Post on 22-Apr-2022
The Energy Technology Options Conferellce openedwith a presentation from Professor Thomas Johansson onthe prospects for renewable energy in a global context. Itwas based upon a study commissioned by the UnitedNations Solar Energy Group for Environment andDevelopment, which he chairs. This study has since beenpublished in a large book entitled Renewable Energy:Sources for Fuels and Electricity; it contains reports byspecialists on a long list of renewable technologies (seeTable of Contents at the end of this paper). The preselltpaper consists of excerpts from Chapter 1 of that book,reprinted here with permission of the publishers. (Thebook may be obtained from Island Press, Box 7, Dept.UN, Covelo, Colifomia, USA 95428, or by telephone: Inthe US 1-800-828-1302; From outside the US 707 9836432; FAX 707 983 6414. ISBN 1-55963-139-2(hardcover, US$85), ISBN 1-55963-138-4 (paperback,US$45).)
La conference sur Ies options technologiques en matiered'energie Sfest auverte par un expose du ProfesseurThomas Johansson sur Ies perspectives d'utilisationd'energies renouvelables dans un contexte mondial. EIlese Jande sur une etude commandee par l'organisationUnited Nations Solar Energy Group for Environmentand Development, dont il est Ie president. Cette etude aite publiee depuis, dans un volume important intituleRenewable Energy: Sources for Fuel and Electricity;il contient des rapports de spedalistes reiatifs a unelongue liste de technologies renouvelables (voir la tabledes matieres ala fin de 1'article). Le present article estcompose d'extraits du chapitre 1 de ce livre, que nousreproduisons iei avec la permission de l'editeur. On peutse procurer ce livre aupres de Island Press, Box 7, Dept.UN, Covelo, Califomia, USA 95428, au par telephone:USA 1-800-828-1302; en dehors des USA 707983 6432;Facsimile 707 983 6414. ISBN 1-55963-139-2 (relie,U5$85) ISBN 1-55963-138-4 (livre de poche, US$45).
Thomas Johansson is professor of Energy SystemsAnalysis in the Department of Environment andEnergy Systems at the University of Lund inSweden. Henry Kelly is senior associate at the Officeof Technology Assessment of the US Congress.Arnulya K.N. Reddy is founding director and president of the International Energy Initiative in Bangalore, India. Robert H. Williams is senior researchscientist at the Center for Energy and Environmental Studies, Princeton University.
Energy Studies Review VoL 4, No.3, 1992 Printed in Canada
Renewable Fuels andElectricity for aGrowing WorldEconomy: Definingand Achieving thePotential
THOMAS B. JOHANSSON,HENRY KELLY,AMULYA K.N. REDDY andROBERT H. WILLIAMS
Major Findings
If the world economy expands to meet theaspirations of countries around the globe,energy demand is likely to increase even ifstrenuous efforts are made to increase theefficiency of energy use. Given adequatesupport, renewable energy technologies canmeet much of the growing demand at priceslower than those usually forecast for conventional energy. By the middle of the 21st century, renewable sources of energy couldaccount for three-fifths of the world's electricity market (see Figure 1) and two-fifths of themarket for fuels used directly (see Figure 2).Moreover, making a transition to a renewables-intensive energy economy would provide environmental and other benefits notmeasured in standard economic accounts (seeBox A). For example, by 2050 global carbondioxide (CO,) emissions would be reduced to75% of their 1985 levels provided that energyefficiency and renewables are both pursuedaggressively (see Figures 3a and 3b). Andbecause renewable energy is expected to be
201
40,000
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Year
20251985o
~ 200
~
1100
300-..
20502025
Year
1985
10,000
20,000
30,000
Figure 1: Electricity Generation for the Renewables-Intensive Global Energy Scenario
Renev.Jables can play major roles in the global energyeconomy in the decades ahead. In the global energydemand scenario adopted for this study, globalelectrictty production would more than double by 2025,and more than triple by 2050. The share of renewableenergy generation would increase from 20% in 1985(mostly hydroelectric power) to about 60% in 2025,with roughly comparable contributions fromhydropower, intermittent renev.Jables (wind and directsolar power), and biomass. TIle contribution of intermittent renewables could be as high as 30% by the middleof the next century.
