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Clean Energy Business and Policy

Beijing Institute of Technology School of Management and Economics

Fall 2014

Lecture #2: Clean Energy Technologies, Economics, and Policies September 27, 2014

Professor Eric Martinot

Business Cases Included:

1. Solar City (residential solar rooftops) 2. Better Place (electric mobility) 3. EnerNOC (demand response)

Renewable Energy Applications by Sector

Buildings

Bulk power generation Industry Transport

Hydro • micro-hydro plant • large-scale hydro plant • small-scale hydro plant

Geothermal • ground-source geothermal heat pump

• geothermal power plant

Wind • household-scale wind turbine

• wind farm

Solar • solar PV panels • solar hot water

panels • solar heating panels • passive solar

architecture

• large-scale solar PV power plant

• concentrating solar thermal power plant (CSP)

• solar hot water for process heating

• electric cars powered from renewable electricity

Biomass • on-site small-scale biomass CHP plant

• small-scale biogas digester and engine

• biomass power plants (and CHP plants)

• biogas or biomass gasification with gas turbine

• on-site small-scale biomass CHP plant

• ethanol fuel • biodiesel

fuel

CHP = combined heat and power

Figure 18. Solar Water Heating Collectors Global Capacity, 2000–2013

Gigawatts-thermal World Total326 Gigawatts-thermal

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

300

250

200

150

100

50

0

Glazed collectors

Unglazed collectors

World total

Source: See Endnote 7

for this section.

China

64%

Rest of the World

13%

Next 9 countries

23%

United States 5.8%Germany 4.2%Turkey 3.9%Brazil 2.1%Australia 1.8%India 1.6%Austria 1.2%Japan 1.1%Israel 1.0%

Figure 16. Solar Water Heating Collectors Global Capacity, Shares of Top 10 Countries, 2012

Source: See Endnote 4

for this section.

Source: See Endnote 60 for this section.

World Total

23.6 Million Tonnes

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

25

20

15

10

5

0

Million Tonnes

Rest of WorldRest of AsiaChinaRussiaUnited States and CanadaEuropean Union (EU-27)

Figure 7. Wood Pellet Global Production, by Country or Region, 2000–2013

Business Case: Solar City • Largest solar power provider in the U.S.

o Founded in 2006, 6000 employees o 80-100% year-on-year growth rates o 140,000 customers (June 2014) o 280 MW deployed in 2013, targeting 475-525 MW in 2014 o 2Q2014 revenue (leases and solar) of $43 million

• Solar leasing to residential customers

o Marketing, sales, finance, design, permitting, installation, maintenance, monitoring o Relies on existence of “net metering” policy o Relies on low-cost financing o Primarily south-west U.S., plus New York, New Jersey

• Solar services to commercial and industrial customers • Energy efficiency evaluations and retrofits • Project financing innovations

o Google Fund ($280 million in 2011, largest in US at the time) o Asset-backed securities

Hydrotreated Vegetable Oil (HVO)

Biodiesel

Ethanol

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

120

100

80

60

40

20

0

World Total

116.5 Billion Litres

Billion Litres

Figure 6. Ethanol, Biodiesel, and HVO Global Production, 2000–2013

Institut für Stromrichtertechnik und Elektrische Antriebe

Folie 15 Threats and opportunities for storage technologies 24.11.2008

Dirk Uwe Sauer

Electrification concepts for passenger cars

Hybrid electric vehicle (HEV)

Storage capacity approx. 1 kWh, charging only during driving, fuel reduction max. 20%

Plug-in Hybrid electric vehicle (PHEV) Storage capacity 5 – 10 kWh, charging from the grid, 30 to 70 km electrical driving range, full driving range with conventional engine or fuel cell, driving with empty battery possible

Electric vehicle (EV) Storage capacity 15 – 40 kWh, charging from the grid, 100 to 300 km electrical driving range

Business Case: Better Place

• Battery-charging and battery-swapping services for electric cars

• Network of “battery-swap” and charging stations throughout California and Israel • Subscriptions for amounts of “driving distance” similar to mobile phone minutes • Subscription provided battery pack leasing, battery charging and swapping, electricity costs,

and all infrastructure

• Car charging network was based on a smart grid software platform, first in the world

o Could manage the charging of hundreds of thousands of electric cars simultaneously by automatically time-shifting recharging away from peak demand hours of the day.

• Problems: only one type of electric vehicle, high investments costs of battery-swap stations,

finance, customer acceptance, “centralized model of charging infrastructure” that requires using Better Place stations, costs of pilot/demonstration projects to gain acceptance

• Founded in 2007, raised $850 million in private capital, built 21 charging/swap stations in Israel by 2012, but never had more than a few thousand customers

• Declared bankruptcy in 2013, sold off for $0.5 million

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Gigawatts350

300

250

200

150

100

50

0

World Total

318 Gigawatts283

238

198

159

12194

74594839312417

Figure 19. Wind Power Total World Capacity, 2000–2013

China United States

Germany Spain India UnitedKingdom

Italy France Canada Denmark

Gigawatts

100

80

60

40

20

0

Added in 20132012 total

+ 16.1

+ 1.1

+ 3

+ 0.2 + 1.7

+ 1.9 + 0.4 + 0.6 + 1.6 + 0.6

Figure 20. Wind Power Capacity and Additions, Top 10 Countries, 2013


Additions are net of repowering.

ies

10 MW,

!9

Global Wind power capacity 1980-2012

GW

Data from GWEC

0

50

100

150

200

250

300

1980 1985 1990 1995 2000 2005 2010

Wind power in leading

countries

GW

Data from GWEC

0

10

20

30

40

50

60

70

80

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

USAChinaGermany SpainIndia

Electricity produced in China

1995-2012

!12

0

20

40

60

80

100

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

WindNuclear

TWh

Gamesa (Spain) 5.5%Suzlon Group (India) 5.3%United Power (China) 4.0%Mingyang (China) 3.5%Nordex (Germany) 3.3%

Based on total sales of ~37.5 GW

Vestas(Denmark)

13.1%

Goldwind(China)

11.0%

Enercon(Germany)9.8%Siemens (Germany)7.4%GE Wind (U.S.)6.6%

Next 5 manufacturers

Others

30.5%

Figure 21. Market Shares of Top 10 Wind Turbine Manufacturers, 2013


1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2011 2012

2,600

2,400

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

Megawatts

354354 354 354 354 354 354 354 354 366485

1,080

1,580

7414

2,550

FIGURE 14. CONCENTRATING SOLAR THERMAL POWER GLOBAL CAPACITY, 1984–2012

59

wide range of applications, is still relatively expensive." In the long

term, Greenpeace expects that favorable electricity production

costs will be achieved by using wood gas both in micro CHP units

and in gas-and-steam power plants, and says, "there is [also] great

potential to use solid biomass for heat generation in both small and

large heating centers linked to local heating networks.”48

Hydropower Hydropower has been a mature technology for decades, and sce-

narios like GEA (2012) show stable costs for hydro in the future.

