EcoRadio

Category: Energy Matters

The twentieth century way of life has been made available, largely due to the miracle of cheap energy. The price of energy has been at record lows for the past century and a half.As oil becomes increasingly scarce, it is becoming obvious to everyone, that the rapid economic and industrial growth we have enjoyed for that time is not sustainable.Now, the hunt is on. For renewable sources of energy, for alternative sources of energy, for a way of life that is less dependent on cheap energy. 

  • A Call to Action on Peak Oil

     

    As soon as the global economy recovers, we can expect oil and other fossil fuel prices to shoot right back to where they were last summer, and probably far higher. The International Energy Agency (IEA), formed in the 1970s to act as an energy watchdog for western nations, stated in its 2008 World Energy Outlook:

    Current global trends in energy supply and consumption are patently unsustainable …The future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply.

    This is a call to action of the most urgent kind and we dare not ignore it.

    U.S. oil production peaked in 1970 and has declined ever since, apart from a small and short uptick in the late 1970s, and oil imports have increased steadily. We now produce half of what we produced at our peak and import about 60 percent of our oil.

    What is the global situation? The United Kingdom struck oil in the North Sea in the 1970s and became a major world producer. But oil production peaked without warning in 1999 and the UK suddenly transformed from an oil exporter into an oil importer just seven years after its oil production peaked. UK North Sea oil production is now down almost 50 percent from its peak.

    The same pattern occurred in Indonesia, formerly a member of OPEC. Norway, Russia, and the majority of other oil producers are also past their peak. This is why the IEA regards the situation as so dire: existing oil fields are declining very quickly and new oil fields are not coming online quickly enough to replace them. The IEA concludes that we need three or four additional Saudi Arabias to meet projected demand by 2015!

    Cambridge Energy Research Associates, a respected oil forecasting firm that has been very skeptical of the peak oil discussion, also recently forecast that eight million barrels per day of oil projects have been canceled or delayed since the global recession hit, exacerbating the mid-term situation further.

    Oil production is not the only issue, however. Natural gas production will follow a similar production decline, probably just a few years behind the oil production decline. Natural gas currently constitutes about one quarter of the world’s energy consumption, so this cannot be forgotten in the discussion.

    As we’ve seen with food exports such as rice, when fears grow over the domestic availability of key resources (like food, oil or gas), nations will change export policies overnight: last year, Thailand, the world’s second largest exporter of rice temporarily outlawed rice exports. The same thing could very well happen in oil- and gas-exporting nations: as soon as the global economy recovers and the supply shortage becomes clear, major exporters can simply forbid exports, keeping their precious oil and gas for their own use.

    Similarly, some countries’ oil and gas exports are already declining quickly. Mexico, while struggling with a major drug war, saw its oil exports plummet over 20 percent in 2008 due to the decline by 33 percent in just one year of its major field, Cantarell. Mexico is the third largest supplier of oil to the U.S. Mexico’s oil revenue has fallen off a cliff as its oil exports and oil prices more generally have plummeted. A full 40 percent of Mexico’s government funding is oil revenue. Clearly, Mexico is facing a formidable future and may not survive as a functioning nation, a conclusion also reached by the U.S. military’s Joint Forces Command in a 2008 report.

    The time is now to invest heavily in alternatives to oil and gas, such as energy efficiency, conservation, renewable energy and more efficient transportation. Our own dream is a sustainable energy future powered predominately by solar and wind energy, backed up with energy storage and baseload geothermal, biomass and hydro power. Much is happening in these areas already – and this is hopeful: the Obama Administration has budgeted billions of dollars for these efforts and has made energy reform one of its three top priorities. Individuals and communities around the world are also springing into action through various initiatives.

    But much more needs to be done. As the IEA concludes: “What is needed is nothing short of an energy revolution.”

    Walter Kohn (left) is Research Professor of Physics and Chemistry at UC Santa Barbara and a Nobel Laureate in Chemistry (1998).

     

  • Green energy overtakes fossil fuel investment,says UN

     

    “There have been many milestones reached in recent years, but this report suggests renewable energy has now reached a tipping point where it is as important – if not more important – in the global energy mix than fossil fuels,” said Achim Steiner, executive director of the UN’s Environment Programme.

