Sunday, May 22, 2011

International Energy Agency (IEA) releases first Clean Energy Progress Report
Notable successes in deployment of clean-energy technologies are being overshadowed by continued hunger for fossil fuels, report says

The International Energy Agency on Wednesday released its first Clean Energy Progress Report, which assesses global deployment of clean energy technologies and provides recommendations to countries on future action and spending.

The report was presented on 6 April in Abu Dhabi at the second Clean Energy Ministerial meeting. The report finds that while impressive progress has been made in developing clean energy technologies in recent years, the success stories are being overshadowed by surging demand for fossil fuels, which are outstripping deployment of clean energy technologies. Coal has met 47% of the global new electricity demand over the past decade, eclipsing clean energy efforts made over the same period of time, which include improved implementation of energy efficiency measures and rapid growth in the use of renewable energy sources.

In order to change this status quo, the IEA argues that more aggressive clean energy policies are required, including the removal of fossil fuel subsidies and the implementation of transparent, predictable and adaptive incentives for cleaner energy options.

Ambassador Richard Jones, Deputy Executive Director of the International Energy Agency, presented the report to the ministers gathered in Abu Dhabi. Jones said the world’s dependence on fossil fuels is posing short-term risks to political stability and economic activity and is threatening environmental sustainability.

“Despite countries’ best efforts, the world is coming ever closer to missing targets that we believe are essential for meeting the goal agreed in Cancun to limit the growth in global average temperatures to less than 2 degrees Celsius,” Jones said.

“A number of countries have shown that achieving rapid transition to cleaner technologies is possible, and can be done from the bottom up. We must see more ambitious, effective policies that respond to market signals while providing long-term, predictable support,” Jones said.

Success stories
The Clean Energy Progress Report provides an overview of key policy developments, public spending on research, development, demonstration and deployment of clean energy technologies – including renewable energy, energy efficiency, electric vehicles, nuclear power, biofuels and CO2 capture and storage (CCS) – and their global deployment status.

Despite the persistent use of coal, the report notes that policy support over the last decade has led to a positive rise in renewable energy.

The report cites solar and wind power as two areas where remarkable developments have been made.

“In the case of solar energy, at least ten countries now have sizeable domestic markets, up from just three in 2000,” the authors observe. “Wind power also experienced dramatic growth over the last decade; global installed capacity at the end of 2010 was around 194 Gigawatts, more than ten times the 17 Gigawatts that was in place at the end of the year in 2000.”

Despite this, and other progress with renewable sources of energy, the report states that worldwide renewable electricity generation since 1990 grew an average of 2.7% per year, which is less than the 3% growth seen for total electricity generation.

Consequently, “achieving the goal of halving global energy-related CO2 emissions by 2050 will require a doubling of all renewable generation use by 2020 from today’s level.”

Tackling fossil fuels
In order to address the world’s heavy reliance on fossil fuels, particularly coal, the report stresses the importance of raising the efficiency of existing and new coal-fired plants.

“Switching to less carbon-intensive fuels (e.g. from coal to natural gas) and improving the efficiency of coal plants will achieve significant reductions in CO2 and should be a top priority,” the authors write.

However, for deep cuts in carbon emissions this is not enough, they emphasise, adding: “Extensive deployment of CCS is critical to achieve climate change goals.”

In order to achieve a 50% reduction in energy-related CO2 emissions by 2050, IEA research shows that around 100 large-scale CCS projects will be needed by 2020, and over 3,000 by 2050. “This represents a significant scale-up from the five large-scale CCS projects that are in operation today.”

While there are over 70 CCS projects currently planned, the report says it is uncertain how many will be realised because of recent delays in allocating public funding.

Advancing electric vehicles
The report also urges governments to do more to assist the introduction of electric and plug-in hybrid vehicles, which are emerging as an area of intensive activity. During 2011, thousands of such vehicles will hit the streets in most major economies, and rapid growth is expected: national plans target a combined EV sales of 7 million sales in 2020, which would mean over 20 million such vehicles on the road by that year.

