Greenbuilding Archive for August 2002

What a difference a decade can make.  Since 1992, renewable energy markets
have shifted into a new gear.  Wind power generation, for example, has gone
from 2,170 megawatts at the beginning of 1992 to 24,800 megawatts at the
beginning of 2002-a more than tenfold increase in 10 years.  The annual
production of solar cells has risen from 55 megawatts in 1991 to 391
megawatts in 2001, a seven-fold increase.

These growth rates-averaging more than 30 percent annually in the last five
years—provide early indicators that the world has entered the post-petroleum
century—a century in which diminishing oil supplies, a limited capacity of
the atmosphere to absorb carbon dioxide, and the burgeoning energy needs of
billions of people in the developing world all indicate the need for new
sources of energy to complement and replace the past-century's fossil fuels.

The extraordinary growth of renewable energy in the past decade was driven
by dynamic markets in a handful of countries.  In the case of wind power,
three quarters of the global capacity is found in Germany, the United
States, Spain, Denmark, and India.  In some regions of Denmark, Germany, and
Spain, wind power already provides more than 20 percent of the
electricity—higher than the hydro or nuclear share of world energy supplies.

The success of these five countries, plus Japan, which has dominated the
solar market in recent years, stems from policies they have adopted in the
last decade.  The challenge for Johannesburg is to extend the success of
these five nations to the world as a whole.  It is therefore essential that
the Johannesburg action plan include a clear recognition of the important
role of renewable energy in powering a sustainable world, as well as
practical recommendations for what national governments and the
international community can do to make this vision a reality.

The renewable energy sources of today represent roughly the same share of
the overall energy supply—and the same prospect for future growth—as
petroleum did a century ago.  In 1902, petroleum accounted for about 2
percent of the total but was already expanding quickly in niche markets.
With wind and solar markets now doubling in size every three years,
manufacturers are able to scale up production and drive down costs.  In
order to find growth rates comparable to those of renewables today, you have
to look at the recent history of such sectors as cell phones and the
Internet.  By comparison, the market for oil is now growing at less than 1.5
percent per year.

Put simply, our current energy system is undermining global security, from
the dangers of depending on the Middle East for oil to the ecological
dangers of continuing to pollute the atmosphere.  Reducing world dependence
on fossil fuels before a major crisis forces an unplanned transition should
be considered a security priority.

Renewable energy has a particularly important role to play in developing
countries.  Indeed, it is hard to think of a better setting than
Johannesburg in which to get serious about renewable energy as a tool for
tackling what might be called "energy apartheid."  With 4 billion people
relying predominantly on unsustainable energy sources, and the remaining 2
billion lacking access to electricity or liquid fuels, the world's energy
haves and have-nots are both in unsustainable positions—and could both
benefit enormously from the accelerated spread of renewable energy.  For
developing countries, providing energy is essential to education, health
care, and the development of new industries.

The potential for renewable energy is increasingly recognized both in the
worlds of government and of business.  This is seen in a growing flow of
capital into renewables by large oil and power companies, as well as from
the venture capital sector.  Renewable energy legislation is beginning to
proliferate at the national and state levels.  Brazil, China, and India are
among the countries that have recently strengthened their renewable energy
laws, with the aim of accelerating market growth.  And in the United States,
nearly half the members of Congress belong to the renewable energy caucus.

The G8 club of industrial country leaders set up a special
government/industry Task Force on Renewable Energy that issued a report in
July 2001, which concluded, " . . . renewable energy resources can now
sharply reduce local, regional, and global environmental impacts as well as
energy security risks, and they can, in some circumstances lower costs for
consumers."  The leader of that Task Force, Mark Moody Stuart, the former
Chief Executive Officer of Royal Dutch Shell, has called on governments " to
expand renewable energy targets, removing inappropriate subsidies and
switching some to renewable energy to provide a level playing field in the
energy sector."

The main responsibility for accelerating the use of renewable energy lies
with national governments (and in some cases state or provincial
governments) that regulate the energy sector, dictate taxes, allocate
subsidies, and otherwise influence energy trends.  However, the
international community can provide assistance in a number of important
ways, and the Johannesburg Summit offers important opportunities for
progress:



1. Goal Setting

Ambitious, specific goals for increasing the share of renewables in the
total energy supply are proven tools for galvanizing government action.  The
success of renewable energy goals can be seen in Germany, where a national
target on renewables passed in 1991 spurred market and policy development,
allowing the country to greatly exceed its initial goal.  More recently, the
European Union has established a goal of doubling the contribution of
renewables to its electricity supply renewables by 2010.

In the course of preparations for the World Summit, various renewable energy
goals for the world have been proposed.  The most widely cited figure is
that contained in the "Brazilian Energy Initiative" and adopted at a meeting
Environment Ministers from Latin America and the Caribbean, meeting in Sao
Paulo in May 3002.  It calls for 10 percent of world energy to come from
renewables by 2010.



2. Providing Information on Policies that Work

Since it is the policies of just a few countries that have successfully
expanded renewable energy markets so dramatically in the past decade, it is
important that the policies of these nations be widely introduced to
government and industry leaders around the world.  Particular focus should
be on providing access to the grid under a system of standardized contracts
at just and reasonable prices; and on providing limited, cost-effective
subsidies at the minimum level needed to spur market development.

There is also a need for a specific institution to serve as a clearinghouse
and disseminator of effective new energy policies, and to provide active
policy advice and human capacity building for countries around the world,
with a particular focus on developing nations.



3. Financing Renewable Energy

International institutions and bilateral government agencies have generously
subsidized the export and development of fossil fuel and nuclear
technologies over the past five decades.  Even today, the bulk of such
financing goes to well established and in many cases unsustainable energy
sources. Funding agencies such as the Global Environment Facility are
devoted to supporting renewables, but at a much lower level.

A shift in energy funding priorities at the international level is essential
to accelerating market growth in developing nations.  GLOBE, an organization
of parliamentarians from around the world has proposed a target of shifting
10 percent of the energy export financing support from industrial country
governments to renewable energy by 2010.  Organizations such as the World
Bank and the regional development banks should also boost their commitment
to renewables.





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