As noted in Chapter 2, the storage inherent in most hydro-

power provides capacity for managing variable renewables on

power grids. Many projections show continued market growth

for all forms of hydro, particularly in developing countries.49

(See Table 4 on page 53 and also Chapter 5 for many country-

VSHFLčF�SURMHFWLRQV��

Many experts foresaw an expanding future role for pumped hydro-

power, particularly as a form of energy storage to balance variable

renewables, including using rapid-reaction turbines and variable-

speed pumps. NREL (2012) notes that: “Pumped-storage hydro-

power is considered a mature technology. However, incremental

LPSURYHPHQWV�LQ�HIčFLHQF\�DUH�SRVVLEOH��DQG�WKH�ĎH[LELOLW\�RI�H[LVW-ing and future plants may be improved using variable-speed drive

WHFKQRORJLHV��2WKHU�SRVVLEOH�GHYHORSPHQWV�LQFOXGH�XVH�RI�VDOWZDWHU�pumped-storage hydro facilities in coastal regions and underground

pumped-storage hydro.” IEA ETP (2012) similarly notes that new

SURMHFWV� RU� UHWURčWV� DUH� LQFRUSRUDWLQJ� YDULDEOH�VSHHG� SXPSV� WKDW�LQFUHDVH� WKH�DELOLW\�RI�SXPSHG�K\GUR� WR�SURYLGH�JULG�ĎH[LELOLW\�RQ�shorter time scales.50

REN21 (2012) shows 130 GW of pumped hydro capacity globally in

2011, more than one-third of this in Europe. REN21 also notes that

Europe plans an additional 27 GW by 2020, that the United States

KDV��*:�XQGHU�SHUPLW��DQG�WKDW�&KLQD�LQFUHDVHG�LWV�čYH�\HDU�SODQ�(2011–2015) target for pumped hydro to 80 GW. IEA ETP (2012)

QRWHV� WKDW�KLVWRULFDOO\��SXPSHG�K\GUR�FRXOG�EH� MXVWLčHG�HFRQRPL-cally by arbitrage in daily electricity price spreads, but that in recent

decades, natural gas has reduced spreads such that, “at present,

energy arbitrage, the traditional driver for investment in pumped

hydro, does not stand up in market conditions.” However, IEA ETP

(2012) also shows pumped hydro levelized energy costs, at about

��FHQWV�N:K�� WR�EH�VLJQLčFDQWO\� OHVV� WKDQ�RWKHU�VWRUDJH�RSWLRQV�

like batteries. GEA (2012) shows pumped hydro costs in the range

of 3–9 cents/kWh.51

Geothermal Geothermal is considered a mature technology. REN21 estimates

current geothermal power costs at 6–11 cents/kWh. Some sce-

narios do show future declines in costs with technology improve-

ments. For example, Greenpeace (2012) shows geothermal power

costs declining from 15 cents/kWh today to 9 cents/kWh by 2050.

Greenpeace says: “[Geothermal electricity] was previously limited

WR� VLWHV� ZLWK� VSHFLčF� JHRORJLFDO� FRQGLWLRQV�� EXW� IXUWKHU� LQWHQVLYH�research and development work has enabled widened potential

sites. In particular the creation of large underground heat exchange

surfaces—Enhanced Geothermal Systems (EGS)—and the improve-

ment of low temperature power conversion, for example with the

2UJDQLF�5DQNLQH�&\FOH��FRXOG�PDNH�LW�SRVVLEOH�WR�SURGXFH�JHRWKHU-mal electricity anywhere. Advanced heat and power cogeneration

plants will also improve the economics of geothermal electricity. As

a large part of the costs for a geothermal power plant come from

deep underground drilling, further development of innovative drill-

ing technology is expected.”52

Ocean Energy 0DUNHW�SURMHFWLRQV�IRU�RFHDQ�HQHUJ\�DUH�GLIčFXOW�EHFDXVH�WKH�WHFK-

nology is still not commercial. By 2011, a handful of projects were

in operation around the world, notably in France and Korea, and the

ocean energy industry appeared poised for full commercial-scale

development. Some experts offered the possibility of future break-

throughs. GEA (2012) shows ocean energy costs of 9–38 cents/

kWh in 2009, depending on the technology, and projects potential

declines in the future to 6–20 cents/kWh for ocean-thermal power

�27(&��ã��FHQWV�N:K�IRU�WLGDO�SRZHU��DQG��ã��FHQWV�N:K�IRU�wave power.53

Greenpeace (2012) sees potential for lower costs in the coming

decades: “The cost of energy from initial tidal and wave energy

farms has been estimated to be in the range of 25–95 US cents/

kWh, and for initial tidal stream farms in the range of 14–28 US

cents/kWh. Generation costs of 8–10 US cents/kWh are expected

by 2030. Key areas for development will include concept design,

RSWLPL]DWLRQ�RI�WKH�GHYLFH�FRQčJXUDWLRQ��UHGXFWLRQ�RI�FDSLWDO�FRVWV�[with] alternative structural materials, economies of scale, and

learning from operation.… In the long term, ocean energy has the

potential to become one of the most competitive and cost effective

forms of generation.”54

06

GFR_Layout_31.indd 59 18.12.12 16:41

WORLD ENERGY [R]EVOLUTIONA SUSTAINABLE WORLD ENERGY OUTLOOK

246

9.3.6 hydro power

Water has been used to produce electricity for about a centuryand even today it is used to generate around one fifth of theworld’s electricity. The main requirement for hydro power is tocreate an artificial head of water, that when it is diverted into achannel or pipe it has sufficient energy to power a turbine.

Classification by head and size

The ‘head’ in hydro power refers to the difference between theupstream and the downstream water levels, determining the waterpressure on the turbines which, along with discharge, decide whattype of hydraulic turbine is used. The classification of ‘high head’and ‘low head’ varies from country to country, and there is nogenerally accepted scale.

Broadly, Pelton impulse turbines are used for high heads (where ajet of water hits a turbine and reverses direction), Francis reactionturbines are used to exploit medium heads (which run full of waterand in effect generate hydrodynamic ‘lift’ to propel the turbineblades) and for low heads, Kaplan and Bulb turbines are applied.

Classification according to refers to installed capacity measuredin MW. Small-scale hydropower plants are more likely to be run-of-river facilities than are larger hydropower plants, but reservoir(storage) hydropower stations of all sizes use the same basiccomponents and technologies. It typically takes less time andeffort to construct and integrate small hydropower schemes intolocal environments106 so their deployment is increasing in manyparts of the world. Small schemes are often considered in remoteareas where other energy sources are not viable or are noteconomically attractive.

