By the end of 2013 the United Kingdom had risen to 4th position in the league table of the World's most attractive renewable energy markets, investment being spurred on by the global aims to reduce green-house gas emissions. The UK overtook Australia to take 4th position and USA, China and Germany retained their top three positions in the Ernst and Young (E&Y) report which tracks the World Top 40 renewable markets1. In E&Y's technology ranking, Britain scored highest for offshore wind and ranked second for biomass after Germany.

In an accompanying statement to this report the UK Government was criticised for only underpinning power plants which use biomass to produce electricity with other energy forms not being supported. This suggests a lack of a wider understanding in Government who continue to fail to recognise the importance of steam raising and other forms energy transfer in energy intensive industries such as chemical manufacture. The failure to support combined heat and power (CHP) plants continues to be a significant oversight and yet remains an opportunity to underpin rising energy costs to energy intensive manufacturing in the UK.

Some commentators realise that rather than the piecemeal approach to energy investment support that has been taken to date, with in some instances disastrous consequences for industry and those developing new energy technologies, a more comprehensive strategic approach to is needed to include the full production spectrum of energy, heat and power. For example an E&Y statement on its own report concludes that the British Government's approved tax-breaks and incentives to explore for shale gas is aimed at using unconventional gas to cut growing dependence on fuel imports. This move appears to be at the expense of biomass power, which E&Y argue "still has a critical role to play in expanding the UK's low-carbon base-load power."

GLOBALISATION OF RENEWABLES

Such energy conundrums are not confined to the UK. The World Energy Outlook report2 from the International Energy Agency (IEA) in November 2013 said "Large differences in regional energy prices are set to affect industrial competitiveness, influencing investment decisions and company strategies." It also points out that India is set to overtake China in the 2020s as the principal source of growth in global energy demand." The agency also reports on the rising impact of renewable energy on global energy markets suggesting that the share of renewables, as a primary energy source, will rise to 18% in 2035, from 13% in 2011.

Outcomes that reduce greenhouse gas emissions can only result through greater implementation of modern renewables technologies to generate power, produce heat and make transport fuels. Interestingly though, in the light of the recent statements by the Intergovernmental Panel on Climate Change (IPCC)3, who want these technologies implemented more quickly, there are concerns expressed by the IEA that the speed of implementation is being limited by the continued shift away from the use of traditional biomass in developing countries.

BIOFUELS - FOOD VS FUEL:

The move away from utilizing biomass may not be at all rational and has been driven in many instances by unsubstantiated food vs fuel arguments. The protagonists of these arguments have utilized the media well, but their arguments have not been data driven. In contrast several scientific reports have shown that land usage from biomass production to make fuels, especially in moderate wet climates, is less land intensive than people may think.

For example biomass might be a productive crop for farmers where the wheat grown is much lower in protein than is needed for bread production, as in the UK. Furthermore this may well be where future generations are prepared to use genetically engineered crops to support energy production. Perhaps we can learn from our forefathers in the UK who knew it was more sensible to ferment our grains than make bread! All whiskey lovers of course approve of such common sense.

Despite the controversy the IEA say that consumption of biofuels is set to increase from 1.3mboe/d (millions barrels of oil equivalent per day) in 2011 to 4.1mboe/d in 2035, to meet 8% of global road-transport fuel demand in 2035. USA, Brazil, European Union and China will make up more than 80% of all biofuels demand. Advanced biofuels will also help address some of the sustainability concerns about conventional biofuels, and these are predicted to gain market share after 2020, reaching 20% of the biofuels supplied by 2035.

These predictions about biofuels by IEA are despite a recent drop in investment in the biofuel sector and a temporary slowdown in production, which IEA say is due primarily to poor harvests in the United States and Brazil. However they conclude that continued policy support and a return to normal harvests will put biofuels consumption back on track over the long term. In addition to the use of biofuels in road transport, its use in aviation will also begin to make grow the biofuels market over these timescales.

VARIABLE ENERGY RESOURCES

The expansion of hydropower and bioenergy, plus the rapid expansion of wind and solar PV already has made a significant impact on the World's power generation from renewables. Their contribution is predicted to increase by over 7000 TWh (Terawatt Hour = 1 billion kilowatts per hour) from 2011 to 2035, making up almost half of the increase in total energy generation. Their rise in importance to energy users has been rapid and these sources will becomes the second-largest source of electricity before 2015 and is set to approach the amount of electricity form coal, the current primary source of energy, by 2035. The IEA report explains that approximately two-thirds of the increase in power generation from renewables is expected to be in non-OECD countries. The increase in China for example is going to be more than that in the European Union, United States and Japan combined.

Power generation technologies that can be ramped up or down to match demand are known as "dispatchable", such as a gas fired power stations. However the output from solar PV and wind power is linked to the availability of the energy resource, hence their availability varies over time, they are therefore known as "variable" renewables. More examples of variable energy production include hydro-power with reservoir storage, geothermal and bioenergy, run-off-river hydro-power (without reservoir storage) and concentrating solar power (without storage). PV and wind power have experienced particularly strong growth in recent years and this is expected to continue and is highlighted as important in the report from IPCC. However the characteristics of variable renewables have direct implications for their integration into power systems and infrastructure and these are not insignificant problems. Clearly the variability is an important issue and once subsidies are removed from these technologies other issues may have a significant impact on their future application. These include their location, modularity, non-synchronicity all of which ultimately add to the uncertainty and cost of supply. In the long term the combined effect of such problems may make such energy sources too variable and too expensive to run when compared to the output from other technologies.

FUTURE NEEDS

IEA suggest that a Global cumulative investment of $6.5trillion is required into renewable energy technologies from 2013 to 2035, but only 5% of this will be for biofuels. Renewables account for 62% of investment in new power plants through to 2035 but this has to be accompanied by investments in new transmission and distribution lines of $260 billion in order to access and integrate renewable sources. They also predict that increasing generation from wind and solar PV will further impact on power markets and system operation, which will reduce the profitability of other generators and stimulate changes in market design.

Although subsidised, renewable energy technologies are becoming more competitive when compared to wholesale electricity prices, however their continued growth remains hinged on subsidies from Governments to facilitate deployment. Subsidies to renewables reached $101billion in 2012, up 11% relative to 2011. Almost 60% of these were paid in the European Union. Global subsidies to renewables increases to over $220 billion by 2035. The IEA report concludes that even though wind will become competitive in a growing number of regions, as does solar PV, this will be in a limited number of markets. If this turns out not to be the case, those countries investing in such technologies have the potential of unsustainable high energy prices for a long time to come and this will inevitably lead to the further deindustrialisation of those countries. This is why much wider support of energy, power and heat production technologies is needed – we do need to hedge our bets.

Renewables have a significant role to play in reducing CO2 emissions, deploying renewables delivers other benefits, including reduction on of other pollutants, enhancing energy security, lowering fossil-fuel import bills and fostering economic development. The challenge is to design creative renewable support schemes across all forms of energy production that are effective and cost efficient, but also to take into consideration existing and planned infrastructure so that adverse effects such as transmission losses are minimised. The recent IPCC reports suggest the world must get on with this work but we do need a clearer and more effective politically agreed strategy to proceed.

REFERENCE:

1. The Ernst & Young Rating the world's renewable energy markets reports are available at http://www.ey.com/GL/en/Industries/Power---Utilities/Plug-in---Rating-the-worlds-renewable-energy-markets
2. The International Energy Agency Reports, World Energy Outlook are available at http://www.worldenergyoutlook.org/
3. The Intergovernmental Panel on Climate Change Reports are available at http://www.ipcc.ch/