Topic: wind

Power Almanac of the American Midwest

Kevin Lustig — Wed, 21 Mar 2012 14:07:40 -0400

WRI Summary of the Clean Energy Standard Act of 2012, S. 2146

Nicholas Bianco — Wed, 07 Mar 2012 17:18:53 -0500

This summary provides an overview of S. 2146, the Clean Energy Standard Act of 2012 (CESA), introduced by Senator Bingaman and 8 cosponsors on March 1, 2012. The CESA establishes a standard for clean energy generation in the U.S. through 2035.

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1. What is the Clean Energy Standard Act?

Beginning in 2015, each utility covered under the bill must obtain a certain amount of electricity from “clean” sources. That obligation increases each year, so that in 2035 covered utilities must supply 84% of their total annual sales of electricity from clean sources.
Covered utilities can generate electricity from clean sources to meet the electric demands of their consumers, or they can purchase tradable credits from other clean sources.
Covered utilities that do not generate electricity from clean sources or purchase credits from other clean sources may also comply by paying a fee, known as an alternative compliance payment. That payment starts at 3 cents/kWh in 2015, and annually increases by 5% plus the rate of inflation. Use of revenues collected through this fee is discussed under question 7. (Read more >>>)

Inside Stories on Climate Compatible Development: China

Kevin Lustig — Tue, 13 Dec 2011 09:48:27 -0500

Key messages

A clear expression of political will, backed by a set of effective policy measures, has been key to China’s success in building the world’s largest wind power market.
The establishment of a stable and favorable pricing mechanism is crucial for the development of wind power, because it increases the chances for profitability and growth.
A strong domestic market contributes to the growth of local wind power equipment manufacturing.

Fact Sheet: The Power of Innovation: Meeting our Energy Challenges through Accelerated Innovation

Micah Ziegler — Mon, 14 Nov 2011 12:44:38 -0500

Innovation can close the gap between the low-carbon technologies of today and the low-cost, high performance technologies the world needs.

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Read more on WRI Insights: Want Low-Cost Clean Energy? Bank on Innovation

This fact sheet is based on the WRI working paper Two Degrees of Innovation — How to Seize the Opportunities in Low-Carbon Power.

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We are facing two urgent energy challenges. We need to maintain modern energy services and expand energy access to another 1.4 billion people.¹ We also need to mitigate further climate change by reducing greenhouse gas emissions, including carbon dioxide from fossil fuel burning.² Low-carbon technologies such as wind and solar power exist and have the technical capacity to meet global energy needs,³ but they are expensive compared to high-carbon alternatives and face performance challenges like requiring large quantities of water or land. They are new to the energy system and can create integration headaches. Innovation—improvements in cost and performance—will close the gap between the low-carbon technologies of today and the low-cost, high performance technologies the world needs.

These infographics demonstrate how innovations in solar photovoltaic (PV) and wind power over the past thirty years have dramatically improved performance and reduced cost, creating the technologies we recognize today. They also project the target costs that experts estimate are necessary to reach our energy goals, highlighting how much more we need to innovate.

For example, if we built the solar PV installations necessary by 2050 using technology from 1982, we would spend US$53.5 trillion (2010$). Building the same solar capacity with 2008 technology would only cost US$8.46 trillion. If we meet the cost goal set by the United States Department of Energy (DOE) Advanced Research Projects Agency-Energy (ARPA-E) we would spend just US$1.58 trillion. Similarly, between 1982 technology and ARPA-E’s goal technology, the total land area required for solar panels would drop by 64 percent.

Innovation is a powerful, cumulative process but it does not happen automatically in a highly regulated sector like electricity. It is critical that policymakers support innovators by building a robust, dynamic innovation ecosystem. This goes beyond investing in public research and development and creating markets through subsidies. It also includes building collaborative networks, creating stable regulatory environments, providing infrastructure, supporting innovators’ needs for finance, and building capacity in the workforce.

To achieve a 50 percent reduction in greenhouse gas emissions by 2050 (compared to 2005 levels) the International Energy Agency estimates that 3,155 GW of photovoltaic capacity will be required by 2050, enough to provide 11 percent of global electricity production. Over time, innovations have made reaching this target easier.⁴ Innovations like new materials and improved methods of production, including improvements through learning-by-doing and finding economies of scale, made solar photovoltaic cells significantly cheaper and more efficient between 1982 and 2008. While many factors—such as commodity prices—also impact costs, future innovations can continue to improve solar cells and push toward a competitive cost of equipment, estimated in U.S. electricity markets to be US$0.50/Wp by the U.S. Department of Energy.

To achieve a 50 percent reduction in greenhouse gas emissions by 2050 (compared to 2005 levels) the International Energy Agency estimates that 2,000 GW of installed wind capacity will be required by 2050, enough to provide 12 percent of global electricity production. Over time, innovations have made reaching this target easier.⁵ Between 1985 and 2010, innovations like new materials and improved methods of production, including improvements through learning-by-doing and finding economies of scale, made wind turbines more capable and their electricity cheaper. While many factors—such as commodity prices—also impact costs, future innovations can continue to improve wind turbines and farms and push toward a competitive position in electricity markets, estimated in U.S. electricity markets to be a levelized cost of electricity of US$.069/kWh by the American Wind Energy Association.

