By 2040, the world's power-generating capacity mix will have transformed: from today's system composed of two-thirds fossil fuels to one with 56% from zero-emission energy sources. Renewables will command just under 60% of the 9,786GW of new generating capacity installed over the next 25 years, and two-thirds of the $12.2 trillion of investment. • Economics – rather than policy – will increasingly drive the uptake of renewable technologies. All-in project costs for wind will come down by an average of 32% and solar 48% by 2040 due to steep experience curves and improved financing. Wind is already the cheapest form of new power generation capacity in Europe, Australia and Brazil and by 2026 it will be the least-cost option almost universally, with utility-scale PV likely to take that mantle by 2030.
• Over 54% of power capacity in OECD countries will be renewable energy capacity in 2040 – from a third in 2014. Developed countries are rapidly shifting from traditional centralised systems to more flexible and decentralised ones that are significantly less carbon-intensive. With about 882GW added over the next 25 years, small-scale PV will dominate both additions and installed capacity in the OECD, shifting the focus of the value chain to consumers and offering new opportunities for market share.
• In contrast, developing non-OECD countries will build 287GW a year to satisfy demand spurred by economic growth and rising electrification. This will require around $370bn of investment a year, or 80% of investment in power capacity worldwide. In total, developing countries will build nearly three times as much new capacity as developed nations, at 7,460GW – of which around half will be renewables. Coal and utility-scale PV will be neck and neck for additions as power-hungry countries use their low-cost domestic fossil-fuel reserves in the absence of strict pollution regulations.
• Solar will boom worldwide, accounting for 35% (3,429GW) of capacity additions and nearly a third ($3.7 trillion) of global investment, split evenly between small- and utility-scale installations: large-scale plants will increasingly out-compete wind, gas and coal in sunny locations, with a sustained boom post 2020 in developing countries, making it the number one sector in terms of capacity additions over the next 25 years.
• The real solar revolution will be on rooftops, driven by high residential and commercial power prices, and the availability of residential storage in some countries. Small-scale rooftop installations will reach socket parity in all major economies and provide a cheap substitute for diesel generation for those living outside the existing grid network in developing countries. By 2040, just under 13% of global generating capacity will be small-scale PV, though in some countries this share will be significantly higher.
• In industrialised economies, the link between economic growth and electricity consumption appears to be weakening. Power use fell with the financial crisis but has not bounced back strongly in the OECD as a whole, even as economic growth returned. This trend reflects an ongoing shift to services, consumers responding to high energy prices and improvements in energy efficiency. In OECD countries, power demand will be lower in 2040 than in 2014.
• The penetration of renewables will double to 46% of world electricity output by 2040 with variable renewable technologies such as wind and solar accounting for 30% of generation – up from 5% in 2014. As this penetration rises, countries will need to add flexible capacity that can help meet peak demand, as well as ramp up when solar comes off-line in the evening. More
That solar photovoltaic (PV) technology is poised to become a dominant energy generation technology throughout the world is of no surprise to most, but the sheer wealth of possibility being forecast throughout the middle and southern hemispheres begins to give an idea of just how prevalent the technology will be by the end of the decade.
Figures published by NPD Solarbuzz have so far predicted that several of the major Asia Pacific nations will account for 60% of solar PV demand in 2014, while being primary drivers of growth over the next several years, at the same time as the Middle East and Africa region currently has close to 12 GW of solar demand in the pipeline.
So it should really come as no surprise that NPD Solarbuzz’s recent figures show that the Latin America and Caribbean region is set to install 9 GW of solar PV over the next five years.
Latin America and Caribbean Five-Year Cumulative Demand Forecast by Project Status
“Solar PV is now starting to emerge as a preferred energy technology for Latin American and Caribbean countries,” said Michael Barker, senior analyst at NPD Solarbuzz. “The region has high electricity prices and it also benefits from strong solar irradiation, which makes it a good candidate for solar PV deployment. As a result, experienced global solar PV developers are seeing strong solar PV growth potential in the region.”
NPD Solarbuzz’s Emerging PV Markets Report: Latin America and Caribbean shows that the total PV project pipeline now exceeds 22 GW of projects across all stages of development — with 1 GW of projects already under construction, and another 5 GW of projects have received the appropriate approval to proceed.
