Global Developments

Renewables like wind & solar, and hydrogen fuel cells, could expand from £16bn, as at present, to a $100 bn a year global market by 2014 as technology costs fall, according to a study by Clean Edge, a research and publishing firm based in California. Markets for solar PV will grow from $7.2 bn last year to $39.2 bn, while wind expands from $8bn to $48.1bn in 2014. Fuel cells & distributed hydrogen will grow from $900m to $15.1bn over the next decade.

Decentralized power generation globally has increased to 7.2%, up from 7% in 2002, according to the latest annual ‘World Survey of Decentralized Energy’ conducted by the World Alliance for Decentralized Energy. It commented ‘The long discussed and expected transition from a central power model to a ‘hybrid’ DE-central mix may possibly be underway, though slowly’.

WADE is optimistic that this market share will continue to expand. Global installed decentralized energy (DE) capacity stood at around 281.9 GWe at the end of 2004, most of this being high efficiency cogeneration systems in the industrial and district heating sectors, fuelled by coal, gas and, to a lesser extent, biomass based fuels. Around 32.2 GWe of DE capacity was added worldwide between 2002 and 2004, most of this being cogeneration.

The global wind power industry installed 7,976 megawatts (MW) in 2004, an increase in total installed generating capacity of 20%, according to the Global Wind Energy Council. Global wind power capacity has grown to 47,317MW with Germany leading (16,629 MW), followed by Spain (8,263 MW), the USA (6,740 MW), Denmark (3,117 MW) and India (3,000 MW). Some countries, including Italy, the Netherlands, Japan, and the UK, are above or near 1 GW. Europe continued to dominate the global market in 2004, accounting for 72.4% of new installations (5,774 MW). Asia had 15.9% (1,269 MW), North America (6.4%; 512 MW) and the Pacific Region (4.1%; 325 MW). Latin America + the Caribbean (49 MW) and Africa (47 MW) had a 0.6% market share respectively.

“Europe is the global leader in wind energy, but we are witnessing the globalisation of the wind energy markets. In Europe, the market has experienced average annual growth rates of 22% over the past six years; however, the further rapid progress that the industry is capable of delivering is constrained by barriers such as grid access and administrative hurdles”, said EWEA President Arthouros Zervos. “Renewed political initiatives by the G8 could boost wind power; the industry is well positioned and ready for a more rapid roll out given the right political signals”.

Growth in the US market was predictably slow because of the long delay in extending the federal production tax credit (PTC) for wind energy, which had expired in December 2003 and was extended in October 2004. Proposed projects are now back on the fast track and AWEA expects that over 2,000 MW will be installed, nationwide, during 2005. Uncertainty continues to loom over the US market however since the PTC will expire again in December 2005 unless Congress moves quickly to extend the incentive. The US wind energy industry is calling for a long-term extension so that it can plan for steadier, stronger growth over the coming years.

A group of US wind energy producers have announced their commitment to taking aggressive action to significantly reduce avian mortalities in the Altamont Pass Wind Resource Area. The Center for Biological Diversity estimates that between 880 and 1,330 golden eagles, hawks, owls and other protected raptors have been killed each year. The companies want to achieve a 35% reduction in raptor mortality at Altamont in the next three years, and have taken the unprecedented step of proposing seasonal shutdowns of one half of Altamont’s 5000 + turbines during all of November and December, alternating with the second half being shut down during January and February; as well as other measures, including removing old towers and machines and replacing old machines with newer designs, all designed to help achieve reductions while allowing the projects to operate in an economically viable fashion.

Altamont is something of an anomaly for the wind industry, experiencing far higher raptor mortality rates than any other wind project area in the U.S. A major study published by the California Energy Commission in 2004 supports replacing the older wind turbines prevalent in the Altamont area (which was a world wind pioneer in the 1980s) with modern wind turbine technology less dangerous to birds. The process of replacing older wind turbines with modern ones, known as “repowering,” is considered the principle long term solution to reducing avian mortality in the Altamont. Meanwhile, seasonal closures should yield significant near term reductions.

While acknowledging the critical importance of reducing raptor mortality rates at Altamont Pass, the companies stressed the importance of keeping the issue in perspective. Overall, out of every 10,000 birds killed annually in the U.S. by human related causes (e.g. buildings, cats, communication towers, vehicles and pesticides), less than one is killed by wind farms.

It’s maybe hard to feel too cheered, but the U.S. Navy is installing four 950 kW wind turbines to provide up to 25% of the power needed at the US base at Guantanamo Bay in Cuba. It’s estimated that the £12m project will save $1.2 m p.a. in energy costs, avoid consumption of 650,000 gallons of diesel fuel, reduce air pollution by 26 tons of SO2 and 15 tons of nitrous oxide, and greenhouse gas emissions by 13 million pounds.