International Energy Agency, “Access to Electricity,” World Energy Outlook, 2010, http://www.worldenergyoutlook.org/electricity.asp. ↩
Intergovernmental Panel on Climate Change, Working Groups I, II and III, Climate Change 2007: Synthesis Report, IPCC Assessment Report (Valencia, Spain, 2007), http://www.ipcc.ch/pdf/assessment-report/ar4/syr/ar4_syr.pdf. ↩
Ottmar Edenhofer et al., IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation - Summary for Policymakers (Cambridge, United Kingdom and New York: Intergovernmental Panel on Climate Change, 2011), 7, http://srren.ipcc-wg3.de/report/IPCC_SRREN_SPM. ↩
These calculations focus on crystalline silicon photovoltaic technology only, assume photovoltaic cells operate at peak capacity, and only consider module cost. For simplicity, this excludes many other factors that can make solar photovoltaic installations more efficient and cheaper, such as careful siting, improved operations, and reduced maintenance costs. This analysis includes only the solar module cost and omits installation and maintenance costs. ↩
The graphic slightly understates the story; the difference in number of turbines needed is so large that it was necessary to round up to make the comparison visible at all. Each turbine in the graphic represents approximately 1 million turbines. The 50% reduction goal could be met by 1.25 million 1.6 MW turbines and 200,000 10 MW turbines. In addition, these calculations focus on horizontal-rotor, onshore wind turbines and treat the 2,000 GW target as “nameplate” capacity. The cost calculations use estimates of the levelized (or lifecycle) cost of energy (or electricity) and compute the cost of producing 5,200 TWh of wind energy, which is stipulated in the IEA Blue Scenario Wind Goal. ↩

Is the Fit Right? Considering Technological Maturity in Designing Renewable Energy Policy

Kevin Lustig — Thu, 11 Aug 2011 14:20:52 -0400

Recent studies suggest that the United States can greatly expand its deployment of renewable energy resources beyond current levels. This would reduce emissions of harmful pollutants and enhance energy security by diversifying the nation’s domestic energy supply. This brief describes a number of policy tools that can be employed to drive investment in renewable energy technologies and discusses which policy options may be the best fit based on the commercial maturity of a targeted technology. We examine several policy tools to describe where they have been most effective to advance technology progress along the innovation chain. The findings and recommendations presented are based on a study of the literature on technology innovation and policy best practices, as well as on discussions with experts in the field, policymakers, and private sector companies involved in renewable energy projects.

Key findings:

Grants can be used to fund technologies in their earliest stages—research and development (R&D) and early-stage demonstration. The R&D stage involves significant uncertainty as to whether the concept will ever lead to a viable technology application. Grants help overcome this risk because they provide an important cost share for investment to research and develop the technology further. Technologies in the demonstration stage typically have difficulty accessing commercial investment due to uncertainty on technical performance and the inability to provide performance warranties. It is unclear whether they will eventually be financially profitable, particularly in the near-term. Demonstration grants allow commercial investors time to pilot and evaluate a new technology with appropriate due diligence. This can reduce risk perception and facilitate further investment.
Loan guarantee programs are well suited for technologies in the commercialization and early deployment stages. In these stages, project performance remains uncertain, making it difficult to attract investors. Loan guarantees help attract private investors by sharing the risk of technical failure with a financially secure and credible entity (namely, a government agency).
Tax credits and feed-in tariffs (FITs) can help advance technologies in the later stages of innovation, namely commercialization and early deployment. These policies allow projects to earn more profit for electricity produced so that they earn the revenues needed to offset higher upfront investment costs.
Renewable electricity standards (RES) are most effective for more mature technologies that are in early deployment. An RES creates demand for renewable electricity and allows the market to determine how to most efficiently supply it; thus the market sets the premium paid to renewable resources. RES mandates can allow for open competition among a range of different technologies, or can be tailored with a carve-out to promote specific technologies that are not yet cost competitive with other renewables. The carve-out option can be a good fit for technologies that are still in the commercialization phase.
A favorable regulatory environment is important to ensure that renewable energy technologies do not face inherent disadvantages due to interconnection standards, utility pricing structures, and other legal hurdles. Failing to address regulatory barriers to renewables can increase their cost of deployment and reduce the effectiveness of incentive programs.

WRI Experts on Asia's Clean Energy Future

Maggie Barron — Thu, 16 Jun 2011 10:44:50 -0400

Why is Asia such an important region for clean energy deployment? WRI experts respond.

From June 22-24, the Asian Development Bank (ADB), the U.S. Agency for International Development (USAID) and the World Resources Institute (WRI) will co-host the premiere knowledge-sharing platform for clean energy investment in Asia, the 6th Asia Clean Energy Forum (ACEF). Taking place in Manila, Philippines, the event brings together energy leaders from around the world to discuss clean energy policy, regulation, financing and innovative business models.

I sat down with WRI experts who will attend the events in Manila and asked each of them, what is unique about Asia’s path to low-carbon development?

Opportunities of a Low-Carbon Economy

Large and small countries in Asia understand the opportunities of a low-carbon economy. We’re seeing these countries transition rapidly to renewable energy, and in doing so driving global markets. China, for instance, is leading the world in renewable energy investment, and others are looking to follow its lead. These successes may help drive even greater ambition among Asian countries, allowing countries to reap the economic, environmental and development benefits of a low-carbon economy.

— Jennifer Morgan, Director, Climate and Energy Program

Global Leadership and Innovation

The low-carbon transformation will be very different from technological transformations of the past because many of the innovations will come from developing countries, in particular countries from Asia.

These are the countries making large scale investments in energy infrastructure. They are transforming their economies to be competitive participants in the global clean energy value chain, as they make the transition from low cost, low skill manufacturing to high skill, high value-added manufacturing. They see the potential to become global leaders in the clean energy sector while meeting domestic energy challenges.

— Letha Tawney, Senior Associate, Two Degrees of Innovation

The Meaning of “Clean” Energy

Asia is home to a large proportion of the world’s poor, who either have no or very limited access to energy. And it’s also home to some serious gaps in governance. That’s why when we say “clean energy” we need to make sure we’re talking about both a type of fuel and an absence of corruption. There is no reason why vested interests will not become entrenched in the clean energy space, just as they have in the energy sector in the past.

So governments need to strive for more transparency, inclusive decision-making, and accountability. Business as usual will allow inefficiencies to continue, with little if any regulatory oversight.

