An analysis of the feasibility of Renewable Energy as the sole energy source

Using Australia as a Case Study with international comparisons

Dr Carolyn V. Currie[i] and Julia McKay[ii]

 

Abstract

Fossil fuels are non-renewable; they draw on finite resources that will eventually become too expensive or too environmentally damaging to retrieve. Renewable energy sources, such as wind, hydro-electric and solar, are constantly replenished and will never run out. It has been suggested that with sufficient public and private sector investment and government policy certainty, Australia could switch entirely to renewable energy within a decade by building additional large-scale solar and wind power developments, upgrading the transmission infrastructure and introducing appropriate energy efficiency measures.[iii]

However, with the advent of blackouts in one State, higher energy prices and the closure of antiquated, “dirty” coal – fired power stations, the reliance on renewable energy, and the quantification of targets, has become a political football in Australia.

Despite the constant changes to policy, renewable energy (RE) has undergone substantial growth in Australia in the 21st century. In 2015 14.6% of the total electricity production was derived from RE, compared with 2006 when less than 4% was generated from renewables.[iv] For RE to become a substitute for most, if not all, fossil fuel generated power, “smart grid” technology based upon Electrical Energy Storage (EES) must be fully commercialized. Emerging EES technology will allow energy generated from renewable resources to be consumed in peak periods with the storage able to smooth supply and demand more effectively over the network.

This article examines the history of policy, the cost of RE schemes and the experience of other countries to conclude whether wholesale reliance on renewables for energy is a feasible alternative in Australia, particularly in view of the push by the current Liberal government for “clean”, coal – fired power stations.

 

1.0 Introduction

Whether the climate change argument demands immediate or mid-term action, fossil fuel reserves are finite and at the current rate of usage, the proven reserves will be exhausted sometime within the next 150 years[1].This does not mean, however, that new reserves will not be located or that the usage will remain static. Proven reserves are defined as fossil fuel that is technically and economically recoverable at current prices, so this ratio represents the number of years of current consumption that can be economically supplied by known fossil fuel deposits. The total amount of any category of fossil fuels that is in the ground and recoverable at any cost is, of course, fixed but reserves can increase or decrease depending on how extraction technologies and prices evolve[2]

The scare of “peak oil” and associated spike in the price per barrel during the mid-1970s is well behind us. New deposits, improved technology, natural gas, coal to gas conversion, shale oil and many other price amelioration options have given fossil fuels a new lease of life. In 2014, US natural gas production was greater than ever before and oil production was at 97 percent of the peak reached in 1970. [3]

Nevertheless, the consumption of “easy access” fossil fuels, the backlash against particulate pollution (particularly in China and India), the desecration of the environment caused by coal seam gas mining, shale oil extraction and oil-well failures are all conspiring to drive a conversion to renewables for up to 50% of total energy needs. The concerns over global warming simply tip the balance in favour of existing and emerging renewable technologies.

 

2.0 Existing Renewable Technology

2.1 Solar

a. Small Scale/Domestic
All the energy stored in Earth’s reserves of coal, oil, and natural gas is equal to the energy from only 20 days of sunshine.[4] Solar energy is now a relatively mature technology although efficiencies are improving rapidly as uptake increases (allowing for economies of scale) and incentives become more widespread internationally. Australia has some of the cheapest small-scale solar in the world. Household solar in Australia is significantly cheaper than in the United States and Japan (Lawrence Berkeley National Laboratory 2013)

Of all renewable options, solar has penetrated the domestic scene most effectively. It started with solar hot water technology. During the period 1954-64, CSIRO published a series of reports which gave details of the design of collectors and systems and the results of field tests. The Australian Government’s decision to install these systems in Government owned houses in the Northern Territory gave the then fledgling industry the necessary boost to expand and develop their solar R&D and manufacturing facilities. By 1970, the Australian solar water heater industry was well established and Darwin was well known internationally for its extensive use of solar water heaters for domestic hot water.[5]

Approximately 47,000 solar water heating systems were installed during 2015, taking the total installed across Australia to more than 958,000. However, solar water heating has continued to lose market share to solar Photovoltaic cells (PVs) since the industry peaked in 2009, when Federal Government rebates and feed in tariffs helped to increase sales. Sales of solar hot water systems in 2015 were no exception, falling about 20 per cent down on the year before.

The rise and rise of rooftop Solar PV Systems in Australia commenced in earnest in 2009 with the introduction of State-based feed-in tariffs. This incentive is now closed to new applicants in all States. Households and businesses who are receiving these incentives applied for them before a deadline (different in each state) and will continue to reap the benefits until they either move house or until the scheme ends – with big implications for the future uptake of energy storage. Some States offered gross payments for all energy produced and fed into the grid while others only credited the net amount after domestic usage was deducted.[6]

The history for feed-in tariffs on a State/Territory basis is: 

• Australian Capital Territory (ACT) rate(s) paid:5c/kWh (Original small-scale, closed 31 May 2011); 30.16c/kWh Medium-scale closed 14 July 2011)
  Type (gross or net): Gross
  Date scheme ends (payments cease): 20 years after date of connection
  Benefits transferable to new occupants if home is sold or rented? Yes
  Current rate paid to new solar homes: Voluntary retailer contribution for small & medium-scale – no mandatory minimum solar payment; the large-scale feed-in tariff is still active, with a rate determined on a project-by-project basis by reverse-auction feed-in tariff.
  Comments: The generosity of the ACT scheme means that there is little financial incentive for an ACT home or business to invest in batteries to improve their energy self-sufficiency unless the programme changes its emphasis away from pure monetary gain.

• New South Wales (NSW) rate(s) paid: 60c/kWh (Application submitted by 27 October 2010), 20c/kWh (Application submitted by28 April 2011)
  Type (gross or net): Gross (customers on the 20c/kWh rate are encouraged to switch to net metering to maximise value)
  Date scheme ends (payments cease): Finished 31 December 2016.
  Current rate paid to new solar homes: Voluntary retailer contribution – no mandatory minimum solar payment (generally around 6-10c/kWh)
  Comments: Following the cessation of the payments at the end of 2016, it is now financially prudent for occupants of premises with solar to have a net electricity meter installed. It is anticipated that many of the 160,000 homes with solar PV will consider battery storage to compensate for the lost tariff.

• Northern Territory (NT): Current rate paid to new solar homes:1-for-1 (equivalent to retail tariff rate).
  Type (gross or net):
  Date scheme ends (payments cease): Ongoing.
  Benefits transferable to new occupants if home is sold or rented? Yes.
  Comments: The NT has the most generous feed-in tariff in Australia, meaning that there is no incentive for grid-connected solar homes to invest in battery storage unless there is a change to the programme.

• Queensland (QLD): Rate(s) paid:44c/kWh (applications in and system installed by 9 July 2012);  8c/kWh (applications in after 9 July 2012).
  Type (gross or net):
  Date scheme ends (payments cease): 1 July 2028 (44c/kWh rate); 8c/kWh rate has already expired.
  Benefits transferable to new occupants if home is sold or rented? Only between spouses.
  Current rate paid to new solar homes: Southeast QLD: Voluntary retailer contribution – no mandatory minimum solar payment; Regional QLD: Rate set by regulator, currently around 7c/kWh.
  Comments: The long duration of QLD’s scheme means that recipients are unlikely to be interested in energy storage unless they move into a home with a pre-existing solar system. New homes are governed by restrictions on the export of power to the grid and this might mean that battery storage becomes the preferred option.
• South Australia (SA): Rate(s) paid:44c/kWh (application in by 30 September 2011); 16c/kWh (application in by 30 September 2013).
  Current rate paid to new solar homes: A ‘minimum retailer payment’ may be available through the electricity retailer.
  Type (gross or net):
  Date scheme ends (payments cease): 30 June 2028 (44c/kWh); Finished 30 September 2016 (16c/kWh).
  Benefits transferable to new occupants if home is sold or rented? Yes. Comments: The early adopters on the 44c/kWh feed-in tariff are unlikely to be motivated to install battery storage unless they move house. However, those that have now expired may consider batteries. This is particularly likely because of unreliable electricity supply occasioned by the closure of all SA coal-fired power stations in 2016 and the problems with the inter-link with Victoria. Blackouts and price spikes have been in the news and consumers are reacting by going ‘off grid’.

