.
China’s non-fossil fuel generation capacity currently stands at 450GW, approximately a third of China's total installed generation capacity of I360GW. In 2014, China increased its power generation capacity by 103.5 GW, 1.28 GW more than that of the preceding year. Non-fossil fuel power sources account for over 57 GW out of the total addition in 2014 which means greater generation of electricity from renewable sources, such as hydropower. solar and wind, and less burning of coal. China's chief source of non-fossil energy remains hydro power, installed capacity of which reached 302 GW in December 2014. Hydropower capacity increased by 21 GW in 2014. expansion was 9.11 GW less than the amount added during 2011. China added 5 new nuclear reactors last year (2014) comprising 5.47 GW of the total generating capacity of 19.88 GW. Wind power received the greatest amount of investment in 2014. China's grid-connected solar power capacity also posted an impressive increase in 2014 to reach 26.52 GW by the end of December 2014. By ihis year end (2015) it is going to be the largest in solar power in the world. In the recent past it is making such a big leap forward in increasing these two renewable sources' capacity that by the end of 2015 it's wind capacity and within three four years it's solar capacity would at least be double that of the country that would be second largest in wind and solar capacity respectively, namely USA and Germany.
In 2009, while drafting its 12th five-year plan, China had envisioned a solar goal of 5 GW. That too by 2015. It revised its plan repeatedly and by the end of 2015 it is going to increase its solar capacity nine times of that initial goal. On 16 March the National Energy Administration (NEA), released the official solar PV installation target for 2015 of 17.8 GW, thus replacing a 15 GW target earlier in late January. 17.8 GW is 27% higher than the 2014 target of 14 GW. This aggressive target of I7.8GW demonstrates the regulator's determination to deploy solar power across the country. 35 GW target was set in the current 12th Five-Year-Plan for Solar Development (2011-2015). By the end of 2014 China's total installed PV power generation capacity amounted to 28.05 GW, so just 7 GW shy of what as a minimum is expected under the plan. Assuming the I7.8GW will indeed be realised, by the end of 2015 China would then be home to 45 GW of installed PV capacity thereby not only exceeding its 35 GW target by a good 30%, but as well overtaking Germany's position in terms of installed capacity, which at the end of 2014 amounted to approximately 37.6GW.
As part of its 13th five-year plan China is considering a solar target of 1200 GW by 2020. A recent study published by Energy Research Institute and the State Grid Energy Research Institute expects that, under a high-penetration scenario, renewables will meet 57% of its power needs in 2030, growing to 86% renewables by 2050.
But the country would still need to install more than 30 GW of PV capacity each year. Apart from the investment of $30-35 billion per year, this would require vast tracts of suitable land and rooftops and sorting out its grid infrastructure woes.
China's dependence on coal dropped for the first time in a decade in 2014. China led in renewable with investments of $89.5 billion, accounting for almost one third of money spent on clean energy in the world. China is the driving force in bringing down solar manufacturing costs by starting mass-production of solar panels. Chinese government plans to boost capacity to 200 GW by 2020. China seems on track to meet its target well ahead of that time. China's new anti-pollution policies are making the big difference. China is seeking alternative to coal which makes up almost two-thirds of its energy consumptions.
Japan has always troubled with energy policy due to lack of fossil fuels of its own. But the public's desire to abandon nuclear power in the wake of the 2011 Fukushima disaster has made the challenge even more severe. The government wants to increase renewable from 10 per cent of its energy mix to 24 per cent by 2030 to reduce its reliance on gas, coal and nuclear.
At present, the top renewable energy source in the country is solar power. Japan's Photovoltaic Energy Association (JPEA) issued a strategy document outlining how solar could reach 100 GW of installed capacity by 2030. It states that by 2020, Japan could target 65.7 GW of solar capacity. By reaching 100 GW by 2030, the country would be meeting around 11.2% of its overall power generation demand with PV with residential solar now costing less than half of 2010 prices and comparing favourably to average household electricity prices. In Japan residential solar power production costs have more than halved since 2010 to under $0.25 (30 yen) per kilowatt-hour, making it comparable to average household electricity prices. According to the Japan Renewable Energy Foundation (JREF), solar power is profitable in Japan. Japan's electric power companies can only delay developments but can't stop it increasing by trying to protect their fossil fuel and nuclear plants.