Countries that exclude people from decisions about clean energy deployment run serious governance risks. To a farmer whose land is taken over without due process, it’s of very little consequence whether it’s for coal or for a solar PV plant. The governance challenges in the energy sector don’t go away just by calling it “clean.”

— Bharath Jairaj, Senior Associate, Electricity Governance Initiative

Scaling Up Smart Renewable Energy Policies

Asian countries are providing more and more examples of smart policies that lead to increased deployment of renewable energy in line with their broader development objectives. And they are learning from each other, instead of looking only to developed countries or international institutions for advice.

These countries can develop good models of what we refer to as “smart renewable energy policy”, but if they want to scale them up to the level that is necessary to meet the huge energy challenge Asia faces, they will need international financial support. For example, both India and Thailand pay guaranteed prices to renewable energy producers, paid for with a surcharge on electricity. They are supporting renewable energy with their own resources. Yet their resources are limited, so their support for renewables can only go so far. Donors need to step in, build on existing successes and help bring them to scale. A meeting like ACEF brings donor institutions and in-country experts together and provides an opportunity to form the partnerships necessary to expand on countries’ successes so far.

— Lutz Weischer, Research Analyst, Two Degrees of Innovation

A Role for Entrepreneurs

Entrepreneurs in Asia are taking on the issue of energy access. There’s a lot of talk about large solar installations, but those come with their own storage and distribution challenges – how are you going to expand the grid to get that solar energy to a remote village? That’s why there is so much potential for decentralized clean energy, like solar lanterns, microhydro plants, and biomass gasification.

For the first time we’re starting to see a critical mass of companies that are selling these kinds of electricity products, and prices keep coming down. So it’s no longer an issue of technology, or price. It’s now about getting these technologies to consumers. That’s a really important shift, and entrepreneurs are coming up with creative solutions to tap into this very significant rural market.

— Saurabh Lall, Research Officer, New Ventures

Energy Efficiency Brings a Competitive Advantage

In Asia, there’s very real pressure for companies to invest in energy efficiency, both from governments and from large customers who want to squeeze carbon out of their supply chains.

So there’s this confluence of very strong policy drivers, very strong demand drivers, and industries that recognize the opportunity to gain a competitive advantage. These all create the conditions for a good market for energy efficiency technology.

The challenge now is that a lot of the low-hanging fruit for energy efficiency projects has already been achieved. The next step is for companies to make longer term investments, and for that many of them need external financing. If Asian countries can help companies address some of the financing and capacity barriers, they can jumpstart a lot of new technology and continue to drive costs down.

— Xiaoyu Shi, Associate, Climate & Energy Program

An Urgent Necessity

Right now Asia is at a crossroads. Energy demand in the region continues to grow rapidly and is expected to rise at a rate well above the global average. Asia must decide whether to meet this demand using traditional carbon-intensive technologies or switch to clean energy and enable the transition to a low-carbon economy.

Asian countries face serious threats from the potential impacts of climate change on their economies, their ecosystems and their people. This combined with rising prices for food and fossil fuels make the case for low-carbon future. This is no longer a matter of choice - it’s an urgent necessity. With Asia leading the charge on massive investments in wind, solar, biomass and geothermal, it has the opportunity to become a major hub for clean energy investments.

— Athena Ballesteros, Project Manager, International Financial Flows and Environment

Technology Transfer

Kevin Lustig — Mon, 13 Jun 2011 16:02:40 -0400

Technology transfer refers to the manner in which technologies that reduce greenhouse gas emissions and aid climate adaptation efforts are developed and shared across borders. Developing countries will need more than financial investment to address climate change; they will need new technology for reducing emissions, such as wind and solar power, and adaptation. Technology transfer also requires collaboration and the sharing of knowledge and skills to ensure that emerging economies have the capacity to follow best practices and use the technology to greatest effect.

Technology transfer is key to reaching a global agreement on efforts to fight climate change because it will facilitate emissions reductions and adapting to a changing climate. WRI works with decision makers in both developed and developing countries to ensure that the benefits of innovative clean technology are available around the globe.

Renewable Energy & Efficiency

Kevin Lustig — Mon, 13 Jun 2011 15:43:14 -0400

Open Climate Network

The Open Climate Network (OCN) is an independent, international partnership that tracks and reports on the progress of key countries on climate change. OCN partners will be tracking clean technology policies, investment, jobs, and more in countries around the globe.

Read more

A variety of technologies, including wind power and solar power, exist today to provide low-cost, low-carbon power to nations and communities of all sizes, and a variety of policies and incentives can make renewable energy both effective and economical everywhere. WRI works to help stakeholders navigate the technical, financial, and policy issues surrounding renewable energy and energy efficiency, and promote those actions that make clean power available to everyone.

Wind and Solar Power

Clean electricity produced by the power of the wind and the sun is key to efforts to reduce the greenhouse gas emissions that are causing climate change. WRI provides resources to help key groups identify the right mix of policies, strategies, and incentives to maximize the benefits of these technologies. Read more

» See all WRI resources on wind power | solar power

Renewable Energy in Developing Countries

The majority of new electrical capacity around the world in the coming decades will be built in developing countries–the same countries that are at greatest risk from the impacts of climate change. WRI works with partners around the world to identify the right mechanisms for growing renewable energies in developing countries. Read more

» See all WRI resources on renewable energy in developing countries

Energy Efficiency Financing in China

The China Energy Efficiency Financing project seeks to help remove one of the principal barriers to implementing energy efficiency projects in the industrial sector in China – lack of access to financing sources under reasonable terms. Read more

PRESS RELEASE: New Paper Lays Out Smart Policies for Renewable Energy Growth

Lauren Zelin — Tue, 24 May 2011 14:15:18 -0400

Offers six principles of smart energy policy for developing countries

A recent report from the Intergovernmental Panel on Climate Change (IPCC) said that 77 percent of the world’s energy could come from renewable sources by 2050, as long as governments adopt the right policies. A new working paper, Grounding Green Power, outlines the key components of smart renewable energy policy in developing countries, focusing on the electrical power sector. The paper, from the World Resources Institute (WRI) and the German Marshall Fund of the United States (GMF), in cooperation with the Heinrich Böll Foundation, suggests priorities for international donors looking to make the most efficient investments in clean energy.

