Transcript Climate Goal - WRI seminar

Transitioning to Renewable Energy : A
Developed Country Perspective
Jonathan Pershing
World Resources Institute
Financing Sustainable Electricity:
Policy and Governance Obstacles
Washington, DC
Wednesday, April 21, 2004
WRI
J. Pershing, April 21, 2004
Overview
• Energy trends and projections
• Drivers for and barriers to promoting
RE – energy security, local pollution,
costs, and climate
• Policies and practices to promote RE
• Looking forward
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J. Pershing, April 21, 2004
Energy Trends – A Quick
Overview
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J. Pershing, April 21, 2004
World Primary Energy Demand
6,000
Oil
5,000
Mtoe
4,000
Natural gas
3,000
Coal
2,000
1,000
0
1970
Nuclear power
1980
1990
Hydro power
Non-hydro renewables
2000
2010
2020
2030
Source: IEA WEO 2002
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J. Pershing, April 21, 2004
Energy Production and Consumption
Source: IEA WEO 2003
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J. Pershing, April 21, 2004
We are not running out of fossil fuels
Source: IPCC, TAR, 2001
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J. Pershing, April 21, 2004
Prices come down as capacity
rises
Electric Technologies in EU 1980-1995
Electricity Cost (EUR(1990)/kWh)
10
Photovoltaics
1
1980
Biomass
Wind Power
0.1
Adv. Coal
Nat. Gas Combined Cycle
1995
0.01
1
Source, IEA, 2001
10
100
1000
10000
100000
Cumulative Installed Capacity (MW)
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Energy Investment
Projected Energy Investment Worldwide: $16 trillion from 2001-2030
E&D = Exploration and Development ; T&D = Transmission and Distribution
Source, IEA WEO, 2003
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J. Pershing, April 21, 2004
Cumulative installed OECD
solar PV capacity
Source, BP Statistical database, 2004
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J. Pershing, April 21, 2004
Cumulative Installed Wind
Turbine Capacity
Country/
Region
1997
1998
1999
2000
2001
2002
Change
(2002/
2001)
2002
share
of
global
total
Total North
America
1639
2226
2573
2752
4462
4947
10.9%
15.4%
Total Europe
4793
6553
9737
13630
17813
23832
33.8%
74.4%
Japan
17
30
68
142
357
486
36.1%
1.5%
World
7636
10153
13932
18450
24927
32037
28.5%
100.0%
Source, BP Statistical database, 2004
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J. Pershing, April 21, 2004
Annual world incremental
installed capacity (GW)
Source: IAEA and BTM Consult ApS
Source, BP Statistical database, 2004
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J. Pershing, April 21, 2004
Wind Power Installed in Europe
(End 2003)
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J. Pershing, April 21, 2004
Drivers for and Barriers to
Promoting Renewable Energy
•
•
•
•
Energy Security
Local Pollution
Cost
Climate Change
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J. Pershing, April 21, 2004
The Security Map: Gas/Oil/Coal Reserves
Proved Reserves, End 2000
66/64/256
82/19/122
558/65/230
585/684/0
117/75/61
Gas: 100 bcm
Oil: 1000 m bbls
Coal: 1000 m ton
Sources: IEA and BP
150/44/292
82/95/22
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J. Pershing, April 21, 2004
Local Pollution
(Global energy-related emissions, 1995)
900
Million metric tons
800
700
600
500
400
300
200
100
0
N20
Source: WRI Earth Trends
SO2
CO
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J. Pershing, April 21, 2004
Costs of New Technologies
Unit Size
(MW)
Plant Size
(MW)
Lead Time
(years)
Capital
Costs
($/kW)
Combustion Turbines
170
170-680
1.4
Supercritical pulverized
coal steam cycle
500
500-2,000
Pressurized fluidized bed
coal steam cycle
300
Small diesel
0.05
Large diesel
Renewable
Distributed
Generation
Lg Scale
Central Stn
Technology
O&M Expenses ($US)
Fixed
(kW-year)
Variable
(MWh)
350
5
3
5.0
1,180
20
1
300-1,200
5.0
1,300
20
1
-
0.5
400
25
2.0
0.5
600
10
Microturbine
0.05
0.5
2,000
11
PEM Fuel Cell
0.25
0.5
1,500
9
Solar PV cells
0.0002
0.5
4,000 –
10,000
1-5 kW
Wind (onshore)
1.5
2.0
800 – 1,000
13
5
Biomass gasification
25
2.0
1,700 –
2,000
45
3
Source: CERA, 2003
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J. Pershing, April 21, 2004
Energy-Related CO2 Emissions
40,000
million tonnes of CO2
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1970
World
1980
OECD
1990
2000
Transition economies
2010
2020
2030
Developing countries
Source: IEA WEO 2002
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J. Pershing, April 21, 2004
Emissions space for
stabilising CO2 concentrations
WRE CO2
Accumulated Year in which
Stabilisation CO2
global
profiles
emissions
emissions
2001 to 2100 peak
(PgC)
450
550
650
750
1000
365 – 735
590 – 1135
735 – 1370
820 – 1500
905 – 1620
2005 – 2015
2020 – 2030
2030 – 2045
2040 – 2060
2065 – 2090
Year in which
global emissions
fall below 1990
level
<2000 – 2040
2030 – 2100
2055 – 2145
2080 – 2180
2135 – 2270
Source: IPCC-TAR Synthesis Report
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J. Pershing, April 21, 2004
Policies and Practices to
Promote Renewable Energy
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J. Pershing, April 21, 2004
RE Policy Mechanisms
• Regulations that govern:
– capacity
– access to the market/electric grid
– production or purchase obligations
• Financial incentives
• Industry standards, permitting and building
codes
• Education and information dissemination
• Stakeholder involvement
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J. Pershing, April 21, 2004
Obstacles – and Solutions to the
Introduction of RE
Obstacles
Solutions
• High up-front costs
• Lack of access to
the transmission
grid
• Lack of information
• Constraining or
inconsistent
government policies
• Production tax
credits
• Feed-in tariffs
• Public awareness
campaigns
• Consistent longterm government
policies
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J. Pershing, April 21, 2004
Renewable Energy Certificates
Figure 1. What is a renewable energy certificate?