    It was very encouraging that a variety of new renewable sectors were attracting capital, while different geographical areas such as Kenya and Angola were entering the field, he added.

    The UN still believes $750bn needs to be spent worldwide between 2009 and 2011 and the current year has started ominously with a 53% slump in first quarter renewables investment to $13.3bn.

    Counting energy efficiency and other measures, more than $155bn of new money was invested in clean energy companies and projects, even though capital raised on public stock markets fell 51% to $11.4bn and green firms saw share prices slump more than 60% over 2008, according to the report, Global Trends in Sustainable Energy, drawn up for the UN by the New Energy Finance (NEF) consultancy in London.

    Wind, where the US is now global leader, attracted the highest new worldwide investment, $51.8bn, followed by solar at $33.5bn. The former represented annual growth of only 1%, while the latter was up by nearly 50% year-on-year.

    Biofuels were the next most popular investment, winning $16.9bn, but down 9% on 2007, as the sector was hit by overcapacity issues in the US and political opposition, with ethanol being blamed for rising food prices.

    Europe is still the main centre for investment in green power with $50bn being pumped into projects across the continent, an increase of 2% on last year, while the figure for America was $30bn, down 8%.

    But while overall spending in the West dipped nearly 2%, there was a 27% rise to $36.6bn in developing countries led by China, which pumped in $15.6bn, mostly in wind and biomass plants.

    China more than doubled its installed wind turbine capacity to 11GW of capacity, while Indian wind investment was up 17% to $2.6bn, as its overall clean tech spending rose to $4.1bn in 2008, 12% up on 2007 levels.

    A number of Green New Deals – government reflationary packages designed to kickstart economies and boost action to counter climate change – have been laid out by ministers around the world.

    The slump in global renewable ­investment during the first quarter of 2009 has alarmed the UN and New Energy ­Finance, the London-based consultancy that compiled the figures for the UN.

    Michael Liebreich, chief executive of NEF, said the second quarter had revealed “green shoots” of recovery, which indicated this year could end up with investment at the upper end of a $95bn to $115bn range, but still a quarter down on 2008 at the least.

    About $3bn of new money had been raised via initial public offerings or secondary issues on the stock markets in the second quarter, compared with none in the first three months of this year.

    The New Energy Index of clean tech stocks, which had slumped from a 450 high to 134 by March, had since bounced back to 230, while more project financing had been raised in the last six weeks than in the 13 before that, he said.

    But Steiner and Liebreich are still anxious that politicians do more to stimulate growth.

    “There is a strong case for further measures, such as requiring state-supported banks to raise lending to the ­sector, providing capital gains tax exemptions on investments in clean technology, creating a framework for Green Bonds and so on, all targeted at getting investment flowing,” said Liebreich.

    It is important stimulus funds start flowing immediately, not in a year or so, he added: “Many of the policies to achieve growth over the medium-term are already in place, including feed-in tariff regimes, mandatory renewable energy targets and tax incentives. There is too much emphasis amongst some policy-makers on support mechanisms, and not enough on the urgent needs of investors right now.”

  • The 10 big energy myths

     

    Other companies are investigating even more efficient ways of capturing the sun’s energy, for example the use of long parabolic mirrors to focus light on to a thin tube carrying a liquid, which gets hot enough to drive a steam turbine and generate electricity. Spanish and German companies are installing large-scale solar power plants of this type in North Africa, Spain and the south-west of America; on hot summer afternoons in California, solar power stations are probably already financially competitive with coal. Europe, meanwhile, could get most of its electricity from plants in the Sahara desert. We would need new long-distance power transmission but the technology for providing this is advancing fast, and the countries of North Africa would get a valuable new source of income.

    Myth 2: wind power is too unreliable

    Actually, during some periods earlier this year the wind provided almost 40% of Spanish power. Parts of northern Germany generate more electricity from wind than they actually need. Northern Scotland, blessed with some of the best wind speeds in Europe, could easily generate 10% or even 15% of the UK’s electricity needs at a cost that would comfortably match today’s fossil fuel prices.