The Japan Wind Power Association (JWPA) now targeting 75 GW of installed wind capacity by 2050. Under the newly set target, 37 GW of offshore wind power is expected to be installed and the rest is onshore wind power.
Japan has 30GW of potential for geothermal power but most of the resources are located in national parks. Any hint of using them produces a fierce backlash from hot spring resorts who think power stations will steal their hot water. So geothermal produces a tiny fraction of Japan's electricity and analysts are not optimistic that it will ever be much more. However after a 20-year lull, new geothermal plants are under constrution.
Japan has retired nearly 2.4 GW of expensive and polluting oil-fired energy plants by early 2015 and switching to alternative fuels. Japan's 48 nuclear reactors have been closed in the wake of the 2011 meltdovvn at the Fukushima Power Plant. Since then renewable energy capacity has tripled to 25 GW, with solar accounting for more than 80 percent of that.
[Electricity Generation (as on July 9, 2015) Thermal 1,91,264 GW (69.9%). Hydro 41.997 GW (15.3%), Nuclear 5.780 GW (2.1%), Other Renewables 35.777 GW (13.3%). Total 2,74,818 GW (100%)—http://powermin.nic.in/power-sector-glance-all-india]
Coal-dominated India, with its plentiful sunlight, is also planning for solar in a big way. By the end of this year India may break into the top 10 solar power markets, as the country has now crossed 4 GW of installed solar power capacity, with a significant increase caused by the country's National Solar Mission. India plans to increase solar capacity to 100 GW and wind capacity to 60 GW by 2022. Wind capacity increased to nearly 24 GW.
In June 2015, the Indian government raised the solar power generation capacity addition target by five times to 1,00,000 MW by 2022, which will entail an investment of around Rs 6 lakh crore. The original target under the mission was 22 GW by 2022. The target will principally comprise of 40 GW (solar) rooftop and 60 GW through large and medium scale grid connected solar power projects. India had an operational solar power capacity of around 3 GW when the upgraded misson targets were announced earlier in 2014.
In the first phase, the Government of India is providing Rs 15,050 crore as capital subsidy to promote solar capacity addition in the country. This capital subsidy will be provided for Rooftop Solar projects in various cities and towns, for Viability Gap Funding (VGF) based projects to be developed through the Solar Energy Corporation of India (SECI) and for decentralized generation through small solar projects.
As part of its Union Budget 2015-2016 India aims to install 60 GW of wind power capacity and 100 GW of solar power capacity by 2022. The government is also planning to launch the National Wind Energy Mission which would accelerate the development of wind energy projects and open the offshore wind energy sector as well. Imported coal is the next most expensive fossil fuel to gas, and is also projected to account for 18% of India's total generation, higher than India's target of 15% of generation from renewable energy by 2020. Compared to imported coal, the cost of wind power is already competitive, thus requiring no additional support, and the cost of solar power will be competitive by 2019.
In absence of any subsidies, wind power is already cheaper than the total cost of power from a new built imported coal plant, at Rs 5.87/kWh for electricity from wind power and Rs 6.81/kWh for electricity from imported coal. As the costs of installing solar power continue to decrease; solar power will become competitive with power from imported coal by 2019 and will require some govvrnnent support from 2015 to 2019.
India will add 4 GW wind energy capacity every year over the next 5 years, requiring a total investment of over $15billion. The feed-in tariffs for wind energy projects has declined significantly and were fast approaching grid parity which would attract fresh investors to the sector. The Indian Wind Turbine Manufacturers Association expects that 3.5 GW capacities would be added in this financial year (2015).
