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Green energy transformations

By Dave Elliott

The International Energy Agency (IEA) has released a new report “the Power of Transformation”, which concludes that the integration of large amounts of renewable energy can be achieved by any country at only a small increase on whole system costs, compared with the current fossil-fuel-heavy electricity systems. The IEA used present-day costs for solar PV and wind, which are likely to continue to fall, with wind and PV being set to provide the bulk of the generating capacity in transformed electricity systems.

These variable renewables are often blamed for driving electricity prices up and destabilising electricity grids and some say the system and grid costs will get prohibitive as renewables expand. Some of these costs will be incurred by fossil plants, which will lose some of their market – they have to act more as back-up rather than baseload. But the IEA says that the first 5-10% of variable renewables pose no technical or economic challenges, and even for higher levels of up to 45% penetration, it says, would cost only 10% to 15% more than the status quo, for additional flexible generating capacity. And that is using today’s technology and assumes a moderate carbon price of 30 USD per tonne. In the future, wind and PV are expected to have lower costs. Combined with increasing prices of CO2, the IEA says “the extra system costs of such high shares of variable renewable energy could be brought down to zero”.

However the whole system would have to change. “Integration is not simply about adding wind and solar on top of ‘business as usual’,” said IEA executive director Maria van der Hoeven at the launch of the report . “We need to transform the system as a whole to do this cost-effectively.” The IEA pointed to examples in Germany and Denmark. Whereas the transformation cost for developed economies like this might be high, Maria van der Hoeven said “These surmountable challenges should not let us lose sight of the benefits renewables can bring for energy security and fighting dangerous climate change. If OECD countries want to maintain their position as front runners in this industry, they will need to tackle these questions head-on.”

Moreover for newly emerging economies, with less sunk costs in conventional energy systems, the transition costs and difficulties would be less: they could ‘leapfrog’ to a new cleaner, greener and more efficient energy system. And while the IEA sees gas playing an interim role, it’s not green, and generally they do not see a future for the inflexible energy options. It does seem that the traditionally conservative IEA has got the green bug! For a good report of the launch meeting see:  Press release/links:,47513,en.html

There are counter views that say the extra system costs will be very large. For example see this Potsdam/Vattenfall paper.

But this says that the cost of grid balancing is relatively small and focuses mainly on what it claims is much larger, the costs incurred by the “stranded” fossil plants, which will become increasingly uncompetitive as renewables get cheaper and fossil (and carbon) costs rise. That has to be faced (e.g. via capacity payments), since some fossil gas plants will be needed for balancing for some while, although green gas (including wind to gas) can be phased in gradually, along with other balancing options, progressively squeezing fossil fuels out of the mix.

Even fossil giant BP seems to have caught the bug to some extent. Although it sees fossil fuels as continuing to dominate, the latest annual BP Energy Outlook suggests that renewables will expand at an average of 6.4% a year to 2035, to a global share of electricity of 14% by 2035. and

And longer term, in their Oceans scenario, Shell sees solar being the largest single energy source globally by 2060.

How likely is this sort of expansion? In the short term, renewables face many hurdles, not least competition from the established energy options and mixed and varying policy support commitments from governments. The battle over 2030 targets in the EU shows how hard it can be to translate vision into reality. But the technology keeps on developing, PV solar especially, and even when some options seem in trouble or stalled, new options keep opening up. For example, offshore wind is a huge resource, but so far it’s been expensive. However the advent of floating wind turbines could change that – there would be no need for costly sea-bed pile-driving or other foundations. And rather than having to send teams out to do maintenance work, the units could be towed in to harbour for repair. The use of energy crops to make biofuels has got a bad press globally (the food versus fuel debate), but a European Climate Foundation report entitled “Wasted: Europe’s Untapped Resource” suggests that Europe has a significant untapped potential for converting wastes from farming, forestry, industry and households to advanced low-carbon biofuels. The study found that if all the wastes and residues that are sustainably available in the EU were converted only to biofuels, this could supply 16% of road transport fuel in 2030. If advanced biofuels from wastes and residues are sourced sustainably, they can deliver greenhouse gas savings well in excess of 60% even when taking a full lifecycle approach.

As I try to report regularly in this blog, there are many other examples. Clever new devices and, more importantly, clever new ways to integrate devices into the evolving new energy system, like the Power to Gas idea: That’s now spreading across Germany:

It is easy to get bogged down in the details of funding schemes, short-term price comparisons and the like, but we also need vision. The IEA report is not a bad starting point, illustrating that a transformation is possible across the world.   And with the technology maturing rapidly, and getting cheaper, that could actually start to happen on a significant scale. The bottom line is – what’s the alternative? More of the same? More carbon emissions? More radioactivity?

There is no doubting that, although it may not be that painful, a big change is needed. However, while it is often claimed that it is those on the political left that are seeking a social transition via (to borrow a phrase) “green crap”, interestingly it’s been argued that it might actually be that the right will now embrace renewables, at least in the US. See Though this may be overstated!

Either way though, change does seem likely:

In my next few posts I will be looking at some of the problems that may face the transition, in terms, for example, of land use constraints, water resource issues and transport requirements. But I will also be looking at some of the potential gains – for example, jobs.

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