In its latest Energy [R]evolution scenario, Greenpeace gives an optimistic outlook for renewables' ability to diminish the risks of climate change from CO2 emissions. While the economic crisis has driven down profits, renewables are now 'directly competitive with heavily subsidised conventional generation in an increasing number of markets,' the report states. The authors now argue for a 'transformation', to a flexible system based on a wide variety of renewables. While the shift will require new infrastructure and storage, there are 'no real technical or economic barriers' to be overcome. 'It is the lack of political will that is to blame'.
Within the renewables sector, a host of technologies will combine to replace traditional power installations.
The worldwide photovoltaics (PV) market is starting to make a significant contribution to electricity generation.
PV is important because of its decentralised/centralised character, flexibility for use in an urban environment and huge potential for cost reduction. The cost curve for PV modules has been fairly constant over the last 30 years, with costs reducing by 20% each time the installed capacity doubles, indicating a high rate of technical learning. Assuming a globally installed capacity of about 1500 GW between 2030 and 2040 with an electricity output of 2600 TWh/year, generation costs of around US$0.05-0.10/kWh (depending on the region) will be achieved, according to the [R]evolution scenario. During the following five to 10 years, PV will become competitive with retail electricity prices in many parts of the world, and widely competitive with fossil fuel costs around 2030.
Renewables are now competitive with conventional generation in many markets (Greenpeace)
Concentrating solar power (CSP)
Various Concentrating Solar thermal Power (CSP) technologies have good prospects for further development and cost reductions. Thermal storage systems are a way for CSP electricity generators to further reduce costs.
Depending on the level of irradiation and mode of operation, it is expected that long-term future electricity generation costs of $0.06-0.10 cents/kWh can be achieved. This presupposes rapid market introduction in the next few years. CSP investment costs assumed include an increasing storage capacity up to 12 hours per day, achieving a maximum of 6500 full load hours per year.
The dynamic development of wind power has resulted in a flourishing global market but the boom in demand has led to supply constraints. As a consequence, the cost of new systems has increased, though the industry is already expanding production to resolve supply chain bottlenecks. Taking into account market projections, learning curve analysis and industry expectations, investment costs for wind turbines are projected to reduce by 25% for onshore and more than 50% for offshore installations up to 2050. Additional grid integration costs of up to 25% of investment have been taken into account.
The crucial factor for biomass economics is the cost of feedstock, which today ranges from a negative for waste wood (based on credit for waste disposal costs avoided) through inexpensive residual materials to the more expensive crops.
One of the most economic options is the use of waste wood CHP plants. Gasification of solid biomass, on the other hand, which has a wide range of applications, is still relatively expensive.
Enhanced Geothermal Systems (EGS) and the improvement of low temperature power conversion could make it possible to produce geothermal electricity anywhere.
Assuming global growth of 15% per year up to 2020, adjusting to 12% up to 2030 and still 7% per year beyond 2030, a cost reduction potential of more than 60% by 2050 is feasible. For conventional geothermal, costs are expected to be $0.15/kWh-$0.09/kWh. Production costs for EGS are expected to fall to around $0.8/kWh, compared with the current $0.20-0.30/kWh.
Globally, ocean energy potential has been estimated at 90,000 TWh/year. The cost of energy from wave farms has been estimated to be $0.25-0.95/kWh, and for initial tidal stream farms $0.14-0.28/kWh.
Generation costs of $0.8-0.10/kWh are expected by 2030. Cost curves per doubling of installations are estimated to be at around 10%-15% for offshore wave and 5%-10% for tidal stream. In the long term, ocean energy has the potential to become one of the most competitive and cost-effective forms of generation.
Hydropower is a mature technology with a significant part of its global resource already exploited. There is still, however, some potential left, and there is likely to be some more potential for hydropower with the increasing need for flood control and the maintenance of water supply during dry periods.
Cost and Demand Trends
Cost trends for renewable power technologies are expected to follow a function not of time, but of cumulative capacity, so dynamic market developments are required. Most of the technologies will be able to reduce their specific investment costs to between 30% and 60% of current levels once they have achieved full maturity (after 2040).
Generation costs in 2009 were around $0.8-0.35/kWh, with the exception of photovoltaic. In the long term, costs are expected to converge at around $0.6-0.12/kWh (examples for OECD Europe), depending on site-specific conditions.
The development of future global energy demand is determined by three key factors: population development, economic development, and energy intensity. Under the reference scenario, total primary energy demand increases by 61% from 499,024 PJ/year in 2009 to about 805,600 PJ/year in 2050.
Renewable energy potential for 2050 in EJ/year by energy source (Greenpeace)
In the Energy [R]evolution scenario, demand increases by 10% until 2020 and decreases by 4% afterwards, and is expected to reach 481,050 PJ/year by 2050.
The accelerated increase in energy efficiency, which is a crucial prerequisite for achieving a sufficiently large share of renewable energy sources in energy supply, is beneficial not only for the environment but also for economics. A dedicated energy efficiency strategy typically helps to compensate in part for the additional costs required during the market introduction phase of renewable energy technologies.
Global Generation Outlook
By 2050, 94% of electricity produced worldwide will come from renewables. ‘New’ renewables – mainly wind, PV and geothermal – will contribute 60% of electricity generation. The Energy [R]evolution scenario projects an immediate market development with high annual growth rates achieving a renewable electricity share of 37% by 2020 and 61% by 2030. The installed capacity of renewables will reach 7400 GW in 2030 and 15,100 GW by 2050.
Up to 2020, hydro and wind will remain the main contributors of the growing market share. The continuing growth of wind will then be complemented by electricity from CSP, ocean energy and bioenergy. The Energy [R]evolution scenario will lead to a high share of fluctuating power generation sources of 31% by 2030, therefore the expansion of smart grids, demand side management (DSM) and storage capacity will be required.
To make the Energy [R]evolution real, the following energy sector policies and actions are recommended:
1. Phase out all subsidies for fossil fuels and nuclear energy;
2. Internalise the external social and environmental costs of energy;
3. Mandate strict efficiency standards;
4. Establish binding targets for renewables and CHP combined heat and power generation;
5. Reform the electricity markets by guaranteeing priority access to the grid for renewable power generators;
6. Provide defined and stable returns for investors, for example by feed-in tariff programmes;
7. Implement better labelling and disclosure mechanisms to provide more environmental product information;
8. Increase research and development budgets for renewable energy and energy efficiency.
The Path Ahead
The report highlights the risk that rising energy demand will push oil exploration towards ‘unconventional’ oil resources, which could threaten remote and sensitive environments such as the Arctic. The environmentally destructive tar sands projects in Canada are already being pursued to extract more marginal sources.
Yet a switch from fossil fuels, while advocated on environmental grounds, could offer substantial benefits such as independence from world market fossil fuel prices and the creation of millions of new green jobs. It can also provide energy to the billion people currently without access to energy services.
Sven Teske is renewable energy director at Greenpeace International.
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