“Helping to build a wind farm is a good thing, but when donors support policies that bring down the cost of renewables, they lay the groundwork for many more wind farms and exponentially more renewable energy projects,” said Lutz Weischer, lead author of the paper and Research Analyst at WRI. “Smart renewable energy policies can drive private investment and create the right environment necessary for long-term growth.”

Grounding Green Power identifies the key components of smart energy policies and draws conclusions from on-the-ground experiences in 12 developing countries. The recommendations were based on a workshop with representatives from Brazil, India, Indonesia, Kenya, Mexico, Morocco, Mozambique, South Africa, Sri Lanka, the Philippines, Tanzania and Thailand.

Thomas Kleine-Brockhoff, GMF Senior Director for Policy Programs said, “No two countries are the same, but by convening actors from so many developing countries we have been able to discern best practices that apply across countries. This paper should help the international community as it seeks simultaneously to achieve the goals of development cooperation and reduce the risk of climate change.”

The working paper outlines six principles of smart renewable energy policy that are necessary to achieve transformative deployment at scale, based on the 12 international case studies. According to the authors, a smart renewable energy policy should be:

Comprehensive – strives to create an enabling environment including power sector regulations, investment and financing conditions, suitable electric grid infrastructure, and technical capacity.
Based on clearly defined objectives – includes technology deployment, energy access and economic development goals, in addition to added power generation.
Welcoming to private investment – leverages private investment by promoting attractive and predictable market conditions.
Cost-effective – calls for careful policy decisions that avoid over subsidization of renewables, while removing incentives for fossil fuels.
Supportive of innovation – improves performance, reliability, safety and cost of renewable technologies, to take innovation beyond the lab.
Transparent, accountable and participatory – takes into account the principles of good electricity sector governance, including transparency, accountability, and stakeholder participation.

The paper is intended for audiences including bilateral and multilateral development agencies (the World Bank, bilateral financial institutions, and export-credit agencies); existing multilateral climate funds (Global Environmental Facility and Clean Technology Fund); as well as the new Green Climate Fund; and other international organizations like the International Renewable Energy Agency.

The full working paper is available here.

“Grounding Green Power; Bottom-up perspectives on smart renewable energy policy” was co-authored by Lutz Weischer, Davida Wood, Athena Ballesteros, Xing Fu-Bertaux, of the World Resources Institute and published by the German Marshall Fund of the United States in cooperation with the Heinrich Boell Foundation and WRI.

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The World Resources Institute (WRI) is a global environmental think tank that goes beyond research to put ideas into action. We work with governments, companies, and civil society to build solutions to urgent environmental challenges. (www.wri.org)

The German Marshall Fund of the United States (GMF) is a non-partisan American public policy and grantmaking institution dedicated to promoting better understanding and cooperation between North America and Europe on transatlantic and global issues. GMF does this by supporting individuals and institutions working in the transatlantic sphere, by convening leaders and members of the policy and business communities, by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to foster renewed commitment to the transatlantic relationship. In addition, GMF supports a number of initiatives to strengthen democracies. Founded in 1972 through a gift from Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has six offices in Europe: Berlin, Paris, Brussels, Belgrade, Ankara, and Bucharest. GMF also has smaller representations in Bratislava, Turin, and Stockholm. (www.gmfus.org/)

The Heinrich Böll Foundation is affiliated with the German Green Party. As part of the Green political movement it has developed worldwide as a response to the traditional politics of socialism, liberalism, and conservatism. The main tenets are ecology and sustainability, democracy and human rights, self-determination and justice. HBF places particular emphasis on gender democracy, meaning social emancipation and equal rights for women and men. As a green think tank and an international policy network, the Heinrich Böll Foundation is active in ecology, democracy and human rights worldwide with 30 offices across the globe. (www.boell.de/service/home.html)

Grounding Green Power: Bottom-Up Perspectives on Smart Renewable Energy Policy in Developing Countries

Maggie Barron — Tue, 24 May 2011 12:51:13 -0400

Watch the summary interview with Lead Author Lutz Weischer

This paper was published by the German Marshall Fund of the United States in cooperation with the Heinrich Boell Foundation and the World Resources Institute.

Developing Countries in the Renewable Energy Transformation

In order to meet the intensifying climate challenge, the global energy system must undergo a fundamental transformation, with a rapid increase of renewable energy worldwide. Developing countries are at the forefront of this challenge, since they are expected to add around 80 percent of all new electric generation capacity worldwide in the next two decades.

The deployment of energy from renewable sources is accelerating in developing countries, and already accounts for a higher percentage of electricity generation than in the developed world. In 2008, non-OECD nations generated 21 percent of their electricity from renewable sources including large-scale hydroelectric power (compared with 17 percent in OECD countries), according to International Energy Agency (IEA) statistics. However, this figure must more than double by 2035, to 46 percent, in order to meet the IEA’s “450 scenario,” which outlines a climate friendly pathway for meeting global energy demands.

Transforming the energy system on this scale will require significantly increased support from developed countries, channeled through both bilateral assistance and multilateral institutions, as well as philanthropic initiatives. Our conclusions, derived from a series of case studies and a comprehensive review of existing literature, suggest that donors should deploy financial support more effectively by moving beyond a project-by-project approach to one that creates the right environment for investments in scaled-up, nationwide deployment.

This working paper seeks to assist in this process, by identifying key components of smart renewable energy policy in developing countries, focusing on the power sector. It also provides recommendations for maximizing the effectiveness of international support for deployment of renewable energies, drawn from these on-the-ground experiences in developing countries.