• Tasmania (TAS): Rate(s) paid:1-for-1 (equivalent to retail tariff rate) for applications in by 31 August 2013.
  Type (gross or net):
  Date scheme ends (payments cease): 31 December 2018.
  Current rate paid to new solar homes: Determined by regulator, but in the range of 5-7c/kWh.
  Benefits transferable to new occupants if home is sold or rented? Only between spouses.
  Comments: The announcement that the FiT tariff would cease in 2018 sparked a burst of installations in the state, but the TAS solar market has always been small due to both small population and lower solar resources. Additionally, TAS exports renewable hydro-electricity to the national grid and enjoys among the lowest prices in Australia. However, for higher consumers, battery storage might become appealing to solar homes when the benefit ceases in 2018.

• Victoria (VIC): Rate(s) paid:60c/kWh (Premium FiT – applications in by 29 December 2011); 25c/kWh, 1-for-1 (Transitional & Standard FiTs, respectively – applications in by 31 December 2012);
  Type (gross or net):
  Date scheme ends (payments cease): 2024 (Premium FiT), Transitional FiT, Standard FiT ceased at the end of 2016.
  Benefits transferable to new occupants if home is sold or rented? Yes, for Transitional and Premium FiTs; No for Standard FiT.
  Current rate paid to new solar homes: Voluntary retailer contribution – no mandatory minimum solar payment generally around 6-10c/kWh.
  Comments: The termination of VIC’s Transitional and Standard FiTs together with anticipated price rises following the imminent closure of Hazelwood Brown Coal Power Station could well result in some of those households seeking energy storage.
• Western Australia (WA): Rate(s) paid: 40c/kWh (applications in by 1 July 2011); 20c/kWh (applications in between 1 July 2011 and 1 August 2011).
  Type (gross or net): Net
  Date scheme ends (payments cease): 10 years from installation.
  Benefits transferable to new occupants if home is sold or rented?
  Current rate paid to new solar homes: Varies sharply depending on retailer and region. Between 5-8c/kWh on average.
  Comments: WA solar PV adopters have been getting a good deal and there are still some generous renewable buybacks on offer in certain areas although grid connection can be expensive. The climate and high retail prices for electricity make WA a good prospect for battery storage.[7] 

b. Solar – Large Scale/Utility

The technology to produce large quantities of electricity from sunlight already exists. Some rely upon PVs via multiple modules (PV Farms) others on Concentrated Solar PV whereby banks of mirrors concentrate the sunlight onto a large PV cell. The 56MW Moree Solar plant in NSW was Australia’s largest solar PV installation of 2016. Others funded and approved of note include the Oakey Solar Farm in south east QLD, the Darling Downs Solar Farm -110MW, White Rock in north east NSW – 20MW, Dubbo Solar Hub in central west NSW – 24.2MW, Manildra Solar Farm in central west NSW – 42.5MW, Parkes Solar Farm in central west NSW – 50.6MW, Kidston Solar Park in far north QLD – 50MW, Collinsville Solar Power Station in tropical central QLD – 42MW and the Whitsunday Solar Farm, again in tropical central QLD – 58.1MW. There is a further 3.7GW of large scale solar in the development pipeline[8].

In recent years, actual costs for new large-scale solar projects have been cheaper than for new coal and nuclear projects. However, despite Australia’s world-class solar resource, reported costs for new large-scale Australian solar plants have tended to be higher than in other countries. Reasons for higher costs for large-scale solar in Australia are likely due to higher financing and construction costs and Australia’s relative lack of large-scale solar development experience compared to other countries.[9]

As the large-scale solar industry expands in Australia and increasingly compete for contracts through reverse auction processes, these prices may come down. Costs are falling so fast that actual as-built costs for solar and wind in Australia and overseas have been consistently cheaper than projections. Electricity prices from new coal power stations could rise to A$160 per megawatt hour, while solar parks are around $110 per megawatt hour. The cost of solar is expected to come down to perhaps $50 by 2025.[10] .

Australia is expected to reach over 20GW of solar PV in the next 20 years, equivalent to about a third of Australia’s current total power generation capacity – 63GW[11] .

2.2 Wind

The wind has long been used to generate mechanical power for pumping water, grinding grain or crushing rocks by means of windmills. The “wind turbine” however, has only been in full commercial development since the 1970s under the direction of NASA (National Aeronautics and Space Association. While wind energy’s growth in the U.S. slowed dramatically after tax incentives ended in the late 1980s, wind energy continued to grow in Europe, in part due to a renewed concern for the environment. [12]

The basic technology applied to wind energy production is uniform, irrespective of scale. Wind turbines convert the force of the wind into a torque (rotational force), which is then used to propel an electric generator to create electricity.

The world’s wind energy resource is estimated to be about one million GW for total land coverage. Assuming only 1 per cent of the area is utilised and allowance is made for the lower load factors of wind plant, the wind energy potential would correspond to around the world total electricity generation capacity.[13] (WEC 2007).

The windiest areas are typically coastal regions of continents at mid-to high latitudes and in mountainous regions. Locations with the highest wind energy potential include the westerly wind belts between latitudes 35 degrees and 50 degrees north and south. This includes the coastal regions of western and southern Australia, New Zealand, southern South America, and South Africa in the southern hemisphere, and northern and western Europe, and the north eastern and western coasts of Canada and the United States. These regions are generally characterised by high, relatively constant wind conditions, with average wind speeds in excess of 6 metres per second (m/s) and, in places, more than 9m/s.

Regions with high wind energy potential are characterised by:

• high average wind speeds;
• winds that are either constant or coinciding with peak energy consumption periods (during the day or evening);
• proximity to a major energy consumption region (i.e. urban/industrial areas); and
• smooth landscape, which increases wind speeds, and reduces the mechanical stress on wind turbine components that results from variable and turbulent wind conditions associated with rough landscape.

As with solar renewables, the scale of the installed facilities falls into sub-sets.

c. Utility Scale On-Shore Wind – wind turbines larger than 100 kilowatts are developed with electricity delivered to the power grid and distributed to the end user by electric utilities or power system operators. These “wind farms” are situated in regions where winds are relatively constant and neither too light nor too strong. Wind energy power stations commonly aggregate the output of multiple wind turbines through a central connection point to the electricity grid.

Wind energy is the fastest growing renewable energy source for electricity generation in Australia, and its current share of total Australian primary energy consumption is currently almost 4%.[14]

Macarthur is a 420MW wind farm near Hamilton, 260km west of Melbourne, Victoria, Australia. The wind farm was commissioned in January 2013. It is the largest wind farm in the southern hemisphere and required an investment of $1bn. The wind farm can power more than 220,000 households in Victoria, while eliminating 1.7 million tons a year of greenhouse gases.

It should be noted that capacity and actual output are radically different. Australia’s wind farm capacity is 3,891MW, spread over SA, VIC, NSW, with QLD and TAS contributing a very small percentage. On average wind farms in south-east Australia operate at a capacity factor of around 30-35%.[15]

The onshore technology has evolved over the last five years to maximise electricity produced per megawatt capacity installed. Machines have become bigger with taller hub heights, larger rotor diameters and in some cases bigger generators depending on the wind and site-specific conditions. Currently manufacturers offer utility-scale turbines with rotor diameters ranging from 50 m to 125 m, generators from 1.5 MW to 3.5 MW and hub heights from 90 m to 150 m. In addition, some manufacturers have recently started to offer 4-5 MW platforms. Meanwhile, the largest generator capacity of a single installed onshore wind turbine reached 7.5 MW. In the 2014/15 year, it is estimated that wind turbine prices decreased 3-5% to around USD 1 050/kW for high-speed turbines and USD 1 175/kW for low- to medium-speed turbines.