In Australia, coal still contributes more than 70 percent of electricity generation. The fact that the nation has abundant proven supplies of low-cost thermal coal. So Australian government is resisting renewable's growth. Poland also has a substantial coal industry, it is also resisting renewables growth. The Greek government has also commissioned a new brown coal-fired power plant this year and warns the intermittent nature of wind and solar endangers the country's energy security. Meanwhile; Australia is set to launch a new debate on the future of nuclear energy.
Advocates argue, price of wind power has fallen to as little as 3 euro cents a kilowatt hour, less than half its price a decade ago. The cost of solar photovoltaic panels is also reducing rapidly, from about 56 kWh a decade ago 11/kWh. Australia has abundant sources of wind and solar compared with Germany, where sunlight hours are reduced to as little as an hour in midwinter. But investment in large-scale renewable energy has slumped 90% over the past year amid uncertainty about the target. Labor accused the Coalition of trying to include the burning of wood waste as a renewable energy source. The renewable energy target (RET) mandates that 41,000 gigawatt hours (GWh) of Australia's energy must come from renewable sources such as solar and wind by 2020.
The Tony Abbott government has planned to cut the renewable energy target by 20%. A 33,000 GWh would mean 25% of Australia's energy coming from renewable sources by 2020. The Coalition initially said it wanted to reduce the RET due to concerns that it pushed up electricity prices.
Labour would vote for the 33,000 GWh target, with no change to the rooftop solar scheme for households, but it wouldn't support the burning of wood waste. Under the changes, the amount of renewable energy will rise from about 16 per cent this year to more than 23 percent in 2020.
[Electricity Generation, 2014, Coal 39%, Natural gas 27%, Nuclear 19%, Hydropower 6%, Other renewable 7% (Wind 4.4%, Biomass 1.7%, Solar 0.4%,Geothermal 0.4%), Petroleum 1%. Other gases < 1%. Over the decade 2004-2014, the largest increases in electrical generation came from natural gas (2014 generation was 412 billion kWh greater than 2004), wind (increase of 168 billion kWh) and solar (increased 18 billion kWh). Over the same decade, annual generation from coal decreased 393 billion kWh, and petroleum decreased 90 billion kWh. http://'www.eia.gov/tools'faqs.;faq.cfm' .'id=427&t=3]
The US Department of Energy (DOE) projected that wind turbines could supply as much as 35 percent of US electricity by 2050. A report by the DOE, "Wind Vision : A New Era for Wind Power in the United States" draws a roadmap for how carbon-free wind power can become one of America's leading sources of energy. The report says that up to 113 gigawatts of new wind power capacity can be installed nationwide by 2020 and up to 404 gigawatts by 2050. It would mean a I percent increase in consumer electricity costs before 2030, shifting to a 2 percent cost savings by 2050 as more wind farms come online. If wind power expands that much, US greenhouse gas emissions can be reduced by about 14 percent.
A study published on April 7, 2014, by Rocky Mountain Institute, an esteemed think-tank, predicts that by 2030, the average monthly bill of domestic solar system with battery storage in USA will be 14th less than that of grid electricity. And whereas most commercial customer depend entirely on the grid today, they will need to take only a quarter of their power from it by 2030—and less than 5% by 2050.
Meanwhile utility scale PV prices have dropped from $3.90 per watt in 2009 to $ 1.85 per watt in 2014. And residential PV system prices are 28 percent less than they were only three years ago. Wind power has seen a huge drop in cost.
But every year, the Energy Information Administration (EIA) releases a report (Annual Energy Outlook) on the future of energy in America. The report routinely overestimates the cost of wind and solar energy and underestimates the future price of fossil fuel, which means greater focus on increasing conventional energy sources such as natural gas.
