Transcript Renewable Energy Perspectives

Renewable Energy
Perspectives
Roberto VIGOTTI
Chair Renewable Energy
Working Party
International Energy Agency
© OECD/IEA - 2007
INTERNATIONAL
ENERGY AGENCY
Mapping a Better Energy Future
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The Energy Future Absent New Policies:
 Security of oil supply is threatened
 Gas security is also a growing concern
 Investment over the next decade will lock in technology that
will remain in use for up to 60 years
 CO2 emissions by 2050 will be almost 2.5 times the current
level!
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On current trends, we are on course for an “unstable, dirty
& expensive energy future” as the carbon intensity of the
world economy will increase
A New Energy Revolution….
Cutting Energy Related CO2 emissions
70
60
Gt CO2/yr
50
40
30
20
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10
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CCS industry
and transformation 9%
CCS power generation 10%
Nuclear 6%
Renewables 21%
Power generation efficiency
& fuel switching 7%
End-use fuel switching 11%
End use electricity
efficiency 12%
End use fuel
efficiency 24%
0
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Improved efficiency and decarbonising the power sector could bring
emissions back to current levels by 2050. To achieve a 50% cut we would also
have to revolutionise the transport sector.
The priorities areas
Strategies for key technologies to make a difference:

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
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
strong energy efficiency gains in transport, industry and
buildings;
electricity supply becoming significantly de-carbonised as
the power generation mix shifts towards, natural gas, coal with
CO2 Capture and Storage (CCS), renewables and nuclear
power,
increased use of biofuels for road transport
Electricity Generation Scenarios
60000
50000
Other renewables
Solar
Wind
Bio-CCS
Biomass
Hydro
Nuclear
Gas-CCS
Gas
Oil
Coal-CCS
Coal
TWh
40000
30000
20000
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10000
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0
2005
Baseline 2030
Baseline 2050
Advanced Technologies
2050
50% CO2 emission
reduction 2050
Renewables would have to play a particularly significant role in
the power sector, increasing from 18% today to nearly 50% by
2050. Non-hydro renewables show the highest growth rate.
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No single solution….a portfolio of
technologies is required
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Average Annual Power Generation Capacity
Additions to achieve a 50% cut in emissions,
2010 – 2050
Coal-fired with CCS
38 CCS coal-fired plants (500 MW)
Gas-fired with CCS
20 CCS gas-fired plants (500 MW)
26 nuclear plants (1000 MW)
Nuclear
1/3 Canadian hydropower capacity
Hydropower
222 CHP Plants (50 MW)
17,500 Turbines (4 MW)
Biomass
Wind
132 Geothermal Units (100 MW)
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Geothermal
PV
175 million m2
CSP
80 CSP plants (250 MW)
0
20
40
[GW/yr]
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60
80
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Main Lessons Learnt
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
Effective policy only in a limited set of countries
 Sometimes depending on specific technology

Potential and perceived risk, more than profit, is key to policy
effectiveness & efficiency

Price support can not be adequately addressed in isolation; noneconomic barriers must be addressed concurrently
 Grid barriers
 Administrative barriers
 Social acceptance issues
 Other barriers (e.g. training, information, financial, etc.)