Greenpeace supports the sustainability criteria developed bythe International Rivers Network (www.internationalrivers.org)

Classification by facility type

Hydropower plants are also classified in the following categoriesaccording to operation and type of flow:

• run-of-river

• storage (reservoir)

• pumped storage, and

• in-stream technology, which is a young and less-developed technology.

Run-of-River: These plants draw the energy for electricity mainlyfrom the available flow of the river and do not collect significantamounts of stored water. They may include some short-termstorage (hourly, daily), but the generation profile will generally bedictated by local river flow conditions. Because generationdepends on rainfall it may have substantial daily, monthly orseasonal variations, especially when located in small rivers orstreams that with widely varying flows. In a typical plant, aportion of the river water might be diverted to a channel orpipeline (penstock) to convey the water to a hydraulic turbine,which is connected to an electricity generator (see Figure 9.11).RoR projects may form cascades along a river valley, often with areservoir-type hydro power plants in the upper reaches of thevalley. Run-of-river installation is relatively inexpensive andfacilities typically have fewer environmental impacts than similar-sized storage hydropower plants.

9

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figure 9.11: run-of-river hydropower plant

Headrace

DesiltingTank

Forebay

Powerhouse

Stream

Intake

Diversion Weir

Tailrace

Penstock

sourceIPCC 2012: SPECIAL REPORT ON RENEWABLE ENERGY SOURCES AND CLIMATE CHANGE MITIGATION.PREPARED BY WORKING GROUP III OF THE INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE,FIGURE(S).... CAMBRIDGE UNIVERSITY PRESS.


figure 9.12: typical hydropower plant with resevoir

Powerhouse

Dam

Penstock

Tailrace

Switch Yard

reference106 EGRE AND MILEWSKI, 2002

247

Storage Hydropower: Hydropower projects with a reservoir arealso called storage hydropower. The reservoir reduces dependenceon the variability of inflow and the generating stations arelocated at the dam toe or further downstream, connected to thereservoir through tunnels or pipelines. (Figure 9.12). Reservoirsare designed according to the landscape and in many parts of theworld river valleys are inundated to make an artificial lake. Ingeographies with mountain plateaus, high-altitude lakes make upanother kind of reservoir that retains many of the properties ofthe original lake. In these settings, the generating station is oftenconnected to the reservoir lake via tunnels (lake tapping). Forexample, in Scandinavia, natural high-altitude lakes create highpressure systems where the heads may reach over 1,000 m. Astorage power plant may have tunnels coming from severalreservoirs and may also be connected to neighbouring watershedsor rivers. Large hydroelectric power plants with concrete damsand extensive collecting lakes often have very negative effects onthe environment, requiring the flooding of habitable areas.

Pumped storage: Pumped storage plants are not generatingelectricity but are energy storage devices. In such a system, wateris pumped from a lower reservoir into an upper reservoir (Figurebelow 9.13), usually during off-peak hours when electricity ischeap. The flow is reversed to generate electricity during the dailypeak load period or at other times of need. The plant is a netenergy consumer overall, because it uses power to pump water,however the plant provides system benefits by helping to meetfluctuating demand profiles. Pumped storage is the largest-capacityform of grid energy storage now readily available worldwide.

In-stream technology using existing facilities: To optimise existingfacilities like weirs, barrages, canals or falls, small turbines orhydrokinetic turbines can be installed for electricity generation.These basically function like a run-of-river scheme, as shown inFigure 9.14. Hydrokinetic devices are also being developed tocapture energy from tides and currents may also be deployedinland for free-flowing rivers and engineered waterways.

Greenpeace does not support large hydro power stationswhich require large dams and flooding areas, but supportssmall scale run of river power plants.

9

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figure 9.13: typical pumped storage project

Upper Reservoir

Lower Reservoir

Generating

Pumping

Pumped StoragePower Plant


figure 9.14: typical in-stream hydropower project usingexisting facilities

Irrigation Canal

Spillway

Powerhouse

Diversion Canal

Tailrace Channel

Switch Yard


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image MOTUP TASHI, OPERATOR OF THE 30KVA MICRO-HYDRO POWER UNIT ABOVEUDMAROO VILLAGE, NUBRA BLOCK, LADAKH. FOR NINE MONTHS OF THE YEAR, THEMICRO-HYDRO POWER UNIT SUPPLIES 90 HOUSES AND SOME SMALL ENTERPRISESWITH ELECTRICITY.

image LIGHTS ARE TURNED ON AT PUSHPAVATHY’S HOME IN CHEMBU, WITH THEHELP OF THEIR PICO HYDRO UNIT. RESIDENTS OF CHEMBU WITH LAND AND ACCESSTO FLOWING WATER HAVE BEGUN TO INSTALL THEIR OWN PRIVATE PICO-HYDROSYSTEMS TO BRING ELECTRICITY. THIRTY FIVE I KW SYSTEMS HAVE BEENINSTALLED IN THE PANCHAYAT BY NISARGA ENVIRONMENT TECHNOLOGIES.

59

wide range of applications, is still relatively expensive." In the long

term, Greenpeace expects that favorable electricity production

costs will be achieved by using wood gas both in micro CHP units

and in gas-and-steam power plants, and says, "there is [also] great

potential to use solid biomass for heat generation in both small and

large heating centers linked to local heating networks.”48

Hydropower Hydropower has been a mature technology for decades, and sce-

narios like GEA (2012) show stable costs for hydro in the future.

As noted in Chapter 2, the storage inherent in most hydro-

power provides capacity for managing variable renewables on

power grids. Many projections show continued market growth

for all forms of hydro, particularly in developing countries.49

(See Table 4 on page 53 and also Chapter 5 for many country-

VSHFLčF�SURMHFWLRQV��

Many experts foresaw an expanding future role for pumped hydro-

power, particularly as a form of energy storage to balance variable

renewables, including using rapid-reaction turbines and variable-

speed pumps. NREL (2012) notes that: “Pumped-storage hydro-

power is considered a mature technology. However, incremental

LPSURYHPHQWV�LQ�HIčFLHQF\�DUH�SRVVLEOH��DQG�WKH�ĎH[LELOLW\�RI�H[LVW-ing and future plants may be improved using variable-speed drive

WHFKQRORJLHV��2WKHU�SRVVLEOH�GHYHORSPHQWV�LQFOXGH�XVH�RI�VDOWZDWHU�pumped-storage hydro facilities in coastal regions and underground

pumped-storage hydro.” IEA ETP (2012) similarly notes that new

SURMHFWV� RU� UHWURčWV� DUH� LQFRUSRUDWLQJ� YDULDEOH�VSHHG� SXPSV� WKDW�LQFUHDVH� WKH�DELOLW\�RI�SXPSHG�K\GUR� WR�SURYLGH�JULG�ĎH[LELOLW\�RQ�shorter time scales.50