About this Working Paper

Chapter 1 introduces the approach and methodology taken in this paper and describes the key concepts we address. The second chapter discusses what developing countries are already doing to deploy renewable energy sources, and how they can be supported in scaling up such efforts. It also introduces a set of principles of smart renewable energy policy to propel such a transformation, developed by the World Resources Institute. These are based on insights drawn from case studies of existing renewable energy policies in 12 countries in Africa, Asia, and Latin America as well as from existing literature.

The following five chapters each examine one key element of smart renewable energy policy, discuss lessons learned, and identify needs for international support. These cover planning and strategy (Chapter 3), well-designed generation-based incentives (Chapter 4), an enabling policy and regulatory framework (Chapter 5), attractive financing conditions (Chapter 6), and the necessary technical environment (Chapter 7). Our findings and recommendations are summarized in Chapter 8.

Principles of Smart Renewable Energy Policy

We define smart renewable energy policy as the set of rules, regulations, and government actions that lead to an increased share of renewables in total electricity consumption in line with a country’s development objectives. Smart renewable energy policy encourages private investment, achieves its objectives in a cost-effective way, promotes continuous innovation, and is designed through transparent, accountable, and participatory processes.

Presentation

Download Slides (PDF, 839 Kb)

IPCC Study: Renewable Energy Could Provide Majority of World’s Energy by 2050

Lutz Weischer — Mon, 23 May 2011 09:09:17 -0400

Recently, the Intergovernmental Panel on Climate Change (IPCC) released a comprehensive study on renewable energy, entitled Special Report on Renewable Energy Sources and Climate Change Mitigation. The report finds that by 2050, nearly 80 percent of the world’s energy supply could be provided by renewable energy sources. WRI Analyst Lutz Weischer, who works on renewable energy policies, sat down to talk about the report’s implications.

Why is this report significant?

IPCC reports have a credibility and legitimacy that few other sources can match. Because this report draws upon the analysis of preeminent scientists, economists and engineers engaged in climate and energy research, the conclusions have considerable weight. This particular report looks at 164 peer-reviewed energy scenarios to find common themes about what the world’s energy supply will look like in 2050. They also assessed the literature on the technical potential of renewable energy sources, the benefits they can bring beyond reducing greenhouse gas emissions and the barriers that stand in the way of broader deployment. The report will be the go-to place for anyone who wants to get a credible and comprehensive view on the global potential of renewable energy.

What are the report’s primary findings?

The report predicts renewable energy, excluding traditional biomass¹, to grow three to ten times by 2050. Not all of the 164 scenarios analyzed in the report predict significant greenhouse gas emissions reductions; but those that do show a massive expansion of renewables. In other words, you can’t solve the climate crisis without renewable energy. Depending on how ambitious countries are, nearly 80 percent of the world’s energy supply could be provided by renewables in 2050. The best news is the report finds that we would have enough wind, water, sun and biomass resources available to meet all of the world’s energy needs with today’s technologies. However, it highlights several political and financial challenges to reaching those numbers.

Many fear that cost is the biggest barrier to large scale deployment of renewable energy. What’s your take on that?

People shouldn’t have to chose between affordable and clean energy - but in most cases fossil fuels are still cheaper than renewables. One reason is that most countries heavily subsidize fossil fuels. The IPCC report suggests that if fossil fuels were not subsidized and reflected their true costs – taking into account externalities like their impact on health and the environment – renewables would be much more cost-competitive.

The world needs cleaner energy, but we also need to find ways to increase energy access for the hundreds of millions of people who currently go without. At WRI, we try to reconcile these two goals. We’re studying ways to drive down the cost renewable energy and also improve its performance, so that it can become available to more people.

One strategy is for countries to phase out fossil fuel subsidies while adding incentives and subsidies for renewable energy that are designed to encourage innovation. In the long run, this would allow renewable energy to be competitive with traditional sources of power, and countries could phase out those incentives as well.

It’s important to note that in some regions of the world, such as rural regions in Africa, renewable energy is already a cost-competitive source of power.

What other policies are needed to tap into our renewable energy potential?

WRI’s research shows that it’s not enough to just create financial support for renewable energy. Smart renewable energy policy should also include targets (such as a renewable energy standard that sets a renewable generation requirement), improvements to a country’s regulatory structure (to ensure that rules are in place to integrate renewables into a country’s energy system), and incentives to encourage community participation in energy decisions. To accelerate the transition to clean energy, you also need companies that are willing to invest in renewable energy projects, and banks willing to back those projects. In developing countries, that support may need to come from bi- and multilateral development banks.

What does the IPCC report say about how renewable energy can meet development goals?

The report suggests that renewable energy may be a good way to increase energy access. In many areas of the world that lack advanced grid systems, electricity is best produced locally. Rather than importing and transporting diesel fuel to a rural area, for instance, a village could create a micro-grid based on the solar resources they have and save money in the process. In many remote areas, decentralized projects can be cheaper and cleaner than grid expansion, as well as providing energy security.

Much of the growth in renewable energy is predicted to come from developing countries. Why?

The report highlights that 53 percent of current renewable electricity generation capacity is in developing countries, and that the majority of future renewable growth will also be in developing countries.

Developing countries are interested in renewable energy for several reasons: energy access, energy security, economic development opportunities, and even the health benefits that renewable energy have over fossil fuels. These countries are acting in their national interests.

How does the IPCC report relate to WRI’s work?

WRI examines how to realize the full potential of renewable energies that is presented in the IPCC report. For example tomorrowk we will release a paper titled Grounding Green Power, that draws lessons learned from developing countries on smart renewable energy policy and provides guidance to donors who are looking for the most efficient ways to support the clean energy transition. In a recent report, High Wire Act, we looked at one of the key barriers identified in the IPCC report, integrating renewables into the power grid, with detailed case studies of the United States, China and the EU. We also conduct research on issues related to governance and finance and how they influence renewable energy deployment. At the upcoming Asia Clean Energy Forum in Manila, we will present the full spectrum of our renewable energy analysis.