    The intermittency of wind power does mean that we would need to run our electricity grids in a very different way. To provide the most reliable electricity, Europe needs to build better connections between regions and countries; those generating a surplus of wind energy should be able to export it easily to places where the air is still. The UK must invest in transmission cables, probably offshore, that bring Scottish wind-generated electricity to the power-hungry south-east and then continue on to Holland and France. The electricity distribution system must be Europe-wide if we are to get the maximum security of supply.

    We will also need to invest in energy storage. At the moment we do this by
    pumping water uphill at times of surplus and letting it flow back down the mountain when power is scarce. Other countries are talking of developing “smart grids” that provide users with incentives to consume less electricity when wind speeds are low. Wind power is financially viable today in many countries, and it will become cheaper as turbines continue to grow in size, and manufacturers drive down costs. Some projections see more than 30% of the world’s electricity eventually coming from the wind. Turbine manufacture and installation are also set to become major sources of employment, with one trade body predicting that the sector will generate 2m jobs worldwide by 2020.

    Myth 3: marine energy is a dead-end

    The thin channel of water between the north-east tip of Scotland and Orkney contains some of the most concentrated tidal power in the world. The energy from the peak flows may well be greater than the electricity needs of London. Similarly, the waves off the Atlantic coasts of Spain and Portugal are strong, consistent and able to provide a substantial fraction of the region’s power. Designing and building machines that can survive the harsh conditions of fast-flowing ocean waters has been challenging and the past decades have seen repeated disappointments here and abroad. This year we have seen the installation of the first tidal turbine to be successfully connected to the UK electricity grid in Strangford Lough, Northern Ireland, and the first group of large-scale wave power generators 5km off the coast of Portugal, constructed by a Scottish company.

    But even though the UK shares with Canada, South Africa and parts of South America some of the best marine energy resources in the world, financial support has been trifling. The London opera houses have had more taxpayer money than the British marine power industry over the past few years. Danish support for wind power helped that country establish worldwide leadership in the building of turbines; the UK could do the same with wave and tidal power.

    Myth 4: nuclear power is cheaper than other low-carbon sources of electricity

    If we believe that the world energy and environmental crises are as severe as is said, nuclear power stations must be considered as a possible option. But although the disposal of waste and the proliferation of nuclear weapons are profoundly important issues, the most severe problem may be the high and unpredictable cost of nuclear plants.

    The new nuclear power station on the island of Olkiluoto in western Finland is a clear example. Electricity production was originally supposed to start this year, but the latest news is that the power station will not start generating until 2012. The impact on the cost of the project has been dramatic. When the contracts were signed, the plant was supposed to cost €3bn (£2.5bn). The final cost is likely to be more than twice this figure and the construction process is fast turning into a nightmare. A second new plant in Normandy appears to be experiencing similar problems. In the US, power companies are backing away from nuclear because of fears over uncontrollable costs.

    Unless we can find a new way to build nuclear power stations, it looks as though CO2 capture at coal-fired plants will be a cheaper way of producing low-carbon electricity. A sustained research effort around the world might also mean that cost-effective carbon capture is available before the next generation of nuclear plants is ready, and that it will be possible to fit carbon-capture equipment on existing coal-fired power stations. Finding a way to roll out CO2 capture is the single most important research challenge the world faces today. The current leader, the Swedish power company Vattenfall, is using an innovative technology that burns the coal in pure oxygen rather than air, producing pure carbon dioxide from its chimneys, rather than expensively separating the CO2 from other exhaust gases. It hopes to be operating huge coal-fired power stations with minimal CO2 emissions by 2020.

    Myth 5: electric cars are slow and ugly

    We tend to think that electric cars are all like the G Wiz vehicle, with a limited range, poor acceleration and an unprepossessing appearance. Actually, we are already very close to developing electric cars that match the performance of petrol vehicles. The Tesla electric sports car, sold in America but designed by Lotus in Norfolk, amazes all those who experience its awesome acceleration. With a price tag of more than $100,000, late 2008 probably wasn’t a good time to launch a luxury electric car, but the Tesla has demonstrated to everybody that electric cars can be exciting and desirable. The crucial advance in electric car technology has been in batteries: the latest lithium batteries – similar to the ones in your laptop – can provide large amounts of power for acceleration and a long enough range for almost all journeys.