A high rate of penetration by intermittent renewableswithout electrical storage would be facilitated byemphasis on advanced natural gas-fired gas turbinepower generating systems. Such power generating systems - characterized by low capital cost, high thermodynamic efficiency, and the flexibility to vary electricaloutput quickly in response to changes in the autput ofintermittent power-generating systems - would make it possible to "back up" the intermittent renewables at lowcost, with little, if any, need for electrical storage. Forthe scenario developed here, the share of natural gas inpower generation nearly doubles by 2025, from its 12%share in 1985.
tems have benefited from developments inelectronics, biotechnology, materials sciences,and in other energy areas. For example,advances in jet engines for military and civilianaircraft applications, and in coal gasificationfor reducing air pollution from coal combustion, have made it possible to produce electricity competitively using gas turbines derivedfrom jet engines and fired with gasifiedbiomass.! And fuel cells developed originallyfor the space program have opened the door tothe use of hydrogen as a non-polluting fuel for
Figure 2: Direct Fuel-Use for the Renewables-Intensive Global Energy Scenario
In the global energy demand scenario adopted for thisstudy, the use offuels for purposes other than electricitygeneration will grow by less than one-third, much lessthan the generation of electricity (compare this figurewith figure 1). The renewables contribution to fuelsused directly could reach nearly onefourth by 2025 andtwo-fifths by 2050, with most of the contributioncoming from biomass-derived fuels - methanol,ethanol, hydrogen, and biogas. Methanol and hydrogenmay well prove to be the biojuels of choice, because theyare the energy carriers most easily used in the juel cellsthat would be used for transportation.
II Oil• CoalGill Oil 0 Gas [J Nuclear
lS§ Biomass [J IrIte,miltem rerIewables arId geothermal
_Coal
B Hydro
competitive with conventional energy, suchbenefits could be achieved at no additionalcost.
This auspicious outlook for renewablesreflects impressive technical gains made during the past decade. Renewable energy sys-
1/ In this study, the term "biomass" refers to anyplant matter used directly as fuel or converted intofluid fuels or electricity. Sources of biomass arediverse and include the wastes of agricultural andforest-product operations as well as wood, sugarcane, and other plants grown specifically as energycrops.
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Box A: Benefits of Renewable Energy not Captured in Standard Economic Accounts
Social and economic development: Productionof renewable energy, particularly. biomass, canprovide economic development and employmentopportunities, especially in rural areas, thatotherwise have limited opport1.mities for econmnic growth. Renewable energy can thus helpreduce poverty in rural areas and reduce pressures for urban migration,
Land restoration: Growing biomass for energy ondegraded lands can provide the incentives andfinancing needed to restore lands rendered nearlyuseless by previous agricultural or forestry practices. Although lands farmed for energy wouldnot be restored to their original condition, therecovery of these lands for biomass plantationswould support rural development, prevent erosion, and provide a better habitat for wildlifethan at present.
Reduced air pollution: Renewable energy technologies, such as methanol or hydrogen for fuel-cell vehicles, produce virtually none of theemissions associated with urban air pollution andacid deposition, without the need for costly additional controls.
Abatement of global warming: Renewableenergy use does not produce carbon dioxide andother greenhouse emissions that contribute toglobal warming. Even the use of biomass fuelswill not contribute to global warming: the carbon
transportation. Indeed, many of the mostpromising options described in our book arethe result of advances made in areas not directly related to renewable energy, and werescarcely considered a decade ago.
Moreover, because the size of most renewable· energy equipment is small, renewableenergy technologies can advance at a fasterpace than conventional technologies. Whilelarge energy facilities require extensive construction in the field, where labor is costly andproductivity gains difficult to achieve, mostrenewable energy equipment can be constructed in factories, where it is easier to applymodern manufacturing techniques that facili-
dioxide released when biomass is, burned equalsthe amount absorbed from the atmosphere byplants as they are grown for biomass fuel.
