Switching to Renewable Power

A Framework for the 21st Century

Volkmar Lauber

• Publisher: Routledge
• Year: 2012
• eBook ISBN: 9781136555312
• Edition: 1
• Topic: Biological Sciences
• Subtopic: Ecology
• Index: Biological Sciences

Renewable energy has enjoyed relatively good - and sometimes extraordinary - growth in recent years, in particular photovoltaics and wind; but it will be difficult to sustain such rates of diffusion on a global basis. A more complete transition to renewable energy is required on a demanding timescale set by climate change and fossil fuel depletion. This book analyses strategies for promoting renewable energy within the context of a rapid energy transition, using case studies from different countries over the past 30 years.

Having described the global context in detail, covering oil and gas depletion, climate change, third world development and the potential for renewable energy, the authors evaluate support mechanisms at national and international levels, offering readers a clear understanding of the regulatory framework and an opportunity to promote renewable energy effectively.

This book offers energy policy makers, renewable energy professionals, energy consultants and students a platform for development and an invaluable research text.

Contributing authors include: Jorg Schindler and Werner Zittel, Ludwig Bohlkow-Systemtechnik, Germany; Ian Rowlands, University of Waterloo, Canada; Giulio Volpi, WWF Europe; Kristian Hvitfelt Nielsen, Aarhus University, Denmark; Staffan Jacobsson, Chalmers University of Technology, Sweden; Peter Connor, University of Warwick, UK; Ole Langniss, Centre of Solar Energy and Hydrogen Research in Baden-Wurttemberg, Germany; Ryan Wiser, Lawrence Berkeley National Laboratory, US; David Elliott, The Open University, UK; and Frede Hvelplund, Aalborg University, Denmark

1

Introduction: The Promise of
Renewable Power

Volkmar Lauber

During the last quarter of the 20th century it became increasingly clear to all who cared to know that the prevailing energy system was unlikely to be sustainable, whether physically or economically. Instead, it began to look more and more as if it was heading down a dead end, plagued by such problems as nuclear risks, climate change and other high external costs, and the prospect of stagnating and then declining oil and gas extraction within a generation or two. The future was likely to be bleak, with costs and risks accumulating over time.

Within a relatively short time – mostly during the last years of the century – the outlines of an alternative energy system began to emerge progressively: one based on renewable energy sources. Few doubted that such a system would be more benign ecologically, but many questioned its economics. Despite those early doubts, it appeared increasingly likely that such a system could be as economically efficient as the previous one – and probably more so in the long run. As to the social dimension of sustainability, that is the social aspect of such an energy system, everything seemed to speak in its favour. Renewable energy sources are more evenly distributed around the globe than fossil or nuclear sources, their harnessing could bring economic vitality to languishing regions, and there was little question of accepting the new technologies, as one survey after another illustrates.

There remained one major question: how would the transition from the old energy system to the new one be organized? Such a transition was and is unlikely to come about by itself: it requires supportive politics and policies and these in turn require substantial vision and imagination, determination and skilful dealing with vested interests and the inertia those tend to produce. This book is about such politics and policies in a particular area – that of the switch to renewable power, with a focus on Europe. Electricity from renewable sources is indeed an area of the renewable energy system in which the new technologies are well on their way. This places particular urgency on the politics of transformation in this area.

Part 1 of this book deals with general aspects of the fossil and nuclear energy system: oil and gas depletion, the climate change issue and the rising demand from the developing world, which cannot possibly be accommodated by the current system, thus making transformation more pressing still. Part 2 deals with the main subject: frameworks for transition to renewable power as they were created in three European countries – Denmark, Germany and the United Kingdom (UK) – and also in Texas, the state that has one of the most successful regulations in the US in this respect, a regulation which in turn is also of interest to the European Union (EU). Finally, Part 2 also looks at the action of the EU in this area so far. Part 3 evaluates these and similar frameworks to assess how they deal with the challenge at hand – to promote the switch to renewable power with lasting success politically and economically.

The problems plaguing the current energy system

Humankind's use of non-renewable sources is historically relatively recent. It essentially started in the 17th century, when deforestation was spreading rapidly throughout Europe as a result of industrialization and urbanization. In response, energy use shifted from wood to coal, and later on to other fossil fuels. Oil became important in the 20th century, particularly in the second half of that century as far as Europe was concerned, and was soon paralleled by the rise of natural gas. Also at that time, nuclear power promised to supply a ready source of cheap electricity, so abundant that other technological options were often abandoned. The oil crises of the 1970s initiated a process of diversification, but mostly a reinforced emphasis on coal and nuclear power, both of which received massive support from politics. Natural gas was also favoured and its consumption expanded significantly. This response to the crises, particularly the plans to multiply nuclear power, drew strong resistance in many European countries. The resulting political pressure helped to strengthen support for programmes aimed at developing renewable energy sources. But financial support was relatively modest then and did not, for some time, produce results that were reflected in any significant market penetration. When oil prices came down again in the mid-1980s, renewable energy seemed to be set for decline again.

