Energy is a basic need of our economy. Yet the world relies primarily on the polluting and exhaustible fossil energies. By Dr. Wolfgang Palz, Chairman, World Council for Renewable Energies.

Consequently, we are faced today with three essential geopolitical challenges: security of energy supply, depletion of conventional fossil energy resources, and climate change that is by and large a result of current energy consumption patterns. The overarching solution for all these problems is the speedy development of the renewable energies (RE) – those derived from the sun, the wind, agriculture and forestry, water flow and other sources.

What used to be an ecologist’s dream just 10 years ago has recently become an economic reality: in a decade of double-digit growth rates reaching in many sectors 50 per cent per year, renewable energies have been a shining star in some national economies and stock markets. Global investments are exceeding US$50 billion per annum and hundreds of thousands of new jobs have been created. Wall Street bankers have become experts in wind and solar technologies.   
 
Being an emerging market segment, renewable energies are still dependent on political support. The European Union, currently leading the world in this field, is targeting shares of over 20 per cent renewable electricity in three years’ time, and 20 per cent renewable energies in Europe’s overall consumption by 2020 – three times more than today. Experts believe that in the long run these inexhaustible and clean energies have the potential to provide the world with nearly all of its energy needs. What is still in its infancy is the deployment of the renewable energies in the developing countries: this is important since RE are particularly suited for promoting progress and peace for two billion people lacking today any form of modern energy supply.  


Introduction and rationale for renewable energy promotion
Since the World Summit in Johannesburg in 2002 where they dominated the agenda, RE have at last gained general recognition of their potential to provide the world with clean, inexhaustible, and decentralised energy that is accessible to all.
 
At present, the world is being alarmed anew by the prospect of a dangerous and costly climate change for which fossil energy consumption is the main driving force: the UN/IPCC report presented at the beginning of 2007 calls for immediate action to alleviate climate change and the costs in human lives and economic growth that go with it; after 2020 it may have become irreversible. The only energies that qualify to avoid that disaster for mankind are the RE, as they emit no greenhouse gases.
 
Moreover, most experts agree that by the middle of this century most fossil resources of the globe, with the exception of coal, will have been used up. Here again RE offer the right solution, because the sun will continue to shine. But the challenge is tremendous: the change of paradigm from fossil to renewable resources implies in not more than 50 years the complete restructuring of the current energy system that represents a global business of trillions of dollars; and we are running out of time. In that respect the renewables have the edge over conventional solutions. It may take a whole decade to get a new conventional power plant on stream, but only weeks to build a wind or solar plant.
 
The limits on fossil resources and the restriction of their availability to a few regions already have an effect on today’s market prices, not only in 50 years’ time; the oil price that leads the market price of all fossil energies stands now at $60 – six times more than a few years ago. The price of fissile uranium has increased in the last six years by a factor of ten. On the other hand the prices for RE across the board are decreasing thanks to the economies of scale facilitated by the globalisation of the energy markets. Market-based competition will in a few years’ time already swing in favour of the RE, and the political incentives that are necessary today can be phased out. Investment decisions on new power plants that operate for 50 years should take this perspective into account. Sticking simply to investments in conventional technologies will not be safe as it may look; even Wall Street feels alarmed and is getting serious about the renewables.
 
Last but not least, we see an extra benefit for RE that rates high on the agenda of any energy policy – energy security, with less dependence on imports. The sun shines everywhere and wind resources are widespread as well whereas – just as an example – 20 per cent of the world’s reserves of natural gas are in the ground of tiny Qatar in the Gulf. 
 
The renewable energies’ share in today’s energy markets
 
RE for power generation
In the global power sector, 20 per cent of all investments go currently to RE power. Large hydro and the ‘new’ RE (in order of market share: wind power, small hydro, bio-power, photovoltaics, and so on) together slightly exceed the overall capacity of all nuclear plants. It is important to note that the RE develop currently much faster than the atomic power plants: in 2006, six atomic power plants were retired from the grid and no new ones added, whereas 15 gigawatts (GW) of new wind capacity was installed worldwide, a business of US$20 billion.
 
Global wind capacity has reached 75GW, a tenfold increase over 1996. Germany owns 20 per cent of that capacity, followed by the USA, Spain, India, China and others; Canada and France were last year doubling their wind market growth rates.
Approximately 60GW of small hydro installations were in operation last year. The world market leader is China.
 
Bio-power represents today over 40GW of global capacity. It comprises such different sectors as co-firing of wood in coal plants or dedicated bio-power plants, small co-generation plants employing vegetable oils, biogas plants feeding into power generators, etc. The two latter sectors are developing most rapidly in Germany, the world leader in these areas.
 