Fuel supply diversity: There would be substantial interregional energy trade in a renewables-intensive energy future, involving a diversity ofenergy carriers and suppliers. Energy importerswould be able to choose from among more producers and fuel types than they do today andthus would be less vulnerable to monopoly pricemanipulation or unexpected disruptions of supplies. Such competition would make wide swingsin energy prices less likely, leading eventually tostabilization of the world oil price. The growth inworld energy trade would also provide newopportunities for energy suppliers. Especiallypromising are the prospects for trade in alcoholfuels such as methanol derived from biomass,natural gas (not a renewable fuel but an important complement to renewables), and, later, hydrogen.
Reducing the risks of nuclear weapons proliferation: Competitive renewable resources couldreduce incentives to build a large world infrastructure in support of nuclear energy, thus avoiding major increases in the production, transportation, and storage of plutonium and othernuclear materials that could be diverted tonuclear weapons production.
tate cost reduction. The small scale of theequipment also makes the time required frominitial design to operation short, so that neededimprovements can be identified by field testingand quickly incorporated into modifieddesigns. In this way, many generations oftechnology can be introduced in short periods.
Key Elements ofa Renwables-Intensive EnergyFuture
An energy future making intensive use ofrenewable resources is likely to have the following key characteristics:. There would be a diversity of energy sources,
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Ind '" industrialized countriesDev", developing countries
2050
Year
2025
• Coal IBl' Oil 0 Gas
1985
'"'8000
1Ind '" mdustriallzed cour1\f;esDev = developing countries
~ World
~ 6,000
0 ,0
5'0
~0
B0 2,000~~
0
1985 2025 2050
Year
• Coal II Oil o Gas
Figure 3a: Emissions of CO2 for the RenewablesIntensive Global Energy Scenario, by World Region
Global CO, emissions from the burning of fossil fuelsassociated with the renewables-intensive global energyscenario would be reduced 12% by 2025 and 26% by2050.
During this period, the CO, emissions from theindustrialized countries (including former centrallyplanned Europe) would be reduced nearly in half by2025 and nearly two-thirds by 2050. The industrializedcountry share of total worldwide emissions woulddedim from about three-fourths in 1985 to abouttwo-fifths in 2025 to about one-third in 2050.
Figure 3b: Per Capita Emissions of CO, for theRenewables-Intensive Global Energy Scenario.. byWorld Region
Global CO2 emissions per capita associated with therenewables-intensive global energy scenario would bereduced nearly in half by 2025 and by more thanthree-fifths by 2050.
Despite the rising relative contribution of developingcountries to total global CO, emissions (see figure 3a),per capita emissions of developing countries in 2050would still be only one-third of those for industrializedcountries.
the relative abundance of which would varyfrom region to region. Electricity could beprovided by various combinations ofhydroelectric power, intermittent renewablepower sources (wind, solar-thermal electric,and photovoltaic power), biomass power,and geothermal power. Fuels could beprovided by methanol, ethanol, hydrogen,and methane (biogas) derived from biomass,supplemented by hydrogen derivedelectrolytically from intermittent renewables.Emphasis would be given to the efficient useof both renewable and conventional energysupplies, in all sectors. Emphasis on efficientenergy use facilitates the introduction ofenergy carriers such as methanol andhydrogen. It also makes it possible to extractmore useful energy from such renewable
resources as hydropower and biomass, whichare limited by environmental or land useconstraints.Biomass would be widely used. Biomasswould be grown sustainably and convertedefficiently to electricity and liquid andgaseous fuels using modern technology, incontrast to the present situation, wherebiomass is used inefficiently and sometimescontributes to deforestation.
. Intermittent renewables would provide asmuch as one-third of total electricity requirements cost-effectively in most regions,without the need for new electrical storagetechnologies.