Predictions that natural gas prices will be low can make power plant developers away from choosing renewable resources. But in reality the rate of installation of solar, wind, and other renewables has greatly increased. Solar Energy Industries Association (SEIA) predicts that when the solar investment tax credit (ITC) expires in 2016, the utility sector of the industry will plummet. The failure to extend the ITC would be a huge economic blow for the industry, but SEIA was optimistic that the tax credit could be extended and advanccments in technology, lower prices, and consumer demand and climate change with growth. I will eventually help solar industry to bounce back and resume its growth. Solar accounted for one-third of new generating capacity. Only natural gas was ahead of solar
A recent US Department of Energy analysis on wind power finds that wind will be cheaper than natural gas within a decade even without a federal tax incentive. Wind power prices have dropped by 58 percent over the last five years. It now supplies more than 4.5 percent of the USA's electricity, up from only 0.3 percent 10 years ago. In several locations around the country, wind power is now the cheapest form of electricity. And in a couple of states like Iowa and South Dakota, wind provides more than 25 percent of all electricity.
About eight years ago President Bush's Emergency Economic Stabili-zation Act provided an eight-year extension of the Investment Tax Credit for solar, wind (not big wind) and other renewable energy technologies that gave a 30 percent tax credit to qualifying projects. But tax credits are an inducement for new construction only if a project owner has a sizeable tax bill—and that's often not the case with renewable energy plants. So the standard practice was for a plant developer to seek out tax equity, often a big financial institution, which can buy the tax credits, providing cash that can help build the project.
Recognizing the problem, in February 2009 the Obama administration and the Congress, made Section 1603 as part of the new president's big stimulus package. Section 1603 allowed project developers to forego their Investment Credit and simply get a lump sum payment from the Treasury once their projects were up and running. The Production Tax Credit for wind was also extended as part of this legislation, and projects eligible for the PTC weee allowed the option of taking the TIC. According to the Treasury Department, as of October 15, 2014, the programme had paid out $23 billion to 98,816 projects valued at $81 billion. The 1603 Program had supported significant deployment of new renewable power capacity. And it was especially valuable in encouraging both small projects and first-time developers. The US residential sector added 1.2 GW of capacity in 2014, marking its first time surpassing 1 GW. Residential PV saw 50 percent or higher annual growth for three consecutive years. The utility sector added nearly 1 GW annually over the past several years. In 2014, 3.9 GW of utility-scale PV projects came online. Today the US solar industry has more employees than tech giants Google, Apple, Facebook and Twiter combined. That success, he added, has come in part from the 9-year-old investment tax credit for solar power. The USA now has 20 gigawatls of installed solar capacity and helping to reduce harmful carbon emissions by 20 million metric tons a year. The ITC has been a huge success for both the economy and environment.
In just five years, the US PV market which does not include concentrated solar plants—has witnessed a fourfold expansion, from an estimated $3 billion in 2009 to $ 13.4 billion last year. Moreover, solar accounted for 32 percent of the nation's new generating capacity in 2014, beating out both wind energy and coal for the second consecutive year. Only natural gas constituted a greater share of new generating capacity. But the industry's primary federal support—the 33 percent investment tax credit (ITC)—is set to expire at the end of 2016, effectively shifting the burden of solar fully to developers and consumers of clean power.
In this situation industry officials forecast a continued growth in US solar markets over the near term, with a projected 31 percent growth target for 2015. The growth will be fuelled by falling costs for solar panels and modules, favourable political and regulatory environments, and increased access to low cost capital.
President Obama had unveiled an ambitious plan to reduce greenhouse gas emission from the country’s coal-burning power plants. By 2030 carbon pollution from America's power plants will be reduced by 32 per cent, compared with 2005 levels or by 40 percent from 2008 level. This means keeping 870 million tons of carbon dioxide pollution off the atmosphere. It is equivalent to taking 166 million cars off the road—Obama further said, the only reason but China is now looking at getting serious about its emission is because they saw that we were going to do it too.
In the USA day by day gas power station is replacing coal powered electricity generating plants. Renewables are also increasing steadily. Efficiency of nuclear power plants have been increased. Overall efficiency of electrical appliances have been increased greatly. On the oilier hand in the transport sector electric and hybrid cars are forthcoming in the market. As a result of all these factors carbon emissions have been remarkably reduced in last couple of years.