Onshore wind leads the global renewable growth, accounting for over one-third of the renewable capacity and generation increase in 2015. Repowering, i.e. replacing “old” wind turbines with more modern and productive equipment, is on the rise. Repowering is shown to increase wind power while reducing its footprint. A 2 MW wind turbine with an 80 metre (m) diameter rotor now generates four to six times more electricity than a 500 kW 40 m diameter rotor built in 1995.[16]

d. Distributed or Small Scale Wind – which uses turbines of 100 kilowatts or smaller to directly power a home, farm or small business as it primary use. Small wind is defined as wind turbines with a capacity rating of less than or equal to 100 kW. Turbines in this category range in size from smaller than 1 kW for off-grid applications to 100-kW turbines that can provide village power. Fifty-four small turbine models are offered commercially in the United States for applications including homes, schools, commercial and industrial facilities, telecommunications, farms and ranches, and communities. By the end of 2012, more than 150,000 small wind turbines were installed in the United States.[17]

Community wind projects have not been as popular in Australia where remote area power has been traditionally derived from diesel generation with a more recent move to community – based solar.

e. Offshore wind – wind turbines erected in bodies of water around the world. The first offshore wind project was installed off the coast of Denmark in 1991. Since that time, commercial-scale offshore wind facilities have been operating in shallow waters, mostly in Europe[18]. In the seas off Liverpool, a Danish company, Dong Energy, is installing 32 turbines that stretch 600 feet high. Each turbine produces more power than that first facility. It is precisely the size, both of the projects and the profits they can bring, that has grabbed the attention of financial institutions, money managers and private equity funds, like the investment bank Goldman Sachs, as well as wealthy individuals like the owner of the Danish toymaker Lego. As the technology has improved and demand for renewable energy has risen, costs have fallen. Offshore wind has several advantages over land-based renewable energy, whether wind or solar. Turbines can be deployed at sea with fewer complaints than on land, where they are often condemned as eyesores.

But the technology had been expensive and heavily dependent on government subsidies, leaving investors wary. That is now changing. Turbines today are bigger, produce much more electricity and are deployed on much larger sites than in the past. The result is more clean power and extra revenue.

The number of major players has also expanded, creating more competition. A joint venture of Vestas, the Danish turbine maker, and Mitsubishi Heavy Industries of Japan, is now competing with Siemens, which had long dominated the market for building offshore turbines. Others, like the American giant General Electric and Chinese manufacturers, are also losing their prejudice against offshore wind.

Companies are developing specialized vessels and improving installation techniques (taking a cue from the oil industry), cutting construction timetables. Dong and its competitors are learning to better cope with the bad weather, corrosive saltwater and scouring currents that increase costs.[19]

In spite of the enthusiasm the glow might have dulled for offshore wind. 1,558 MW of new offshore wind power capacity was connected to the grid during 2016 in Europe. This is a 48.4% decrease compared to 2015. The level of activity in 2016 is similar to that seen in 2013 and 2014 and reflects both pluses and minuses.

During 2016 work was carried out on 18 offshore wind farms in Europe.
• Four utility-scale wind farms were completed.
• A further four sites saw turbine installations and partial grid-connection.
• Work has started but no turbines are yet erected in seven other wind farms.
• Three sites were fully decommissioned.

By far the biggest players in this source of renewable power are the UK with 40.8% of all installations (by capacity) followed by Germany and Denmark.

While 2016 did not see as much grid-connected capacity as in 2015, the high number of projects that started construction means that grid-connected activity is set to increase noticeably in the next two years. The UK will see significant capacity addition after a noticeable absence in 2016 that was down to consenting delays. Growth in Germany will continue, and Belgium will add capacity at Nobelwind as well as from two sites that were awarded the final concession for support in August 2016. Tendered projects awarded support in 2015 and 2016 in Denmark and the Netherlands will also begin construction in the next two years.

However, the number of project starts will fall towards 2019 as European member states complete their National Renewable Energy Action Plans (NREAPs) under the current Renewable Energy Directive which covers the period up to 2020. As happened in 2016, capacity additions will stall in 2020, though a good level of construction activity will still be ongoing. By 2020, total European offshore wind capacity will be 24.6 GW.[20]

It will be interesting to see whether the rest of the world follows the European lead that has been largely driven by greenhouse gas policy. The United States is just beginning to invest in offshore wind energy, and has now commissioned its first commercial facility in the waters off Rhode Island (30MW). There is incredible potential for offshore wind development in the United States – the National Renewable Energy Laboratory (NREL) has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.

2.3 Other Renewables

2.3.1 Hydroelectric-Power

As with all other forms of renewable energy, water has been a source of mechanical power since ancient times. It has been used to drive mills to grind grain to flour, for the removal of precious metals from sediments and to deliver water from rivers to the land via waterwheels.

Harnessing the power of moving water to generate electricity, known as hydroelectric power, is the largest source of emissions-free, renewable electricity worldwide. Although the generation of hydropower does not emit air pollution or greenhouse gas emissions, it can have negative environmental and social consequences. Blocking rivers with dams can degrade water quality, damage aquatic and riparian habitat, block migratory fish passage, and displace local communities. The benefits and drawbacks of any proposed hydropower development must be weighed before moving forward with any project. Still, if it’s done right, hydropower can be a sustainable and non-polluting source of electricity that can help decrease our dependence on fossil fuels and reduce the threat of global warming.[21]

Hydropower is the leading renewable source for electricity generation globally, supplying 71% of all renewable electricity. Reaching 1,064 GW of installed capacity in 2016, it generated 16.4% of the world’s electricity from all sources.

There are many opportunities for hydropower development throughout the world and although there is no clear consensus, estimates indicate the availability of approximately 10,000 TWh/year of unutilised hydropower potential worldwide. At the end of 2015, the leading hydropower generating countries were China, the US, Brazil, Canada, India and Russia.

Hydropower capacity is often categorised as ‘gross theoretical capacity’, the capacity of hydropower generation possible if all natural water flows contained as many 100% efficient turbines as possible; ‘technically exploitable capacity’, the amount of gross theoretical capacity possible within the limits of current technology; and ‘economically exploitable capacity’, the capacity possible within the constraints of current technology and local economic conditions.

There are three types of hydropower stations: ‘run of river’, where the electricity is generated through the flow of a river’; ‘reservoir’, where power is generated through the release of stored water; and ‘pumped storage’, where stored water is recycled by pumping it back up to a higher reservoir in order to be released again. Hydropower facilities installed today range in size from less than 100 kW to greater than 22 GW, with individual turbines reaching 1000 MW in capacity.[22]

Hydroelectricity does not actually consume any water, as all the water is returned to the river after use.

While hydro plants can have very large capacities, the amount of electricity they generate can vary markedly from year to year depending on rainfall and electricity demand. Hydro can provide both baseload and peak load electricity, and hydro generators can start up and supply maximum power within 90 seconds.

Smaller hydroelectric power stations (called mini or micro hydro) do not generally need dams but rely on naturally flowing water such as streams. These provide a good source of power and are often used as stand-alone systems not connected to the main electricity grid.

Australia as the driest and flattest inhabited continent has real constraints for the generation of hydroelectricity. Yet the output of the five major utilities in Australia is 6,064 GWh representing 40.1% of the renewable energy produced in the country. The majority of Australia’s suitable hydro sites have already been developed, so the sector’s opportunity for growth is limited. In coming years, most of the activity in the sector will be in developing mini hydro power plants or upgrading and refurbishing existing power stations[23].

2.3.2 Biomass

The most widely used form of renewable energy is biomass. Biomass simply refers to the use of organic materials and converting them into other forms of energy that can be used. Although some forms of biomass have been used for centuries – such as burning wood to fire kilns, for heating and cooking – other, newer methods, are focused on methods that don’t produce carbon dioxide. All sorts of organic matter can be used to produce energy, either by biodigestion or following refinement as fuel substitutes. Feed stocks might include food crop residues, grassy and woody plants, waste from forestry, oil-rich algae, animal manures and the organic component of municipal and industrial wastes. Even the fumes from landfills (which are methane, the main component in natural gas) can be used as a biomass energy source.