The Latin America and Caribbean region was previously home to many small-scale and off-grid solar PV applications, however governments are now looking to solar PV to address large-scale utility power requrements — specifically in Brazil, Chile, and Mexico.
“Many countries across the LAC region have the potential to develop into major solar PV markets in the future,” added Barker. “While project pipelines vary by country, there is a strong contribution from early-stage developments that have yet to finalize supply deals or find end-users to purchase the generated electricity, which presents both risks and opportunities for industry players.”
A number of countries throughout the developing and second-world countries are turning to renewable energy technologies to develop strong, future-proof, and economically efficient energy generation. Such a trend is being backed by major manufacturing companies who are focusing their efforts on these regions, hoping to increase their own profits while fulfilling renewable energy demand. More
What simple tool offers the entire world an extended energy supply, increased energy security, lower carbon emissions, cleaner air and extra time to mitigate climate change? Energy efficiency. What’s more, higher efficiency can avoid infrastructure investment, cut energy bills, improve health, increase competitiveness and enhance consumer welfare — all while more than paying for itself.
The challenge is getting governments, industry and citizens to take the first steps towards making these savings in energy and money.
The International Energy Agency (IEA) has long spearheaded a global move toward improved energy efficiency policy and technology in buildings, appliances, transport and industry, as well as end-use applications such as lighting. That’s because the core of our mandate is energy security — the uninterrupted availability of energy at an affordable price. Greater efficiency is a principal way to strengthen that security: it reduces reliance on energy supply, especially imports, for economic growth; mitigates threats to energy security from climate change; and lessens the global economy’s exposure to disruptions in fossil fuel supply.
In short, energy efficiency makes sense.
In 2006, the IEA presented to the Group of Eight leading industrialized nations its 25 energy efficiency recommendations, which identify best practice and policy approaches to realize the full potential of energy efficiency for our member countries. Every two years, the Agency reports on the gains made by member countries, and today we are working with a growing number of international organizations, including the European Bank for Reconstruction and Development, the Asian Development Bank and the German sustainable development cooperation services provider GIZ.
The opportunities of this “invisible fuel” are many and rich. More than half of the potential savings in industry and a whopping 80 percent of opportunities in the buildings sector worldwide remain untouched. The 25 recommendations, if adopted fully by all 28 IEA members, would save $1 trillion in annual energy costs as well as deliver incalculable security benefits in terms of energy supply and environmental protection.
Achieving even a small fraction of those gains does not require new technological breakthroughs or ruinous capital outlays: the know-how exists, and the investments generate positive returns in fuel savings and increased economic growth. What is required is foresight, patience, changed habits and the removal of the barriers to implementation of measures that are economically viable. For instance, as the World Energy Outlook 2012 demonstrates, investing less than $12 trillion in more energy-efficient technologies would not only quickly pay for itself through reduced energy costs, it would also increase cumulative economic output to 2035 by $18 trillion worldwide.
While current efforts come nowhere close to realizing the full benefits that efficiency offers, some countries are taking big steps forward. Members of the European Union have pledged to cut energy demand by 20 percent by 2020, while Japan plans to trim its electricity consumption 10 percent by 2030. China is committed to reducing the amount of energy needed for each unit of gross domestic product by 16 percent in the next two years. The United States has leaped to the forefront in transportation efficiency standards with new fuel economy rules that could more than double vehicle fuel consumption.
Such transitions entail challenges for policy, and experience shows that government and the private sector must work together to achieve the sustainability goals that societies demand, learning what works and what does not, and following the right path to optimal deployment of technology. Looking forward, energy efficiency will play a vital role in the transition to the secure and sustainable energy future that we all seek. The most secure energy is the barrel or megawatt we never have to use.
Maria van der Hoeven is the Executive Director of the International Energy Agency, an autonomous organization which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. This commentary appeared first this month in IEA Energy, the Agency’s journal.
The Edison Electric Institute, the power industry's main trade group, is calling on utilities to better promote electric cars in order to stimulate demand for electricity and help reverse trends that threaten the long-term viability of some in the industry.