. Natural gas would play a major role insupporting the growth of a renewable energyindustry. Natural gas-fired turbines, whichhave low capital costs and can quickly adjust
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their electrical output, can provide excellentback-up for intermittent renewables onelectric power grids. Natural gas would alsohelp launch a biomass-based methanolindustry; methanol might well be introducedusing natural gas feedstocks before the shiftto methanol derived from biomass occurs.A renewables-intensive energy future wouldintroduce new choices and competition inenergy markets. Growing trade in renewablefuels and natural gas would diversify the mixof suppliers and the products traded (seeFigure 4), which would increase competitionand reduce the likelihood of rapid pricefluctuations and supply disruptions. It couldalso lead eventually to a stabilization ofworld energy prices. In addition, newopportunities for energy suppliers would becreated. Especially promising are prospectsfor trade in alcohol fuels, such as methanolderived from biomass. Land-rich countries insub-Saharan Africa and Latin America couldbecome major alcohol fuel exporters.Most electricity produced from renewablesources would be fed into large electricalgrids and marketed by electric utilities.Liquid and gaseous fuels would be marketedmuch as oil and natural gas are today. Largeoil companies could become the principalmarketers; some might also becomeproducers, perhaps in joint ventures withagricultural or forest-product industry firms.The levels of renewable energy developmentindicated by this scenario represent a tinyfraction of the technical potential forrenewable energy. Higher levels might bepursued, for example, if society should seekgreater reductions in CO2 emissions.
Constructing a Renewables-IntensiveGlobal Energy Scenario
Our findings are based on a renewablesintensive global energy scenario which wedeveloped in order to identify the potentialmarkets for renewable technologies in theyears 2025 and 2050, assuming that marketbarriers to these technologies are removed bycomprehensive national policies.' Some global
features of the scenario are presented in Figures 1 to 4. Separate detailed scenarios wereconstructed for 11 world regions (seeJohansson et ai, 1993, Appendix).'
In constructing the scenario, it was assumedthat renewable energy technologies will capture markets whenever (1) a plausible case canbe made that renewable energy is no moreexpensive on a life-cycle cost basis than conventional alternatives,' and (2) the use of renewable technologies at the levels indicatedwill not create significant environmental, landuse, or other problems. The economic analysisdid not take into account any credits for theexternal benefits of renewables listed in Box A.
Energy Demand
The market for renewable energy depends inpart on the future demand for energy services:heating and cooling, lighting; transportation,and so on. This demand, in tum, depends oneconomic and population growth and on theefficiency of energy use. Future energy supplyrequirements can be estimated by taking suchconsiderations into account. For the construction of the renewables-intensive energy scenario, future levels of demand for electricityand for solid, liquid, and gaseous fuels wereassumed to be the same as those projected in ascenario by the Response Strategies WorkingGroup of the Intergovernmental Panel on Climate Change.
The Working Group developed severalprojections of energy demand. The one
2/ See "An Agenda for Action" in Chapter 1 ofJohansson et al (1992) pp. 43-63.
3/ The regions are Africa; Latin America, Southand East Asia, Centrally Planned Asia, Japan, Australia/New Zealand, United States, Canada, OECDEurope, former Centrally Planned Europe, and theMiddle East.
4/ AssumptiOns about the cost and performance offuture renewable energy equipment are based ondetailed analyses of technologies in Chapters 2-22of Johansson et al. For a list of these chapters, seethe Table of Contents reprinted at the end of thispaper.
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10
oOil Gas Oil MeOH Gas
1M = importsEX = exports
'"Oil MeOH Gas
1985 2025 2050
~ Canada ~ Former centrally planned Europe
~ Africa ~ South and East Asia
~ Latin America ~ Centrally planned Asia
III Middle East ~ OEeD except Canada
Figure 4: Interregional Flows of Fuels for the Renewables-Intensive Global Energy Scenario
The importance of world energy commerce for the renewables-intensive global energy scenario is illustrated here.This figure shows that in the second quarter of the next century there would be comparable interregional flows ofoil, natural gas, and methanol- and that hydrogen derived from renewable energy sources begins to playa role inenergy commerce. This diversified supply mix is in sharp contrast to the situation today, where oil dominatesinternational commerce in liquid and gaseous fuels.
