Energy Demand And Renewable Energy

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Many alternative energy sources can be used instead of fossil fuels. The decision as to what type of energy source should be utilized in each case must be made on the basis of economic, environmental, and safety considerations. Because of the desirable environmental and safety aspects it is widely believed that solar energy should be utilized instead of other alternative energy forms because it can be provided sustainably without harming the environment.

If the world economy expands to meet the expectations of countries around the globe, energy demand is likely to increase, even if laborious efforts are made to increase the energy use efficiency. It is now generally believed that renewable energy technologies can meet much of the growing demand at prices that are equal to or lower than those usually forecast for conventional energy. By the middle of the 21st century, renewable sources of energy could account for three fifths of the world's electricity market and two fifths of the market for fuels used directly.1 Moreover, making a transition to a renewable energy-intensive economy would provide environmental and other benefits not measured in standard economic terms. It is envisaged that by 2050 global carbon dioxide (CO2) emissions would be reduced to 75% of their 1985 levels, provided that energy efficiency and renewables are widely adopted. In addition, such benefits could be achieved at no additional cost, because renewable energy is expected to be competitive with conventional energy (Johanson et al., 1993).

This promising outlook for renewables reflects impressive technical gains made during the past two decades as renewable energy systems benefited from developments in electronics, biotechnology, material sciences, and in other areas. For example, fuel cells developed originally for the space program opened the door to the use of hydrogen as a non-polluting fuel for transportation.

Moreover, because the size of most renewable energy equipment is small, renewable energy technologies can advance at a faster pace than conventional technologies. While large energy facilities require extensive construction in the field, most renewable energy equipment can be constructed in factories, where it is easier to apply modern manufacturing techniques that facilitate cost reduction. This is a decisive parameter that the renewable energy industry must consider in an attempt to reduce cost and increase the reliability of manufactured goods. The small scale of the equipment also makes the time required from initial design to operation short; therefore, any improvements can be easily identified and incorporated quickly into modified designs or processes.

1 This is according to a renewable energy-intensive scenario that would satisfy energy demands associated with an eightfold increase in economic output for the world by the middle of the 21st century. In the scenario considered, world energy demand continues to grow in spite of a rapid increase in energy efficiency.

According to the renewable energy-intensive scenario, the contribution of intermittent renewables by the middle of this century could be as high as 30% (Johanson et al., 1993). A high rate of penetration by intermittent renewables without energy storage would be facilitated by emphasis on advanced natural gas-fired turbine power-generating systems. Such power-generating systems— characterized by low capital cost, high thermodynamic efficiency, and the flexibility to vary electrical output quickly in response to changes in the output of intermittent power-generating systems—would make it possible to back up the intermittent renewables at low cost, with little, if any, need for energy storage.

The key elements of a renewable energy-intensive future are likely to have the following key characteristics (Johanson et al., 1993):

1. There would be a diversity of energy sources, the relative abundance of which would vary from region to region. For example, electricity could be provided by various combinations of hydroelectric power, intermittent renewable power sources (wind, solar-thermal electric, and photovoltaic), biomass,2 and geothermal sources. Fuels could be provided by methanol, ethanol, hydrogen, and methane (biogas) derived from biomass, supplemented with hydrogen derived electrolytically from intermittent renewables.

2. Emphasis would be given to the efficient mixing of renewable and conventional energy supplies. This can be achieved with the introduction of energy carriers such as methanol and hydrogen. It is also possible to extract more useful energy from such renewable resources as hydropower and biomass, which are limited by environmental or land-use constraints. Most methanol exports could originate in sub-Saharan Africa and Latin America, where vast degraded areas are suitable for re-vegetation that will not be needed for cropland. Growing biomass on such lands for methanol or hydrogen production could provide a powerful economic driver for restoring these lands. Solar-electric hydrogen exports could come from regions in North Africa and the Middle East that have good insolation.

3. Biomass would be widely used. Biomass would be grown sustainably and converted efficiently to electricity and liquid and gaseous fuels using modern technology without contributing to deforestation.