Biomass can provide an array of benefits. For example:

• The use of biomass energy has the potential to greatly reduce greenhouse gas emissions. Burning biomass releases about the same amount of carbon dioxide as burning fossil fuels. However, fossil fuels release carbon dioxide captured by photosynthesis millions of years ago—an essentially “new” greenhouse gas. Biomass, on the other hand, releases carbon dioxide that is largely balanced by the carbon dioxide captured in its own growth (depending how much energy was used to grow, harvest, and process the fuel). Recent studies have found that clearing forests to grow biomass results in a carbon penalty that takes decades to recoup, so it is best if biomass is grown on previously cleared land, such as under-utilized farm land.
• The use of biomass can reduce dependence on imported oil because biofuels are the only renewable transportation fuels available.
• Biomass energy supports agricultural and forest-product industries. The main biomass feedstocks for power are paper mill residue, lumber mill scrap, and municipal waste. For biomass fuels, the most common feedstocks used today are sugar cane and cereal grain (for ethanol) and soybeans or brassicas such as canola (for biodiesel). However, compressed natural gas (CNG) derived from organic waste is a growing fuel supply, particularly in the agricultural section.
• Bioproducts are also under development whereby biomass is converted into chemicals for making plastics and other products that typically are made from petroleum.[24]

  Much research around the world is currently being directed towards the commercialisation of marine microalgae to biofuel technology. Concerns have been raised about using productive agricultural land suited to the growing of human food for fuel has driven this research into controlled – temperature algal farms, some using the heated water from coal-fired power stations as an input. This technology is still in its infancy. 

2.3.3 Tidal/Wave Power

Tidal power is considered to be a potential source of renewable energy because tides are steady and predictable. Traditionally, tidal power has suffered from relatively high cost and limited availability of sites with sufficiently high tidal ranges or flow velocities. However, many recent technological developments and improvements, both in design and turbine technology, indicate that the total availability of tidal power may be much higher than previously assumed, and that economic and environmental costs may be brought down to competitive levels.

The world’s first large-scale tidal power plant is the Rance Tidal Power Station in France, which became operational in 1966. And in Orkney, Scotland, the world’s first marine energy test facility – the European Marine Energy Center (EMEC) – was established in 2003 to start the development of the wave and tidal energy industry in the UK.

In 2015, the world’s first grid-connected wave-power station (CETO, named after the Greek goddess of the sea) went online off the coast of Western Australia. Developed by Carnegie Wave Energy, this power station operates under water and uses undersea buoys to pump a series of seabed -anchored pumps, which in turn generates electricity.[25]

2.3.4 Geothermal

Geothermal electricity is another form of alternative energy that is sustainable and reliable. In this case, heat energy is derived from the Earth – usually from magma conduits, hot springs or hydrothermal circulation – to spin turbines or heat buildings. It is considered reliable because the Earth contains 1031 joules worth of heat energy, which naturally flows to the surface by conduction at a rate of 44.2 terawatts (TW) – more than double humanity’s current energy consumption.

One drawback is the fact that this energy is diffuse, and can only be cheaply harnessed in certain locations. However, in certain areas of the world, such as Iceland, Indonesia, and other regions with high levels of geothermal activity, it is an easily accessible and cost-effective way of reducing dependence on fossil fuels to generate electricity. Countries generating more than 15 percent of their electricity from geothermal sources include El Salvador, Kenya, the Philippines, Iceland and Costa Rica.

As of 2015, worldwide geothermal power capacity amounts to 12.8 gigawatts (GW), which is expected to grow to 14.5 to 17.6 GW by 2020. The Geothermal Energy Association (GEA) estimates that only 6.5 percent of total global potential has been tapped so far, while the IPCC reported geothermal power potential to be in the range of 35 GW to 2 TW.[26]

2.3.5 Nuclear Power

There is vigorous debate concerning the status of nuclear power. It does not produce any greenhouse gas emissions and is sustainable, but is it renewable? Depending upon the source of the uranium and the type of reactor employed in the production of power, it could be renewable. Uranium from sea water which is continually replenished by geological processes could be as inexhaustible as solar.

The semantics of this discussion are interesting, because some renewable energy is not sustainable and some sustainable energy is not fully renewable.[27] Nuclear energy involves prejudices based upon its weapons usage, disposal of spent fuel and well-publicised accidents but it continues to supply at least one quarter of the electricity in 13 countries with France topping the list at 73%. There are 450 nuclear power plants worldwide producing 391,915 MW and a further 60 under construction[28], indicating that nuclear energy remains an essential part of the non-fossil fuel mix.

 

3.0 Can Renewables Replace Fossil Fuels?

It has been shown that the potential output from all forms of renewable energy, particularly if applied as hybrid systems (e.g. solar/hydroelectricity, wind/solar, biomass/solar, wave/wind) is sufficient to replace traditional coal or gas- fired power plants. However, most renewable energy sources are by their nature intermittent, remotely situated or of limited value in some parts of the world.

When renewables are working at optimum levels; when the wind is blowing or the sun is shining, large amounts of electricity can be generated. Such supply may exceed demand at that time and cause network imbalances or, alternatively, when supply does not meet demand, gas or coal must provide the shortfall.

Current research is devoted to the storage of power to enable renewables to meet demand at all times so as to mirror the base load output provided by fossil fuels. Great efforts have been made in searching for viable solutions, including Electrical Energy Storage (EES), load shifting through demand management, interconnection with external grids, etc. Amongst all the possible solutions, EES has been recognized as one of the most promising approaches.[29]

EES technology refers to the process of converting energy from one form (mainly electrical energy) to a storable form and reserving it in various mediums; then the stored energy can be converted back into electrical energy when needed.[30] The most promising options are:

3.1 Pumped Hydroelectric Storage (PHS)

This system is tried and true and is now the subject of a feasibility study by the Australian government to achieve greater output from the Snowy Hydro Scheme fully completed in 1974. It can be a retro-fit for existing hydro schemes (by building a second reservoir) or part of the initial design. Pumped hydro is the most basic form of energy storage and converts electrical energy into potential energy by pumping water up to the top of a hill, storing it there in a reservoir, and then using it when needed to generate electricity at very high efficiency.

With an installed capacity of 127–129 GW in 2012, PHS represents more than 99% of worldwide bulk storage capacity and contributes to about 3% of global generation[31]. During off-peak electricity demand hours, the water is pumped into the higher reservoir; during peak hours, the water can be released back into the lower level reservoir. In the process, the water powers turbine units which drive the electrical machines to generate electricity. The amount of energy stored depends on the height difference between the two reservoirs and the total volume of water stored. The rated power of PHS plants depends on the water pressure and flow rate through the turbines and rated power of the pump/turbine and generator/motor units[32]. Various PHS plants exist with power ratings ranging from 1 MW to 3003 MW, with approximately 70–85% cycle efficiency and more than 40 years lifetime[33]. However, with the restriction of site selection, PHS plants suffer long construction time and high capital investment.

Recently, with the advance of technology, some PHS plants using flooded mine shafts, underground caves and oceans as reservoirs have been planned or are in operation, such as the Okinawa Yanbaru in Japan, a 300 MW seawater-based PHS plant in Hawaii (with another planned in SA’s Spencer Gulf, Australia), the Summit project in Ohio and the Mount Hope project in New Jersey[34]. In addition, wind or solar power generation coupled with PHS is now being developed. This could help the adoption of renewable energy in isolated or distributed networks. For instance, the Ikaria Island power station will integrate a 3×900kW wind farms with a PHS facility. The development trend of PHS facilities consists of building the hydroelectric set with higher speed and larger capacity compared to the current technical level, installing centralized monitoring and using intelligent control systems[35].

3.2 Battery Energy Storage (BES)

A BES system consists of a number of electrochemical cells connected in series or parallel, which produce electricity with a desired voltage from an electrochemical reaction.

Currently, relatively low cycling times and high maintenance costs have been considered as the main barriers to implementing large-scale facilities. The disposal or recycling of dumped batteries must be considered if toxic chemical materials are used. Furthermore, many types of battery cannot be completely discharged due to their lifetime depending on the cycle Depth-of-Discharge (DoD).[36] A description of several important BES technologies appears below:

3.2.1 Lead–acid batteries – The most widely used rechargeable battery is the lead–acid battery. The cathode is made of PbO₂, the anode is made of Pb, and the electrolyte is sulfuric acid. There are a few installations around the world as utility-scale EES, because of several technical inefficiencies. In addition, they may perform poorly at low temperatures so a thermal management system is normally required, which increases the cost.[37] Work on improving the performance of these batteries is ongoing.