By this time in Bedford, Massachusetts, a new technique of making silicon wafers for solar pannels is being developed. 1366 Technologies is the company behind the new method of wafer fabrication. The company is melting the silicon in specially built ovens and recasting it into thin wafers for less than half the cost per wafer or a 20% drop in the overall cost of a crystalline silicon module. 1366 hopes to begin mass production in 2016. Maybe in next few years, this wafer will allow solar to be as cheap as coal and will drastically change the way we consume energy.
In OECD economies, efforts to promote more sustainable growth, including greater energy efficiency and more renewable energy, are producing the desired effect of decoupling economic growth from greenhouse gas emissions. Five European countries including Denmark and Germany have already met their renewable energy targets five years ahead of schedule. Bulgaria, Estonia, and Sweden have all surpassed the required goal of 20 percent renewable energy by 2020, mandated by the EU for each member country.
The total installed power capacity of Denmark in 2014 was about 13 GW. Its wind capacity became 4.84 GW. The rest come from natural gas, coal and oil.
Danish are the pioneer of the modern wind-power industry and are above 40 percent renewable power on their electric grid, aiming toward 50 percent by 2020. Denmark aims to end the burning of fossil fuels in any form by 2050—not just in electricity production but in transportation as well. The political consensus here is to keep pushing but unanimous.
But as more of these types of power sources push their way into the electric grid, they cause power prices to crash at most profitable times of a day. That makes conventional power plants, uneconomical to run. Yet those plants are needed to supply backup power for times when the wind is not blowing and the sun is not shining. So electricity suppliers in Denmark (and in Germany) are on the edge. They have applied to shut down unprofitable power plants but governments are resisting, afraid of having deficit some time with little wind. The governments have offered short-term subsidies.
Not only in Denmark, throughout Europe, governments have come to the realization that electricity markets are required to be redesigned. A reform would have to attach a market price to standby capacity. The Danish climate minister thinks of real-time pricing of electricity—if the wind is blowing vigorously or the sun is shining brightly prices would fall sharply, but in times of shortage they would rise just as sharply. Denmark is installing more smart meters and smart appliances able to track those prices automatically. Demand would adjust smoothly to the available supply. If Denmark can figure out a proper design for the electric market, it has another big task—banish the fossil fuels out of transportation by 2050.
Electricity capacity of Germany. 2014, Coal 47.38 GW, Gas 28.30 GW, Solar 38.87 GW, Wind 37.80, Nuclear 12.07 GW, Biomass 8.79 GW, Hydro power 5.59 GW [https://www.energy-charts.de/power_inst.htm]
Collectively, renewable energy resources supplied more electricity in Germany than any other category last year. Wind, hydro, solar and biomass accounted for 27.3 percent of German electricity generation in 2014. Even then a troubling increase in coal combustion, hence carbon dioxide (CO2) emissions, had been recorded in recent years because, Germany carried out the process of decommissioning of its 22 nuclear power plants. Utilities opted to burn more lignite coal to make up for the shortfall. Natural gas is much more expensive in Germany. Hard coal and gas are the losers in the power mix. Lignite-fired power plants, on the other hand, are still producing at a high level. Germany pushes to bridge a gap between its current emissions levels and its ambitious 2020 target. German plans to drive another 22 million tonnes of emission reductions from its brown-coal power plants are being opposed by unions worried about job losses.
The European Union has set a series of binding renewable energy targets for all of its members. The goals are about 35% of Europe's electricity is to come from renewable sources by 2020. But Germany goes much further. By 2025, Germany aims to produce 40%-45% of its electricity from renewable sources, rising to at least 80% by 2050 and that too without nuclear power. Ms Merkel, who ordered Germany's accelerated exit from nuclear power after the Fukushima disaster in 2011 has declared the Energieivende (energy revolution) both a major contribution in the battle against global warming and a historic step toward ending the world's reliance on nuclear power. One government estimate projects the Energiewende by 2040 to cost about $ 1.4 trillion, or almost half of Germany's GDP and nearly as much as the country spent on the reunification of East and West Germany. Feed-in tariffs for renewables in Germany are running at more than $30 bn a year, paid by households and businesses that are not in the trade-exposed sector. The intermittent capacity of renewables is also obliging substantial investments in the Germany electricity grid.