In the meantime, however, the intensified reliance on fossil fuels and nuclear energy had to deal with rising difficulties that affected its political base. These difficulties concerned import dependence and security of supply (for both fossil fuels and uranium), unsolved and perhaps unsolvable problems of nuclear power, climate change due mainly to fossil fuel use, accumulating evidence of other damage caused by fossil fuels in the form of external costs, and finally the prospect of stagnation and decline of oil and gas production within a few decades. Greater reliance on renewable energy began to supply a plausible answer to these problems, and not just at some distant point in the future when the technology would be ready, but starting there and then and to be phased in during the course of the 21st century, to allow for the inevitably slow pace that characterizes large infrastructure investments such as those of the power system.

Historically, dependence on energy imports was the first problem that the fossil energy system presented for Europe. This was already evident in both World Wars, and emerged again with the Suez crisis in 1956. But vulnerability to oil imports in particular kept growing until the 1970s, partly as a result of cheap oil. The oil price increases of the 1970s led to greater efficiency, diversification and the activation of new discoveries in the North Sea. But efficiency gains began to stagnate when prices came down again in the 1980s, and production in the North Sea has already passed its peak. At the present time, the outlook for Europe is again sombre with regard to energy imports. From about 50 per cent in 2000, they are expected to increase to about 70 per cent by 2030 (European Commission, 2000). Also during this time period, the Organization of Petroleum Exporting Countries (OPEC) will probably achieve a much stronger position on the world oil market than currently since most other countries’ reserves will have declined strongly by then; in many cases, former exporting countries will actually have become net importers (see Schindler and Zittel, in this volume). At the same time, demand for energy is likely to increase worldwide, especially in industrializing countries such as China and India where per capita consumption is still low but rising fast.

Table 1.1 Primary energy sources for electricity generation and their ratios of import dependence: EU 1998

	Total share (%)	Import dependence (%)
Solid fuel (mostly coal)	27	50+
Oil	8	76
Natural gas	16	40
Nuclear (uranium)	35	95
Renewable energy sources	15	near 0

Source: European Commission, 2000.

What can Europe do to reduce its energy dependence, particularly in the electric power sector that is at the core of this book? Nuclear power, coal and gas (oil plays only a limited role in Europe's power generation) all present considerable problems. The most unproblematic sources of power in the future are clearly efficiency increases and renewables. But let us look at the situation in detail.

Nuclear power has experienced a revival in the levels of political and media attention in several European countries. Some of the problems that have haunted it in the past have been neglected in this discussion. For example, the fact that a significant increase in nuclear power use would also increase dependence on imported uranium, and that known and conjectured reserves of uranium will only last for about 60 years by present counts (Traube, 2004). This can be changed by a second attempt to shift to plutonium on the basis of fast breeders and reprocessing plants. However, the fast breeders built in the 1970s and 1980s in the UK, France, Germany and Japan all turned out to be expensive failures; for this reason the technology, and the plutonium cycle for civilian use, were abandoned. Second, there is the problem of safety. Since the partial core meltdown at Three Mile Island in Harrisburg in 1979, and the actual meltdown in Chernobyl in 1986, nuclear power has a blemished record. Since then, prominent nuclear operators such as Sellafield or Tokyo Electric Power have been caught faking their safety records for a number of years, and the Davis-Besse incident in Ohio illustrated a similar mentality. Owing to these safety problems, the acceptance of nuclear fission at the political level is currently restricted to a small number of countries in the EU, several of them in Eastern Europe and relatively backwards with regard to their energy systems. Third, there is the unsolved problem of nuclear waste storage. And since 2001, a whole series of new questions have emerged for which there is no satisfactory answer: for example, the vulnerability of nuclear power plants to well-organized terrorists. In the past, security systems were notoriously easy to overcome by quite ‘unprofessional’ nuclear power opponents who dramatized their protest by taking along bazookas and other explosive weapons and remained undetected. Proliferation is another issue that probably cannot be solved in a satisfactory fashion if nuclear power is to be revitalized. And then there is the problem of the economics of nuclear power, particularly if external costs are taken into account, a point to be taken up below.

This leaves the hope of nuclear fusion – or does it? Work on fusion as an abundant energy source has been pursued for over 50 years. The next step currently being discussed is the plan for an International Thermonuclear Experimental Reactor (ITER) that will cost about US$5 billion to build and a similar amount to operate. This is only one of several steps with a similar price tag which by 2050 – so it is hoped by fusion's supporters – may result in a reactor capable of producing commercially competitive power. Whatever the merits of fusion (and the eventual outcome of current research is still open), it is evident from this schedule that it will not play much of a role – if any – in European power production before the last quarter of the 21st century.

