Wednesday, January 28, 2009

Bioenergy to tackle energy poverty

Bioenergy has the potential to sustainably meet around 10 per cent of the world’s medium-term energy requirement.

In its new report "Future Bioenergy and Sustainable Land Use", the German Advisory Council on Global Change (WBGU) concludes that the global sustainable potential for producing energy from biomass is significant and should be tapped.The report is the first integrated study of bioenergy to explore the issue in the context of both global environmental and development policy.It shows that in the medium term around 10% of the world’s energy needs could be met by sustainable bioenergy from biogenic residues and energy crops.About a quarter of the potential arising from energy crops is located in Central and South America. Sub-Saharan Africa, Europe, North America and China each account for around 15 per cent, while India accounts for six per cent.However, use of this potential should only be pursued if risks to food security as well as to nature conservation and climate change mitigation targets can be excluded. For this to happen, binding sustainability standards need to be introduced at national and international level.

Electric Power, Not Petrol

Bioenergy achieves the greatest contribution to climate change mitigation when it is used to generate electricity.The key approach is to deploy bioenergy to replace energy sources entailing high CO2 emissions, particularly coal. In the electricity sector the climate change mitigation effect of bioenergy is almost twice that of using biofuels for transport or when bioenergy is used to produce heat alone.Because of its high energy efficiency, cogeneration – involving the combined production of both power and heat – is always preferable to pure electricity generation. WBGU recommends that the generation of electricity from biomass be more vigorously promoted, but that promotion be restricted to sustainably produced bioenergy carriers.If biomethane is used to generate electricity, the climate change mitigation effect could be even greater if the CO2 captured in the production process of biomethane could be stored securely.First generation liquid biofuels such as biodiesel from rape or bioethanol from maize are not suitable for mitigating climate change.If the cultivation of energy crops on agricultural land displaces food production and land elsewhere has to be cleared as a result, more greenhouse gases may be released than would have been the case if fossil fuels had been used. Second generation liquid biofuels, in which the whole above-ground part of the plant is used, perform no better in this regard. By contrast, the use of perennial tropical plants such as sugar cane, oil palm or jatropha – where they are grown on degraded land – can have a substantial positive impact on climate change mitigation.However, considerable damage can be done to the climate if tropical forest is cleared in order to grow these crops. WBGU therefore advocates that the promotion of liquid biofuels for road transport purposes be rapidly abandoned by removing blending quotas and instead expanding electromobility.

Residues are Fuels

Biogenic residues such as wood residue, liquid manure and straw are ideal sources of energy, because when used properly they entail very little risk to soils, water or the climate. In addition, they do not compete with food production. The generation of electricity from wastes and residues should therefore be particularly promoted.

Deploying Modern Bioenergy to Tackle Energy Poverty

There are some 50 developing countries in which traditional bioenergy, involving the burning of wood, dung or crop residues for cooking and heating, still accounts for more than 90 per cent of energy use. As a result, more than 1.5 million people die each year of indoor air pollution.The more widespread use of improved wood or charcoal stoves or of micro biogas systems, and the production of vegetable oils from oil plants such as jatropha, represent an important and as yet insufficiently exploited lever for tackling poverty.These technologies should be promoted, since they can deliver significant improvements in the quality of life of many hundred millions of people within a very short time and at low cost.The opportunities for rural development associated with the cultivation of energy crops should be harnessed.As a first step, however, integrated strategies for bioenergy use and food security need to be drawn up jointly with partner countries.

Saturday, January 24, 2009

The effect of Spanish Solar Industry Growth

The Spanish PV market grew by more than 2661 Megawatts of new installed power in 2008. As a result, the global PV market has grown by around 5600 Megawatts.