The report looks at six renewable energy sources: Direct solar, geothermal energy, hydropower, ocean energy, wind energy and bioenergy. ”Traditional biomass” is a form of bioenergy and mainly refers to burning wood for cooking and heating purposes in many parts of the developing world. In most scenarios, a decrease in the use of traditional biomass is predicted, as people switch to more modern energy sources. To get an accurate idea of the growth in all other renewable energy sources, traditional biomass was excluded when calculating these growth rates. ↩

High Wire Act: Improving the Grid for Renewable Energy

Letha Tawney — Tue, 12 Apr 2011 12:22:58 -0400

China, the United States, and the European Union take on transmission upgrades

The European Union, China, and the United States have all made significant commitments to renewable energy deployment, at either the central or regional levels. But they all face a major challenge: how to integrate this power into the existing grids. As a new WRI report shows, policies to help transmit renewable energy have not kept pace with renewable energy ambitions.

Despite its potential, renewable energy puts new pressure on transmission infrastructure as it scales up. Excellent sources of sun, wind, and wave power are rarely conveniently located next to industrial centers and cities. The energy generated in remote places must be transmitted to heavily populated areas.

Renewable energy is also intermittent–that is, dependent on the sun shining or the wind blowing. Typically the most cost-effective way to manage intermittency is to draw energy from a large geographic area. This requires moving electricity across a more widely integrated grid than has historically been necessary.

Read the Report

Today’s transmission infrastructure is simply not up to the job. But just adding new wires will not resolve all of the obstacles to integrating renewable energy in the grid. Transmission policy, such as how electricity markets incorporate planning for intermittent sources and operations that keep the power flowing smoothly, must also evolve.

A new report from World Resources Institute, High Wire Act examines the relationship of renewable energy and transmission in the European Union, China, and the United States. Supported by the HSBC Climate Change Centre of Excellence, the research highlights how, in all three markets, transmission is currently a bottleneck to maximizing renewable energy’s cost-effective contribution to the power mix.

The main message for policy makers crafting renewable energy policies and for investors seeking to be a part of this $240 billion a year market is a simple one. Transmission constraints have to be addressed upfront to improve the chances of reaping the long-term rewards of a future powered by renewable energy.

As the report highlights, transmission policy has not kept pace with clean energy ambitions, largely as a result of concerns over associated costs and reliability. Transmission decisions are also shaped as much by complex politics as they are by economics. A deep tension between locally borne costs and national or supra-national benefits emerges over and over again. Local communities are reluctant to accept large infrastructure when most of the benefits are seen at the national level rather than locally. Each region examined in this report is uniquely grappling with this “local” versus “larger society” tension, based on its own political and regulatory norms.

The European Union

The renewable energy market is large and growing in the European Union, stoked by both EU-wide goals and national incentive programs. Recognizing that transmission policy and infrastructure has to evolve, the EU is in the midst of implementing the 3rd Legislative Package on Energy Markets, which is pushing towards more integrated electricity markets by 2014 and assistance for transmission projects that have an EU-wide strategic importance. However, it is unclear how much authority the countries will cede to the EU-wide bodies or whether they will remain largely advisory instead. The wide range of transmission cost policies across countries is also shaping the renewable energy market – driving projects to locate where the transmission costs are lower, rather than where the best renewable energy resources are.

China

China’s renewable energy growth – particularly through wind farms in the remote North and Northwest of the country – poses transmission companies with a large physical challenge. For this reason, among others, China is investing heavily in groundbreaking research into ultra-high voltage transmission, which will allow more efficient transmission over far larger distances.

However, the dramatic growth in new wind turbines has yet to translate into growth in renewable energy in the grid. A lack of connection standards for generators to follow, a lack of coordination between wind farm planning and transmission planning, inflexible electricity dispatching, and a lack of financial incentives for grid operators to buy renewable energy power have all contributed to the problem. As a result, many of these wind turbines are not contributing as much as they could to the national grid. The central government attempted to resolve several of these issues through the 2009 Amendments to the Renewable Energy Law, but it will take time for the effects to be widely felt.

The United States

While Congress is considering President Obama’s proposed Clean Energy Standard, currently renewable energy goals are set at the state level in the United States. This state-by-state approach is also reflected in very strong state control of transmission decisions, which has made large-scale projects or coordinated planning very challenging to accomplish –. The Federal Energy Regulatory Commission (FERC) is considering new federal rules for cost allocation, but substantial reform would likely face both legal and legislative challenges.

**Table 1. Incentives Driving Transmission Action**
	RE Goals	Coordination Efforts	Innovations
European Union	EU Renewable Energy Directive (June 2009) sets goal of 20 percent power from RE sources by 2020 and mandates grid connectors to provide access to new RE to achieve EU climate policy	The European Network of Transmission System Operators for Electricity (ENTSO-E) and the Agency for the Cooperation of Energy Regulators (ACER) have transmission coordinating missions	EU Priority Projects defined and assigned an EU coordinator to push the project forward
China	Renewable Energy Law (2005, 2009) obligates power grid companies to connect all RE generation sites that fall in their grid coverage	Renewable Energy Law Amendments (2009) require coordinated RE and transmission planning	Development of UHV infrastructure with $59.7 billion in investment
United States	Thirty-one state Renewable Portfolio Standards	Federal efforts encourage regional transmission planning, though there are no requirements	Innovative cost allocation resolutions such as the Tehachapi and Southwest Power Pool projects

**Table 2. Roadblocks to Sufficient Transmission Action**
	Local Interests	Costs
European Union	Transnational coordination and enforcement powers of EU institutions remain unproven while local opposition to large-scale infrastructure projects is significant in some areas	Transmission investment will be difficult in an era of austerity and slow economic growth
China	Disagreement between the grid operators and wind developers on technology standards and planning complicate RE generation connection	Vast distances between generation and load sites and chronic grid congestion necessitate massive transmission expansion
United States	Weak jurisdictional coordination in the transmission siting and approval process slows or stops transmission projects	Transmission cost allocation issues remain largely unresolved or are resolved at local level, reflecting narrow local interests

Going Forward

In a time of austerity, the issues raised by this report are all the more pressing. Public subsidies for renewables are under pressure and raising consumer costs to pay for renewable energy is even less palatable. Meeting renewable energy goals in the most cost effective manner is critical to the industry’s long-term success. But if the transmission issues highlighted by this research continue to fester, achieving competitive pricing with fossil fuel electricity will be all the more difficult and the goals themselves may fall by the wayside.