    Batteries still need to become cheaper and quicker to charge, but the UK’s largest manufacturer of electric vehicles says that advances are happening faster than ever before. Its urban delivery van has a range of over 100 miles, accelerates to 70mph and has running costs of just over 1p per mile. The cost of the diesel equivalent is probably 20 times as much. Denmark and Israel have committed to develop the full infrastructure for a switch to an all-electric car fleet. Danish cars will be powered by the spare electricity from the copious resources of wind power; the Israelis will provide solar power harvested from the desert.

    Myth 6: biofuels are always destructive to the environment

    Making some of our motor fuel from food has been an almost unmitigated disaster. It has caused hunger and increased the rate of forest loss, as farmers have sought extra land on which to grow their crops. However the failure of the first generation of biofuels should not mean that we should reject the use of biological materials forever. Within a few years we will be able to turn agricultural wastes into liquid fuels by splitting cellulose, the most abundant molecule in plants and trees, into simple hydrocarbons. Chemists have struggled to find a way of breaking down this tough compound cheaply, but huge amounts of new capital have flowed into US companies that are working on making a petrol substitute from low-value agricultural wastes. In the lead is Range Fuels, a business funded by the venture capitalist Vinod Khosla, which is now building its first commercial cellulose cracking plant in Georgia using waste wood from managed forests as its feedstock.

    We shouldn’t be under any illusion that making petrol from cellulose is a solution to all the problems of the first generation of biofuels. Although cellulose is abundant, our voracious needs for liquid fuel mean we will have to devote a significant fraction of the world’s land to growing the grasses and wood we need for cellulose refineries. Managing cellulose production so that it doesn’t reduce the amount of food produced is one of the most important issues we face.

    Myth 7: climate change means we need more organic agriculture

    The uncomfortable reality is that we already struggle to feed six billion people. Population numbers will rise to more than nine billion by 2050. Although food production is increasing slowly, the growth rate in agricultural productivity is likely to decline below population increases within a few years. The richer half of the world’s population will also be eating more meat. Since animals need large amounts of land for every unit of meat they produce, this further threatens food production for the poor. So we need to ensure that as much food as possible is produced on the limited resources of good farmland. Most studies show that yields under organic cultivation are little more than half what can be achieved elsewhere. Unless this figure can be hugely improved, the implication is clear: the world cannot feed its people and produce huge amounts of cellulose for fuels if large acreages are converted to organic cultivation.

    Myth 8: zero carbon homes are the best way of dealing with greenhouse gas emissions from buildings

    Buildings are responsible for about half the world’s emissions; domestic housing is the most important single source of greenhouse gases. The UK’s insistence that all new homes are “zero carbon” by 2016 sounds like a good idea, but there are two problems. In most countries, only about 1% of the housing stock is newly built each year. Tighter building regulations have no effect on the remaining 99%. Second, making a building genuinely zero carbon is extremely expensive. The few prototype UK homes that have recently reached this standard have cost twice as much as conventional houses.

    Just focusing on new homes and demanding that housebuilders meet extremely high targets is not the right way to cut emissions. Instead, we should take a lesson from Germany. A mixture of subsidies, cheap loans and exhortation is succeeding in getting hundreds of thousands of older properties eco-renovated each year to very impressive standards and at reasonable cost. German renovators are learning lessons from the PassivHaus movement, which has focused not on reducing carbon emissions to zero, but on using painstaking methods to cut emissions to 10 or 20% of conventional levels, at a manageable cost, in both renovations and new homes. The PassivHaus pioneers have focused on improving insulation, providing far better air-tightness and warming incoming air in winter, with the hotter stale air extracted from the house. Careful attention to detail in both design and building work has produced unexpectedly large cuts in total energy use. The small extra price paid by householders is easily outweighed by the savings in electricity and gas. Rather than demanding totally carbon-neutral housing, the UK should push a massive programme of eco-renovation and cost-effective techniques for new construction.

    Myth 9: the most efficient power stations are big

    Large, modern gas-fired power stations can turn about 60% of the energy in fuel into electricity. The rest is lost as waste heat.

    Even though 5-10% of the electricity will be lost in transmission to the user, efficiency has still been far better than small-scale local generation of power. This is changing fast.