Without a strategy to help connect more vehicles to the grid, utilities will continue to face slow growth and stagnant revenues, warns EEI in a new report. The organization calls electric vehicles a “quadruple win” for power companies looking to boost demand, find new ways to interact with customers, support environmental goals and mandates, and reduce operating costs through electrifying their own fleets.
“The bottom line is that the electric utility industry needs the electrification of the transportation sector to remain viable and sustainable in the long term,” conclude the authors.
Some leading investor-owned utilities have rolled out programs to support charging stations, created pilots to test integration of new vehicle-to-grid technologies and have supported studies to model how lots of electric vehicles would interact with the distribution system. But there hasn't yet been a strategic, industry-wide effort to support the electrification of transportation as a way to boost demand.
To understand why EEI is now calling for more electric vehicles, consider where the industry is headed. As the chart below illustrates, growth in retail demand has come to a virtual standstill.
At the same time, the states with the biggest solar PV markets are seeing that technology slow electricity demand growth even further. This is adding additional pressure on utilities (creating borderline disruption in some markets), as third-party developers capture much of the value from developing solar.
“Stagnant growth, rising costs, and a need for even greater infrastructure investment represent major challenges to the utility industry,” writes EEI. “Today’s electric utilities need a new source of load growth — one that fits within the political, economic and social environment.”
Part of the answer is electric vehicles, which could both grow electricity sales and help balance a future grid made up of much more distributed renewables.
Thus far, utilities have had a conflicted relationship with electric vehicles. Although sales continue to grow, consumer demand has been relatively low compared to initial estimates. That has prevented power companies from investing heavily in charging infrastructure. There are also legitimate concerns about how electric cars and trucks will impact circuits on local grids.
However, the potential upside is enormous. If the two charts above have utilities worried, the chart below should have them excited about the future.
As Opower pointed out in a recent analysis, owners of electric cars use nearly 60 percent more electricity than the average customer. And customers who own both a solar system and an electric car consume roughly the same amount of electricity from the grid as an average customer — offsetting much of the excess solar that utilities must buy back through net metering. More
Some of the largest companies in the United States have banded together to call for a substantial increase in the production of renewable electricity, as well as for more simplicity in purchasing large blocs of green energy.
A dozen U.S-based companies, most of which operate globally, say they want to significantly step up the amount of renewable energy they use, but warn that production levels remain too low and procurement remains too complex. The 12 companies have now put forward a set of principles aimed at helping to “facilitate progress on these challenges” and lead to a broader shift in the market.
“We would like our efforts to result in new renewable power generation,” the Corporate Renewable Energy Buyers’ Principles, released Friday, state. The companies note “our desire to promote new projects, ensure our purchases add new capacity to the system, and that we buy the most cost-competitive renewable energy products.”
The principles consist of six broad reforms, aimed at broadening and strengthening the renewable energy marketplace. Companies want more choice in their procurement options, greater cost competitiveness between renewable and traditional power sources, and “simplified processes, contracts and financing” around the long-term purchase of renewables.
Founding signatories to the principles, which were shepherded by civil society, include manufacturers and consumer goods companies (General Motors, Johnson & Johnson, Mars, Proctor & Gamble), tech giants (Facebook, HP, Intel, Sprint) and major retailers (Walmart, the outdoor-goods store REI).
These 12 companies combined have renewable energy consumption targets of more than eight million megawatt hours of energy through the end of this decade, according to organisers. Yet the new principles, meant to guide policy discussions, have come about due to frustration over the inability of the U.S. renewables market to keep up with spiking demand.
“The problem these companies are seeing is that they’re paying too much, even though they know that cost-effective renewable energy is available. These companies are used to having choices,” Marty Spitzer, director of U.S. climate policy at the World Wildlife Fund (WWF), a conservation and advocacy group that helped to spearhead the principles, told IPS.
WWF was joined in the initiative by the World Resources Institute and the Rocky Mountain Institute, both think tanks that focus on issues of energy and sustainability.
“The companies have also recognised that it’s often very difficult to procure renewables and bring them to their facilities,” Spitzer continues. “While most of them didn’t think of it this way at first, they’ve now realised that they have been experiencing a lot of the same problems.”