Most methanol exports would originate in sub-Saharan Africa and in Latin America, where there are vast degradedareas suitable for revegetation that will not be needed for cropland. Growing biomass on such lands for methanol orhydrogen production would provide a powerful economic driver for restoring these lands. Solar-electric hydrogenexports would come from regions in North Africa and the Middle East that have good insolation.
adopted for the renewables-intensive scenariois characterized by "high economic growth"and "accelerated policies" (see Figure 5). Theaccelerated policies case was designed to demonstrate the effect of policies that wouldstimulate the adoption of energy-efficienttechnologies, without restricting economicgrowth. Because renewable teclmologies areunlikely to succeed unless they are part of aprogram designed to minimize the overall costof providing energy services, the energy-efficiency assumptions underlying the accelerated
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policies scenario are consistent with the objectives of the renewables-intensive scenario.
The high economic growth, acceleratedpolicies scenario projects a doubling of worldpopulatiC'n and an eight-fold increase in grossworld economic product between 1985 and2050. Economic growth rates are assumed to behigher for developing countries than for thosealready industrialized. Energy demand growsmore slowly than economic output, because ofthe accelerated adoption of energy-efficientteclmologies, but demand growth outpaces
Direct fuel use Electricity consumption
500 HEr 50,000
~
" 400 40,000Q; L.
"" co'iJ 300 30,000 ~"'- L.
-"Q)
~Q
OJ 200 20,000~0
'" 100 10,000iii0
1985 2025 2050 1985 2025 2050
Year Year
• Solid • Liquid 0 Gas HE =high emissionsAP =accelerated policies
Figure 5: Alternative Global Energy Scenarios Developed by the Intergovernmental Panel on ClimateChange
The two altemative scenarios for the direct use of fuels (left) and electricity consumption (right! shown here weredeveloped by the Response Strategies Working Group (RSWG) of the Intergovemmental Panel on Climate Change([PCC), as a contribution to that group's assessment of strategies for responding to the prospect of climatic changearising from the buildup of greenhouse gases in the atmosphere. Both scenarios are characterized by high economicgrowth. The lower energJj dernand scenario provides the basis for developing the renewables-intensive global energysupply scenario in the present study. For details see the appendix to chapter 1 in Johansson et aI, 1993.
efficiency improvements - especially in rapidly growing developing countries. Worlddemand for fuel (excluding fuel for generatingelectricity) is projected to increase 30%between 1985 and 2050 and demand for electricity 265% (see figure 5).
The Working Group's assumptions aboutenergy efficiency gains are ambitious; nonetheless cost-effective efficiency improvementsgreater than those in the scenario are technically feasible, and new policies can help speedtheir adoption. Structural shifts to less energyintensive economic activities may also reducethe energy needs of modem economies belowthose projected"
Energy Resources
Construction of a global energy supply scenario must be consistent with energy resourceendowments and various practical constraintson the recovery of these resources.
5/ For example, per capita energy use in OECDEurope is presently about 20% less than in EasternEurope and the former Soviet Union. In the acceleratedpolicies scenario, per capita energy demanddeclines in OECD Europe and increases 60% by2050 in Eastern Europe and the former SovietUnion. In light of the rapid economic and politicalchanges now under way, it is doubtful that thesetwo regions will take such divergent paths.
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RENEWABLE ENERGY
In the renewables-intensive energy scenario,global consumption of renewable resourcesreaches a level equivalent to 318 exajoules peryear of fossil fuels by 2050 - a rate comparable to total present world energy consumption. Though large, this rate of productioninvolves using less than 0.01% of the 3.8 million exajoules of solar energy reaching theearth's· surface each year. The total electricenergy produced from intermittent renewablesources (some 34 exajoules per year (EJ/yr))would be less than 0.003% of the sunlight thatfalls on land and less than 0.1% of the energyavailable in the winds. Moreover, the electricenergy that would be recovered from hydropower resources, some 17 EJ/yr by 2050, issmall relative to the 130 to 160 EJ/yr that aretheoretically recoverable (Chapter 2).6 Theamount of energy targeted for recovery frombiomass, 206 exajoules per year by 2050, is alsosmall compared with the rate (3,800 EJ/yr) atwhich plants convert solar energy to biomass(Chapter 14).