Commodity
electricity
Renewable power
generation
Environmental &
other attributes
renewable
energy
certificate
• Emissions benefits
• Fuel source
• Location of generation
• Date of generation
1
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J. Pershing, April 21, 2004
Selected OECD REC Markets
Australia
Italy
Sweden
UK
Mass.
Texas
2001
2002
2003
2002
2003
2002
Compliance
Responsibility
Wholesale
electricity
purchaser
s
Electricity
producers
(after first
100
GWh/year
)
End users
<10MW
(passed on to
electricity
suppliers)
Retail
electricity
suppliers
Retail
electricity
suppliers
Retail
electricity
suppliers
RE generation
target
9,500
GWh of
new
generation
by 2010
2% in
2002
16.9% by
2010
10% by 2010
4% by 2009
2,000 MW of
new capacity
by 2009
Eligible
resource
Biomass,
solar,
ocean,
wind,
geotherm
al, tidal,
hydro
Biomass,
solar,
wind,
geotherm
al, tidal,
wave &
hydro
Biomass,
solar, wind,
geothermal,
wave & hydro
Biomass,
solar, wind,
tidal, wave &
hydro
Biomass,
solar, wind,
tidal, &
wave
Biomass,
solar, wind,
geothermal,
tidal, wave &
hydro
1 REC =
1 MWh
100 MWh
1 MWh
1 MWh
1 MWh
1 MWh
2003 market
size
1.8 million
MWh
3.3 million
MWh
(2002)
n/a
1.2 million
MWh*
500,000
MWh
1.2 million
MWh
Year effective
Source: Burzynski, R., et al. 2003, Anna Giovinetto, Evolution Markets, March 24, 2004.
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REC Markets
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J. Pershing, April 21, 2004
Renewable Energy in the EU :
Setting Regional Targets
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J. Pershing, April 21, 2004
Key Policies: Germany
• RE feed-in law: purchase obligation with agreed price for
power generated from biomass sources (8,70 to 10.23 €cent/kWh) of 20 MW or lower, and from wind (9.1 €cent/kWh), solar (50.6 €-cent/kWh), or geothermal
sources (7.2 €-cent/kWh), as well as from hydro, landfill,
sewage or mine gas plants of 5MW or below
• 100,000 Solar Roofs Program: supports the installation
or extension of PV systems of at least 1kWp, offering
special reduction up to -4.5% of market interest rates on
loans, with a repayment period of 10 years and a 2 year
repayment holiday. The possible share of financing is up
to 100% to a maximum sum of 500 000 €. Overall
program target of an additional 300 MW PV power
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J. Pershing, April 21, 2004
Key Policies: UK
• Renewable Obligation Plan: requires licensed electricity
suppliers to buy specified portions of their purchases
from renewable sources. Targets are a percentage of
output of 3% between October 1, 2001 and March 31,
2003 (4.3% in 2004, 4.9% in 2005, 5.5% in 2006, 6.7% in
2007, 7.9% in 2008, 9.1% in 2009, 9.7% in 2010) and
10.4% by March 31, 2011.
• Offshore Wind Capital Grants Scheme: totals GBP 74
million. Key programme objective is to stimulate early
deployment of a significant capacity of offshore wind. the
government will seek to ensure swift completion, making
output from these projects available for electricity
suppliers to respect their renewable obligation.