3.2.2 Lithium-ion (Li-ion) batteries – The Li-ion battery is considered as a good candidate for applications where the response time, small dimension and/or weight of equipment are important. The main drawbacks are that the cycle DoD can affect the Li-ion battery’s lifetime and the battery pack usually requires an on-board computer to manage its operation, which increases its overall cost. In 2013 Toshiba announced a project to install a 40 MW/20 MWh Li-ion battery project in Tohoku, to assist with the integration of renewables into the grid. The real prospect for Li-ion batteries is their use in Hybrid and full Electric Vehicles (HEVs and EVs), because of their small size and light weight for an application not requiring high storage and output.[38]

3.2.3  Sodium–sulphur (NaS) batteries – The desirable features of NaS batteries include relatively high energy densities, almost zero daily self-discharge, higher rated capacity than other types of batteries (up to 244.8 MWh) and high pulse power capability. The battery uses inexpensive, non-toxic materials leading to high recyclability. However, the limitations are high annual operating cost (80$/kW/year) and an extra system required to ensure its operating temperature. These batteries are most likely to be used to support wind farm generation. [39]

3.2.4  Nickel–cadmium (NiCd) batteries – These normally have s relatively robust reliabilities and low maintenance requirements. The weaknesses of NiCd batteries are: cadmium and nickel are toxic heavy metals, resulting in environmental hazards; the battery suffers from the memory effect (as experienced by cell phone users) meaning the capacity can be dramatically decreased if the battery is repeatedly recharged after being only partially discharged[40].

There is a growing number of other battery options being investigated to store electricity and to buffer the effects of renewables on grid stability. These include Nickel-metal Hydride, Sodium Nickel Chloride and Sodium-Metal Halide all of which have different benefits and drawbacks. At present, battery technology seems destined for domestic and community-based applications, electric vehicles or back-up on ocean-going vessels.[41]

3.3 Compressed Air Energy Storage (CAES)

CAES works as a generation storage technology by using the elastic potential energy of compressed air to improve the efficiencies of conventional gas turbines. CAES systems compress air using electricity during off-peak times, and then store the air in underground caverns. During times of peak demand, the air is drawn from storage and fired with natural gas in a combustion turbine to generate electricity. This method uses only a third of the natural gas used in conventional methods. Because CAES plants require some sort of underground reservoir, they are limited by their locations. Two commercial CAES plants currently operate in Huntorf, Germany and MacIntosh, Alabama, though plants have been proposed in other parts of the United States.[42]

3.4 Flywheels

Flywheels can provide a variety of benefits to the grid at either the transmission or distribution level, by storing electricity in the form of a spinning mass. The device is shaped liked a cylinder and contains a large rotor inside a vacuum. When the flywheel draws power from the grid, the rotor accelerates to very high speeds, storing the electricity as rotational energy. To discharge the stored energy, the rotor switches to generation mode, slows down, and runs on inertial energy, thus returning electricity to the grid.

Flywheels typically have long lifetimes and require little maintenance. The devices also have high efficiencies and rapid response times. Because they can be placed almost anywhere, flywheels can be located close to the consumers and store electricity for distribution. While a single flywheel device has a typical capacity on the order of kilowatts, many flywheels can be connected in a “flywheel farm” to create a storage facility on the order of megawatts[43]. Beacon Power’s Stephentown Flywheel Energy Storage Plant in New York is the largest flywheel facility in the United States, with an operating capacity of 20 MW[44].

3.5 Thermal Storage

Thermal storage is used for electricity generation by using power from the sun, even when the sun is not shining. Concentrating solar plants can capture heat from the sun and store the energy in water, molten salts, or other fluids. This stored energy is later used to generate electricity, enabling the use of solar energy even after sunset. Plants like these are currently operating or proposed in California, Arizona, and Nevada. For example, the proposed Rice Solar Energy Project in Blythe, California will use a molten salt storage system with a concentrating solar tower to provide power for approximately 68,000 homes each year[45].

Thermal technology can also be used for cooling in lieu of grid power. One method is freezing water at night using off-peak electricity, then releasing the stored cold energy from the ice to help with air conditioning during the day. For example, Ice Energy’s Ice Bear system creates a block of ice at night, and then uses the ice during the day to condense the air conditioning system’s refrigerant. In this way, the Ice Bear system shifts the building’s electricity consumption from the daytime peak to off-peak times when the electricity is less expensive. The company boasts that “since 2005, over 40 utilities have been using our award-winning Ice Bears to manage their customers’ air conditioning load without impacting comfort. At less than half the life-cycle cost of lithium ion batteries, Ice Bears deliver the most cost-effective, reliable and green distributed energy storage for the grid.”[46]

3.6 Hydrogen and Fuel Cell

Hydrogen can be used as a zero-carbon fuel for generation. Excess electricity can be used to create hydrogen, which can be stored and used later in fuel cells, engines, or gas turbines to generate electricity without producing harmful emissions. The National Renewable Energy Laboratory in the US (NREL) has studied the potential for creating hydrogen from wind power and storing it in the wind turbine towers for electricity generation when the wind isn’t blowing[47].

There are two processes employed, the first using a water electrolysis unit to produce the hydrogen which can then be stored in high pressure containers and/or transmitted by pipelines for later use. The second part of the operation is the use of the stored hydrogen for electricity generation via the fuel cell (also known as regenerative fuel cell) which is the key technology in hydrogen EES.

In general, the electricity generation by using fuel cells is quieter, produces less pollution and is more efficient than the fossil fuel combustion approach Other features include easy scaling (potential from 1 kW to hundreds of MW) and compact design. Fuel cell systems combined with hydrogen production and storage can provide stationary or distributed power (primary electrical power, heating/cooling or backup power) and transportation power (potentially replacing fossil fuels for vehicles). Such hydrogen EES systems can offer capacity and power independence in energy production, storage and usage, due to the separate processes. It should be noted that the disposal of exhaust fuel cells must consider degradation and recycling while toxic metals are used as electrodes or catalysts[48].

3.7 Other EES Options Under Development

Work is continuing on commercialisation of solar fuels (through natural or artificial photosynthesis), superconducting magnetic energy storage (where the superconducting coil is frozen below its critical temperature using rare metals), capacitor and supercapacitor for small quantities of electrical storage and flow battery energy storage where some or all electroactive components are dissolved in the electrolyte[49]. Most of these technologies are complex and, as yet, experimental.

 

 4.0 Are Renewables Economically Competitive?

The international pressure in support of renewable power generation technologies to reduce greenhouse gas emissions, and thereby to arrest the effects of climate change, has led to the accelerated deployment, technological improvements and cost reduction of non-fossil fuel power generation. Already, renewables are the economic solution off-grid and are increasingly the competitive for grid supply.

Solar PV is democratising electricity production and bringing it within reach of individual households, as millions of people around the world now have rooftop PV systems. In some countries, this growth of distributed solar PV is starting to call into question the viability of traditional utility business models. The challenges faced by utilities, sometimes amplified by inflexible or outdated electricity markets, will only increase as renewable power generation costs continue to fall.

For the past 50 years, the most economic renewable power generation options were hydropower for electricity, biomass for power and geothermal where fossil fuels were unavailable or extraction too expensive. However, as the cost of solar PV and wind declines, future growth can be sustained because of the much larger and more widely distributed access to the “raw” resource. But it is not all “plain sailing” – new challenges are emerging, such as outdated network pricing, problems with grid stability, and utility business models that have not adapted to the new reality

For a transition to a truly sustainable energy sector to be achieved, continued cost improvements need to be realised to ensure that renewable power generation options are, on average, the least-cost solution for almost all new electricity generation capacity required worldwide to meet either demand growth or plant retirements.

Cost reductions are in train, even without government subsidies, through the growing economies of scale. However, due to the rapid cost declines seen for solar PV modules and to a lesser extent wind turbines in recent years, the absolute cost reduction opportunities in the future will increasingly need to come from balance of system costs (that part of the project that excludes the solar PVs or the wind turbines) or operations and maintenance cost optimisation and reduced financing costs. It is still more problematic to gain finance for a renewable power station than for a fossil fuel-powered project, particularly at current international prices for coal, gas and oil.

The technologies with the largest cost reduction potential, because they are still the newest, are Concentrating Solar Power (CSP), solar PV and wind. Hydropower and most biomass combustion and conventional geothermal technologies are mature and their cost reduction potentials are not as large, save for PHS.