REN21 (2012) shows 130 GW of pumped hydro capacity globally in

2011, more than one-third of this in Europe. REN21 also notes that

Europe plans an additional 27 GW by 2020, that the United States

KDV��*:�XQGHU�SHUPLW��DQG�WKDW�&KLQD�LQFUHDVHG�LWV�čYH�\HDU�SODQ�(2011–2015) target for pumped hydro to 80 GW. IEA ETP (2012)

QRWHV� WKDW�KLVWRULFDOO\��SXPSHG�K\GUR�FRXOG�EH� MXVWLčHG�HFRQRPL-cally by arbitrage in daily electricity price spreads, but that in recent

decades, natural gas has reduced spreads such that, “at present,

energy arbitrage, the traditional driver for investment in pumped

hydro, does not stand up in market conditions.” However, IEA ETP

(2012) also shows pumped hydro levelized energy costs, at about

��FHQWV�N:K�� WR�EH�VLJQLčFDQWO\� OHVV� WKDQ�RWKHU�VWRUDJH�RSWLRQV�

like batteries. GEA (2012) shows pumped hydro costs in the range

of 3–9 cents/kWh.51

Geothermal Geothermal is considered a mature technology. REN21 estimates

current geothermal power costs at 6–11 cents/kWh. Some sce-

narios do show future declines in costs with technology improve-

ments. For example, Greenpeace (2012) shows geothermal power

costs declining from 15 cents/kWh today to 9 cents/kWh by 2050.

Greenpeace says: “[Geothermal electricity] was previously limited

WR� VLWHV� ZLWK� VSHFLčF� JHRORJLFDO� FRQGLWLRQV�� EXW� IXUWKHU� LQWHQVLYH�research and development work has enabled widened potential

sites. In particular the creation of large underground heat exchange

surfaces—Enhanced Geothermal Systems (EGS)—and the improve-

ment of low temperature power conversion, for example with the

2UJDQLF�5DQNLQH�&\FOH��FRXOG�PDNH�LW�SRVVLEOH�WR�SURGXFH�JHRWKHU-mal electricity anywhere. Advanced heat and power cogeneration

plants will also improve the economics of geothermal electricity. As

a large part of the costs for a geothermal power plant come from

deep underground drilling, further development of innovative drill-

ing technology is expected.”52

Ocean Energy 0DUNHW�SURMHFWLRQV�IRU�RFHDQ�HQHUJ\�DUH�GLIčFXOW�EHFDXVH�WKH�WHFK-

nology is still not commercial. By 2011, a handful of projects were

in operation around the world, notably in France and Korea, and the

ocean energy industry appeared poised for full commercial-scale

development. Some experts offered the possibility of future break-

throughs. GEA (2012) shows ocean energy costs of 9–38 cents/

kWh in 2009, depending on the technology, and projects potential

declines in the future to 6–20 cents/kWh for ocean-thermal power

�27(&��ã��FHQWV�N:K�IRU�WLGDO�SRZHU��DQG��ã��FHQWV�N:K�IRU�wave power.53

Greenpeace (2012) sees potential for lower costs in the coming

decades: “The cost of energy from initial tidal and wave energy

farms has been estimated to be in the range of 25–95 US cents/

kWh, and for initial tidal stream farms in the range of 14–28 US

cents/kWh. Generation costs of 8–10 US cents/kWh are expected

by 2030. Key areas for development will include concept design,

RSWLPL]DWLRQ�RI�WKH�GHYLFH�FRQčJXUDWLRQ��UHGXFWLRQ�RI�FDSLWDO�FRVWV�[with] alternative structural materials, economies of scale, and

learning from operation.… In the long term, ocean energy has the

potential to become one of the most competitive and cost effective

forms of generation.”54

06

GFR_Layout_31.indd 59 18.12.12 16:41

Indicators for Economic Comparisons

1. Simple payback time (SPT) = Investment ($) / Annual Savings ($)

2. Cost of conserved energy (CCE) = Investment ($) * CRF / Annual Energy Savings

3. Cost of electricity (COE) – also called “levelized cost”

4. Internal rate of return (IRR)

5. Net present value (NPV)

Investment ($) = capital investment; if for efficiency, then added investment above baseline

CRF = capital recovery factor = annual share of investment amortized over lifetime

“Annual Energy Savings” = how much energy is saved per year, i.e., kWh or liters of petrol

64

02 MARKET AND INDUSTRY TRENDS

TABLE 2. STATUS OF RENEWABLE ENERGY TECHNOLOGIES: CHARACTERISTICS AND COSTS

TECHNOLOGY TYPICAL CHARACTERISTICS CAPITAL COSTS USD / kW

TYPICAL ENERGY COSTS LCOE – U.S. cents / kWh

POWER GENERATION

Bio-power from solid biomass (including co-firing and organic MSW)

Plant size: 1–200 MW Conversion e!ciency: 25–35% Capacity factor: 50–90%

800–4,500 Co-fire: 200–800

4–20 Co-fire: 4.0–12

Bio-power from gasification


2,050–5,500 6–24

Bio-power from anaerobic digestion


Biogas: 500–6,500 Landfill gas: 1,900–2,200

Biogas: 6–19 Landfill gas: 4–6.5

Geothermal power Plant size: 1–100 MW Capacity factor: 60–90%

Condensing flash: 1,900–3800 Binary: 2,250–5,500

Condensing flash: 5–13 Binary: 7–14

Hydropower: Grid-based

Plant size: 1 MW–18,000+ MW Plant type: reservoir, run-of-river Capacity factor: 30–60%

Projects >300 MW: 1,000–2,250 Projects 20–300 MW: 750–2,500 Projects <20 MW: 750–4,000

Projects >20 MW: 2–12 Projects <20 MW: 3–23

Hydropower: O"-grid/rural

Plant size: 0.1–1,000 kW Plant type: run-of-river, hydrokinetic, diurnal storage

1,175–6,000 5–40

Ocean power: Tidal range

Plant size: <1 to >250 MW Capacity factor: 23–29%

5,290–5,870 21–28

Solar PV: Rooftop

Peak capacity: 3–5 kW (residential); 100 kW (commercial); 500 kW (industrial) Capacity factor: 10–25% (fixed tilt)

Residential costs: 2,200 (Germany); 3,500–7,000 (United States); 4,260 (Japan); 2,150 (China); 3,380 (Australia); 2,400–3,000 (Italy) Commercial costs: 3,800 (United States); 2,900–3,800 (Japan)