The production levels considered are therefore not likely to be constrained by resourceavailability. A number of other practical considerations, however, do limit the renewableresources that can be used. The scenario wasconstructed subject to the following restrictions:
Biomass must be produced sustainably/ withnone harvested from virgin forests. Some62% of the biomass supply would come fromplantations established on degraded lands or,in industrialized countries, on excessagricultural lands. Another 32% would comefrom residues of agricultural or forestryoperations. Some residues must be leftbehind to maintain soil quality or foreconomic reasons; three-fourths of the energyin urban refuse and lumber and pulpwoodresidues, one-half of residues from ongoinglogging operations, one-fourth of the dungproduced by livestock, one-fourth of theresidues from cereals, and about two-thirdsof the residues from sugar cane are recoveredin the scenario. The remaining 6% of the
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biomass supply would come from foreststhat are now routinely harvested for lumber,paper, or fuel wood. Production from theseforests can be made fully sustainable although some of these forests are not wellmanaged today.Although wind resources are enormous, theuse of wind equipment will be substantiallyconstrained in some regions by land-userestrictions - particularly where populationdensities are high. In the scenario, substantialdevelopment of wind power takes place inthe Great Plains of the United States (wheremost of the country's wind resources arefound), while in Europe the level ofdevelopment is limited because of "severeland-use constraints" (Chapter 4).The amounts of wind, solar-thermal, andphotovoltaic power that can be economicallyintegrated into electric generating systemsare very sensitive to patterns of electricitydemand as well as weather conditions. Themarginal value of these so-called intermittentelectricity sources typically declines as theirshare of the total electric market increases.Analysis of these interactions suggests thatintermittent electric generators can provide25 to 35% of the total electricity supply inmost parts of the world (Chapter 23). Someregions would emphasize wind, while otherswould find photovoltaic or solar-thermalelectric systems more attractive. On average,Europe is a comparatively poor location forintermittent power generation, so that thepenetration of intermittent renewabies thereis limited to 14% in 2025 and 18% in 2050.Although the exploitable hydroelectricpotential is large, especially in developingcountries (Chapter 2), and hydropower is anexcellent complement to intermittent electricsources, the development of hydropower willbe constrained by environmental and socialconcerns - particularly for projects thatwould flood large areas. Because of these
6/ Chapter references refer to Johansson et al(1993). See the Table of Contents at the end of thispaper.
7/ See Johansson et a1 (1993), p. 13 and Chapter 14.
constraints, it is assumed that only a fractionof potential sites would be exploited, withmost growth occurring in developingcountries. Worldwide, only one-fourth of thetechnical potential, as estimated by the WorldEnergy Conference, would be exploited inthe scenario by 2050. Total hydroelectricproduction in the United States, Canada, andOECD Europe would increase by only onethird between 1985 and 2050, and some of theincrease would result from efficiency gainsachieved by retrofitting existing installations.
CONVENTIONAL FUELS
By making efficient use of energy and expanding the use of renewable teclmologies, theworld can expect to have adequate supplies offossil fuels well into the 21st century. However, :in some instances regional declines infossil fuel production can be expected becauseof resource constraints.
Oil production outside the Middle Eastwould decline slowly under the renewablesintensive scenario, so that one-third of the estimated ultimately recoverable conventionalresources will remain in the ground in 2050. Asa result, non-Middle Eastern oil productionwould drop from 103 EJ/yr in 1985 to 31 EJ/yrin 2050. To meet the demand for liquid fuelsthat cannot be met by renewables, oil production is assumed to increase in the Middle East,from 24 EJ/yr in 1985 to 34 EJ/yr in 2050. Totalworld conventional oil resources woulddecline from about 9,900 EJ in 1988 to 4,300 EJin 2050.
Although remaining conventional naturalgas resources are comparable to those for conventional oil, gas is presently produced globally at just half the rate for oil. With adequateinvestment in pipelines and other infrastructure components, gas could be a major energysource for many years. In the decades ahead,substantial increases in gas production arefeasible for all regions of the world except forthe United States and OECD Europe. For theUnited States and OECD Europe, whereresources are more limited, production woulddecline slowly, so that one-third of these re-
gions' gas resources will remain in 2050. Inaggregate, gas production outside the MiddleEast would increase slowly, from 62 EJ/yr in1985 to 75 EJ in 2050. But in the Middle East,where gas resources are enormous and largelyunexploited, production would expand morethan 12-fold, to 33 EJ/ yr in 2050. Globally,about half the conventional gas resourceswould remain in 2050.