The most ‘noble’ among the RE is solar photovoltaics (PV), the semiconductor plates that convert radiation directly into electricity without any moving part. 7GW of PV are currently in operation, a sevenfold increase with respect to 2004. One-third of that capacity is installed in Germany, followed by Japan and California. The global PV business exceeds €10 billion a year. Most of the PV plants installed in the industrialised countries are grid connected; they come in any size, from microwatts in watches, kilowatt plants for buildings, and larger ground mounted installations up to 60 megawatts. Combined with battery storage PV is ideally suited for independent power generation, for instance in remote villages for lighting and communication; 15 per cent of world production goes to applications of this kind in the developing countries for the benefit of the poor.

Overall a wealthy RE power industry has developed with billions in euro investments. Most of the participants are small or medium-size companies; about 300,000 new jobs have been created in the last few years in this new industry.  
 
 
Renewable biofuels for transport  
The world relies today for three per cent of its fuel consumption on liquid biofuels; more than three-quarters of global bioalcohol for transport is produced and used in Brazil and the US. In Brazil its share in petrol consumption is 44 per cent – it is used pure or blended in the country. The US currently produces 16 million tonnes of ethanol per year, slightly more than Brazil. The US development is breathtaking: production has tripled over the last three years and is supposed to double in a year’s time. The US invested US$3 billion in 2005 and created 150,000 new jobs in the sector.  
 
Ethanol in the US is corn-based and subsidised; Brazil employs sugar cane as a feedstock that is more economic and needs no subsidy. There are disagreements within the US agricultural sector on a possible over-reliance on alcohol: important US players see the risk of pressures on food and feed supply and inconsistencies with market demand.
 
The EU has fixed a target of six per cent biofuels contribution in the transport market by 2010. For European agriculture, plagued as it is by over-production of food and set-aside regimes, biofuels are seen as a welcome new opportunity.
 
An emerging market segment of biofuels are the vegetable oils and the derived biodiesel. They are cultivated with the highest productivity as palm oil in South-east Asia – with the rising concern that forests are being cleared to give way for new plantations.  
 
 
RE for heating and cooling  
China is the market leader for solar heat collectors; the Chinese market is not subsidised and has reached a volume of 10 million square metres of new collectors every year; 40 million solar water heaters are now in operation in the country.
 
In Europe the markets for wood pellet stoves and geothermal heat pumps are booming with growth rates of more than 70 per cent.
 
Last but not least – the tremendous efforts, particularly in Europe, towards low-energy housing and solar architecture must be mentioned. ‘Passive solar’ architecture coupled with solar collector integration has one of the highest potentials for RE utilisation.  
 
 
Outlook  
The RE benefited in the last few years from a significant market development that is encouraging for the future: renewables have   definitely entered the mainstream of global energy markets. The new RE mass markets will rapidly gain in competitiveness against conventional energies. Their progress is unstoppable.
 
But the challenges ahead are tremendous: China is aggressively developing new coal plants for power generation and will in two years time become the country emitting the most carbon dioxide; and there is every chance that the world will try to consume the remaining oil and natural gas resources to the very last droplet.  
 
'Passive solar' architecture coupled with solar collector integration has one of the highest potentials for RE utilisation.

The European Union has adopted the ambitious goal of tripling the RE share over the next 13 years to 20 per cent: 20 per cent of power generation from RE will be achieved by 2010. On the other hand, the US – leaving aside their controversial 20 per cent biofuel target in transport by 2017 – has today a RE power share of 6 per cent and does not think it could get to 15 per cent within the next two decades. Japan has just decided it wants to achieve RE electricity sales of a meagre 1.63 per cent by 2014.
 
What is needed most now is to raise awareness about RE facts and figures, and the unique role of renewables in controlling climate change. As the climate experts have just made clear, the alternative is to leave our children a world in jeopardy.   

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Wolfgang Palz, Ph.D, is Chairman of the World Council for Renewable Energies. In the mid-1970s he published ‘Solar Electricity, an Economic Approach to Solar Energy’ (UNESCO, Paris). For 20 years (1977-97) he was in charge of the European Union’s research and development of all renewable energy. In 1997 he developed the target figures for RE implementation in Europe by 2010 that were adopted by the EU Commission in its first White Paper published that year (he was too pessimistic; most of these goals will actually be exceeded). He has been chosen as a wind energy pioneer by the British Wind Energy Association, and won European awards for his work in photovoltaics, wind power and biomass. He has also received the Order of Merit from the Federal Republic of Germany.   
 
The World Council for Renewable Energy (WCRE) is the global voice for renewable energy. It operates independently and free of the vested interests of the present global energy system. As a non-profit and non-governmental globally working organisation, it is focused on developing policies and strategies for renewable energy. Its mission is to bring RE into the mainstream of world economy and lifestyle. It seeks to convince global opinion of the potential of renewable energy, while showing the undesirable developments, dangers, hidden costs and damage to civilization caused by conventional energy supply.   

Source:
Dr. Wolfgang Palz 2007
World Council for Renewable Energy (WCRE)
The Commonwealth Ministers Reference Book – 2007