Wind power is now one of the most competitive renewable power generation options. The decline in the cost of turbines has declined by as much as 30% since their peak in 2008/2009. In addition, there is increasing demand for today’s “state of the art” technologies, and large turbines with the greatest swept areas command a price premium. The additional costs are required for more advanced materials to retain structural integrity at acceptable blade weights for the longer blades, for sturdier and quieter gear boxes and other increased structural costs to deal with greater heights and weights. Future cost reductions will therefore increasingly depend on cost trends for the larger machines, as 100 to 120 metre diameter bladed machines now dominate the market.

The average size and hub-height of turbines is also growing to accommodate lower wind quality sites as the best sites have already been exploited. With turbine cost reductions likely to slow closer to 2020, the importance of reducing balance of project costs, O&M costs and financing costs will grow.

Solar PV module prices continue to fall as the market continues to grow and manufacturing innovations and economies of scale take effect. Balance of system costs and financing costs are becoming the crucial determinants for solar PV. This can easily be seen by comparing one of the most competitive markets, Germany, with the United States. A similar dynamic could play out in the small-scale rooftop market. If BoS costs can be pushed down to very competitive levels, average installed costs could range from USD 1 600 to USD 2 000/kW by 2025.

For CSP plants, the overall capital cost reductions for parabolic trough plants by 2025 could be between 20% and 45%.[50]

The latest comparisons for generating electricity from renewable energy was published in December 2016 by Lazard showing the Levelized Cost of Energy Analysis (LCOE 10.0) – an annual study comparing the cost of generating energy from conventional and alternative technologies.[51]

The LCOE is the present discounted value of costs associated with an energy technology divided by the present discounted value of production – i.e. it is a measure of the long run average cost of the energy source.

Unsubsidized Levelized Cost of Energy—Wind/Solar PV (Historical)

Perhaps the most striking finding shown in the figure is the dramatic fall in the cost of solar energy during the past five years. The 2009 forecast for the near – term levelized cost of solar power was nearly $450/MWh of electricity generated, while the 2014 number was under $150/MWh.

Perhaps the most telling graph appears below, courtesy of IRENA, indicating the LCOE for renewables outperforming coal.

[52]

 

 5.0 International Comparisons

Renewable energy, together with energy efficiency, is essential to delivering the low-carbon energy future that the international community agreed upon at the United Nations’ 21st Conference of the Parties (COP21) at the end of 2015. Renewable energy deployment is driven by governmental incentives that aim not just at decarbonisation, but also – and sometimes even more importantly – at making electricity available to those without it and reducing harmful local air pollution.[53]

Hence, developing economies jumped ahead of developed countries for the first time in 2015 in terms of total new renewable energy investment – the former growing by 19% while the latter fell by 8%. Much of these record-breaking developing world investments took place in China (up 17% to $102.9 billion). Other developing countries showing increased investment included India, South Africa, Mexico and Chile. The share of global investment accounted for by developing countries rose from 49% in 2014 to 55% in 2015, with the dollar commitment at $155.9 billion, up from $131.5 billion the previous year. Developed economies invested $130.1 billion, compared to $141.6 billion in 2014. Within the developing-economy category, the “big three” of China, India and Brazil saw investment rise 16% to $120.2 billion, while “other developing” economies enjoyed a 30% bounce to $36.1 billion.[54]

At the same time, global country level growth in the production of fossil fuels slowed and was only 0.5% higher than in 2014. Lower growth was mainly caused by a fall in coal production in 2015 (-3.1%), whilst crude oil and natural gas increased at a higher rate in 2015 (+3.0% and +1.6% respectively). The decrease in coal production was equally shared between OECD countries and China (-125 Million Tonnes of Oil Equivalent “Mtoe” in total, of which -64 Mtoe and -57 Mtoe respectively). Around 40% of the growth in crude oil and 60% for gas in 2015 occurred in OECD countries and is largely due to “unconventional” production (oil sands, oil shale, coal seam gas, etc.).

The following two tables are reprinted from: REN21. 2016.

Renewables 2016 Global Status Report (Paris: REN21 Secretariat).

ISBN 978-3-9818107-0-7

TOP FIVE COUNTRIES

Annual investment / net capacity additions / biofuel production in 2015

	1	2	3	4	5
Investment in renewable power and fuels (not including hydro > 50 MW)	China	USA	Japan	U.K.	India
Investment in renewable power and fuels per unit GDP[3]	Mauritania	Honduras	Uruguay	Morocco	Jamaica
Geothermal Power Capacity	Turkey	USA	Mexico	Kenya	Germany/Japan
Hydro Power Capacity	China	Brazil	Turkey	India	Vietnam
Solar PV Capacity	China	Japan	USA	U.K.	India
Concentrating Solar Thermal Power (CSP) Capacity[4]	Morocco	South Africa	USA	–	–
Wind Power Capacity	China	USA	Germany	Turkey	Brazil
Solar Water Heating Capacity	China	Turkey	Brazil	India	USA
Biodiesel Production	USA	Brazil	Germany	Argentina	France
Fuel Ethanol Production	USA	Brazil	China	Canada	Thailand

 

Total capacity or generation as of end-2015

	1	2	3	4	5
POWER
Renewable power (incl. hydro)	China	USA	Brazil	Germany	Canada
Renewable power (not incl. hydro	China	USA	Germany	Japan	India
Renewable power capacity per capita (among top 20, not including hydro)[5]	Denmark	Germany	Sweden	Spain	Portugal
Biopower generation	USA	China	Germany	Brazil	Japan
Geothermal Power Capacity	USA	Philippines	Indonesia	Mexico	New Zealand
Hydropower Capacity[6]	China	Brazil	USA	Canada	Russian Fed.
Hydropower Generation	China	Brazil	Canada	USA	Russian Fed.
CSP	Spain	USA	India	Morocco	South Africa
Solar PV Capacity	China	Germany	Japan	USA	Italy
Solar PV Capacity (per capita)	Germany	Italy	Belgium	Japan	Greece
Wind Power Capacity	China	USA	Germany	India	Spain
Wind Power Capacity (per capita)	Denmark	Sweden	Germany	Ireland	Spain
HEAT
Solar water heating collector capacity	China	USA	Germany	Turkey	Brazil
Solar water heating collector capacity per capita[7]	Austria	Cypress	Israel	Barbados	Greece
Geothermal heat capacity[8]	China	Turkey	Japan	Iceland	India
Geothermal heat capacity (per capita)	Iceland	New Zealand	Hungary	Turkey	Japan

 

5.1 The Nexus Between Uptake of Renewables and Decarbonisation Policies

It is difficult to gauge the role that national and international incentives and penalties have played in the adoption of renewable technology worldwide. As alluded to above, renewables have been viewed as a means of electrification in many third world countries as a cheap alternative to diesel or kerosene for power and heating and/or cooking where national grids do not connect to villages. In developed nations however, renewables are viewed increasingly as a substitute for fossil fuel power generation in both transportation and generation in a concerted effort to reduce GGEs and thereby limit (if not reverse) global warming.

Cap and trade and its close cousin a carbon tax are the approaches that most economists favour for reducing greenhouse gas emissions. These market-based approaches work by creating incentives for businesses and households to conserve energy, improve energy efficiency, and adopt clean-energy technologies — without prescribing the precise actions they should take. A market-based approach that “puts a price on carbon” is likely to be more cost-effective (i.e., achieve a given emissions target at a lower cost) than the traditional “command-and-control” approach of government regulation.[55]

California and the several northeastern states of the USA form the Regional Greenhouse Gas Initiative and each has already implemented a regional cap-and-trade system. In addition, the European Union has operated a cap-and-trade system since 2005. The U.S. House passed a cap-and-trade bill in 2009 (the American Clean Energy and Security Act, known as Waxman-Markey after its sponsors), but the Senate did not. Now, President Trump is repealing the legislation that is in place (the Clean Air Act) and actively promoting a return to subsidised coal, that he describes as “clean coal” – a technology that is both expensive and untried.