Average electricity prices for companies have jumped 60% over the past five years because of costs passed along as part of government subsidies of renewable energy producers. Prices are now more than double those in the US. About three-fourth of the US companies operating in Germany said the Energiewende had made the country a less attractive place for business, according to a poll by the US Chamber of Commerce. And for the first time since 2008, German companies cited rising overall costs at home as a motivation to invest abroad in a recent survey by the German Chambers of Commerce and Industry. The German government says, Once Germany's renewable infrastructure is complete, electricity prices should fall. The government also argues that by establishing German industry as the leader in green technology, the Energiewende will give German business another lucrative export, pointed to eventual technological advances in solar and wind power generation, grid management systems and power storage technologies.
No country has pushed harder than Germany to find a solution to global warming. Wind turbines are sending as far as 60 miles from the mainland inside sea stretching as high as 60-story buildings. The price tag of up to $30 million per operating turbine. To induce utilities to go forward, the government has had to guarantee them power prices of several times the market rate. They expect that the costs of harnessing offshore wind to drop sharply as the market grows over the coming decade. The German people are paying significant money. Polls suggest it is a burden they are willing to carry. It's their gift to the world. The Germans were not buying power—they were buying renewable price decline.
Worldwide, Germany is seen as a model for energy transition. By creating huge demand for wind turbines and solar panels, Germany has helped inducing Chinese manufacturers into the market, and as a result costs are going down steadily. Germany has spent more than $140 billion on its programme, which resulted in dangling guaranteed returns for farmers, households, businesses and local cooperatives willing to install solar panels, wind turbines, biogas plants and other sources of renewable energy. The plan is paid for through surcharges on electricity bills that cost the typical German family roughly $280 a year. The Programme has expanded the renewable market and created huge economies of scale, with worldwide sales of solar panels doubling about every 21 months over the past decade, and prices falling roughly 20 percent with each doubling.
To encourage the expansion of green power production, the government guaranteed prices for electricity fed into the grid from renewable sources. The price guarantees, which vary depending on when the system was installed and its generating capacity, are binding for 20 years. The government passes the subsidy cost on to consumers in as surcharge. While the flood of new energy sources has lowered market prices for electricity, consumer prices have actually increased as the surcharge has risen to make up the difference between the market and government guaranteed prices. The renewable energy surcharge levied on German households and businesses has nearly tripled since 2010 and now accounts for about 18% of a German household's electric bill. All told, the subsidies amount to about 24 billion a year. The incentives, introduced in 2000, have worked to increase renewable-energy production. Wind turbines now dot the horizon in almost every corner of the country. Farmers and suburbanites from Bavaria to Berlin have installed solar panels on their barns and homes to earn extra money from the government subsidy.
Wind and sunshine is not abundant at all in Germany. Even then solar panels supply 7 percent of power and wind turbines about 10 percent. Wholesale power prices have crashed time and again during most profitable times of day. The big utility RWE announced a $3.8 billion annual loss 2014. Renewable power is intermittent in supply, so German utilities have had to dial their conventional power plants up and down rapidly to compensate. The plants are not necessarily profitable when operated this way, and the utilities have been threatening to shut down facilities. So Germany is thinking for regular payments to persuade utilities to keep some fossil-fuel power plants on standby for times when renewable sources lag.
This may require changing the old rules of electricity markets and initiating techniques like paying utilities extra to keep conventional power plants on standby for times when they don't get wind or sun shining. Electricity companies make a lot of their money at times of day when demand for power, therefore power prices are high. Solar power, even a small amount, could be disruptive, falling wholesale prices during those peak periods. But over the past decade, the Germans set out to lower the cost of going green by creating rapid growth for renewable power. The situation is further complicated by the government's determination to get rid of Germany's nuclear power stations over the next decade. The government is now trying to slow down the transition, but the public is apprehensive that they are trying to pull the brakes of the energy transformation.