21–44 (OECD) 28–55 (non-OECD) 16–38 (Europe)

Solar PV: Ground-mounted utility-scale

Peak capacity: 2.5–250 MW Capacity factor: 10–25% (fixed tilt)Conversion e!ciency: 10–30% (high end is CPV)

1,200–1,950 (typical global); as much as 3,800 including Japan. Averages: 2,000 (United States); 1,710 (China); 1,450 (Germany); 1,510 (India)

12–38 (OECD) 9–40 (non-OECD) 14–34 (Europe)

Concentrating solar thermal power (CSP)

Types: parabolic trough, tower, dish Plant size: 50–250 MW (trough); 20–250 MW (tower); 10–100 MW (Fresnel) Capacity factor: 20–40% (no storage); 35–75% (with storage)

Trough, no storage: 4,000–7,300 (OECD); 3,100–4,050 (non-OECD) Trough, 6 hours storage: 7,100–9,800 Tower: 5,600 (United States, without storage) 9,000 (United States, with storage)

Trough and Fresnel: 19–38 (no storage); 17–37 (6 hours storage) Tower: 12.5–16.4 (United States; high end of range is with storage)

Wind: Onshore

Turbine size: 1.5–3.5 MW Capacity factor: 25–40%

925–1,470 (China and India) 1,500–1,950 (elsewhere)

4–16 (OECD) 4–16 (non-OECD)

Wind: O"shore

Turbine size: 1.5–7.5 MW Capacity factor: 35–45%

4,500–5,500 15–23

Wind: Small-scale

Turbine size: up to 100 kW Average 6,040 (United States); 1,900 (China)

15–20 (United States)

TECHNOLOGY TYPICAL CHARACTERISTICS

INSTALLED COSTS OR LCOE USD / kW or U.S. cents / kWh

DISTRIBUTED RENEWABLE ENERGY IN DEVELOPING COUNTRIES

Biogas digester Digester size: 6–8 m3 Unit cost: USD 612 / unit (Asia); USD 886 / unit (Africa)

Biomass gasifier Size: 20–5,000 kW LCOE: 8–12

Solar home system System size: 20–100 W LCOE: 160–200

Household wind turbine

Turbine size: 0.1–3 kW Capital cost: 10,000 / kW (1 kW turbine); 5,000 / kW (5 kW); 2,500 / kW (250 kW) LCOE: 15–35+

Village-scale mini-grid System size: 10–1,000 kW LCOE: 25–100

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ASSESSING THE COSTS OF ELECTRICITY 311

TABLE 2 Cost components for various current electricity technologiesa

Overnight Variable Heat ratecosts in 2003 Fixed O&M O&M ($2002 in 2003

Technology ($2002/kW)b ($2002/kW)c mills/kWh)c (MJ/kWh)d

Scrubbed coal new technology 1,168 24.81 3.1 9.5

Integrated coal-gasification 1,383 34.11 2.07 8.4combined cycle (IGCC)

IGCC with carbon sequestration 2,088 40.47 2.53 10.1

Conventional gas/oil 542 12.4 2.07 7.9combined cycle

Advanced gas/oil combined 615 10.34 2.07 7.3cycle (ADVCC)

ADVCC with carbon 1,088 14.93 2.58 9.1sequestration

Conventional combustion turbine 413 10.34 4.14 11.5

Advanced combustion turbine 466 8.27 3.1 9.8

Fuel cells 2,162 7.23 20.67 7.9

Advanced nuclear 1,928 59.17 0.43 11.0

Distributed generation, base 813 13.95 6.2 9.9

Distributed generation, peak 977 13.95 6.2 11.0

Biomass 1,731 46.47 2.96 9.4

Municipal solid waste 1,477 99.57 0.01 14.4landfill gas

Geothermale,f 2,203 79.28 0 39.3

Wind 1,015 26.41 0 10.9

Solar thermalf 2,916 49.48 0 10.9

Solar photovoltaicf 4,401 10.08 0 10.9

aValues in this table are from Reference 5, table 38, p.71. They are not based on any specific technology, but rather are meantto represent the cost and performance of typical plants under normal operating conditions for each plant type. Key sourcesreviewed are listed on p. 86.bCosts reflect market status and penetration as of 2002.cO&M represents operation and maintenance.dConversion factor applied: 1 Btu = 1,055.87 J (5).eBecause geothermal cost and performance characteristics are specific for each site, the table entries represent the cost ofthe least expensive plant that could be built in the Northwest Power Pool region, where most of the proposed sites arelocated.fCapital costs for geothermal and solar technologies are net of (reduced by) the 10% investment tax credit.

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But…. Direct Cost-of-Electricity Comparisons Are Not “Fair”!

Renewables more competitive considering subsidies, external costs and fuel-price risk

• Subsidies: to competing fuels or technologies, or from one type of customer to another

o Subsidies to fossil fuels worldwide estimated at $150 billion/year (UNEP 2004)

o Subsidies to nuclear power in OECD countries estimated at $16 billion/year (UNEP 2004). Also government reactor accident insurance (indemnity) and waste disposal are forms of subsidies (1-3 cents/kWh?).

o Military costs of protecting oil supplies and shipping routes?

• External costs:

o Damages to human health, agriculture, fisheries, ecosystems, and infrastructure.

o EC (2003) estimates external cost of coal power generation at 2-15 eurocents/kWh

o Costs of nuclear waste disposal and risk of radioactive contamination of ground water over next 10,000 years?

o Costs of climate change are potentially huge – how to value? (“Avoidance costs”?)

• What is the Cost of Future Fossil-Fuel Price Risk?

o Can estimate from market-based hedging costs – futures, swaps, options

o California in 2004: added 0.5 cents/kWh for natural-gas hedging cost

o Long-term physical storage costs

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Figure 12 Electricity costs.

Annu. Rev. Environ. Resourc. 2004.29:301-344. Downloaded from arjournals.annualreviews.orgby University of Tokyo on 02/17/09. For personal use only.

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Figure 2 Cost of conserved energy for different end uses in the residential and commercial sectors (8).

Annu. Rev. Environ. Resourc. 2004.29:301-344. Downloaded from arjournals.annualreviews.orgby University of Tokyo on 02/17/09. For personal use only.

Distributed Energy Technologies

• Distributed renewables (micro-hydro, solar PV, wind, small-scale biomass power)

• Gas turbines and micro-turbines • Reciprocating (internal combustion) engines and generators (i.e. diesel generators) • Distributed energy storage (stationary flow batteries, other batteries, electric vehicles)

• Fuel cells (PEM, SOFC, MCFC) • Smart metering (time-of-use metering, inverted block rates, real-time prices) • Net billing (“ratcheted” meters) and net metering

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image THE MARANCHON WIND TURBINE FARM INGUADALAJARA, SPAIN IS THE LARGEST IN EUROPEWITH 104 GENERATORS, WHICH COLLECTIVELYPRODUCE 208 MEGAWATTS OF ELECTRICITY,ENOUGH POWER FOR 590,000 PEOPLE, ANUALLY.

