Rapid Near-Term Emissions Reductions Renewable EnergyJosé Goldemberg

Renata Grisoli

University of São Paulo (USP), São Paulo, Brazil

May, 2014

One of the strategies to reduce the amount of GHGs resulting from energy

production is to increase the share of renewable energy sources in the world’s energy

mix.

Renewable energy sources today represent approximately 19.04% of the world’s

final energy consumption. The remaining 80.96% originate in fossil fuels and nuclear

energy (Figure 1).

Figure 1. The world’s final energy consumption in 2011 (Total: 338 EJ)

Source: based on Appendix I

However, almost one half of the renewable energy is “traditional biomass”

(9.29%) used mainly for cooking in very inefficient and primitive cookstoves

generating health problems related to the soot produced in inefficient burning. Solving

GOLDEMBERG, J.; GRISOLI, R. (2014)

these problems, either improving cooking stoves or using better fuels, which – will lead

to modernizing cooking – is an important challenge which could make biomass

available for better uses.

The remaining (4.92%) main contribution comes from “modern biomass” (bio

heat, bio power, ethanol and biodiesel). Hydropower represents 3.74%, the remaining

1.08% coming from “new” renewable (Wind, Solar photovoltaic- PV, Concentrated

solar thermal power - CSP, Ocean, Solar thermal and Geothermal).

Table I. Non fossil final energy demand*

Total world's final renewable energy consumption (EJ)

Renewable energy share of global final energy consumption

1. Traditional biomass 31.40

9.29%

Fraction of the world’s energy demand

2. Modern biomass 16.60 4.92%2.1. bioheat 12.70

  2.2. bio power 1.17

2.3. ethanol 1.97 2.4. biodiesel 0.79

3. Hydropower 12.65 3.74% 4. New Renewables 3.65

1.08%

4.1.Wind power 1.88 4.2.Solar thermal 0.75

Hot water 0.74CSP 0.1

4.3.Geothermal 0.74Heat 0.49

power 0.25 4.4.PV 0.28 5. Nuclear 9.56 2.83% Total 73.90 21.9%

*The world’s total final energy demand is 338EJ (REN21, 2013).

Source: based on Appendix I

GOLDEMBERG, J.; GRISOLI, R. (2014)

Despite their small contribution, the annual growth of renewables is very impressive

and they could certainly play a very significant role in the next few decades.

Figure 2 shows the growth of all renewable energy source hydro, modern

biomass, and “new” renewables in the period 2008-2011.

Figure 2. Renewable energy sources

2008 2009 2010 20110

5

10

15

20

25

30

35

New Renewables (18%*)Modern biomass (22%*)Hydropower (2%*)Total (12%*)

YEAR

EJ

(*) Average annual growth rates of renewable energy (2008-2011)

Source: based on Appendix I

Figure 3 shows the evolution of each of the main “new” renewables.

Figure 3. Contribution of “new” renewable energy sources and ethanol and biodiesel (EJ) (2008-2011)

2008 2009 2010 20110

0.5

1

1.5

2

2.5

Wind (19%*)

PV (51%*)

Solar heat (21%*)

Geothermal (12%*)

Ethanol (6%*)

Biodiesel (9%*)

YEAR

EJ

(*) Average annual growth rates of renewable energy (2008-2011)

Source: based on Appendix I

GOLDEMBERG, J.; GRISOLI, R. (2014)

These sources of energy are not entirely neutral regarding GHG emissions since

fossil fuels are used in some parts of their life cycle. However their emissions per EJ are

usually less than 10% of emissions from fossil fuels (IPCC, 2011).

Investments in renewable energies have grown considerably in recent years

(Figure 4a) particularly in the area of electricity generation as shown in Figure 4b.

Figure 4. Global new investment in renewable energy by technology, developed and developing countries, 2012

(a)

(b)

Source: REN21 (2013)

GOLDEMBERG, J.; GRISOLI, R. (2014)

The obvious strategy to near-term emissions reductions is therefore to increase

the contribution of biomass and new renewable energy sources. Although they represent

only approximately 6% of the present world’s energy supply their contribution is

growing at rate of 9% per year more rapidly than fossil fuels consumption (at

approximately 2% per year) which still represents the main source of energy used

presently.

However despite the obvious advantages from being, in principle, non-polluting

and inexhaustible – in clear contrast to fossil fuels use – some renewables energies face

serious problems in expanding their share due to cost considerations. Most of

technologies involved were established in the last century but they were non-

competitive until recently, except for hydroelectricity.

What we learned in the last few decades, however is that there are steep

“learning curves” for most renewables: each time production doubles the cost is reduced

by approximately 20%. There is a clear evidence for that behavior for PV electricity,

biofuel production and wind.

Figures 5. Learning curves for PV (a) and ethanol (b)

(a)

GOLDEMBERG, J.; GRISOLI, R. (2014)

(b)

Source: (a) BNEF (2012); (b) GOLDEMBERG et al. (2004) updated

What this means is that in the initial stages of the introduction of such

technologies regulatory and financial instruments are needed to nudge the growth of

energy system in the right direction.

