"Barreling past 400 parts per million of CO2 in the atmosphere"

The Status of Renewable Energy - REN21 Policy Briefing

with US Representative Holt

Trinica Sampson, Arthur Morgan Institute for Community Solutions | May 8, 2013

On April 25, Worldwatch Institute hosted the Renewable Energy Policy Network for the 21st Century (REN21), a policy briefing on the present and future of renewables in the United States and around the world. Founded in 2004, REN21 is a global policy network which aims to provide a forum for international leadership on renewable energy. Its mission is to allow the rapid expansion of renewable energies in developing countries by strengthening policy development and decision-making on sub-national, national, and international levels. The briefing presented information from the Renewables 2013 Global Status Report, which is one of the most referenced reports on renewable energy technology, market, and policy trends worldwide; and the Renewables Global Future Report, which provides a range of conclusions on the future of renewable energy based on the opinions of 170 leading experts around the world. This year’s emphasis is on system integration of renewables with electricity and energy.

Mohamed El-Ashry, Senior Fellow with the UN Foundation, provided some context for the world’s current relationship with renewables during his Introductory Remarks. He noted that, although the recent natural gas boom in the United States has helped the renewables industry, the lack of strong support mechanisms and uncertainty over production tax credit expiration dates leaves investors uncertain and unwilling to take the risk of investing in renewables. Despite this insecurity, renewable energy has had remarkable growth in the last year alone. El-Ashry pointed out that 70% of new power capacity added in Europe in 2011 was renewable, and in the last six years, the United States has quadrupled its electricity from renewables. According to the Bureau of Labor Statistics, in 2012 the solar industry employed 35% more people than the coal mining industry. If this growth is to continue, however, he believes we will need to tighten our policies to ensure investors feel secure enough to continue investing.

Christine Lins, Executive Secretary of REN21, offered some insights and figures from the upcoming July 2013 edition of the REN21 Renewables Global Status Report. Lins explained that today, renewables supply an estimated 18% of global final energy consumption, about half of which is traditional biomass. REN21 is committed to doubling the share by 2030, with an emphasis on sustainable renewables. According to Lins, this means that “the modern renewables in the form of wind, modern biomass, solar, and hydro need to triple or even quadruple over the next two decades.” She noted that in 2011, 25% of global power generation capacity was based on renewables, and about 20% of global electricity was produced from renewable energy—with renewables accounting for nearly half of the new electricity capacity that was installed worldwide. In 2012, 30 gigabytes of new solar PV capacity came into being, with a total global capacity of 101 gigabytes installed. As Lins stated, this growth is indicative of the evolving market and falling prices, making renewable energy sources more accessible to more people in the world, including those in developing countries. Half of the 120 countries that have renewable energy policies in place are developing countries. But despite this good news, Lins clarified that this continued growth in manufacturing, sales, and installation was likely a result of a backlog of installations financed through recovery packages in 2011 and is not likely to continue at the same capacity in 2013. Between 2011 and 2012, a drop of 32% in investments occurred due to changes in policy and uncertainty in the market. Again, the shakiness of renewable energy policies is affecting investors. Lins shared three goals that REN21 would like to accomplish by 2030: Ensure universal access to modern energy services, double the global rate of improvement in energy efficiency, and double the share of renewable energy in the global energy mix.

Although REN21’s goals are impressive and achieving them is crucial in the development of widespread renewable energy programs and integration, other issues came to the forefront when author Eric Martinot described the future of renewable energy. He had published a report featuring 150 leading experts in renewable energy and their opinions on the future of renewable energy. The findings led Martinot to three key realizations: our current thinking about renewable energy is “ten or twenty years behind the reality of where renewables are today”; we are facing an “explosion of policies” related to power grids, transport, buildings, and industry in the next five to ten years; and the future of renewable energy is no longer a question of technology or cost but is instead related to finance, business models, investments, standards and codes, and new ways of integrating types of business models for utilities that have to come into play.

Martinot outlined three main aspects of renewable energy that must be addressed now and in the near future: what share of our energy mix we can get from renewable sources in a long-term time period, investments, and cost. In terms of shares coming from renewables, he gave three common scenarios: low-shares or conservative scenarios in the 15-20% range, moderate-share scenarios in the 30-50% range, and high-share scenarios with 50-80% of total global energy. Martinot argued that low-share projections are no longer credible because we are already reaching moderate-share of renewables in the energy mix. He also claimed that, since countries such as Germany and Denmark project eighty and even one hundred percent shares, it is becoming a question of how and when we will reach such levels rather than if. (Such optimism seems questionable, with only 3% of US energy coming from renewables and no talk of the need to reduce consumption.)

As far as investments are concerned, Martinot said experts expect renewable energy investments to double by 2020 or 2050, bringing our annual number of investments up to 500 billion. However, our current sources of finance—bank lending and utility balance sheet finance— “just won’t cut it.” Experts are looking at insurance and pension funds as viable new sources of investment. The hope is that renewable energy would be seen as the lowest risk renewable energy policy and a way to balance portfolios. Martinot also listed aggregated securities funds, community funds, oil companies, equipment suppliers and vendors, sovereign wealth funds, and national governments as other possible sources of investment.

Less worrisome was the aspect of cost. In fact, Martinot showed that, at less than $1 per watt, the cost of solar PV panels has fallen by a factor of three in the last three to four years. The cost of the panel is a non-issue. According to Martinot, “the issue is the cost of the installation labor, the cost of the framing, the cost of wiring the house, the cost of the system.” There are ways to lower these costs, he said, such as building standards, pre-wired solar PV, and building integration materials. He noted that if such changes are made, experts see solar PV panels spreading around the world in the next five to ten years.

United States Representative Rush Holt was able to lend some congressional insight about renewable energy, but the news was not all positive. Holt called out his fellow congressman and the U.S. administration for not looking at environmental issues with any sense of the urgency that is so vital if we are to achieve levels of sustainability. When asked why the administration has been quiet on the issue of climate change, he said that it has become a passing topic in Congress. He attributes that to his colleagues saying, “‘I don’t know what to think, so we won’t think about it.’” Holt acknowledged their reticence toward a discourse on climate change, stating that “we are losing track in this country—we have lost track here in Congress. We are barreling past 400 parts per million of CO2 in the atmosphere.” As of April 30, the Scripps Institution of Oceanography measured a reading of 399.50 ppm, nearly 50 parts higher than the amount at which uncontrollable climate change occurs. Holt lambasted his fellow congressmen, asking “how many Hurricane Sandy’s, how many barges running aground in the Mississippi, how many wildfires out west, how many disruptions—costly in lives and dollars—in our climate do we need before we actually assign some urgency to the energy transition?” Holt calls the way we produce and use energy today “the greatest insult to our planet,” and as the month of May continues, we may very well find our CO2 levels reaching 400 ppm for the first time in 5,000,000 years. According to Holt, “It’s not how much energy we generate; it’s whether we are generating energy in a way that actually helps improve the lives of people.”

The briefing examined the positive aspects of our current status with renewable energy, but the points brought up by Congressman Holt were sobering. As Alexander Ochs, Moderator and Director of Climate and Energy at Worldwatch Institute pointed out, “This is amazing, but this isn’t enough. We’re already beyond 400 parts per million of climate change. We’re still driving head-on into war.” It is a war not of weapons, but of willpower against a common enemy—ourselves. If we cannot fight our way of thinking which glorifies an unsustainable, consumption-driven economy, and if we do not establish a sense of urgency on a worldwide level, we will lose the struggle.

Global Status Report 2013 will be published on June 11 and can be found at www.ren21.net