Meanwhile, a study finds that Germany is likely not only to miss its carbon reduction target by the end of this decade, but also the target for the share of renewable. The study conducted on behalf of German renewable energy association BEE says. Energiewende is clearly still an electricity transition, not a true energy transition. Current policy still lacks a coherent strategy to tackle all sectors by 2050. The German Energiewende consensus has to be renegotiated continually. And while the targets for 2050 are set, German engineering and political masterminds don't know how to get there anymore. In the transport sector a considerable increase in efficiency in the short and midterm, including a modal shift and changes in mobility behavior is urgently required, people should begin combining different modes of transport (trains, public transportation, cycling & walking, and rental cars / car-sharing) rather than just taking their own car. In the heat sector, the current restrictions for biomass (particularly the tiny target of 100 MW annually) will slow down renewable heat. In no scenario does Germany come even close to its target for the share of cogeneration. Renewable energy currently only makes up 11 percent of total energy supply. And that figure is only growing slowly.
Techniques to manage demand have been in limited use for decades, but new technologies are enabling a far more ambitious approach. Apple and Google are investing billions in businesses designed to capitalize on the new opportunities, such as by helping homeowners manage their power use with devices like digital thermostats. Electricity prices, instead of being averaged over a month, could theoretically vary in real time, at least for willing customers. Price spikes would encourage conservation. On the contrary, smart chips built into appliances like dishwashers or water heaters could switch the devices on when power was plentiful and prices low.
But the world is building more and more power plants fueled by solar, wind, and hydro, while the pace of fossil-fuel plant additions is slowing down. Countries around the world added more electric capacity from hydropower, solar wind, biomass, geothermal and even nuclear in 2013, than they did from oil, gas, and coal. Wind and solar power's growth is increasingly driven by its competitive pricing, enhancing energy security, price stability, the need to address the choking smog that is increasingly making major urban areas in the developing world especially unlivable in China and India. The cost of wind and solar has been dropping dramatically all over the world, comprising around 6-9% of global electricity demand by the year 2020 and at least 8% to a high of 19% by the year 2030. Offshore wind is expected to grow significantly with a projected increase of 11-15 GW this year and 58-65 GW in the year 2020. In addition, wind turbines are becoming cheaper and more reliable. Very soon the fraction of energy we get from low-carbon sources will start expanding, may be this year or next year. The traction of energy from fossil fuels will start shrinking. All told, fossil fuels made up 87 percent of the world's primary energy consumption in 2013. By contrast, low-carbon sources including hydropower, wind, solar, biomass and nuclear made up just 13 percent.
That ratio hasn't changed since 1999. In other words, the world's energy supply hasn't been cleaner for 14 years. Clean energy sources have been raising over that time. Coal, natural gas and oil have more than kept pace with the growth of clean energy. In 2013, non-hydro renewable energy consumption grew by 38.5 million tons of oil equivalent (TOE ). Coal consumption grew by 38.5 million tons of oil equivalent (TOE) more than twice as much.
Still, if the world wants to avoid drastic global wanning, then it's not enough to have some progress in clean energy in some countries. True gigantic shift is needed—the proportion of energy we get from carbon-free sources would have to rise from 13 percent to something like 90 percent or more by this century.
Electricity and heat were only responsible for about 42 percent of global CO2 emissions from fuel combustion in 2012. For clean energy to truly win the race, it will have to make inroads in other sectors as well, particularly transportation. Not just electricity but also cars and airplanes and heating are affordable for global warming. Meanwhile, the price of batteries for electric cars has been plummeting much faster than expected and fuel cell run cars are entering the market with a goal to be cheaper than battery driven cars. Herein lays a little hope.
Vol. 48, No. 13, Oct 4 - 10, 2015