In recent years, nearly two-thirds of big U.S. businesses have created explicit policies around climate goals and renewable energy usage, according to WWF. While there is increasing political and public compunction behind these new policies, a primary goal remains simple cost-cutting and long-term efficiencies.
“A significant part of the value to us from renewable energy is the ability to lock in energy price certainty and avoid fuel price volatility,” the principles note.
In part due to political deadlock in Washington, particularly around issues of climate and energy, renewable production in the United States remains too low to keep up with this corporate demand. According to the U.S. government, only around 13 percent of domestic energy production last year was from renewable sources.
Accessing even that small portion of the market remains unwieldy.
“We know cost-competitive renewable energy exists but the problem is that it is way too difficult for most companies to buy,” Amy Hargroves, director of corporate responsibility and sustainability for Sprint, a telecommunications company, said in a statement.
“Very few companies have the knowledge and resources to purchase renewable energy given today’s very limited and complex options. Our hope is that by identifying the commonalities among large buyers, the principles will catalyse market changes that will help make renewables more affordable and accessible for all companies.”
One of the most far-reaching sustainability commitments has come from the world’s largest retailer, Walmart. A decade ago, the company set an “aspirational” goal for itself, to be supplied completely by renewable energy.
Last year, it created a more specific goal aimed at helping to grow the global market for renewables, pledging to drive the production or procurement of seven billion kilowatt hours of renewable energy globally by the end of 2020, a sixfold increase over 2010. (The company is also working to increase the energy efficiency of its stores by 20 percent over this timeframe.)
While the company has since become a leader in terms of installing solar and wind projects at its stores and properties, it has experienced frustrations in trying to make long-term bulk purchases of renewable electricity from U.S. utilities.
“The way we finance is important … cost-competitiveness is very important, as is access to longer-term contracts,” David Ozment, senior director of energy at Walmart, told IPS. “We like to use power-purchase agreements to finance our renewable energy projects, but currently only around half of the states in the U.S. allow for these arrangements.”
Given Walmart’s size and scale, Ozment says the company is regularly asked by suppliers, regulators and utilities about what it is looking for in power procurement. The new principles, he says, offer a strong answer, providing direction as well as flexibility for whatever compulsion is driving a particular company’s energy choices, whether “efficiency, conservation or greenhouse gas impact”.
“We’ve seen the price of solar drop dramatically over the past five years, and we hope our participation helped in that,” he says. “Now, these new principles will hopefully create the scale to continue to drop the cost of renewables and make them more affordable for everyone.”
Ozment is also clear that the new principles need not apply only to U.S. operations, noting that the principles “dovetail” with what Walmart is already doing internationally.
In an e-mail, a representative for Intel, the computer chip manufacturer, likewise told IPS that the company is “interested in promoting renewables markets in countries where we have significant operations … at a high level, the need to make renewables both more abundant and easier to access applies outside the U.S.”
For his part, WWF’s Spitzer says that just one of the principles is specific to the U.S. regulatory context.
“Many other countries have their own instruments on renewable production,” he says, “but five out of these six principles are relevant and perfectly appropriate internationally.”
Meanwhile, both the principles and their signatories remain open-ended. Spitzer says that just since Friday he’s heard from additional companies interested in adding their support. More
The people of Kiribati, a group of islands in the Pacific ocean particularly exposed to climate change, now own a possible refuge elsewhere. President Anote Tong has recently finalised the purchase of 20 sq km on Vanua Levu, one of the Fijiislands, about 2,000km away.
The Church of England has sold a stretch of land mainly covered by dense forest for $8.77m. “We would hope not to put everyone on [this] one piece of land, but if it became absolutely necessary, yes, we could do it,” Tong told the Associated Press. Kiribati has a population of about 110,000 scattered over 33 small, low-lying islands extending over a total area of 3.5m sq km.
In 2009 the Maldives were the first to raise the possibility of purchasing land in another country in anticipation of being gradually submerged. At the time the government looked at options in India and Sri Lanka.