4. Intermittent renewables would provide a large quantity of the total electricity requirements cost-effectively, without the need for new electrical storage technologies.

5. Natural gas would play a major role in supporting the growth of a renewable energy industry. Natural gas-fired turbines, which have low capital costs and can quickly adjust their electrical output, can provide

2 The term biomass refers to any plant matter used directly as fuel or converted into fluid fuel or electricity. Biomass can be produced from a wide variety of sources such as wastes of agricultural and forest product operations as well as wood, sugarcane, and other plants grown specifically as energy crops.

excellent backup for intermittent renewables on electric power grids. Natural gas would also help launch a biomass-based methanol industry.

6. A renewables-intensive energy future would introduce new choices and competition in energy markets. Growing trade in renewable fuels and natural gas would diversify the mix of suppliers and the products traded, which would increase competition and reduce the possibility of rapid price fluctuations and supply disruptions. This could also lead eventually to a stabilization of world energy prices with the creation of new opportunities for energy suppliers.

7. Most electricity produced from renewable sources would be fed into large electrical grids and marketed by electric utilities, without the need for electrical storage.

A renewable energy-intensive future is technically feasible, and the prospects are very good that a wide range of renewable energy technologies will become competitive with conventional sources of energy in a few years' time. However, to achieve such penetration of renewables, existing market conditions need to change. If the following problems are not addressed, renewable energy will enter the market relatively slowly:

■ Private companies are unlikely to make the investments necessary to develop renewable technologies because the benefits are distant and not easily captured.

■ Private firms will not invest in large volumes of commercially available renewable energy technologies because renewable energy costs will usually not be significantly lower than the costs of conventional energy.

■ The private sector will not invest in commercially available technologies to the extent justified by the external benefits that would arise from their widespread deployment.

Fortunately, the policies needed to achieve the goals of increasing efficiency and expanding renewable energy markets are fully consistent with programs needed to encourage innovation and productivity growth throughout the economy. Given the right policy environment, energy industries will adopt innovations, driven by the same competitive pressures that revitalized other major manufacturing businesses around the world. Electric utilities have already shifted from being protected monopolies, enjoying economies of scale in large generating plants, to being competitive managers of investment portfolios that combine a diverse set of technologies, ranging from advanced generation, transmission, distribution, and storage equipment to efficient energy-using devices on customers' premises.

Capturing the potential for renewables requires new policy initiatives. The following policy initiatives are proposed by Johanson et al. (1993) to encourage innovation and investment in renewable technologies:

1. Subsidies that artificially reduce the price of fuels that compete with renewables should be removed or renewable energy technologies should be given equivalent incentives.

2. Taxes, regulations, and other policy instruments should ensure that consumer decisions are based on the full cost of energy, including environmental and other external costs not reflected in market prices.

3. Government support for research, development, and demonstration of renewable energy technologies should be increased to reflect the critical roles renewable energy technologies can play in meeting energy and environmental objectives.

4. Government regulations of electric utilities should be carefully reviewed to ensure that investments in new generating equipment are consistent with a renewables-intensive future and that utilities are involved in programs to demonstrate new renewable energy technologies.

5. Policies designed to encourage the development of the biofuels industry must be closely coordinated with both national agricultural development programs and efforts to restore degraded lands.

6. National institutions should be created or strengthened to implement renewable energy programs.

7. International development funds available for the energy sector should be increasingly directed to renewables.

8. A strong international institution should be created to assist and coordinate national and regional programs for increased use of renewables, support the assessment of energy options, and support centers of excellence in specialized areas of renewable energy research.

The integrating theme for all such initiatives, however, should be an energy policy aimed at promoting sustainable development. It will not be possible to provide the energy needed to bring a decent standard of living to the world's poor or sustain the economic well-being of the industrialized countries in environmentally acceptable ways if the use of present energy sources continues. The path to a sustainable society requires more efficient energy use and a shift to a variety of renewable energy sources. Generally, the central challenge to policy makers in the next few decades is to develop economic policies that simultaneously satisfy both socioeconomic developmental and environmental challenges.