If reducing emissions proves harder than analysts expect, the result under cap and trade would be higher compliance costs and less production of other valued goods and services, while the result under a carbon tax would be less emissions reduction and greater risk of damage from global warming. Policymakers deciding between these two market-based approaches must weigh those potential outcomes.[56]

In fact, a widely held tenet among environmental economists is that policies promoting renewable energy have no effect on total greenhouse gas (GHG) emissions at all if the power sector is subject to a cap-and-trade scheme, as in the EU, parts of the US, China (started from 2016), and other regions (Fischer & Preonas, 2010; Fowlie, 2010; Goulder, 2013; Böhringer, 2014). The argument is simple and convincing: as long as the cap is binding, total emissions do not change. Additional instruments applied to the same sector merely reallocate emissions between sources and hence raise total abatement costs. This has been used to argue against such policies, such as the feed-in tariff scheme in Germany (BMWA, 2004), or the explicit targets for renewables in the European Union complementing GHG reduction targets (Böhringer et al., 2009). The reasons for these conclusions are:

5.1.1 If the subsidy scheme is derived from general tax revenue, then raising the FIT unambiguously reduces emissions. The principal reason is that the growing green electricity avoids participating in industries outside the cap-and-trade scheme, that in turn reduce output and emissions.

5.1.2 A levy-funded FIT always performs worse in terms of emissions than a tax-funded one, and the disadvantage is increasing in the relative size of the green electricity sector. This is because the levy creates a direct incentive for consumers to substitute into goods that are produced outside the cap-and-trade scheme. If this effect is sufficiently large, then raising the FIT can increase emissions under a levy-funded scheme. Thus, governments are well advised to fund a FIT scheme from general tax revenues instead of a levy on electricity consumption, in particular if the green electricity sector has grown beyond negligible size.

5.1.3 Policies supporting technologies that use electricity instead of fossil fuels outside the cap-and-trade system, and policies supporting renewables inside the system are complementary: Not only do the former policies reduce GHG emissions directly, but they reinforce the emission reducing effect of a FIT. Furthermore, the FIT has wider technology adoption effects beyond the electricity sector: it does not only incentivise investment in green electricity generation technologies but also in, for example, electric cars, power-to-gas or power-to-heat facilities.

5.1.4 Policies supporting the technical efficiency of electricity consumption supplement the FIT scheme in reducing emissions, because they induce a direct incentive for consumers to substitute into electricity, and hence away from goods produced outside the cap-and-trade system.[57]

 

6.0 Conclusions

2015 was a year of firsts and high-profile agreements and announcements related to renewable energy. These included commitments by both the G7 and the G20 to accelerate access to renewable energy and to advance energy efficiency, and the United Nations General Assembly’s adoption of a dedicated Sustainable Development Goal on Sustainable Energy for All (SDG 7). The year’s events culminated in December at the United Nations Framework Convention on Climate Change’s (UNFCCC) 21^st Conference of the Parties (COP21) in Paris, where 195 countries agreed to limit global warming to well below 2 degrees Celsius. A majority of countries committed to scaling up renewable energy and energy efficiency through their Intended Nationally Determined Contributions (INDCs). Out of the 189 countries that submitted INDCs, 147 countries mentioned renewable energy, and 167 countries mentioned energy efficiency; in addition, some countries committed to reforming their subsidies for fossil fuels. Precedent-setting commitments to renewable energy also were made by regional, state and local governments as well as by the private sector.[58]

Globally, renewable electricity production in 2015 continued to be dominated by large (e.g., megawatt-scale and up) generators that are owned by utilities or large investors. At the same time, there are markets where distributed, small-scale generation has taken off. Bangladesh is the world’s largest market for solar home systems, and other developing countries (e.g., Kenya, Uganda and Tanzania in Africa; China, India and Nepal in Asia; Brazil and Guyana in Latin America) are seeing rapid expansion of small-scale renewable systems, including renewables-based mini-grids, to provide electricity for people living far from the grid. Developed countries and regions – including Australia, Europe, Japan and North America – have seen significant growth in numbers of residential and industrial electricity customers who produce their own power.

Twenty-five worldwide business networks representing more than 6.5 million companies from over 130 countries pledged to lead the global transition to a low-carbon, climate-resilient economy.[59] Late in the year, 409 investors representing more than USD 24 trillion in assets called on governments to provide stable, reliable and economically meaningful carbon pricing, to strengthen regulatory support for renewables and energy efficiency, and to develop plans to phase out fossil fuel subsidies.[60]

A series of religious declarations were released – including the Pope’s environmental encyclical, Laudato Si’, as well as the Islamic, Hindu and Buddhist declarations on climate change – called on billions of people of faith to address climate change and to commit to a zero- or low-carbon future through renewable energy.[61]

New investment vehicles – including green bonds, crowdfunding and yieldcos[62] – expanded during the year. Although their levels remained relatively small, green bonds supporting renewable energy (as well as energy efficiency) grew many-fold from 2012 to 2015 and have helped to address a major challenge for renewable energy financing: lack of liquidity.[63] Mainstream financing and securitisation structures continued to penetrate developing country markets as companies (particularly solar PV) and investors sought higher yield, even at the expense of higher risk.[64]

Affordable, reliable energy from whatever source is the cornerstone of economic growth – it underpins education so that a child might study at night, families can keep cool or warm, small businesses can prosper, women and children can walk home through well-lit streets and hospitals can function efficiently to save lives. That is why reaching Sustainable Energy for All’s (SEforALL) objectives of universal access to modern energy, doubling the rate of improvement of energy efficiency and doubling the share of renewable energy by 2030 is crucial.[65]

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[i] MD, Public Private Sector Partnerships, www.carolyncurrie.net email: ppsl@bigpond.com Mobile: +61458001763

[ii] PhD scholar at the Fenner School, Australian National University.

[iii] https://climatecommission.angrygoats.net/wp-content/uploads/Australias-Future-Solar-Energy-Report.pdf

[iv] https://www.cleanenergycouncil.org.au/policy-advocacy/reports/clean-energy-australia-report.html

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[1] https://climatecommission.angrygoats.net/wp-content/uploads/Australias-Future-Solar-Energy-Report.pdf

[2] https://www.cleanenergycouncil.org.au/policy-advocacy/reports/clean-energy-australia-report.html

[3] Countries considered include only those covered by Bloomberg New Energy Finance (BNEF); GDP (at purchasers’ prices) data for 2014 from World Bank. BNEF data include the following: all biomass, geothermal and wind generation projects of more than 1 MW; all hydropower projects of between 1 and 50 MW; all solar power projects, with those less than 1 MW estimated separately and referred to as small-scale projects or small distributed capacity; all ocean energy projects; and all biofuel projects with an annual production capacity of 1 million litres or more. Small-scale capacity data used to help calculate investment per unit of GDP cover only those countries investing USD 200 million or more

[4] Only three countries brought concentrating solar thermal power (CSP) plants online in 2015, which is why no countries are listed in places 4 and 5

 

[5] Per capita renewable power capacity ranking considers only those countries that place among the top 20 worldwide for total installed renewable power capacity, not including hydropower.

Several other countries including Austria, Finland, Ireland and New Zealand also have high per capita levels of non-hydro renewable power capacity, with Iceland likely the leader among all

countries. Population data are for 2014 and are from the World Bank.

[6] Per capita renewable power capacity ranking considers only those countries that place among the top 20 worldwide for total installed renewable power capacity, not including hydropower.

Several other countries including Austria, Finland, Ireland and New Zealand also have high per capita levels of non-hydro renewable power capacity, with Iceland likely the leader among all

countries. Population data are for 2014 and are from the World Bank.

[7] Solar water heating collector rankings for total capacity and per capita are for year-end 2014 and are based on capacity of water (glazed and unglazed) collectors only. Data from IEA SHC. Total capacity rankings are estimated to remain unchanged for year-end 2015.

[8] Not including heat pumps.

Note: Most rankings are based on absolute amounts of investment, power generation capacity or output, or biofuels production; if done on a per capita, national GDP or other basis, the

rankings would be different for many categories (as seen with per capita rankings for renewable power, solar PV, wind power and solar water collector capacity).

---

Endnotes

 

[1] Senior, K “When Will Fossil Fuels Run Out?”, http://www.carboncounted.co.uk/when-will-fossil-fuels-run-out.html, Updated: 8 Mar 2017.

[2]Covert, T., Greenstone, M., Knittel, C.R., “Will We Ever Stop Using Fossil Fuels?” February 2016, CEEPR 2016-003 http://ceepr.mit.edu/files/papers/2016-003.pdf

[3] Ibid.