The key to the introduction and success in the use of renewables is mass

production. This is why the early attempts of demonstration projects of wind and PV in

many developing countries didn’t lead to significant cost reductions.

Great strides in the direction of reducing costs was only achieved when

industrialized countries (Germany, Denmark, Spain, US the UK and others) adopted

energy policies that opened the way for the increased use of renewables.

By early 2013, policy targets for the increased deployment of renewable energy

have been identified in at least 138 countries, worldwide, including all 27 European

Union member states (REN21, 2013). Targets exist for shares of total primary or final

energy supply, specific installed capacities of various technologies, or total amounts of

energy production from renewables, including heat. Targets also exist for biofuels in

many countries.

As an example the European Union aims to have 20% of its gross final

consumption of energy and a 10% of each member state’s transport energy come from

renewable sources by 2020 (EC, 2009).

The main policy instruments to implement these policies are: feed-in tariffs

(FIT) and renewable portfolio standards (RPS) for power generation; and blending

mandates for the transport sector.

GOLDEMBERG, J.; GRISOLI, R. (2014)

FEED-IN TARIFFS (FIT) is a policy mechanism that (a) sets a fixed, guaranteed

price over a stated fixed-term period when renewable power can be sold and fed into the

electricity network, and (b) usually guarantees grid access to renewable electricity

generators. Some policies provide a fixed tariff whereas others provide fixed premium

payments that are added to wholesale market- or cost-related tariffs. Other variations

exist, and feed-in tariffs for heat are evolving.

As of early 2013, feed-in tariff policies had been enacted in 71 countries and 28

states/provinces (REN21, 2013).

A RENEWABLE PORTFOLIO STANDARDS (RPS) is a measure requiring

that a minimum percentage of total electricity or heat sold, or generation capacity

installed, be provided using renewable energy sources. Obligated utilities are required to

ensure that the target is met; if it is not, a fine is usually levied.

In early 2013, RPS or “quotas” are in place in 22 countries and 54

states/provinces in United States, Canada and India (REN21, 2013).

The adoption of Renewable Portfolio Standards seems to work better when the

number of existing actors involved is small (such as electricity companies or car

manufacturers). The advantage of the feed in approach (FIT) is that it can attract a large

number of new small investors once adequate prices and contract terms are in place. It

works better with small units and is quite adequate for decentralized systems such as

wind and PV.

Mainly for the transport sector BLENDING MANDATES/OBLIGATION

require designated parties (consumers, suppliers, generators) to meet a minimum, and

often gradually increasing, target for renewable energy, such as a percentage of total

supply or a stated amount of capacity. Costs are generally borne by consumers.

Mandates can also include renewable portfolio standards (RPS); building codes or

obligations that require the installation of renewable heat or power technologies (often

in combination with energy efficiency investments); renewable heat purchase

requirements; and finally requirements for blending biofuels into transport fuel.

In early 2013, biofuels blending mandates have been identified in 27 countries at

the national level and in 27 states/provinces (REN21, 2013).

GOLDEMBERG, J.; GRISOLI, R. (2014)

Recommendations for short term actions

1. An analysis of Table I indicates that “biomass heat” and ethanol are the

main contributors to renewable energy (approximately 5% of the world’s

energy use) and growing rapidly. This trend should be encouraged

(including pellets). Biofuels represent today 3% of the energy used in

transportation but this share could double or triple in 10 years.

2. Hydropower is the main contributor to renewable energy consumption

after biomass (approximately 4% of the world’s energy use) and there are

many opportunities for its expansion mainly in Africa and Latin

America.

3. Of the “new renewables” wind and PV are growing very rapidly but their

contribution is still small (less than 1% of the world’s final energy

consumption).

GOLDEMBERG, J.; GRISOLI, R. (2014)

REFERENCES

BNEF - Bloomberg New Energy Finance (2012). Bloomberg New Energy Finance Summit.

Available at: http://about.bnef.com/summit/content/uploads/sites/3/2013/11/ BNEF_2012-03-

20-ml_keynote.pdf

EC - European Commission (2009). Directive 2009/28/EC of the European Parliament and of

the Council of 23 April 2009 on the Promotion of the Use of Energy from Renewable Sources

and Amending and Subsequently Repealing Directives 2001/77/EC and 2003/ 30/EC.

GOLDEMBERG, J.; COELHO, S. T.; NASTARI, P.; LUCON, O. Ethanol learning curve:The

Brazilian experience. Biomass and Bioenergy, 2004, Vol. 26 (/3) pp. 301-304

IPCC (2011). IPCC Special Report on Renewable Energy Sources and Climate Change

Mitigation. Prepared by Working Group III of the Intergovernmental Panel on Climate Change.

Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, 1075 pp

REN21 – Renewable Energy Policy Network for the 21th Century (2013). Renewables

2013.Global Status Report. Paris.

GOLDEMBERG, J.; GRISOLI, R. (2014)

Appendix I

Non fossil energy sources demand in Exajoules (EJ)

(2000-2012)

GOLDEMBERG, J.; GRISOLI, R. (2014)