Effective systems have, in practice, frequently been the most cost
efficient
 Technology-specific support is key for both effectiveness and
cost-efficiency
Key Principles for Effective Renewable
Energy Policies
1.
2.
3.
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4.
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Establish stable support framework - to attract
Continuity
investments
Certainty
Remove barriers to improve market functioning
Set up transitional incentives decreasing over
time – to foster and monitor technological innovation
and move towards market competitiveness
Ensure technology-specific support to exploit full
RET basket potential
Move towards a combination framework of incentive schemes
in function of technology maturity level
in order to foster RETs’ transition towards mass market
integration
Renewable Energy Technologies: Today
and Tomorrow….
High costgap
technologi
es
Low costgap
technologi
es
Market Deployment
Prototype &
demonstration
stage technologies
Mature technologies
Hydro
Sugarcane
Traditional
ethanol
Conventional biomass
geothermal
Modern
biomass
technologies
Solar
thermal
heat
Wind
onshore
Biodiesel
from oil-seed
rape
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Solar PV
2nd
generation
biofuels
Tidal
Development
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Ocean
Shallow
geothermal
heat
Wave
Wind
offshore
Concentrating
solar power
Niche Niche markets
Mass Mass market
Time
Combination framework of policy
incentives versus
technology maturity
High
Prototype &
demonstration
stage
technologies
Low costgap
technologi
es
Market Deployment
cost-gap
technolo
gies
Mature technologies
Stimulate market pull
Technology-neutral
competition
Voluntary (green)
demand
TGC
Carbon trading (EU ETS)
Sugarcane
ethanol
Modern
biomass
technologies
Stability, low-risk
incentives
Solar
thermal
heat
Price-based: FIT, FIP
Quantity-based: Tenders
Hydro
Traditional
biomass
Conventional
geothermal
Wind
onshore
Imposed market risk,
guaranteed but declining
minimum return
Biodiesel
from oil-seed
rape
Price-based: FIP
Quantity-based: TGC with
technology banding
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Solar PV
2nd
generation
biofuels
Tidal
Development
Ocean
Shallow
geothermal
heat
Wave
Concentrating
solar power
Niche markets
Continuity, RD&D, create market
attractiveness
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Wind
offshore
Capital cost incentives: investment tax
credits, rebates, loan guarantees etc.
Mass market
Time
Recommendations
Key question:
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How to lead the transition from the present system to a level playing
field in an open and fully competitive market
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1.
Focus on coherent and rigorous implementation of key policy
design principles  only then can ambitious targets be
reached
2.
Exploit substantial potential for improvement of policy
effectiveness and efficiency: learn from international
experiences
3.
Remove non-economic barriers first
4.
Deploy full basket of available RETs besides exploiting “lowhanging fruit”
 Minimise time and total costs in the long term
5.
Allow a combination framework of incentive schemes in
function of technology maturity level
Public Sector Energy R&D in IEA Countries
20000
15%
18000
13%
16000
14000
9%
12000
10000
7%
8000
5%
6000
Share of Energy R&D in Total R&D
Million US$ (2006 prices and PPP)
11%
3%
4000
1%
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2000
0
-1%
1974
Energy efficiency
1978
Fossil fuels
1982
1986
Renewable energy sources
1990
1994
Hydrogen and fuel cells
1998
Other
2002
Nuclear
2006
Share of energy R&D in total R&D
R&D investment is not adequate given the magnitude of the climate challenge.
Government spending on energy R&D has fallen, while the private-sector is focused on
projects with short-term payoffs
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Relative Cost of Electricity Generation
from Wind and Solar
CCGT
Coal Steam
Wind
Concentrated Solar
Power
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Solar PV on good sites
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0
10
20
30
40
50
US cents per kWh
60
70
80
Wind power generation can already compete in certain locations,
Concentrated solar power is not far away in the sunbelt.
Solar photovoltaics has costs decreasing by up to 18% with every doubling of
cumulative production, but as yet remains economic only in remote locations.
Source: World Energy Outlook 2006 and IEA databases
Capital Costs of Renewables-Based
Power Generation Technologies
6 000
dollars (2000) per kW
5 000
4 000
3 000
2 000
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1 000
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Wind
onshore
Wind
offshore
Hydro
Geothermal Biomass
2002
Solar
thermal
Tide/wave Solar PV
2030
The capital costs of renewables are expected to continue to fall in the
future, with solar PV registering the biggest decline
The learning curve effect
Deployment cost can be derived from the learning curves,
Which show a constant reduction of the investment cost to each
doubling of the installed capacity.
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Average figures of the learning rate is:
CSolarPower: 5%
Wind on shore: 7%
Wind off shore: 9%
Photovoltaics : 20%
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i.e. pv investment cost reduces by 20% each doubling of the
capacity installed
RE added value to the energy mix

enhancing security of supply - both for geopolitical-concentrated
in few countries in critical regions- and infrastructure-power plants,
pipeline, sea straits…

allowing energy sources diversification & reducing imports for
consumers/ deferring production for exporters

mitigating risks in current energy portfolio and trends, due to
volatility and instability of fossil prices;
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creating
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framework for investment, enhancing industrial
competitiveness – and opportunities for export,creating new jobs,
favouring economic development
advancing
environmental targets;
providing unique access to energy services;
Create fair market rules
Energy prices do not reflect the true costs of generation options a market failure:
the social and environmental costs of polluting energy are not
internalised
 the added values of RE for diversification, reduced portfolio risk,
job creation, industrial competitiveness not accounted for
 there are also massive subsidies to ‘conventional’ energy sources

To acknowledge the benefits of Renewable Energy, support
frameworks are established – not just “subsidies”
they should be viewed as compensation mechanisms for
correcting these market failures and
 a learning investments to reduce cost and improve performance
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
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Cheaper than conventional sources
Comparison of costs for different technologies
Cents $ / kWh
Other
costs
16
14
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Average
value of
external
costs
Maximum &
minimum.
generation
costs
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Tensions
due to
scarcity of
other fossil
fuels
Price
volatility
Resource
shortage
12
+ 7.47
10
Transport,
reprocessing
and storage
of waste
Scarcity of
uranium
Concentrated
reserves
+ 2.35
8
Geostrategic
risks
6
Energy
storage
+ 0.19
+ 0.51
4
2
0
COAL
GAS
GAS
Nuclear
WIND
External costs are expressed as the average value estimated for each technology,
based on a 2003 report by the European Commission showing maximum and
minimum external cost figures for electricity production in the EU
Conclusions

A sustainable energy future is possible with a portfolio of
clean and efficient technologies, RE definitely among them.

The task will take decades and it will require significant
investments costs. But Business As Usual would cost more!!

The task is urgent: it must be carried out before a new

Implementing sustainable scenarios will require a
generation of inefficient and high-carbon energy infrastructure is
locked into place.
transformation in:
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


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the way power is generated,
the way homes, offices and factories are built and use energy,
the technologies used for transport.
It will also take unprecedented co-operation between the
developed and emerging economies to achieve the results
implied
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Contact
[email protected]
http://renewables.iea.org
http://www.iea.org
[email protected]
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Thanks to Enel for the support to IEA
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