Tag Archives: alternative
Europe: Draining Energy
by Steve Kingshott 27 Jun 2013 Europe was fast out of the blocks with its carbon emissions schemes but the financial downturn and the emergence of Asia and Latin America is threatening its future, Steve Kingshott writes. The number of countries and regions proposing cap-and-trade carbon emissions schemes is growing. Australia, India, the US and China are among those who have established or proposed plans to rival Europe. Yet while the EU Emissions Trading Scheme was the first to be established, its long-term future is in jeopardy. The start of the financial crisis has lowered industrial production, resulting in a significant oversupply of carbon allowances. This has caused the price of carbon to plummet and served to question the viability of the trading scheme. This uncertainty is threatening Europe’s ambition to become a world leader in renewable energy. Falling prices From a high point of €30 a tonne, the carbon price fell to the all-time low of €2.75 the day after the European Parliament voted to reject a plan to “backload” allowances. This would have involved withholding 900 million allowances from the market over the next two years in an attempt to boost the carbon price. Since that setback, energy and environment ministers from nine EU states – including the UK, France and Germany – have published a joint statement calling for a new timetable for ETS reform. These calls need urgently to be heeded. The EU should work quickly to address the surplus of ETS allowances and send a clear signal that Europe is committed to a low-carbon economy. “This uncertainty is threatening Europe’s ambition to become a world leader in renewable energy.” The EU’s vision for the ETS extends as far as 2020 but not beyond. Without a defined carbon incentive, investors are understandably wary of making appropriate commitments. Large-scale projects such as offshore wind farms can take up to ten years from planning to operation and so are dependent upon long-term stability. For the insurance industry, this uncertainty and lack of investment will mean lower insurance premium revenues from the renewable energy sector. An increase in carbon emissions is also likely to mean insurers will more frequently have to take account of climate change risk factors such as major weather events and flooding. Significant investment Focused properly, the ETS has the potential to drive significant investment in low-carbon energy and renewables. This would help to stimulate economic growth as well as enable Europe to achieve security of supply and meet its carbon-reduction targets. Extending the scheme beyond 2020 would send positive market signals while a strategic Europe-wide approach to support energy-intensive industries will prevent carbon leakage to less regulated parts of the world. However, as long as the glut of carbon permits continues to depress the price and while MEPs stall on the issue of backloading, the viability of many projects will be in doubt. With the European Commission estimating the renewables sector could create five million jobs across the region by 2020, it is clear that action is needed now to ensure we do not miss out on opportunities for green growth. Investment in renewables can have significant economic impacts, both directly and indirectly through the supply chain. For example, it is estimated that the UK onshore-wind sector alone could contribute £1.2bn through the supply chain by 2020. “For the insurance industry, this uncertainty and lack of investment will mean lower insurance premium revenues from the renewable energy sector.” New jobs are being created in the insurance industry itself, and firms are recruiting and training underwriters specialised in renewable energy. By taking the initiative to insure renewables in the early stages of development, the industry can build a cluster of expertise and established market-leading positions across the globe including in offshore wind. However, continued job creation and growth will only be realised if there is a stable regulatory and policy environment to support investment in the transition to a low-carbon economy. If we don’t keep up with the rest of the world, then competitors will grow in emerging markets and capitalise on this opportunity. Not enough The UK Government, for its part, has introduced a carbon floor price. This move is very welcome, but unilateral action is not enough. We need politicians across Europe to see the opportunities that exist and realise that any further delay and uncertainty is bad news for business, investors and most of all for consumers. With rapid reform, the ETS can return to being a flagship scheme for carbon trading around the world and help put more economies on a shared low-carbon pathway. Ministers need to work quickly to address existing problems with the ETS while also setting out a vision for the scheme beyond 2020. That is the right way to go and UK Energy Secretary Ed Davey should be supported in this ambition. “UK Energy Secretary Ed Davey should be supported in this ambition.” Ministers need to work quickly to address existing problems with the ETS while also setting out a vision for the scheme beyond 2020. If they do not, investment in renewables will increasingly flow to other territories, including Asia and Latin America, and the UK and Europe will miss out on the significant benefits this can bring. Steve Kingshott, global director for renewables, RSA Continue reading
Renewables To Create Quarter Of World’s Electricity By 2018 – IEA