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J. Pershing, April 21, 2004
Key Policies: Japan
• New Energy Target : 3.1% (or 19.1m kl Oil Equivalent) of new
energies in total primary energy supply in financial year 2010
(excluding hydro electric and geothermal energy). In 2000 the
corresponding figure was about 1.2%. Targets :
–
–
–
–
–
PV: 4820 MW (from 330 MW in 2000)
Solar thermal utilization: 4,390,000 kl (from 890,000 kl in 2000)
Wind: 3000 MW (from 144 MW in 2000)
Waste power generation: 4170 MW (from 1030 MW in 2000)
Biomass generation: 330 MW (from 69 MW in 2000)
• Regional Introduction of New Energy: NEDO incentive programme
for local governments providing subsidy up to 50% of the installation
cost to local public organizations, which introduce and promote PV,
wind power, solar heat, differential temperature energy, natural gascogeneration, fuel cell, wastes generation, use of waste heat,
production of wastes fuel, clean energy car, energy saving
measures. Budget - 2000: 8.72 , 2001: 13.79 billion yen.
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J. Pershing, April 21, 2004
Renewable Portfolio
Standards (RPS)
Source: CO2e.com, 2004
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J. Pershing, April 21, 2004
Wind in the USA
With today's wind turbine technology,
wind power could supply 20% of US
electricity demand using only 0.6% of
the land of the lower 48 states (and
less than 5% of this land would be
physically occupied by wind
equipment)
Source: Pacific Northwest Laboratory , 1993
WRI
J. Pershing, April 21, 2004
Net Metering Programs
*
25 kW
50 kW
100 kW
*
25 kW
*
40 kW
20 kW
25/100 kW
25 kW
varies
*
30 kW
*
1 MW
*
40
kW
25 kW
10/400 kW
no limit
*
1,000 *
kWh/mo.
varies
10/25 kW
10 kW
100 kW
VT: 15/150 kW
NH: 25 kW
MA: 60 kW
CT: 100 kW
RI: 25 kW
varies
varies
10 kW
100 kW
NJ: 100 kW
DE: 25 kW
MD: 80 kW
D.C. 100 kW
25 kW
25/100
kW
10/100
kW
*
50 kW
25/100
kW
*
varies
10 kW
State-wide net metering rules for all utilities
*
State-wide net metering rules only for certain utility types (e.g., IOUs only)
In these cases, other utilities (e.g., municipal utilities, cooperatives) may have different
rules.
Net metering offered by one or more individual utilities
# kW indicates limit on system size; in some cases, limits vary by customer type.
Source: Database of State Incentives for Renewable Energy (DSIRE)
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State GHG Summary
Source: AEP
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Looking Forward
WRI
J. Pershing, April 21, 2004
World Non-Hydro RenewablesBased Power Generation
1,600
Share in total electricity generation (%)
4.4%
1,400
1,200
TW h
1,000
3.4%
800
600
2.6%
400
1.6%
200
1.4%
0
1990
Biomass
2000
W ind
Source: IEA WEO, 2002
2010
Geothermal
2020
S olar
2030
T ide/W ave
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J. Pershing, April 21, 2004
Energy Supply: The Shell Scenario
Sustained Growth Scenario
exajoules
Surprise
1500
Geoth.
Solar
Biomass
1000
RE
Component
Wind
Nuclear
Hydro
500
Gas
Oil & NGL
Coal
Trad Bio.
0
1860
1880
1900
1920
1940
1960
1980
2000
2020
2040
Source: Shell International Limited.
2060
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J. Pershing, April 21, 2004
2000
0
2000
Enhanced RE Scenario
2005
2010
2015
2020
2025
2030
(G-8
Report,
2001)
Non-OECD On-Grid
Total
(5%)
system
cost cost
= 4679
billion billion
US$
Totaldiscounted
discounted
(5%)
system
= 9837
14000
35000
US$
Total discounted (5%) system
20000
12000
30000
10000
8000
[TWh]
[TWh] [TWh]
25000
6000
20000
4000
15000
2000
10000
0
2000
5000
2005
2010
2015
2020
2025
OECD
Total discounted (5%) system cost = 56 billion US$
2030
geothermal
18000
solar thermal
PV/H2/FC
16000
solar PV
14000
wind
hydro small
12000
bio fuel cells
bio IGCC
10000
bio/waste
8000fuel cells
gas
gas CC
6000
coal IGCC
conv.
4000 coal
oil
2000
nuclear
hydro
0 large
2000
2005
2010
2015
Non-OECD O
WRI
Total discounted
(5%) system
J. Pershing, April 21, 2004
Conclusions
• Energy demand growth is continuing, and will
require significant new investment
• RE can fill part of this demand – but prices and
regulatory barriers are keeping it from rapid
market penetration
• Policy mechanisms to overcome barriers are
emerging in the developed world, with key
players initiating major efforts; RE growth trends
mirror these successes
• Ultimately, the developed country RE future is
bright only if policies can be sustained over a
long period
WRI
J. Pershing, April 21, 2004
The Shape of the Future?
WRI
J. Pershing, April 21, 2004