The lesson from this report is clear: if renewable energy investors and policy makers are to build a vibrant global renewable energy industry they must first transform the transmission landscape.

High Wire Act: Electricity Transmission Infrastructure and its Impact on the Renewable Energy Market

Maggie Barron — Fri, 08 Apr 2011 16:37:13 -0400

Executive Summary

Context

Renewable energy (RE)—electricity from wind, solar, and other naturally renewing energy sources— has drawn increasing attention in the quest to reduce greenhouse gases on a scale commensurate with the dictates of climate science. Renewables have the potential to substitute for a significant proportion of the conventional fossil fuels prevalent in today’s electricity generation. However, two key features of renewable energy complicate this promise. First, renewable energy resources are location constrained and often available only in remote areas. Their energy must therefore be transported via connected transmission lines (the grid) to demand centers, such as cities. Second, because RE resources are typically intermittent, this energy must be stored or managed with other generation sources to provide a stable and reliable service to consumers. One effective way to address this intermittency is widespread interconnection to diverse resource areas so that low production in one location can be balanced by high production in another. These two important attributes, location-constrained generation and intermittency, mean that transmission is critical to unlocking the promise of renewable energy.

About this Paper

This paper examines transmission developments and challenges in the European Union (EU), China, and the United States—three regions that present entirely different pictures in terms of governance structures, institutions, and traditions for making decisions about transmission.

Transmission infrastructure can be either a roadblock or an enabling technology for meeting renewable energy deployment goals and thus presents a poorly understood risk to RE investment. To provide context for renewable energy investors, this report examines the policy challenges of providing transmission to:

Move electricity from large-scale renewable energy generation in remote areas to distant demand centers; and
Facilitate regional grid interconnections necessary to manage intermittency. Because transmission is highly dependent on government decisions at both the political and administrative level, this paper emphasizes the regulatory trends in transmission that in turn affect renewable energy investments.

Key Findings

The transmission challenges impacting RE investment in China, the EU, and the United States have some commonality but occur in three unique regulatory and governance landscapes that establish different incentives and roadblocks to reform. Financing new or upgraded transmission capacity faces the difficult task of allocating cost across users (RE generators, power consumers in various jurisdictions, and society broadly) while ensuring low-cost energy and profitable business models that attract private investment. In all three markets examined, transmission planning and siting is primarily constrained by ongoing tension between national (or in the case of Europe, pan-European) interests and local, state, and member-state interests. In all cases, unlocking greater RE potential through improved transmission is highly dependent on government and regulatory decisions that try to steer through these challenges.

European Union

The European Union uses a mix of private and public investment for grid development, has aggressive targets for developing renewable energy, and is making progress toward those goals. It is also using Directives and other policy tools to push member states to integrate their grids and make the necessary technical and policy changes for cross-border transmission that will allow the flow of renewable energy. The challenges to reaching these objectives can be seen in the still fragmented planning processes and the resistance of member states to fully integrate, making the EU efforts a work in progress. Member states also currently retain the authority to determine whether projects will have a net benefit or cost to domestic customers, and thus to thwart crossborder objectives that do not yield enough local benefit.

The differences among member states in determining cost allocation for transmission expansion, preferential regimes for network usage charges, or the technical grid connection requirements creates additional complexities for planning generation projects across Europe.

China

China has aggressive plans to continue the grid spending surge of the past five years in an effort to keep pace with growing electricity generation. The central government is planning for a likely doubling of electric power generation capacity by 2020 (from 2009 levels), driven by a large increase in electricity demand. Wind farms that are largely located in northwest China, where grid coverage is currently sparse, will provide a large part of anticipated new renewable energy. China recognizes the compelling need to transfer energy from such remote locations conducive to wind and solar generation to its growing megacities and is focusing on new approaches such as investing in ultra high voltage (UHV) transmission research.

Despite a clear commitment to renewable energy, China faces several challenges when integrating RE into the grid, including a lack of connection standards for generators to follow, uncoordinated build-out of new generation, inflexible dispatching, and a lack of financial incentives for grid operators to take up RE power. The central government attempted to resolve several of these issues through the 2009 amendments to the Renewable Energy Law, but it will take time for the effects to be widely felt.

United States

Even more so than the other two markets, United States electricity generation and transmission planning and siting are managed in a highly local and fragmented manner. Renewable energy goals are currently set by states, rather than by the federal government, complicating broader regional planning for renewable electricity generation and supporting transmission. Whether the 112th Congress will set national goals, move transmission siting responsibility (in whole or in part) from states and local authorities to the federal government, or facilitate multi-state transmission project approvals is highly uncertain after the power shift during the 2010 midterm elections.

Cost allocation negotiations are also a significant challenge for proposed transmission projects, particularly those that cross utilities and/or states. Methods for allocating costs exist but cost allocation disputes between transmission companies or their regulators jeopardize large-scale transmission projects, particularly those not directly related to improved system reliability. The Federal Energy Regulatory Commission (FERC) is considering new federal rules for cost allocation, but reform would face both legal and legislative challenges.