The report says that in order for electric vehicles to succeed, governments must commit to building sustained markets that last for at least the next 10 years. This commitment should include price incentives for consumers (and adequate and stable funding to pay for these incentives over at least the next five years, followed by a phase-out period); support for construction of adequate recharging infrastructure; cooperation with cities to ensure cohesive urban, regional and national systems; funding for RD&D; and consumer education campaigns. The new Electric Vehicles Initiative (formed at the CEM in July 2010) will help countries coordinate these types of activities.
Smarter, more ambitious strategies are needed
The last decade has seen some renewable energy technologies become competitive with conventional energy technologies. Most clean energy technologies, however, still cost more than incumbent fossil-based technologies that have received (and continue to receive) subsidies from government in the form of tax credits, infrastructure development and funding for large-scale demonstration. Fossil fuels currently receive USD 312 billion (2009) in consumption subsidies, versus USD 57 billion (2009) for renewable energy. The competitiveness of clean energy technologies lags behind fossil-based technologies due to their level of maturity, as well as the lack of a price for external environmental impacts, including greenhouse-gas (GHG) emissions. Moreover, the deployment of technologies is hampered by non-economic barriers such as administrative burdens, grid integration issues, lack of awareness and public acceptance problems. Clean energy technology deployment will therefore require a concerted public and private commitment, supported by more ambitious policies. It is clear that setting a CO2 price will not be enough to achieve the revolution.
Annual global public RD&D spending on energy in CEM countries now exceeds USD 21 billion.... During the last decade, countries spent USD 56 billion on nuclear energy research and USD 22 billion on fossil research, but only USD 17 billion on renewable energy and energy‐efficiency research combined.
Recent studies on ratepayer-funded energy-efficiency programmes for gas and electricity in the United States and Canada put 2009 spending at USD 6.1 billion and forecast that US spending alone would top USD 10 billion by 2015 (Barbose and Goldman, 2009)(CEE, 2010). In some US jurisdictions, utilities spend as much as 3% of collected revenue on energy efficiency. Utilities in Brazil collect 1% of electricity revenues, which is used to fund EE programmes as well as R&D. In the United Kingdom, energy provider spending on energy efficiency is about USD 3 billion under the Carbon Emissions Reduction Target (CERT) supplier obligation. This obligation has a target CO2 emissions reduction of 0.19 Gt between 2008-12 (Energy Savings Trust, 2009). The French and Italian White Certificates programmes, which give energy providers the choice between implementing energy‐efficiency programmes and purchasing energy-efficiency offsets in a secondary market, together account for about USD 700 million in annual spending on energy efficiency.

The success of programmes and policies that mobilise energy providers to deliver energy efficiency has led to increased interest in this sector. Most recently, the 2011 the EU Energy-Efficiency Plan proposes legislation that will oblige energy regulators and energy companies to take steps that enable their customers to cut their energy consumption. This could take the form of obligations to cut customer energy consumption, as is currently the case in the United Kingdom, or requirements to implement certain types of efficiency investment programmes, either directly or through Energy Service Companies (EC, 2011).
Between 2005 and 2010 the United States had the largest budget dedicated to clean coal and CCS, spending USD 1.2 billion on CCS RD&D, the lion’s share of which was on several large-scale demonstration projects; with USD 4.1 billion on clean coal. Japan also recently focused more on clean coal technologies.
A number of recent important policy measures and programmes have emerged in support of expanded wind markets. Many of the new policy developments concern offshore wind:
  • Offshore wind is now a Chinese priority with the publication of its Offshore Wind Development Plan in 2009 and with the establishment of a new FIT. The official target for wind deployment was increased to 150 GW.
  • The United Kingdom emphasised onshore and offshore wind in its National Renewable Energy Action Plan, with funding allocated by the newly created Green Investment Bank. Up to 33 GW of offshore renewable generation is targeted via a maximum of GBP 15 billion invested in offshore infrastructures.
  • In the United States, the USD 1 billion Cape Wind project, the country’s first offshore wind farm, was successfully approved by the Department of Interior. The Department of Energy is currently reviewing the loan guarantee application. In December 2010, the DOE also finalised a deal for the Caithness Shepherds Flat project, the world's largest wind project to date, by providing a partial loan guarantee of USD 1.3 billion for the 845 MW facility located in eastern Oregon.
  • Spain continues its focus on onshore wind deployment, issuing a new FIT in December 2010 for new wind power capacity to 2012.
  • The European Union launched a 10‐year European Wind Initiative that will provide EUR 6 billion in partnership with industry to advance wind RD&D.
To halve global carbon emissions by 2050 from 2005 levels, power from renewables will have to reach 7,000 terrawatt hours (TWh) by 2020 from 3,700 TWh. Wind power must experience an annual growth rate of 17 percent and solar 22 percent

About the IEA
The International Energy Agency (IEA) is an autonomous organisation which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. While this continues to be a key aspect of its work, the IEA has evolved and expanded. It is at the heart of global dialogue on energy, providing authoritative and unbiased research, statistics, analysis and recommendations.

International Energy Agency (IEA)
Press Release dated April 6, 2011 and full free report at
via CNET Green Tech Blog

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