This enormous 100% increase compared with the 2007 figure explains part of the scarcity and high module prices in 2008. But, with a cap of 500 MW in 2009, it also means that the Spanish market will decrease in size by at least 80% (or more than 2100 MW) this year. And that is bad news for the global PV industry as it faces an oversupply situation and bad economic times. However, this turns into good news for the customer, as prices along the supply chain have decreased by at least 20-40%. Solar modules are now cheaper than ever before. Record growth could be even higher. The figures for the Spanish PV market were published by the Spanish magazine Energias Renovables, which quoted sources from CNE (Comisión Nacional de la Energía). CNE pays out to the energy utilities that in turn give the feed-in tariff to customers with a PV installation. The more than 300% increase compared to 2007 could be even higher. CNE estimates that the 2008 market could well be above 3500 Megawatts. This would mean that the Spanish market in 2008 alone was bigger than the global market figure for 2007. Even the figure of 2661 MW is astonishing, and comes as a surprise to most people in the solar energy business. It not only made Spain the world’s biggest PV market in 2008, but clearly demonstrates that the new regulation will have a major impact on the global PV market. Although other PV markets in the world will continue to grow, the impact is such that the global PV market in 2009 is likely to decrease by around 10% compared to 2008 according to calculations by SolarPlaza.

Lessons from Spain

In 2007, and during the first half of 2008, all the sign for PV were positive. There was a very attractive feed-in tariff in Spain, credit lines were easy to get, oil prices were rising and economies growing rapidly. Now, the industry faces a strong head wind with oil prices very low, economies in recession, finance hard to obtain and the world’s largest market regulated by a cap with a 30% lower feed-in tariff. The consequence will be felt throughout the entire industry. Several major international companies recently announced cut backs in staff. As many Spanish companies were focused on the domestic market, jobs, and a part of the solar energy business infrastructure, will be lost. What happened in Spain clearly shows that the global PV market is still strongly dependent on government support programs and decisions by politicians. What is needed for continuous market development is not the highest feed-in tariff, but a stable and long-term policy and program. What works is a feed-in tariff that is decreased by clear steps over time. It provides the industry with targets for cost reduction, working towards a situation where incentives are no longer needed. It is no coincidence that Germany, not the country with the best solar resources, is the world’s leading PV market.

Germans set to take the lead again

The German government decreased the feed-in tariff by almost 10% at the start of 2009. Nevertheless, this market is likely to continue to grow steadily. Module prices in the world markets have fallen by more than 20% over the last months. Germany will therefore resume the lead from Spain to again be the world’s largest PV market in 2009. The stable solar policy pays off…

Strong long-term outlook for USA

Many people expect that Obama's renewable energy plans will lead to a further push for solar energy in the USA. The eight year guaranteed Tax Credit regulation, approved under President Bush, offers an excellent starting point for stable growth. Experts predicted a market growth of around 50% before Obama was elected. Much will now depend on recovery of the economy and details of Obama’s plans. But even if the Californian and whole US-market were to grow by 100% in 2009, the US market will be comparable with that of Spain (about 500 MWp). The longer-term prospects are even better. Several energy utilities in the USA have discovered PV as a serious and viable option for power supply. Many large scale PV projects, like the 800 MWp project by PG&E in California, are being prepared and developed. The push for renewable and solar, and an economic recovery, could make the USA one of the major PV markets from 2010 onwards.

What will happen in China?

The Chinese PV industry grew explosively in 2008 with soaring demand from Spain and Germany in particular. Declining global demand, which started at the end of 2008, means the Chinese PV industry will face hard times in 2009. Sources indicate that many of the hundreds of PV module manufacturers have already gone out of business. Will the Chinese government support its industry with incentives for development of the domestic market in 2009? Rumors indicate that the government is working on this. Reliable figures are hard to obtain, but experts estimate that the market size was less than 50 MW in 2008. If a feed-in tariff were introduced in 2009, it would be unlikely to have a major impact on demand for 2009.

Italy is the place to be The most attractive feed-in tariffs can now be found in Italy. The market is growing rapidly as investors have discovered the opportunities, certainly with currently decreasing module prices. In terms of size, Italy will still be smaller than Spain in 2009, but with many projects under development, Italy could become the second largest market in the world in 2010.

Global market consequences

What are the consequences of this all for the global PV market? The promising growth in other markets will not be able to compensate for the 2100 MWp loss in Spain in 2009. Promising markets are France, Czech Republic, Belgium, Korea, Greece and India. All were still below 50 MW in size in 2008. As in Spain, even under the most attractive circumstances, it takes at least three years to achieve a market size in the hundreds of MW. As a result, and based on its global market demand model, SolarPlaza expects the global PV market to decline instead of grow in 2009.