Such policies could be implemented in many ways. The preferred policy instruments will vary with the level of the initiative (local, national, or international) and the region. On a regional level, the preferred options will reflect differences in endowments of renewable resources, stages of economic development, and cultural characteristics. Here the region can be an entire continent. One example of this is the recent announcement of the European Union (EU) for the promotion of renewable energies as a key measure to ensure that Europe meets its climate change targets under the Kyoto Protocol.

According to the decision, central to the European Commission's action to ensure the EU and member states meet their Kyoto targets is the European Climate Change Program launched in 2000. Under this umbrella, the Commission, member states, and stakeholders identified and developed a range of cost-effective measures to reduce emissions.

To date, 35 measures have been implemented, including the EU Emissions Trading Scheme and legislative initiatives to promote renewable energy sources for electricity production, expand the use of biofuels in road transport, and improve the energy performance of buildings. Earlier, the EC proposed an integrated package of measures to establish a new energy policy for Europe that would increase actions to fight climate change and boost energy security and competitiveness in Europe, and the proposals put the EU on course toward becoming a low-carbon economy. The new package sets a range of ambitious targets to be met by 2020, including improvement of energy efficiency by 20%, increasing the market share of renewables to 20%, and increasing the share of biofuels in transport fuels to 10%. On greenhouse gas emissions, the EC proposes that, as part of a new global agreement to prevent climate change from reaching dangerous levels, developed countries should cut their emissions by an average of 30% from 1990 levels.

As a concrete first step toward this reduction, the EU would make a firm independent commitment to cut its emissions by at least 20% even before a global agreement is reached and irrespective of what others do.

Many scenarios describe how renewable energy will develop in coming years. In a renewable energy-intensive scenario, global consumption of renewable resources reaches a level equivalent to 318 EJ (exa, E = 1018) per annum (a) of fossil fuels by 2050—a rate comparable to the 1985 total world energy consumption, which was equal to 323 EJ. Although this figure seems to be very large, it is less than 0.01% of the 3.8 million EJ of solar energy reaching the earth's surface each year. The total electric energy produced from intermittent renewable sources (~34 EJ/a) would be less than 0.003% of the sunlight that falls on land and less than 0.1% of the energy available from wind. The amount of energy targeted for recovery from biomass could reach 206 EJ/a by 2050, which is also small compared with the rate (3,800 EJ/a) at which plants convert solar energy to biomass. The production levels considered are therefore not likely to be constrained by resource availability. A number of other practical considerations, however, do limit the renewable resources that can be used. The renewable energy-intensive scenario considers that biomass would be produced sustainably, not harvested in virgin forests. About 60% of the biomass supply would come from plantations established on degraded land or excess agricultural land and the rest from residues of agricultural or forestry operations. Finally, the amounts of wind, solar-thermal, and photovoltaic power that can be economically integrated into electric generating systems are very sensitive to patterns of electricity demand and weather conditions. The marginal value of these intermittent electricity sources typically declines as their share of the total electric market increases.

By making efficient use of energy and expanding the use of renewable technologies, the world can expect to have adequate supplies of fossil fuels well into the 21st century. However, in some instances regional declines in fossil fuel production can be expected because of resource constraints. Oil production outside the Middle East would decline slowly under the renewables-intensive scenario, so that one third of the estimated ultimately recoverable conventional resources will remain in the ground in 2050. Under this scenario, the total world conventional oil resources would decline from about 9900 EJ in 1988 to 4300 EJ in 2050. Although remaining conventional natural gas resources are comparable to those for conventional oil, with an adequate investment in pipelines and other infrastructure components, natural gas could be a major energy source for many years.

The next section reviews some of the most important environmental consequences of using conventional forms of energy. This is followed by a review of renewable energy technologies not included in this book.

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