    New types of tiny combined heat and power plants are able to turn about half the energy in fuel into electricity, almost matching the efficiency of huge generators. These are now small enough to be easily installed in ordinary homes. Not only will they generate electricity but the surplus heat can be used to heat the house, meaning that all the energy in gas is productively used. Some types of air conditioning can even use the heat to power their chillers in summer.

    We think that microgeneration means wind turbines or solar panels on the roof, but efficient combined heat and power plants are a far better prospect for the UK and elsewhere. Within a few years, we will see these small power plants, perhaps using cellulose-based renewable fuels and not just gas, in many buildings. Korea is leading the way by heavily subsidising the early installation of fuel cells at office buildings and other large electricity users.

    Myth 10: all proposed solutions to climate change need to be hi-tech

    The advanced economies are obsessed with finding hi-tech solutions to reducing greenhouse gas emissions. Many of these are expensive and may create as many problems as they solve. Nuclear power is a good example. But it may be cheaper and more effective to look for simple solutions that reduce emissions, or even extract existing carbon dioxide from the air. There are many viable proposals to do this cheaply around the world, which also often help feed the world’s poorest people. One outstanding example is to use a substance known as biochar to sequester carbon and increase food yields at the same time.

    Biochar is an astonishing idea. Burning agricultural wastes in the absence of air leaves a charcoal composed of almost pure carbon, which can then be crushed and dug into the soil. Biochar is extremely stable and the carbon will stay in the soil unchanged for hundreds of years. The original agricultural wastes had captured CO2 from the air through the photosynthesis process; biochar is a low-tech way of sequestering carbon, effectively for ever. As importantly, biochar improves fertility in a wide variety of tropical soils. Beneficial micro-organisms seem to crowd into the pores of the small pieces of crushed charcoal. A network of practical engineers around the tropical world is developing the simple stoves needed to make the charcoal. A few million dollars of support would allow their research to benefit hundreds of millions of small farmers at the same time as extracting large quantities of CO2 from the atmosphere.

    • Chris Goodall’s new book, Ten Technologies to Save the Planet, is published by Profile books, priced £9.99.

     

  • Heat and power plants could triple their energy output, report says

     

    The sites included clusters around Grangemouth in Scotland and in the Humber. The latter area already has the largest CHP site in Europe, producing 730MW of electricty. The report suggests an additional 2,550MW could be produced there. Building CHP stations near industrial sites means that the heat can be piped into factories or buildings as high pressure steam or hot water. Greenpeace said that the increased efficiency would reduce the UK’s carbon dioxide emissions by 10m tonnes a year.

    Tim Warham, principal consultant at Pöyry, said: “We were surprised at the large technical potential for industrial combined heat and power we encountered. Provided the policy framework is right, CHP could make a huge contribution to securing power supplies for UK.”

    John Sauven, Greenpeace executive director, said: “Energy technologies like industrial-scale CHP beat nuclear and old-style coal plants on every front. They’re cheaper, they’re much quicker to construct, they’ll cut more carbon emissions, they could halve gas imports and they won’t leave behind an expensive radioactive legacy.” He added that heat was key because it accounted for 49% of the UK’s final energy demand, compared to just 17% for electricity. Greenpeace says that CHP had been neglected in the UK as part of the energy mix, noting that the Netherlands and Denmark are 40% powered by CHP.

    The government recently held a consultation on a heat strategy for the UK and is expected to publish its results later this year. A spokesperson for the Department for Business, Enterprise and Regulatory Reform said on Thursday: “The government recognises the benefits of the combined production of heat and power. Our target is to install 10GW of electricity of good quality CHP by 2010 and with current generation from CHP at 5.5GW, we’re over halfway there.”

    At the launch of the report, Liberal Democrat leader, Nick Clegg, is expected to highlight the record high prices of oil and gas, saying these have brought the UK’s energy crisis into focus. He will say that CHP makes both environmental and economical sense. “The political debate to address this crisis is at a crossroads: do we stick with old centralised technologies like nuclear power or should we instead be investing in efficient localised energy production and usage?”

    Graham Meeks, director of the Combined Heat and Power Association, warned: “Without effective and enduring incentives to make these investments, the fact remains that our next generation of power stations will simply replicate the failings of the past and continue with a needless waste of valuable heat. It really is time to stop fiddling as gas burns.”

     

  • Will Emerging Markets Make Renewable Energy More Democratic?