Long-term perspective still very good

The long-term perspectives for the global solar energy market remain great, however. Module prices are declining and industry members expect prices to fall further during 2009. It will bring solar energy closer at the stage where government support is no longer needed.

And, above all, the long-term market drivers that push solar energy will remain in place:

+ oil prices are expected to increase when economic recovery returns due to supply limitation

+ an increasing number of countries have started CO2 reduction plans including Renewable Energy support programs

+ continuously growing electric power demand, pushed by economic growth in Western countries and Asian rising stars such as India and China

+ continuously decreasing cost of solar modules makes solar energy attractive as a reliable energy source in a growing number of market segments

+ growing interest for electrified transportation (automotive industry opting for electric cars) which will stimulate decentralized electricity production

The big question for the near-term is which of the solar PV manufacturers will be able to survive the global decrease in demand and economic crisis in 2009, and maybe 2010. Those who can will have a bright future and infinite market potential ahead. When the cost of solar energy for customers reaches the cost of energy from the grid, the market potential for a reliable, predictable and 25 year fixed cost energy source will be infinite. This ‘grid parity’ will be reached in the next three to five years in major markets in the world.

Tuesday, January 20, 2009

China's Renewable Enery for greater growth

China will receive approximately 23 percent of global investment in renewable energy between 2005 and 2030, equivalent to about $1.2 trillion, said Francois Nguyen, senior advisor to the International Energy Agency on the development of renewable energy in China.

"China has a golden opportunity for investment in cleaner and more efficient power plants," Nguyen said, in an exclusive interview.

Such investment is being strongly encouraged by China's government. The National Development and Reform Commission (NDRC), the country's primary macroeconomic planner, has targeted renewable energy to make up 10 percent of China's total energy consumption by 2010, and 15 percent by 2020, compared with 7.5 percent in 2005.

Clear targets

The NDRC has set clear industry-specific targets for this push. The commission aims for the country's hydropower generation capacity to reach 190 gigawatts (GW) by 2010 and 300 GW by 2020, compared with 115 GW in 2005; wind power generation capacity to reach 10 GW by 2010 and 30 GW by 2020, compared with 1.3 GW in 2005; biomass capacity to reach 5.5 GW in 2010 and 30 GW in 2020, compared with 2 GW in 2005; and solar power generation capacity to reach 300 megawatts (MW) in 2010 and 1.8 GW in 2020, compared with 70 MW in 2005.

Industry experts tend to agree that China will likely hit its targets. Former World Bank energy specialist on China's renewable energy development, Dr. Eric Martinot, told Interfax that the country's goals are reasonable, with the exception of those for biomass.

Underlying factors

Several factors are driving development. Firstly, China is the world's second largest energy consumer. If its economic growth continues, it will likely surpass the United States and become the largest consumer in a matter of years. As China is relying more and more on imported energy resources, it is becoming more sensitive to rising international prices and energy security issues.

Second, increasingly severe environmental problems are threatening China's economic sustainability. In two 2007 reports, the Chinese government acknowledged that global warming is a legitimate problem and climate change will likely damage the country's agricultural and water resources.

At the same time, China is working to address issues stemming from its energy resource make up. The country has little in oil and gas resources, but is rich in coal. Coal made up 70.2 percent of total primary energy consumption. Thermal power accounted for 77.82 percent of the country's total installed capacity at the end of 2006. In contrast, most countries use far less coal, usually about 30 percent to 40 percent of their energy sources.

More challenges

Although the Chinese government supports the development of solar power, current policy suggests that it does not view solar energy as an economically viable option in the near-term. Instead, the government is supporting the industry's export business, hoping to deploy solar in the country once costs drop.

Bio-energy holds the greatest promise as an alternative fuel source as the nation has abundant natural resources. Based on current development targets, bio-energy is expected to contribute the same amount of power as wind by 2020.

However, faced with the task of feeding the largest population on earth, the government has shown caution, strictly limiting the development of feedstock that does not compete directly with the food supply. The country is building up plantations of various promising crops, such as jatropha curcas and cassava, and the industry is expected to develop rapidly once these resources are available.

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