Step 2: the renewable energy [r]evolution Decentralised energy andlarge scale renewables In order to achieve higher fuel efficienciesand reduce distribution losses, the Energy [R]evolution scenariomakes extensive use of Decentralised Energy (DE).This termsrefers to energy generated at or near the point of use.

Decentralised energy is connected to a local distribution networksystem, supplying homes and offices, rather than the high voltagetransmission system. Because electricity generation is closer toconsumers any waste heat from combustion processes can to bepiped to nearby buildings, a system known as cogeneration orcombined heat and power. This means that for a fuel like gas, allthe input energy is used, not just a fraction as with traditionalcentralised fossil fuel electricity plant.

Decentralised energy also includes stand-alone systems entirelyseparate from the public networks, for example heat pumps, solarthermal panels or biomass heating. These can all becommercialised for domestic users to provide sustainable, lowemission heating. Some consider decentralised energytechnologies ‘disruptive’ because they do not fit the existingelectricity market and system. However, with appropriate changesthey can grow exponentially with overall benefit anddiversification for the energy sector.

A huge proportion of global energy in 2050 will be produced bydecentralised energy sources, although large scale renewableenergy supply will still be needed for an energy revolution. Largeoffshore wind farms and concentrating solar power (CSP) plantsin the sunbelt regions of the world will therefore have animportant role to play.

Cogeneration (CHP) The increased use of combined heat andpower generation (CHP) will improve the supply system’s energyconversion efficiency, whether using natural gas or biomass. Inthe longer term, a decreasing demand for heat and the largepotential for producing heat directly from renewable energysources will limit the need for further expansion of CHP.

Renewable electricity The electricity sector will be the pioneer ofrenewable energy utilisation. Many renewable electricitytechnologies have been experiencing steady growth over the past 20to 30 years of up to 35% annually and are expected to consolidateat a high level between 2030 and 2050. By 2050, under theEnergy [R]evolution scenario, the majority of electricity will beproduced from renewable energy sources. The anticipated growth ofelectricity use in transport will further promote the effective use ofrenewable power generation technologies.

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1. PHOTOVOLTAIC, SOLAR FAÇADES WILL BE A DECORATIVE ELEMENT ONOFFICE AND APARTMENT BUILDINGS. PHOTOVOLTAIC SYSTEMS WILLBECOME MORE COMPETITIVE AND IMPROVED DESIGN WILL ENABLEARCHITECTS TO USE THEM MORE WIDELY.

2. RENOVATION CAN CUT ENERGY CONSUMPTION OF OLD BUILDINGS BY ASMUCH AS 80% - WITH IMPROVED HEAT INSULATION, INSULATEDWINDOWS AND MODERN VENTILATION SYSTEMS.

3. SOLAR THERMAL COLLECTORS PRODUCE HOT WATER FOR BOTH THEIROWN AND NEIGHBOURING BUILDINGS.

4. EFFICIENT THERMAL POWER (CHP) STATIONS WILL COME IN A VARIETY OF SIZES - FITTING THE CELLAR OF A DETACHED HOUSE ORSUPPLYING WHOLE BUILDING COMPLEXES OR APARTMENT BLOCKS WITHPOWER AND WARMTH WITHOUT LOSSES IN TRANSMISSION.

5. CLEAN ELECTRICITY FOR THE CITIES WILL ALSO COME FROM FARTHERAFIELD. OFFSHORE WIND PARKS AND SOLAR POWER STATIONS INDESERTS HAVE ENORMOUS POTENTIAL.

city

figure 2.2: a decentralised energy future

EXISTING TECHNOLOGIES, APPLIED IN A DECENTRALISED WAY AND COMBINED WITH EFFICIENCY MEASURES AND ZERO EMISSION DEVELOPMENTS, CANDELIVER LOW CARBON COMMUNITIES AS ILLUSTRATED HERE. POWER IS GENERATED USING EFFICIENT COGENERATION TECHNOLOGIES PRODUCING BOTH HEAT(AND SOMETIMES COOLING) PLUS ELECTRICITY, DISTRIBUTED VIA LOCAL NETWORKS. THIS SUPPLEMENTS THE ENERGY PRODUCED FROM BUILDINGINTEGRATED GENERATION. ENERGY SOLUTIONS COME FROM LOCAL OPPORTUNITIES AT BOTH A SMALL AND COMMUNITY SCALE. THE TOWN SHOWN HERE MAKESUSE OF – AMONG OTHERS – WIND, BIOMASS AND HYDRO RESOURCES. NATURAL GAS, WHERE NEEDED, CAN BE DEPLOYED IN A HIGHLY EFFICIENT MANNER.

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image A WORKER ASSEMBLES WIND TURBINE ROTORSAT GANSU JINFENG WIND POWER EQUIPMENT CO. LTD.IN JIUQUAN, GANSU PROVINCE, CHINA.

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figure 2.3: the smart-grid vision for the energy [r]evolution

A VISION FOR THE FUTURE – A NETWORK OF INTEGRATED MICROGRIDS THAT CAN MONITOR AND HEAL ITSELF.

PROCESSORSEXECUTE SPECIAL PROTECTIONSCHEMES IN MICROSECONDS

SENSORS (ON ‘STANDBY’)– DETECT FLUCTUATIONS ANDDISTURBANCES, AND CAN SIGNALFOR AREAS TO BE ISOLATED

SENSORS (‘ACTIVATED’)– DETECT FLUCTUATIONS ANDDISTURBANCES, AND CAN SIGNALFOR AREAS TO BE ISOLATED

SMART APPLIANCESCAN SHUT OFF IN RESPONSE TO FREQUENCY FLUCTUATIONS

DEMAND MANAGEMENTUSE CAN BE SHIFTED TO OFF-PEAKTIMES TO SAVE MONEY

GENERATORSENERGY FROM SMALL GENERATORSAND SOLAR PANELS CAN REDUCEOVERALL DEMAND ON THE GRID

STORAGE ENERGY GENERATED ATOFF-PEAK TIMES COULD BE STOREDIN BATTERIES FOR LATER USE

DISTURBANCE IN THE GRID

CENTRAL POWER PLANT

OFFICES WITHSOLAR PANELS

WIND FARM

ISOLATED MICROGRID

SMART HOMES

INDUSTRIAL PLANT

Demand'Response'Program'Types'INCENTIVES(BASED,PROGRAMS, TIME(BASED,PROGRAMS,

Demand'bidding'and'Buyback' Critical'Peak'Pricing'with'Control'

Direct'Load'Control' Critical'Peak'Pricing'Emergency'DR' Peak'Time'Rebate'Interruptible'Load' Real?Time'Pricing'Load'as'Capacity'Resource' Time?of?use'Pricing'

Non?Spinning'Reserves' System'Peak'Response'Transmission'Tariff'

Regulation'Service'Spinning'Reserves'

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The following table, extracted from REstore.eu “Services for Businesses,” viewed 14 November 2013, also helps to get a first idea of what industries can usually enroll in DR programs and the loads they can reduce.