     

    Over the years, the industry has been expanding to new countries, dividing the market among a larger number of countries every year. But in an economic downturn, with price declines amid an oversupply of solar panels and wind turbines, that trend could be accelerating. And as more countries pass a variety of climate-change legislation, industry insiders predict that — in the coming years — the clean-energy oligarchy will become ever more democratic.

    This change may be most visible among developing countries, such as China, which has doubled its wind market in each of the last four years. With 6.3 gigawatts (GW) of new wind-power installations and 12.2 GW of total installed capacity in 2008, the Chinese market was the second-largest — after the United States — last year. And the GWEC expects the market to double again this year, in spite of the recession. India was the third-largest wind-energy market last year, with 1.8 GW of new installations, and had the fifth highest total capacity, with 9.6 GW.

    While the rest of the list of top wind markets comprise the usual suspects, including Germany, Spain, Italy, France and the U.K., the list of the fastest-growing wind economies holds some surprises. Among countries with at least 50 megawatts of annual wind installations, the five fastest-growing markets include:

    • Hungary, which grew more than fifteenfold to 62 megawatts in 2008 from a mere 4 megawatts in 2007;
    • Norway, which expanded its market nearly 13 times to 102 megawatts in 2008 from 8 megawatts in 2007;
    • Brazil, which rose ninefold to 94 megawatts from 10 megawatts;
    • Portugal, which increased nearly sixfold to 712 megawatts from 123 megawatts and
    • Turkey, which more than quadrupled to 345 megawatts from 97 megawatts.


    Courtesy Jennifer Kho, Data Source: GWEC

    Steve Sawyer, secretary general for the GWEC, said he expects to see a boom in Turkey before the other emerging markets in Europe. The country’s rapidly-growing economy, combined with “no indigenous fossil-fuel resources to speak of,” tremendous wind resources and a government that’s greening up to enhance its bid to join the European Union, has contributed to the speedy growth of wind power in Turkey, he said. The country’s windiness and high electricity prices make wind projects competitive without any major subsidies, he added.

    Brazil is likely to continue its strong wind growth — the country already has one of the cleanest electrical grids in the world, mostly dependent on hydro power, he said — while Chile and South Africa also have huge potential to be a bright spot in the next few years, Sawyer said.

    Chile has few of its own energy sources, except hydropower, and in May, lost much of its natural-gas supply for several days when Argentina halted exports to deal with a supply shortage. That volatility helped attract substantial wind-energy investments, Sawyer said, adding that Chile could see several big projects come online by the end of this year or next year. One challenge, however, is that the Chilean market isn’t large enough to sustain a manufacturing industry, and will likely rely on Brazil to supply its turbines, he said.

    Meanwhile, South Africa has far and away the world’s most progressive policies on climate change, Sawyer said. Under former president Thabo Mbeki, the government made a strong commitment to renewables, he said. The country in April announced a feed-in tariff of 1.25 South African rand (about US $0.15) per kilowatt-hour of wind. Sawyer said he hopes the new administration of President Jacob Zuma, who was sworn in earlier this month, will continue to support renewables.

    Sawyer also sees Romania, Bulgaria, Hungary, Poland, Turkey, and possibly the Czech Republic, growing “very quickly.” In addition, Pakistan has installed its first commercial wind farms and has enormous growth potential, he said, but it will take “a good deal more political stability there for that market to really bloom.”

    Aside from the above-mentioned countries, Michael Liebreich, CEO of New Energy Finance, a London-based research firm, said that renewable energy is becoming popular in Romania, which has shot up to No. 4 on the list of top clean-energy markets. He added that several Latin American countries, including Peru and Mexico, also popped on to the Top 15 list in the first quarter. Only one Latin American country, Brazil, made it on the list last year, he said. “Latin America is a big secret [market],” he said. “We expect several Latin American countries to do very well.”

