The Challenge of Energy Security in the 21st Century: Trends of Significance

2. Global Trends in Renewable Electricity, Renewable Fuels, and Markets for Renewable Heating and Cooling

8 Benjamin K. Sovacool 2 GLOBAL TRENDS IN RENEWABLE ELECTRICITY, RENEWABLE FUELS, AND MARKETS FOR RENEWABLE HEATING AND COOLING Benjamin K. Sovacool 1. INTRODUCTION Renewable resources of energy have immense potential to supply a much larger fraction of the world’s electricity, fuel for transportation, and heat and other energy services. Renewable energy can be utilized through a variety of sources, approaches, systems, and technologies: • Plants and algae require sunlight for photosynthesis before they can be converted to biofuels or biopower; • Hydropower capitalizes on rain and snowfall resulting from water evaporation and transpiration; • Wind generates electricity directly by turning a turbine, or indirectly in the form of ocean waves, but the wind itself is driven by the sun; • Tidal and geothermal energy are the only renewable energy resources that are not a direct result of solar energy. Tides rise and fall due to the 02 EnergySecurity 4/18/11, 3:31 PM 8 Global Trends in Renewable Energy Resources 9 gravitational attraction between the oceans and the moon. The heat trapped in the earth itself is due to both leftover heat from the formation of the planet, and the radioactive decay of elements within the crust, such as uranium and thorium. When the potential for these energy sources is quantified, the numbers are startling. One recent assessment, which collected actual data on wind speeds (at a hub height of 80 metres) at 7,753 surface stations, identified about 72 terawatts (TW) of potential.1 One fifth of this potential could satisfy 100 per cent of the world’s energy demand and more than seven times its electricity needs.2 If we exclude biomass and look at solar, wind, geothermal, and hydroelectric energy resources, the world has roughly 3,439,685 terawatthours (TWh) of potential — about 201 times the amount of electricity the world consumed in 2007 (see Table 2.1).3 So far, less than 0.09 per cent of the potential for renewable energy to meet global energy needs has been harnessed. However, that percentage is starting to increase. This chapter explores recent growth in renewable energy markets and explores the use of wind, solar, hydroelectric, geothermal, and biomass resources to generate electricity; ethanol and biodiesel as transportation fuels; and solar thermal, geothermal, and biomass to provide direct heating and cooling. The late economist John Kenneth Galbraith once mused that “the function of economic forecasting is to make astrology look respectable”. His comment emphasizes how difficult projecting future trends in any area can be, from political elections and the weather, to energy markets and the economy. Thus, Table 2.1 Renewable Energy Potential (by source) for the World Technology Available Electrical Current Worldwide energy potential electricity capacity factor (TWh/year) (TWh/year) generation (per cent) (TWh/year) Solar PV 14,900,000 3,000,000 11.4 10 to 20 Concentrated 10,525,000 4,425 0.4 13 to 25 Solar Power Wind 630,000 410,000 173 20.5 to 42 Geothermal 1,390,000 890 57.6 73 Hydroelectric 16,500 14,370 2,840 41.6 Source: Ren21, 2009. 02 EnergySecurity 4/18/11, 3:31 PM 9 10 Benjamin K. Sovacool this chapter looks closely at trends in the markets for renewable electricity, renewable fuels and renewable heating and cooling, but it does so with an appreciation of Galbraith’s scepticism about the art of forecasting.The chapter focuses intently on historical trends in the past few years (which still give readers an excellent sense of what is going on in these markets), but refrains from making any projections about the future. It dedicates most of its space to the two fastest growing sources of renewable energy — wind and solar electricity supply — although it does explore market trends for many other technologies and areas. 2. GLOBAL OVERVIEW Growth in global renewable energy markets has been impressive, to say the least. From 2004 to 2008, annual renewable energy investment quadrupled to reach more than $160 billion when large hydroelectric facilities are included (see Table 2.2). Investments in solar photovoltaics (PV) increased Table 2.2 Global Rates of Production and Capacity, Growth and Investment in Renewable Energy Systems, 2008 Production/Capacity Annual Growth Annual Investment (2008) Rate (2007–08) (2008) Electricity Supply Wind 121 GW 29% $49 billion Solar PV 13 GW 70% $39 billion CSP 0.5 GW 6% — Small hydro 85 GW 8% $6 billion Large hydro 860 GW 4% $42...