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Response Periods Due to the complexities of large, custom built-up refrigeration systems, primarily related to safety-of-life and refrigerant management, many facilities will not be able to manage a full system shutdown for DR when there is less than a 30 minute notification. This is due to the time it takes to stage down and pump out evaporators in a safe, orderly fashion. The few exceptions would be facilities with split systems or a small rack system. Large facilities with evaporator fan variable speed drives could respond in less than 30 minutes by clamping fan speeds, though this only reduces a fraction of the total load. Most facilities have curtailable loads that require different amounts of advance notification. Certain actions could have very short (four minute or less) response times, such as adjusting lighting levels or evaporator fan speeds. Other actions would require more lead time. CONCLUSIONS: While the landscape of industrial refrigerated facility controls is as varied as the types of facilities and refrigeration systems, the majority of the facilities have integrated control systems that can be upgraded and expanded to implement DR activities. Today, facilities with a priority on energy efficiency and cost management, as well as facilities with large ammonia central plant systems are likely to have integrated control systems. Control technologies installed for energy efficiency and load management purposes can often be adapted for Auto-DR protocol at reduced incremental cost. Beyond the technical challenging aspects of DR, efforts to increase participation in DR programs may include, improved marketing and recruitment of potential DR sites, and better alignment and emphasis on financial benefits of participation. Examples of Concrete Implementation Algoma Orchards, Newcastle, Ontario (Canada): Business Apple and cider production. DR program Ontario Power Authority DR3 Program. Facility An apple cider facility processing thousands of gallons of cider and apple juice for

wholesale customers. The facility is 115,000-s.f., houses a fresh packing production line, juicing operation, and offices, and operates year-round. It was constructed in 2009 and includes state-of-the-art equipment and a high degree of automation.

Strategy and loads controlled Curtailment and backup generation. Temporarily shuts down large refrigeration units used to chill fresh apples. Once the pulp is cool, the refrigeration system can be shut off for a few hours.

Capacity enrolled 400 kW. Dispatch notification & duration, and response period

Response period: Within minutes, personnel can shut down the necessary equipment.

Direct financial incentive $20,000 Annual payments. Source EnerNOC Case Study, “Algoma Orchards Picks EnerNOC for Demand Response:

Innovative commercial orchard earns payments while supporting its community and Province,” 2011.

Mission Produce, Oxnard (California): Business Global packer, importer, processor, and distributor of avocados and asparagus. DR program EnerNOC DR in SCE, from 11:00 a.m. to 7:00 p.m. weekdays year-round. Facility Cold storage facility. Strategy and loads controlled Curtailment. Optimization of the following loads: Cold room evaporators with VFDs.

condensers with VFDs. Freon refrigeration compressors (sequencing & staging). Hydro-coolers. Ripening rooms. Battery chargers. Lights.

Capacity enrolled 500 kW.

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households in Southeastern Pennsylvania. Jointly owned by two Pennsylvania municipal water authorities— North Penn and North Wales.

DR program EnerNOC DemandSMART - PJM Emergency Load Response and EnerNOC DemandSMART - PJM Synchronized Reserves programs.

Facility Includes a water treatment plant, a pumping station, and other facilities. Strategy and loads controlled Curtailment and backup generation. Temporary remote activation of on-site backup

generation and shutdown of pump station during emergency events. Shutdown of pump station during synchronized reserves events.

Capacity enrolled Emergency events: Almost 4 MW; 2.4 MW by starting up two diesel backup generators at the water treatment facility, and 1.5 MW by temporarily shutting down the pumping station. Synchronized reserves events: ~1.5 MW.

Dispatch notification & duration, and response period

Emergency events dispatch duration: 4-6 hours emergency events. Synchronized reserves events dispatch duration: 10-30 minutes.

Direct financial incentive $200,000 Annual payments. Source EnerNOC Case Study, “Forest Park Water Turns Expiring Rate Caps Into New

Savings With EnerNOC: Innovative water authority relies on EnerNOC to trim energy bills and earn payments,” 2010.

Eastern Municipal Water District, (California): Business Largest water providers in southern California—serving a population of more than

630,000 in a 555 square-mile area. DR program EnerNOC DR in SCE. Facility Hemet Water Filtration Plant and Perris Water Filtration Plant. Strategy and loads controlled Curtailment. Shuts down major electricity-using equipment (e.g., pumps)

temporarily. The equipment can be run at lower levels or shut down completely depending on the needs. This operation is done manually. Water stored in tanks, water coming in via pipeline, and redundant sources, such as wells compensate.

Capacity enrolled 1.5 MW. Dispatch notification & duration, and response period

Dispatch notification: 30 minutes. Dispatch duration: a couple of hours.

Direct financial incentive $100,000 Annual payments. Source EnerNOC Case Study, “Eastern Municipal Water District Works with EnerNOC to

Reduce Significant Electrical Load: Major Southern California water agency issues a strong call to action to other agencies across the U.S.,” 2008.

Southeast Water Pollution Control Plant, San Francisco (California) [TEST]: Business Large facility that treats both wastewater and stormwater in a moderate climate. DR program No. Facility There are 5 major drainage basins that feed the plant: 4 of which have major

pumping stations to transport water to Southeast, and 1 whose flow reach Southeast via gravity or minor pumping stations. The plant was designed for a dry-weather capacity of 85 million gallons per day (MGD) daily average, and 142 MGD peak-hour flow. In wet weather (October-March) additional equipment is brought online to raise the plant’s capacity to 250 MGD: 150 million gallons of which goes through primary, secondary, and disinfection treatment before discharge, and 100 million gallons of which is discharged after only primary treatment and disinfection. Wastewater treatment has 6 main stages at this plant: pretreatment, primary treatment, secondary treatment, disinfection, digestion, and solids stabilization. Equipment: the plant has 4 lift pumps which are operated with variable frequency drives (VFDs), they raise wastewater from the sewer system to the plant. The plant’s 6 centrifuges dewater digester sludge as the final step in producing “class B” biosolids. The plant also has on-site generation in the form of a turbo-charged internal combustion cogeneration unit fueled by digester gas, rated at 2 MW, and a

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image GREENPEACE OPENS A SOLAR ENERGYWORKSHOP IN BOMA. A MOBILE PHONE GETSCHARGED BY A SOLAR ENERGY POWERED CHARGER.