    Emerging Solar Stars

    Meanwhile, the list of emerging solar-power markets has little in common with that of emerging wind markets. The fastest-growing solar markets above 10 megawatts of annual installations include

    • Czech Republic, with 54 megawatts installed last year, up nearly elevenfold from 5 megawatts in 2007;
    • Greece, with fivefold growth to 15 megawatts in 2008 from 3 megawatts the previous year;
    • South Korea, with expanded more than five times to 258 megawatts from 50 megawatts;
    • Spain, which more than quadrupled to 2.5 gigawatts from 526 megawatts and
    • Italy, which also more than quadrupled to 271 megawatts from 60 megawatts. (As noted earlier, Spain and Italy already are among the world’s largest wind markets, although not the fastest-growing.)

    Jenny Chase, manager of the Solar Insight Service at New Energy Finance, said feed-in tariffs drove most of this growth last year. And she expects many of the emerging markets to keep growing. Chase forecasts that the Czech solar market will grow 48 percent this year to 80 megawatts, based on a generous tariff and relatively easy permitting, but said that financing will remain a challenge.


    Courtesy Jennifer Kho, Data Source: New Energy Finance

    She predicts the Greek market will more than triple to 50 megawatts, in spite of an almost impenetrable bureaucratic process for applying for government incentives and permits. New legislation passed in January should speed up the process, at least “in theory,” she said. Chase also expects the Italian market to more than double to 671 megawatts, based on a strong feed-in tariff and a fairly sunny climate on par with Greece. Solar developers in Italy may struggle with financing, as with everywhere else right now, as well as some permitting bottlenecks — although nothing as bad as in Greece, she added.

    Still, the outlook isn’t all sunny. Chase predicts that the Spanish and South Korean markets will decline this year. Spain’s shrinking market hardly comes as a surprise, as the country — which grew to 2.5 gigawatts last year based on a generous incentive, capped its incentive program at 500 megawatts this year. That represents an 80 percent drop in the market size, expected to put the Spanish market — which surpassed Germany to be the No. 1 market last year — back below Deutschland.

    “Spain is currently trying to figure out how they’re going to pay their annual feed-in-tariff bill,” Chase said. “Spain is a bit of a disaster area and the government is probably trying to exclude as many projects as possible from the 2008 feed-in tariff.”

    In South Korea, a similar feed-in tariff cap could slow the market, she said. Rumors suggest that large projects could be capped at as little as 50 megawatts, she added, although she has not been able to confirm the number.

    Overall, Chase expects this to be “a shockingly hard year” for solar companies. The New Energy Finance forecast ranges from a bearish 5.5 gigawatts, which would represent a 5 percent fall from a 5.8-gigawatt global market in 2008, to a more bullish 29 percent increase to 7.5 gigawatts.

    “We just cannot see as much demand as there potentially could be supply,” Chase said. “I think the solar industry will be really surprised at how low solar prices can go.” Low prices, of course, could be good for the industry in the long-term. “It will open up new markets that we haven’t even considered,” she said. 

    Any growth this year will have to come from a larger number of markets, she said. Many of the emerging markets have suffered from pent-up demand because, even if they wanted solar panels last year, anyone who had panels available sold them to Spain, she said. “Now manufacturers are interested in talking to them.”

    Comparative Development

    In terms of deployment, wind power is about a decade ahead of solar, and that goes for the degree of market-share distribution as well, Sawyer said. “Solar is where wind was 10 years ago, with most of the market in two to three countries — all Spain and Germany, with a little bit in the U.S. and Japan,” he said. “In wind, it was all Germany and Denmark, and a little bit of Spain, and now that’s changed. We’ve got a dozen countries over 100 megawatts.”

    The largest wind market, the United States, accounts for only 20.8 percent of the cumulative installed capacity and but accounted for 30.9 percent of the new wind installations last year, while Spain made up some 45 percent of the global solar market last year.

    Sawyer expects the top 10 wind markets to keep growing, continuing to capture the lion’s share of the world market for some time. But he forecasts the top 10’s market share will drop by about the middle of the next decade, when the industry comprises 20 or 25 major markets.

    It makes sense that more developing countries are turning to wind power, he said. While the solar industry isn’t yet large enough to fulfill the electricity needs of rapidly developing economies at an affordable price, wind is, Sawyer argues. “Wind is competitive now, unless you have large quantities of cheap coal and no concern about the climate,” he said. “Wind is many times the cheapest and best option for adding large quantities to the grid in a very short amount of time.”