**Table 1. Incentives Driving Transmission Action**
	RE Goals	Coordination Efforts	Innovations
European Union	EU Renewable Energy Directive (June 2009) sets goal of 20 percent power from RE sources by 2020 and mandates grid connectors to provide access to new RE to achieve EU climate policy	The European Network of Transmission System Operators for Electricity (ENTSO-E) and the Agency for the Cooperation of Energy Regulators (ACER) have transmission coordinating missions	EU Priority Projects defined and assigned an EU coordinator to push the project forward
China	Renewable Energy Law (2005, 2009) obligates power grid companies to connect all RE generation sites that fall in their grid coverage	Renewable Energy Law Amendments (2009) require coordinated RE and transmission planning	Development of UHV infrastructure with $59.7 billion in investment
United States	Thirty-one state Renewable Portfolio Standards	Federal efforts encourage regional transmission planning, though there are no requirements	Innovative cost allocation resolutions such as the Tehachapi and Southwest Power Pool projects

**Table 2. Roadblocks to Sufficient Transmission Action**
	Local Interests	Costs
European Union	Transnational coordination and enforcement powers of EU institutions remain unproven while local opposition to large-scale infrastructure projects is significant in some areas	Transmission investment will be difficult in an era of austerity and slow economic growth
China	Disagreement between the grid operators and wind developers on technology standards and planning complicate RE generation connection	Vast distances between generation and load sites and chronic grid congestion necessitate massive transmission expansion
United States	Weak jurisdictional coordination in the transmission siting and approval process slows or stops transmission projects	Transmission cost allocation issues remain largely unresolved or are resolved at local level, reflecting narrow local interests

Looking Forward: Signposts for Investors

Transmission siting and construction in general may be marginally easier to approve in the EU than in the United States; therefore, RE expansion may be more likely if the current European cooperative efforts succeed on schedule by 2014. This will depend on whether the controlling nature of the relevant EU directives and policies can prevail over local interests in practice. The potential generation that could be unlocked through transmission expansion in the United States and China may, however, be relatively greater, due to the large domestic tracts of land with significant RE generation potential that are currently inaccessible because of transmission constraints.

These opportunities could prove tougher to capture in the United States as a result of difficult-to-resolve regulatory and political uncertainties. If reform efforts bring greater certainty to the United States, investors will be able to respond and shape renewable energy projects accordingly. Even if not all roadblocks are addressed with legislation or regulatory reform, any increase in certainty regarding transmission siting coordination, cost allocation, and national energy policy would unlock new potential in the United States. Perhaps the market most likely to remove transmission barriers and unlock the real potential of RE is China, as the central government methodically works to reform transmission to support its national renewable energy goals. China faces primarily technical and capacity barriers rather than the paralyzing political debate seen in the United States. China’s future market depends on its ability to overcome the resistance of grid companies in a regulatory environment that at least appears more opaque than those in the United States or EU.

Two Degrees of Innovation

Kevin Lustig — Wed, 06 Apr 2011 12:53:55 -0400

Key Resources

Innovations in the global power sector need to emerge and spread quickly to drive down cost and improve performance to the point that low-carbon development becomes the default choice everywhere in the world. Today, the available low-carbon energy solutions - renewable energy such as wind and solar, energy efficiency and other clean technologies - are often too costly to meet the dual challenges of climate change and economic development.

WRI’s Two Degrees of Innovation project works with practitioners to build a robust global innovation system to catalyze rapid and continuous improvements in the price and performance of low-carbon power sector technologies through innovation beyond the lab.

For Obama's Clean Energy Goal, Details Behind the Policies Matter

John Larsen — Tue, 01 Feb 2011 16:37:41 -0500

This post originally appeared on the National Journal Energy & Environment blog.

In his State of the Union address, the president called for a goal of 80 percent clean energy by 2035. If implemented, President Obama’s goal should give American businesses the certainty to make clean energy investments and retool our aging power fleet. By encouraging innovation, this concrete goal will empower American businesses to compete in the global clean energy market, boosting our competitiveness. As Members of Congress develop a clean energy standard to meet this goal, the details behind the policies matter. Questions policymakers will need to address include:

Do technologies count evenly?

For a clean energy standard to be most effective, technologies should compete on an even playing field so that the cleanest, cheapest technologies are the ones that move forward. This lowers overall program costs. Giving certain technologies preferential treatment – for instance, through giving extra credits per megawatt to one technology—could stifle the effectiveness of the standard.

Which technologies count?

Policymakers will need to decide if the clean energy standard will provide incentives for truly transformational clean technologies or lock in the outdated technologies of the past. Will they aim to bring solar, wind and other renewable energy options to scale? Will they incentivize the use of new high-efficiency natural gas turbines? Will they prioritize the application of carbon capture and storage (CCS) for conventional technologies? If done right, a clean energy standard can drive innovation and investment while achieving real greenhouse gas emissions reductions. A broad portfolio of technology options should make an 80 percent target by 2035 attainable if we start soon.

How would the federal clean energy standard interact with state policies?

Any federal standard must ensure that innovation at the state level is protected. While Congress has struggled for years to pass comprehensive energy legislation, the states have led the way in developing renewable energy standards and other incentives that are driving investments in clean technologies today. Congress must ensure that a federal law doesn’t weaken existing state efforts or hinder states from developing the next wave of transformational energy policies down the road.

Which utilities are subject to the standard?

In the past, some federal energy standard proposals have exempted small utilities. The greater the number of utilities exempted from the standard, the harder it will be to reach the 80 percent goal.

Right now, there is no clear path forward for clean power generation in the United States. A clean energy standard will kick start a long-overdue transition to cleaner energy.

It’s important to note, though, that a clean energy standard is not a substitute for policies that regulate greenhouse gases and directly deal with climate change. Greenhouse gas rules and clean energy standards are not mutually exclusive. Much more will be needed to combat climate change, including using existing regulatory authorities and future climate legislation, to avoid the worst impacts. A clean energy goal, however, is a good place to start.