Now Kiribati has taken action. “Kiribati is just the first on a list which could get longer as time passes,” says Ronald Jumeau, Seychelles ambassador at the United Nations, who took part in the international negotiations on climate change in Bonn last month.
In March the Intergovernmental Panel on Climate Change published the volume on adaptation of its fifth assessment report, confirming in starker terms forecasts first outlined by scientists in 1990. Within a few decades, small islands in the Pacific and Indian oceans risk being extensively or even completely submerged. In places the sea level is rising by 1.2cm a year, four times faster than the global average.
The cost of protecting these places against rising sea levels, compared with national income, is among the highest in the world. Kiribati, Tuvalu and the Maldives are among the 10 countries where the financial impact of climate change is the most severe.
For many of these countries, which are represented by the Alliance of Small Island States, the impacts of climate change are “irreparable”, as Tong has often stressed. “Whatever is agreed within the United States today, with China [the two largest sources of CO2 emissions], it will not have a bearing on our future, because already, it's too late for us … And so we are the canary. But hopefully, that experience will send a very strong message that we might be on the frontline today, but others will be on the frontline next,” he said in an interview on CNN last month. This explains why small island states think it is so important to set up an international mechanism for loss and damage, to compensate for the irremediable consequences of global warming.
The international community approved the principle of such a mechanism in November 2013. “When a population is forced to leave its country, it is no longer a matter of adaptation,” Jumeau claims. “Where will these countries find funds? It is up to the industrialised countries, which caused global warming, to shoulder their responsibilities.” He wants to make the loss and damage mechanism a priority for the global deal on climate change slated to be signed in Paris in December 2015.
In the immediate future, the land purchased by Kiribati will above all be used to for agricultural and fish-farming projects to guarantee the nation's food security. With sea water increasingly contaminating the atolls' groundwater and catastrophic coral bleaching – total in some cases such as Phoenix atoll – there are growing food shortages. “Among the small islands, Kiribati is the country that has done most to anticipate its population's future needs,” says François Gemenne, a specialist on migrations at Versailles-Saint Quentin University, France. “The government has launched the 'migration with dignity' policy to allow people to apply for jobs on offer in neighbouring countries such as New Zealand. The aim is to avoid one day having to cope with a humanitarian evacuation.”
Kiribati has long-standing relations with Fiji. In the 1950s families from Banaba island, who had been displaced to make room for a phosphate mine, took refuge there, Gemenne recalls. More
Sir Richard Branson supports Many Strong Voices
The work of MSV to help raise the profile of people in the Arctic and Small Island Developing States (SIDS) and their struggle against climate change has gained the support of one of the world’s most influential business leaders.
Sir Richard Branson, founder of Virgin Airlines and a champion of green energy, has offered his support to MSV, which brings together the peoples of the Arctic and SIDS to meet the challenges of climate change.
“When it comes to climate change, arctic communities and small island states share similar struggles,” Branson said. “As they feel the impacts of rising sea levels and deteriorating coastal environments, organizations like Many Strong Voices collaborate, act and innovate to achieve lasting change.
“Their critical work fills the gap between those affected by adverse climate impacts and the political and business leaders focused on creating big picture solutions.”
Branson has invested considerable time and money in supporting global initiatives to reduce greenhouse gas emissions through the use of renewable resources and new technologies. Recently, he called on business leaders to take a stand against climate deniers.
MSV is coordinated by GRID-Arendal and the University College London. More
Solar is here.
That’s right. You know the solutions to the climate crisis are available today; we simply need the public (and political) will to implement them. Clean energy is urgently necessary, abundant, and becoming increasingly more affordable. That’s why on June 21, The Climate Reality Project is joining 12 other organizations in a day of action to support clean-energy solutions and show our commitment to bringing solar power to communities around the world.
If you don’t already have plans to take part on Saturday, don’t despair! Here are a few last minute ways to get involved:
- Sign: Send President Obama an email thanking him for putting solar panels on the roof of the White House.
- Share: Take your own #PutSolarOnIt photo and share it with your social media network.
- Discover: Check out the Mosaic website to find out if solar is right for you.
- Participate: Check out OFA’s website to find an event near you, some of which are being hosted by your fellow Climate Reality Leaders.