Global electricity generation from renewable energy sources will rise 40 per cent in the next five years, outpacing natural gas, as China and other developing countries expand capacity, according to a report from the International Energy Agency on Wednesday. As the cost of generating power from wind, solar, hydro and other sources falls, renewables will account for nearly 25 per cent of global electricity production by 2018, up from about 20 per cent in 2011, according to the IEA’s latest medium-term renewable energy market report. Renewables will overtake natural gas and be double that of nuclear by 2016, said the IEA, which acts as energy policy adviser to 28 member countries, including the United States, Japan, Canada and leading European nations. “Renewable power sources are increasingly standing on their own merits versus new fossil-fuel generation,” IEA Executive Director Maria van der Hoeven said at the Renewable Energy Finance Forum in New York. Developing countries outside the Organization for Economic Cooperation and Development (OECD) are expected to account for two-thirds of the global increase, the IEA said, with Africa and Asia showing some of the strongest gains. China, with government backing and access to cheap capital, is streaks ahead of other countries, expected to beef up its renewable capabilities by 750 terawatt hours (TWh) between 2012 and 2018. The United States (150 TWh), Brazil (130), India (95) and Germany (70) are also expected to show large increases. In terms of percentage growth, however, smaller economies are seen making the largest strides, with Morocco (25 per cent) and South Africa (20 per cent) leading the list. Much will depend on government policies and regulations to encourage renewable growth. Uncertainty about renewable policies may hamper investment and growth in the sector, the IEA said. “Policy uncertainty is public enemy number one,” van der Hoeven said, citing policies surrounding tax credits in the United States and incentives for wind power in India. Global investment in renewables fell 12 per cent in 2012, according to the report, driven by a drop in European spending as the economic crisis lingers. In the United States, “boom and bust” cycles are hampering development of renewable sources, especially wind, said Paolo Frankl, head of the IEA’s renewable energy division. US President Barack Obama launched a new climate change initiative on Tuesday that would involve cutting carbon emissions from coal-fired power plants and supporting renewable energy sources. Continue reading
IEA: Renewable Power To Exceed Gas By 2016 And Double Nuclear
Silvio Marcacci CleanTechnica Natural gas is widely considered the bridge to take us from fossil fuel dependence to a clean energy future – but that bridge may be a lot shorter than anyone could have predicted. Global renewable electricity production by region image via IEA The International Energy Agency predicts power generation from renewable sources will exceed natural gas and be twice the contribution from nuclear energy globally by 2016 – just three short years from now. IEA’s second-annual Medium-Term Renewable Energy Market Report (MTRMR) forecasts renewable generation will grow 40 per cent in the next five years despite difficult economic conditions. Wind and solar lead renewables charge Renewable energy is now the fastest-growing sector of the global power market, and will represent 25 per cent of all energy generation worldwide by 2018, up from 20 per cent in 2011. In addition, renewable electricity generation is expected to reach 6,850 terawatt-hours (TWh) and total installed renewable capacity should hit 2,350 gigawatts (GW), both by 2018. Wind and solar photovoltaic generation is powering this jump, and non-hydro renewable power will double from 4 per cent of gross generation in 2011 to 8 per cent in 2018. IEA cites two main drivers for their incredible outlook: accelerating investment and deployment, and growing cost competitiveness versus fossil fuels. Strongest growth in developing countries Even though government funding has been inconsistent, private investment has remained strong, especially in developing economies. Rural electrification, energy poverty, and rising demand have been major challenges for policymakers in these countries, and renewables have become an increasingly attractive option for diverse and non-polluting power. Countries with non-hydro renewable capacity above 100MW image via IEA Non-developed countries, led by China , are expected to contribute two-thirds of all renewable market growth between now and 2018, compensating for slower growth and market volatility acorss Europe and the US. Indeed, non-hydro renewable power will make up 11 per cent of gross generation in these countries by 2018, up from 7 per cent in 2012. By itself, China will account for 310GW, or 40 per cent of all global renewable power capacity increases over this time period. Falling costs, rising capacity Solving energy poverty issues without harmful emissions is key to renewables growth , but the larger reason for IEA’s outlook is more likely falling costs. The report finds renewables now cost-competitive with fossil fuels across many countries and a wide set of circumstances. Solar PV annual capacity additions by region image via IEA IEA notes wind is competitive with new fossil fuel in multiple markets, including Brazil, South Africa, Mexico, and New Zealand, and solar is competitive both in markets with high peak prices and decentralized power needs. “As their costs continue to fall, renewable power sources are increasingly standing on their own merits versus new fossil-fuel generation,” said Maria van der Hoeven of IEA. IEA – policy uncertainty is public enemy #1 However, the IEA warns renewables still face a challenging future. Global investment fell in 2012, and policy uncertainties loom over clean energy technology in several important markets. In addition, grid integration challenges have materialized in some regions as renewables penetration has hit new levels. “Policy uncertainty is public enemy number one,” said Van der Hoeven . “Many renewables no longer require high economic incentives, but they do still need long-term policies that provide a predictable and reliable market and regulatory framework.” Read more: http://www.businesss…r#ixzz2XPwhHSpo Continue reading