Responses to a poll of possible US national budgetry changes by Knowledge Networks found that, of all the changes proposed, the most dramatic change supported was for energy conservation and the development of renewable energy, with the respondents calling for an increase of $24bn, an increase of over 1000% over the $2.2 bn in the budget proposed by Bush.

Interestingly, a separate Knowledge Networks poll found that solar has higher public awareness as a climate change solution than wind. When given a list of technologies and energy sources that could mitigate emissions of greenhouse gases, 70% said they had heard of more efficient cars, 63% identified solar energy, while only 50% mentioned wind. However 54% identified nuclear as a mitigation option. Biomass and bioenergy was noted by only 10%, well behind the 49% for efficient appliances and 48% for hydrogen, but ahead of the 4% for carbon capture and storage. The environment was rated 13th on a list of 22 options for the ‘most important issues facing the USA today’, with global warming scoring sixth on a list of ten environmental problems, well behind water pollution and toxic waste. When asked how the US could best address global warming, half wanted to expand the use of solar and wind but, when told that switching to renewables could triple their family’s annual power bill, half abandoned renewables for other options such as carbon storage with coal- or gas-fired power plants and nuclear.

*A new tax credit bill proposed in California aims to stimulate the installation of a million solar PV roofs. Meanwhile, 87% of the US public support more wind farms- according to a Yale University survey (05/05)

One result of the USA’s refusal to ratify the Kyoto protocol is that renewable energy companies in the US have suffered a share price fall of 13.8% on average since the beginning of the year, according to New Energy Finance, an energy consultancy. By contrast renewable energy companies in the countries participating in the agreement, including the EU, Canada and Japan, saw their shareprices rise by an average of 21.9%. Shares in companies specialising in renewables in Australia, which is the only major economy outside the US to reject the treaty, rose slightly, but by a much smaller amount- 4.2%. Several Australian renewables companies have recently made moves to leave their home markets or expand into Europe, including Novera Energy, which has bought into several wind farms in Germany. David Scaysbrook, Novera’s founder, told the FT 6/4/05): “The Australian renewable energy climate is pretty bleak, so we no longer have any real operational assets in Australia”.

You can see the attractions for Kyoto outsiders of the new Asian Pacific ClimatePact- see below...

As in the EU, the nuclear lobby is making its pitch there too- on the basis of responding to climate change, while the coal lobby remains strong- its one of Australia’s main exports. Thus, as the Sydney Morning Herald (7/4/05) noted, the Minister for Industry, Ian Macfarlane, recently attacked the environment movement for promoting renewables as a viable alternative to current forms of energy generation such as coal. “I really [have] to wonder how much effort has been made by the resource sector to explain the harsh reality of life without fossil fuels and why so many people still seem able to imagine life without a basic, consistent and affordable supply of energy”. He urged the fossil fuel industry to begin a campaign telling people that without them “electricity will become an unknown, unreliable quantity, unraveling life as we know it”. There was no need for a carbon tax to rein in emissions because Australia’s levels had already been reduced by 4% in the past five years. The Herald noted however that, despite this decline, Australia’s emission levels remain the highest per capita in the developed world and that the Australian Greenhouse Office predicted that emissions will be nearly 25% higher by 2020, mainly due to rising electricity consumption & greater vehicle use.

Reactions: There have been pressures on the opposition Australian Labor Party to toughen up its stance on Climate change, with MP Peter Garrett, once a rock star, calling for a target of reducing emissions by 60% by 2050, as in the UK. And campaigners have been arguing forcefully that nuclear power was no solution, with nuclear weapons proliferation being a key concern.

As Jim Green noted in Green Left Weekly ‘Australian uranium has resulted in the production of more than 60 tonnes of plutonium, sufficient to produce about 6000 nuclear weapons’. He noted that, tragically, instead of supporting renewables strongly,‘the Howard government provides fossil fuel industries with $9 bn in subsidies annually’, and had ‘closed the Energy Research and Development Corporation’ which had invested almost $100m 350 energy innovation ventures since it was created in 1990, and had ‘reneged on a commitment to meet existing ERDC funding commitments’. It addition it had withdrawn funding from the Co-operative Research Centre for Renewable Energy and introduced only very low Mandatory Renewable Energy Target- set at 2%. He concluded ‘small wonder than that the proportion of Australia’s overall energy consumption from renewable resources declined in the 10 years 1991-2001 from 6% to 5.7%’.