    Freelancer Jennifer Kho has been covering green technology since 2004, when she was a reporter at Red Herring magazine. She has more than nine years of reporting experience, most recently serving as the editor of Greentech Media. Her stories have appeared in such publications as The Wall Street Journal, the Los Angeles Times, BusinessWeek.com, CNN.com, Earth2Tech, Cleantechnica, MIT’s Technology Review, and TheStreet.com.

     

  • Green energy overtakes fossil fuel investment, says UN

    Green energy overtakes fossil fuel investment, says UN

    Clean technologies attract $140bn compared with $110bn for gas, coal and electrical power

     

    Green energy overtook fossil fuels in attracting investment for power generation for the first time last year, according to figures released today by the United Nations.

    Wind, solar and other clean technologies attracted $140bn (£85bn) compared with $110bn for gas and coal for electrical power generation, with more than a third of the green cash destined for Britain and the rest of Europe.

    The biggest growth for renewable investment came from China, India and other developing countries, which are fast catching up on the West in switching out of fossil fuels to improve energy security and tackle climate change.

    “There have been many milestones reached in recent years, but this report suggests renewable energy has now reached a tipping point where it is as important – if not more important – in the global energy mix than fossil fuels,” said Achim Steiner, executive director of the UN’s Environment Programme.

    It was very encouraging that a variety of new renewable sectors were attracting capital, while different geographical areas such as Kenya and Angola were entering the field, he added.

    The UN still believes $750bn needs to be spent worldwide between 2009 and 2011 and the current year has started ominously with a 53% slump in first quarter renewables investment to $13.3bn.

    Counting energy efficiency and other measures, more than $155bn of new money was invested in clean energy companies and projects, even though capital raised on public stock markets fell 51% to $11.4bn and green firms saw share prices slump more than 60% over 2008, according to the report, Global Trends in Sustainable Energy, drawn up for the UN by the New Energy Finance (NEF) consultancy in London.

    Wind, where the US is now global leader, attracted the highest new worldwide investment, $51.8bn, followed by solar at $33.5bn. The former represented annual growth of only 1%, while the latter was up by nearly 50% year-on-year.

    Biofuels were the next most popular investment, winning $16.9bn, but down 9% on 2007, as the sector was hit by overcapacity issues in the US and political opposition, with ethanol being blamed for rising food prices.

    Europe is still the main centre for investment in green power with $50bn being pumped into projects across the continent, an increase of 2% on last year, while the figure for America was $30bn, down 8%.

    But while overall spending in the West dipped nearly 2%, there was a 27% rise to $36.6bn in developing countries led by China, which pumped in $15.6bn, mostly in wind and biomass plants.

    China more than doubled its installed wind turbine capacity to 11GW of capacity, while Indian wind investment was up 17% to $2.6bn, as its overall clean tech spending rose to $4.1bn in 2008, 12% up on 2007 levels.

    A number of Green New Deals – government reflationary packages designed to kickstart economies and boost action to counter climate change – have been laid out by ministers around the world.

    The slump in global renewable ­investment during the first quarter of 2009 has alarmed the UN and New Energy ­Finance, the London-based consultancy that compiled the figures for the UN.

    Michael Liebreich, chief executive of NEF, said the second quarter had revealed “green shoots” of recovery, which indicated this year could end up with investment at the upper end of a $95bn to $115bn range, but still a quarter down on 2008 at the least.

    About $3bn of new money had been raised via initial public offerings or secondary issues on the stock markets in the second quarter, compared with none in the first three months of this year.

    The New Energy Index of clean tech stocks, which had slumped from a 450 high to 134 by March, had since bounced back to 230, while more project financing had been raised in the last six weeks than in the 13 before that, he said.

    But Steiner and Liebreich are still anxious that politicians do more to stimulate growth.

    “There is a strong case for further measures, such as requiring state-supported banks to raise lending to the ­sector, providing capital gains tax exemptions on investments in clean technology, creating a framework for Green Bonds and so on, all targeted at getting investment flowing,” said Liebreich.

    It is important stimulus funds start flowing immediately, not in a year or so, he added: “Many of the policies to achieve growth over the medium-term are already in place, including feed-in tariff regimes, mandatory renewable energy targets and tax incentives. There is too much emphasis amongst some policy-makers on support mechanisms, and not enough on the urgent needs of investors right now.”