The renewables-intensive scenario wasdeveloped for future fuel prices that are significantly lower than those used in most longterm energy forecasts. It is expected that in thedecades ahead the world oil price would riseonly modestly and the price of natural gaswould approach the oil price (which impliesthat the gas price paid by electric utilitieswould roughly double). There are two primaryreasons for expecting relatively modest energyprice increases: first, overall demand for fuelswould grow comparatively slowly between1985 and 2050 because of assumed increases inthe efficiency of energy use; and second, renewable fuels could probably be produced atcosts that would make them competitive withpetroleum at oil prices not much higher than atpresent.
Public Policy Issues
A renewables-intensive global energy future istechnically feasible, and the prospects areexcellent that a wide range of new renewableenergy teclmologies will become fully competitive with conventional sources of energyduring the next several decades. Yet the transition to renewables will not occur at the paceenvisaged if existing market conditions remainunchanged. Private companies are unlikely tomake the investments necessary to developrenewable teclmologies because the benefitsare distant and not easily captured by individual firms. Moreover, private firms will notinvest in large volumes of commercially available renewable energy teclmologies becauserenewable energy costs will usually not besignificantly lower than the costs of conventional energy. And finally, the private sectorwill not invest in commercially available
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technologies to the extent justified by theexternal benefits (e.g., a stabilized world oilprice or reduced greenhouse-gas emissions)that would arise from their widespread deployment. If these problems are not addressed,renewable energy will enter the market relatively slowly.
Fortunately, the poliCies needed to achievethe twin goals of increasing efficiency andexpanding markets for renewable energy arefully consistent with programs needed to encourage innovation and productivity growththroughout the economy. Given the right policy environment, energy industries will adoptinnovations, driven by the same competitivepressures that have revitalized other majormanufacturing businesses around the world.Electric utilities will have to shift from beingprotected monopolies enjoying economiesof-scale in large generating plants to beingcompetitive managers of investment portfoliosthat combine a diverse set of technologies,ranging from advanced generation, transmission, distribution, and storage equipment toefficient energy-using devices on customers'premises. Automobile and truck manufacturers, and the businesses that supply fuels forthese vehicles, will need to develop entirelynew products. A range of new fuel and vehicletypes, including fuel-cell vehicles powered byalcohol or hydrogen, are likely to play majorroles in transportation in the next century.
Capturing the potential for renewabIesrequires new policy iritiatives. The followingpolicy iritiatives are proposed to encourageinnovation and investment in renewable technologies:. Subsidies that artificially reduce the price of
fuels that compete with renewables shouldbe removed; if existing subsidies cannot beremoved for political reasons, renewableenergy technologies should be givenequivalent incentives.Taxes, regulations, and other policy instruments should ensure that consumer decisionsare based on the full cost of energy, includingenvironmental and other external costs notreflected in market prices.
. Government support for research on and
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development and demonstration of renewable energy technologies should be increasedto reflect the critical roles renewable energytechnologies can play in meeting energy,developmental, and environmentalobjectives. This should be carried out in closecooperation with the private sector.Government regulations of electric utilitiesshould be carefully reviewed to ensure thatinvestments in new generating equipmentare consistent with a renewables-intensivefuture and that utilities are involved inprograms to demonstrate new renewableenergy technologies in their service territories.Policies designed to encourage the development of a biofuels industry must be closelycoordinated with both national agriculturaldevelopment programs and efforts to restoredegraded lands.National institutions should be created orstrengthened to implement renewable energyprograms.International development funds availablefor the energy sector should be directedincreasingly to renewables.
. A strong international institution should becreated to assist and coordinate national andregional programs for increased use ofrenewables, to support the assessment ofenergy options, and to support centers ofexcellence in specialized areas of renewableenergy research.
There are many ways such policies couldbe implemented. The preferred policy instruments will vary with the level of the iritiative(local, national, or international) and with theregion. On a regional level, the preferredoptions will reflect differences in endowmentsof renewable resources, stages of economicdevelopment, and cultural characteristics.