In April, Australia hosted a meeting of 25 countries to discuss the prospects for an international climate-change strategy outside the Kyoto Protocol. Then in July Australia, the USA, China, India, Japan and S. Korea, announced an Asia-Pacific Partnership on Clean Development and Climate, to support the development, transfer & deployment of new clean energy technology, including renewables, carbon capture and storage and nuclear. Very much the US line- a voluntary ‘tech push’ alternative to using mandatory regulatory caps to create and stimulate emission trading markets, as under the Kyoto agreement.

However, US Deputy Secretary of State Robert Zoellick said that it was ‘a complement, not an alternative’ to Kyoto, although Australian Prime Minister John Howard said ‘the fairness and effectiveness of this proposal will be superior to the Kyoto protocol’.

Reactions were mixed. Some welcomed the involvement of Asian countries (and the USA!), others saw it as a ‘coal pact’ (Australia has huge reserves), and as undermining the yet to be negotiated post-2012 phase of the Kyoto protocol, and as likely to be ineffective since there were no emission reduction targets. Quite a challenge though.

The Standing Committee of the National People’s Congress of China endorsed the Renewable Energy Law in March. It makes renewables a priority in national energy strategy. The new law, which will take effect next year, requires the power grid operators to pay the full cost for registered green power produced in their area- at prices set by the government. The law offers financial incentives, such as a national fund to foster development of renewables, and discounted lending and tax preferences for renewables.

* In 2003, renewables accounted for 3% of China’s energy use, and the target for 2020 is 10%. While this may sound small as a %, given the size of the country, the actual scale is quite significant- China generates about the same total TWh’s from renewables, including hydro, as the US. But 10 new nuclear plants are planned.

In the run up to the G8 meeting in Gleneagles, the National Science Academies of the G8 countries, including the USA’s, issued a statement, backed also by the academies in China, India and Brazil, which said “It is likely that most of the warming in recent decades can be attributed to human activities. The scientific understanding of climate change is now sufficiently clear to justify nations taking prompt action.”

However, the US government was still dragging its feet- even thought its position began to look a little untenable after the revelation that some of its reports on climate change had been doctored by a staff member to cast doubt of the reliability of the science.

The UK by contrast remained fairly robust, as was indicted earlier in the year at the G8 Energy and Environment Ministerial ‘Roundtable’ held in London in March, when Gordon Brown linked climate issues to the other key issue for the G8- sustainable development. He commented that it was ‘not a question of making climate change a priority over poverty reduction- that would be absurd as well as immoral. It is precisely economic development and growth which will provide the resources and technological advance to enable economies to adapt to and mitigate climate change. The task is to ensure that poverty reduction strategies and our quest to meet the 2015 Millennium Development Goals are not overwhelmed and reversed by the impact of climate change.’

He added: ‘Over the next 25 years, the International Energy Agency estimate that global economic growth and development will require investment in the world’s energy infrastructure of some 16 trillion dollars. Around 1,500 large generating plants will be built, most using fossil fuels, over a third of them in China alone. And, with the lifespan of a power station itself at up to 40 or 50 years, the decisions we make now, and over the next two decades, will affect our energy options- and the climate change impacts these will have- for at least the next half a century. So the task facing the world is to ensure that the energy investment decisions we make now contribute to addressing these challenges, and do not exacerbate them.’

He went on: ‘one area where Britain and Europe excel is in environmentally friendly technologies. It is now clear that- as well as renewable sources of energy- cleaner fossil fuel technologies, including the capture of carbon dioxide and its long-term storage underground, are likely to become crucial.’

However, in the event, the full G8 meeting in July produced very little in terms of targets for developments like this. It seems like the same old roundabout, with the US blocking any firm commitments. Although Bush did seem to at least accept that climate change was real and that human activities were at least partly responsible, he focussed on technology (including nuclear) in the belief that this could constrain emissions while allowing growth to continue. But he didn’t want to sign up to any emission targets. So the final G8 Action Plan and Comminique were framed tenatively- e.g. see quote below: for now we only ‘slow’ the growth of emissions. But there was support for renewables and Carbon Capture and Storage- mainly via collaboration. And nuclear, for those that wanted it.

G8 Output

‘Climate change is a serious and long-term challenge that has the potential to affect every part of the globe... While uncertainties remain in our understanding of climate science, we know enough to act now to put ourselves on a path to slow, and, as the science justifies, stop, and then reverse the growth of greenhouse gases.’

Renew On Line (UK) 57	Extracts from NATTA's journal Renew, issue 157 Sept-Oct 2005
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