The reality is this: solar is affordable. It’s clean. And it’s powerful. The cost of solar panels has plummeted 60 percent since early 2011, and the number of installations keeps growing. The United States now has enough installed solar capacity to power more than 2.2 million homes. In several states, solar power is now competitive with other sources of energy without emitting the dangerous greenhouse gases that cause climate change.
Climate Reality Leaders are the first responders to the climate crisis and lead action across the globe. We’re proud so many of you will be participating on Saturday by hosting presentations, organizing events, and informing others about the benefits of solar power.
The Climate Reality Leadership Corps Team
This makes it more important than ever to take urgent and drastic action to curb climate change by reducing carbon emissions, he argues.
Lord Stern, who wrote a hugely influential review on the financial implications of climate change in 2006, says the economic models that have been used to calculate the fiscal fallout from climate change are woefully inadequate and severely underestimate the scale of the threat.
As a result, even the recent and hugely authoritative series of reports from the UN Intergovernmental Panel on Climate Change (IPCC) are significantly flawed, he said.
“It is extremely important to understand the severe limitations of standard economic models, such as those cited in the IPCC report, which have made assumptions that simply do not reflect current knowledge about climate change and its … impacts on the economy,” said Lord Stern, a professor at the Grantham Institute, a research centre at the London School of Economics.
Professor Stern and his colleague Dr Simon Dietz will today publish the peer-reviewed findings of their research into climate change economic modelling in the The Economic Journal.
Their review is highly critical of established economic models which, among other things, fail to acknowledge the full breadth of climate change’s likely impact on the economy and are predicated on assumptions about global warming’s effect on output that are “without scientific foundation”.
Professor Stern, whose earlier research said it is far cheaper to tackle climate change now than in the future, added: “I hope our paper will prompt … economists to strive for much better models [and] … help policy-makers and the public recognise the immensity of the potential risks of unmanaged climate change.”
“Models that assume catastrophic damages are not possible fail to take account of the magnitude of the issues and the implications of the science,” he said.
Professor Stern and Dr Dietz say their findings strengthen the case for strong cuts in greenhouse gas emissions and imply that, unless this happens, living standards could even start to decline later this century.
For the study, they modified key features of the “dynamic integrated climate-economy” (Dice) model, initially devised by William Nordhaus in the 1990s. The changes take into account the latest scientific findings and some of the uncertainties about the major risks of climate change that are usually omitted.
The standard Dice model has been used in a wide range of economic studies of the potential impacts of climate change, some of which have been cited in the most recent IPCC report which has been released in three parts over the past nine months.
Dr Dietz said: “While this standard economic model has been useful for economists who estimate the potential impacts of climate change, our paper shows some major improvements are needed before it can reflect the extent of the risks indicated by the science.”
Dr Dietz said his aim was to show how a new version of the model could produce a range of results that are much more representative of the science and economics of climate change, taking into account the uncertainties.
“The new version of this standard economic model, for instance, suggests that the risks from climate change are bigger than portrayed by previous economic models and therefore strengthens the case for strong cuts in emissions of greenhouse gases,” he said.
The new model differs in that it considers a wider temperature range when estimating the impact of doubling the atmospheric concentration of greenhouse gases – a measure of “climate sensitivity”.
Whereas the standard model usually assumes a single temperature for climate sensitivity of about 3C, the new model uses a range of 1.5C to 6C, which the authors say more accurately reflects the scientific consensus.
The standard model also “implausibly” suggests a loss of global output of 50 per cent would only result after a rise in global average temperature of 18C, even though such warming would likely render the Earth uninhabitable for most species, including humans, Dr Dietz contends.
The new model includes the possibility that such damage could occur at much lower levels of global warming. Standard economic models rule out the possibility that global warming of 5-6C above pre-industrial levels could cause catastrophic damages, even though such temperatures have not occurred on Earth for tens of millions of years. Such an assertion, he says, is without scientific foundation and embodies a false assumption that the risks are known, with great confidence, to be small.
The new model also takes into account that climate change can damage not just economic output, but productivity. The standard model assumes that rising levels of greenhouse gases in the atmosphere only affect economic growth in a very limited way, according to Dr Dietz. More