The integrating theme for all such iritiatives, however, should be an energy policyatmed at promoting sustainable development.It will not be possible to prOVide the energyneeded to bring a decent standard of living tothe world's poor or to sustain the economicwell-being of the industrialized countries inenVironmentally acceptable ways, if the pres-
ent energy course continues. The path to asustainable society requires more efficientenergy use and a shift to a variety of renewableenergy sources.
While not all renewables are inherentlyclean, there is such a diversity of choices that asMtto renewables carried out in the context ofsustainable development could provide a farcleaner energy system than would be feasibleby tightening controls on conventional energy.
The central challenge to policymakers inthe decades ahead is to frame economic policies that simultaneously satisfy both socioeconomic developmental and environmentalchallenges. The analysis in our book demonstrates the enormous contribution that renew-
able energy can make in addressing this challenge. It provides a strong case that carefullycrafted policies can provide a powerful impetus to the development and widespread use ofrenewable energy technologies and can leadultimately to a world that meets critical socioeconomic, developmental and environmentalobjectives.
References
Johansson, Thomas B., Henry Kelly, AmulyaK.N. Reddy & Robert H. Williams (Editors)(1993) Renewable Energy: Sources for Fuels andElectricity (Washington, DC & Covelo,California: Island Press) pp. 1160.
As a service to readers interested in the details of renewable technologies, the Table of Contents of theabove book is reproduced below.
Renewable Energy Sources for Fuels and Electricity
1 Renewable Fuels and Electricity for a Growing World Economy: Defining and Achievingthe PotentialThomas B. Johansson, Henry Kelly, Amulya KN. Reddy and Robert H. Williams
Z Hydropower and Its ConstraintsJose Roberto Moreira and Alan Douglas Poole
3 Wind Energy: Technology and EconomicsAlfred J. Cavallo, Susan M. Hock and Don R. Smith
4 Wind Energy: Resources, Systems and Regional StrategiesMichael J. Grubb and Niels 1. Meyer
5 Solar-thermal Electric TechnologyPascal De Laquill III, David Kearney, Michael Geyer and Richard Diver
6 Introduction to Photovoltaic TechnologyHenry Kelly
7 Crystalline- and Polycrystalline-silicon Solar CellsMartin A. Green
8 Photovoltaic Concentrator TechnologyEldon C. Boes and Antonio Luque
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9 Amorphous Silicon Photovoltaic SystemsDavid E. Carlson and Sigurd Wagner
10 Polycrystalline Thin-film PhotovoltaicsKen Zweibel and Allen M. Barnett
11 Utility Field Experience with Photovoltaic SystemsKay Firor, Roberto Vigotti and Joseph J. Iannucci
12 Ocean Energy SystemsJames E. Cavanagh, John H. Clarke and Roger Price
13 Geothermal EnergyCivis G. Palmerini
14 Biomass for Energy. Supply ProspectsDavid O. Hall, Frank Rosillo-Calle, Robert H. Williams and Jeremy Woods
15 Bioenergy. Direct Applications in CookingGautam S. Dutt and N.H. Ravindranath
16 Open-top Wood GasifiersH.S. Mukunda, S. Dasappa and U. Shrinivasa
17 Advanced Gasification-based Biomass Power GenerationRobert H. Williams and Eric D. Larson
18 Biogas Electricity-the Pura Village Case StudyP. Rajabapaiah, S. Jayakumar and Amulya K.N. Reddy
19 Anaerobic Digestion for Energy Production and Environmental ProtectionGatze Lettinga and Adrian C. van Haandel
20 The Brazilian Fuel-alcohol ProgramJose Goldemberg, Lourival C. Monaco and Isaias C. Macedo
21 Ethanol and Methanol from Cellulosic BiomassCharles E. Wyman, Richard L. Bain, Norman D. Hinman and Don. J. Stevens
22 Solar HydrogenJoan M. Ogden and Joachim Nitsch
23 Utility Strategies for Using RenewablesHenry Kelly and Carl J. Weinberg
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