[4] Union of Concerned Scientists, “Renewable Energy and Agriculture: A Natural Fit”, http://www.ucsusa.org/clean_energy/smart-energy-solutions/increase-renewables/renewable-energy-and.html#.WNSEg3_MiJe

[5] https://csiropedia.csiro.au/solar-hot-water-systems/

[6] https://www.solarchoice.net.au/blog/when-do-feed-in-tariffs-end-NSW-QLD-VIC-ACT-TAS-SA-WA-NT

[7] Ibid.

[8] RenewEconomy (2017a) 2017 to mark “transformational” year for large scale solar in Australia. Accessed at http://reneweconomy.com.au/2017-mark-transformational-year-large-scale-solar-australia-38719/

[9] AIGroup (The Australian Industry Group) (2016) Re-Powering NSW in the interest of consumers. Re-Powering NSW Conference. Innes Willox, AFR (Australian Financial Review) (2017) Solar closing cost gap with wind, conventional power. Accessed at http://www.afr.com/business/energy/solar-energy/solar-closing-cost-gap-with-wind-conventional-power-20170113-gtqw91.

[10] BNEF (Bloomberg New Energy Finance) Research – New coal the most expensive form of new supply.

[11] AEMO (Australian Energy Market Operator) (2016) Regional generation information, NSW. Accessed at http://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Planning-and-forecasting/Generation-information

[12] Wind Energy Foundation, 2016, 1501 M Street, NW, Suite 900, Washington, DC 20005 http://windenergyfoundation.org/about-wind-energy/history/

[13] http://www.ga.gov.au/scientific-topics/energy/resources/other-renewable-energy-resources/wind-energy

[14] https://arena.gov.au/about-renewable-energy/wind-energy/

[15] http://anero.id/energy/wind-energy

[16] http://www.iea.org/topics/renewables/subtopics/wind/

[17] http://www.awea.org/small-and-community-wind

[18] https://www.boem.gov/Offshore-Wind-Energy/

[19] https://www.nytimes.com/2017/02/07/business/energy-environment/renewables-offshore-wind-green-power-dong.html?_r=0

[20] https://windeurope.org/wp-content/uploads/files/about-wind/statistics/WindEurope-Annual-Offshore-Statistics-2016.pdf

[21] http://www.ucsusa.org/clean_energy/our-energy-choices/renewable-energy/how-hydroelectric-energy.html#.WN2X9aIlEdU

[22] https://www.worldenergy.org/data/resources/resource/hydropower/

[23] https://www.cleanenergycouncil.org.au/technologies/hydroelectricity.html

[24] https://www.nrel.gov/workingwithus/re-biomass.html

[25] https://phys.org/news/2015-06-renewable-energy.html

[26] https://phys.org/news/2015-06-renewable-energy.html

[27] https://www.forbes.com/sites/jamesconca/2016/03/24/is-nuclear-power-a-renewable-or-a-sustainable-energy-source/#20be

[28] https://www.nei.org/Knowledge-Center/Nuclear-Statistics/World-Statistics/World-Nuclear-Generation-and-Capacity

[29] H. Chen, T.N. Cong, W. Yang, C. Tan, Y. Li, Y. Ding, Progress in electrical energy storage system: a critical review. Prog Nat Sci, 19 (2009), pp. 291–312

[30] Ibid.

[31] Energy storage – packing some power. The Economist. Published 3^rd March 2012. http://www.economist.com/node/21548495

[32] F.C. Figueiredo, P.C. Flynn. Using diurnal power price to configure pumped storage IEEE Trans Energy Convers, 21 (2006), pp. 804–809

[33] Pumped-hydro energy storage: potential for transformation from single dams. JRC IET scientific and technical report.EUR 25239 EN.Institute for Energy and Transport. Published on 24th February 2012.

[34] W.F. Pickard. The history, present state, and future prospects of underground pumped hydro for massive energy storage. Proc IEEE, 100 (2012), pp. 473–483

[35] http://www.sciencedirect.com/science/article/pii/S0306261914010290#b0150

[36] Ibid.

[37] Paul B. The future of electrical energy storage: the economics and potential of new technologies. Report. Business Insights (Energy). 2009. Table of Contents and brochure. <http://www.globalbusinessinsights.com/content/rben0208p.htm>

[38]C. Liu, F. Li, L.-P. Ma, H.-M. Cheng. Advanced materials for energy storage Adv Mater, 22 (2010), pp. E28–E62.

[39] http://www.sciencedirect.com/science/article/pii/S0306261914010290#b0415

[40] Ibid.

[41] Ibid.

[42] Union of Concerned Scientists.  2013.  Ramping up renewables: Energy you can count on.  Online at http://www.ucsusa.org/assets/documents/clean_energy/Ramping-Up-Renewables-Energy-You-Can-Count-On.pdf.

[43] Electricity Storage Association.  2013.  Online at: http://www.electricitystorage.org/

[44] Beacon Power.  2013.  Online at: http://www.beaconpower.com/

[45] http://www.ucsusa.org/clean-energy/how-energy-storage-works#references

[46] https://www.ice-energy.com/grid/

[47] Kottenstette, R., and J. Cottrell. 2003. Hydrogen storage in wind turbine towers. NREL/TP-500-34656. Golden, CO: National Renewable Energy Laboratory. Online at http://www.nrel.gov/docs/fy03osti/34656.pdf.

[48]http://www.sciencedirect.com/science/article/pii/S0306261914010290?np=y&npKey=59c6fec7377e40a42ac0312d43c5736a3605e74ceca4a564cc0da2cb57ad3e79#b0780

[49] http://www.sciencedirect.com/science/article/pii/S0306261914010290#b0515

[50] IRENA (2015), Renewable Power Generation Costs in 2014 https://www.irena.org/DocumentDownloads/Publications/IRENA_RE_Power_Costs_2014_report.pdf

[51] https://www.lazard.com/perspective/levelized-cost-of-energy-analysis-100/

[52] http://grist.org/climate-energy/renewable-energy-is-getting-cheaper-and-cheaper-in-6-charts/

[53] http://www.iea.org/topics/renewables/

[54] http://fs-unep-centre.org/sites/default/files/publications/globaltrendsinrenewableenergyinvestment2016lowres_0.pdf

[55] http://www.iea.org/topics/renewables/

[56] Ibid.

[57] https://www.wiso.uni-hamburg.de/fileadmin/einrichtungen/forschungslabor/WorkingPaper_21_Jarke_Perino.pdf

[58] http://www.ren21.net/wp-content/uploads/2016/06/GSR_2016_Full_Report.pdf

[59] UN Global Compact, “Global business leaders at the Business & Climate Summit send a clear message to national and international policymakers: ‘We want a global climate deal that achieves net zero emissions – make it happen at COP21’,” press release (Paris: 21 May 2015), https://www.unglobalcompact.org/news/1871-05-21-2015

[60] Asia Investor Group in Climate Change et al., “Global Investor Statement on Climate Change,” December 2015, http://investorsonclimatechange.org/wp-content/uploads/2015/12/11DecemberGISCC.pdf. See also UN Global Compact, “The Road to Paris,” December 2015, https://www.unglobalcompact.org/take-action/action/cop21-business-action

[61] The Vatican, Encyclical Letter Laudato Si’ of the Holy Father Francis on Care of Our Common Home (Vatican City: Vatican Press, 2015), p. 21, http://w2.vatican.va/content/dam/francesco/pdf/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-si_en.pdf

[62] Public companies (which own solar farms, wind farms and similar assets) could grow their dividends at double-digit rates despite no internal growth or retained earnings. http://www.ey.com/Publication/vwLUAssets/ey-yieldco-brochure/$FILE/ey-yieldco-brochure.pdf

[63] Richard Taylor, IHA, personal communication with REN21, 7 October 2015

[64] Ferroukhi, op. cit. note 1; Katherine Tweed, “Bigger risk, bigger returns in renewable energy’s emerging markets,” Greentech Media, 20 April 2016, http://www.greentechmedia.com/articles/read/Bigger-Risk-Bigger-Returns-in-Renewable-Energys-Emerging-Markets

[65] http://www.ren21.net/wp-content/uploads/2016/06/GSR_2016_Full_Report.pdf