Coal and gas are the main fossil fuels used in European power generation today. Their long term prospects have suffered a severe setback due to climate change. There is widespread scientific agreement on the basic facts. In pre-industrial times, the concentration of carbon dioxide (CO₂) in the atmosphere was around 280 parts per million (ppm). Currently it stands at 375 ppm, and will exceed the figure of about 500 ppm unless carbon emissions are stabilized at the present level of about seven gigatonnes per year for the next half century (Pacala and Socolow, 2004; see also Ian Rowlands, in this volume), with a decline thereafter. If the threshold of 500 ppm is exceeded, natural disasters on a major scale appear inevitable (in fact, the major insurance companies point to the fact that such disasters have already been on the rise during the last two decades, though not yet on the scale expected at higher emission levels). So the question is how to stabilize emissions at current levels.

The most plausible conclusion is to cut back fossil fuel use, or at least carbon emissions. The Kyoto protocol – entering into force in early 2005 – is a first step, requiring industrial countries that are signatories to the treaty to take the lead with these cutbacks, while ‘developing’ countries are expected to take on commitments at some later time. The EU, which for a long time took the lead in the Kyoto process, has taken the first steps by introducing an emissions trading system and requiring national allocation plans from all member states in 2004. At the expected price of 8 Euro per tonne of carbon,¹ once it is traded, this is expected to add about 8 Euro to the price of one megawatt-hour (MWh) of electricity from coal, and 3.2 Euro to the price of power from gas (Milborrow, 2005). This is not likely to pay for the full climate cost of those fuels – and the price is expected to rise later on – but it is a first step that will help to check further growth in the consumption of those fuels. At some point, however, a drastic reduction in their use will be necessary to meet global stabilization goals, considering that developing countries are allowed to increase their emissions.

Can fossil fuels gain a new lease of life thanks to technologies of carbon sequestration and storage? This avenue is already being pursued, but it is open to question on two counts. First, can storage be relied upon to last for many centuries and beyond, or is there a danger that it will leak into the atmosphere at some point? Second, how does the procedure make economic sense? While it is hard to predict specific values, the cost of one to two additional US cents per kWh of coal-generated electricity has been put forward by International Energy Agency (IEA) experts as a goal to be attained for capture. There would be additional costs for transport and storage in the range of US$5–10 per tonne of CO₂ (Gielen and Podkanski, 2004), roughly similar to the price a tonne of carbon is expected to be traded for; for this reason, only the cost of capture needs to be considered here as extra cost. Even at this rate, the process appears to be profoundly uneconomic in the long run, that is, with sufficient availability of renewable sources. The costs of capture will increase generation costs of coal-based electricity, from about 3.5–4 Euro cents, to about 5.25 Euro cents. If average external costs (e.g. of air pollution – see next paragraph) are added, coal's generation cost will go up by another four or five Euro cents on average and thus come close to 10 Eurocents. That is substantially more than wind power costs in Germany (even offshore) today, and corresponds approximately to the admittedly high rates currently paid under the British Renewables Obligation. Nonetheless, carbon capture may be interesting for a time of transition, until safer and more economic alternatives are available in sufficient amounts. It must be remembered again that large infrastructures (as in the power generation sector) only change at a slow rate, and that wind power and other renewable sources need many years – in fact decades – of high growth rates before they can replace coal and nuclear.

External costs of energy use are a relatively recent discovery, not in terms of economic theory but in terms of calculating specific monetary values. In his groundbreaking discussion of external costs in 1912, A. C. Pigou illustrated the concept by referring to the locomotives that frequently used to set fire to fields and forests, with the railroads making no efforts to avoid such damage as they were not held liable for it; this made these costs external to their accounting (Pigou, 1912). While many costs have been internalized since those days, in the energy sector external costs are still considerable. In the early 1990s the European Commission began to take them more seriously, fully expecting that this would lead to reorienting economic activities in more sustainable directions (European Commission, 1993). A large research project (ExternE) was set up to explore this field. Originally it was conducted by both EU and US research teams; however, the US dropped out in the mid-1990s after data showed unexpectedly high costs (Krewitt, 2002). In 2003 the EU Commission published provisional ‘consensus’ results from this study. For electricity generation from coal, this publication (European Commission, 2004) shows figur...

Table of contents

• Front Cover
• Half Title
• Title Page
• Copyright
• Contents
• List of Figures and Tables
• List of Contributors
• Acknowledgements
• List of Acronyms and Abbreviations
• 1 Introduction: The Promise of Renewable Power
• Part 1 Context
• Part 2 Policies to Develop Renewable Electricity and its Generation
• Part 3 Evaluation of Policies and Approaches
• Index