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figure 2.4: a typical load curve throughout europe, shows electricity use peaking and falling on a daily basis

Time (hours/days)

Load

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DEMAND

Current supply system

• Low shares of fluctuating renewable energy

• The ‘base load’ power is a solid bar at the bottom of the graph.

• Renewable energy forms a ‘variable’ layer because sun and windlevels changes throughout the day.

• Gas and hydro power which can be switched on and off inresponse to demand. This is sustainable using weatherforecasting and clever grid management.

• With this arrangement there is room for about 25 percentvariable renewable energy.

To combat climate change much more than 25 percent renewableelectricity is needed.

Time of day (hour)

0h 6h 12h 18h 24h

GW

LOAD CURVE

‘FLEXIBLE POWER’.GRID OPERATORCOMBINES GAS & HYDRO

FLUCTUATING RE POWER

BASELOAD

Supply system with more than 25 percent fluctuating renewableenergy > base load priority

• This approach adds renewable energy but gives priority to base load.

• As renewable energy supplies grow they will exceed the demandat some times of the day, creating surplus power.

• To a point, this can be overcome by storing power, movingpower between areas, shifting demand during the day orshutting down the renewable generators at peak times.

Does not work when renewables exceed 50 percent of the mix, andcan not provide renewable energy as 90- 100% of the mix. Time of day (hour)

0h 6h 12h 18h 24h

GW

LOAD CURVE

SURPLUS RE - SEE FOLLOWINGOPTIONS

BASELOADPRIORITY: NOCURTAILMENTOF COAL ORNUCLEAR POWER

BASELOAD

figure 2.5: the evolving approach to grids

WORLD ENERGY [R]EVOLUTIONA SUSTAINABLE WORLD ENERGY OUTLOOK

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One of the key conclusions from Greenpeace research is that inthe coming decades, traditional power plants will have less andless space to run in baseload mode. With increasing penetrationof variable generation from wind and photovoltaic in theelectricity grid, the remaining part of the system will have to runin more ‘load following’ mode, filling the immediate gap betweendemand and production. This means the economics of base loadplants like nuclear and coal will change fundamentally as morevariable generation is introduced to the electricity grid.

Supply system with more than 25 percent fluctuating renewableenergy – renewable energy priority

• This approach adds renewables but gives priority to clean energy.

• If renewable energy is given priority to the grid, it “cuts into”the base load power.

• Theoretically, nuclear and coal need to run at reduced capacity orbe entirely turned off in peak supply times (very sunny or windy).

• There are technical and safety limitations to the speed, scaleand frequency of changes in power output for nuclear and coal-CCS plants.

Technically difficult, not a solution. Time of day (hour)

0h 6h 12h 18h 24h

GW

LOAD CURVE

RE PRIORITY:CURTAILMENT OFBASELOAD POWER- TECHNICALLYDIFFICULT IF NOTIMPOSSIBLE

The solution: an optimised system with over 90% renewable energy supply

• A fully optimised grid, where 100 percent renewables operatewith storage, transmission of electricity to other regions, demandmanagement and curtailment only when required.

• Demand management effectively moves the highest peak and‘flattens out’ the curve of electricity use over a day.

Works!

Time of day (hour)

0h 6h 12h 18h 24h

GW

LOAD CURVE WITH NO DSM

LOAD CURVE WITH(OPTION 1 & 2)

RE POWERIMPORTED FROMOTHER REGIONS &RE POWER FROMSTORAGE PLANTS

SUPPLY - WIND + SOLAR

SOLAR

WIND

BIOENERGY, HYDRO & GEOTHERMAL

figure 2.5: the evolving approach to grids continued

Clean Coal • Flue-gas desulfurization (FGD)

• High-efficiency electrostatic precipitators • Low-NOx burners • Retirement of smaller, less efficient power plants • Circulating fluidized bed (CFB) boilers • Coal supercritical power plants • Coal gasification – large-scale (400 MW) IGCC and polygeneration (CCS possible) • Coal gasification – small-scale (25 MW) including “co-gasifcation” with biomass • Coal-to-liquids (CCS possible) CCS = carbon capture and storage

%NGCP�%QCN�2QYGT

Schematic Diagram of IGCC

CoalFeed

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Air Compressor

S/TG/T

O2

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Syngas

N2

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GypsumRecovery

Gas clean up(cold)Air-blown Gasifier

Combined Cycle SystemAir Separation Unit

GasifierDry

Combuster

Figure does not show all policy types in use. Countries considered when at least one national or sub-national policy is in place.2010 2011 2012 2014

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Figure 28. Number of Countries with Renewable Energy Policies, by Type, 2010–Early 2014

FITTenderingRPS/QuotaNet Metering

Heat Obligation

Biofuel BlendMandate

Power Policies

TransportPolicies

Heating and Cooling Policies

Figure does not show all policy types in use. Countries considered when at least one national or sub-national policy is in place.

Renewable Energy Promotion Policies for Electric Power Sector (Top 10)

• Feed-in tariffs (differentiated by technology, for typically 10-20 years)

• Renewable portfolio standard (binding minimum requirement on utility by future year)

• Energy production payments/ tax credits (i.e., U.S. Production Tax Credit, PTC)

• Public competitive bidding (including the defunct NFFO in the UK)

• Net metering

• Capital subsidies, grants, or rebates

• Investment tax credits

• Public-source loans, investment, or financing (including “public benefit funds”)

• Transmission or “wheeling” policies that don’t discriminate against renewables

• Targets or goals for future share of electricity generation from renewables

Biofuels Policies and Other Transport-Sector Policies

• Biofuels blending mandates (ethanol blended w/gasoline and biodiesel blended w/diesel)

• Policy goals/targets for share of transportation energy from renewables

o EU target of 10% of transport energy by 2020, including biofuels & electric vehicles

o Individual EU country targets, typical is 5.75% of transport energy by 2010

• Gasoline taxes (or exemptions, i.e., for biofuels)

• Biofuels production subsidies

• Energy-efficiency standards for vehicles, either by vehicle type or by manufacturer

o CAFE (corporate average fuel efficiency) standards in the U.S.

• Rebates, tax credits for purchasing hybrid or electric vehicles

• Tax preferences for “flex-fuel” vehicles that run on both gasoline and pure (E85) ethanol

• Electric vehicle recharging infrastructure development

• Public transit development, city-center vehicle restrictions, carpool lanes

• High-occupancy vehicle lanes (HOV) open to hybrid or electric vehicles

• Tax credits for research and development

• Mandates (on auto makers) for future levels/shares of zero- or low-emissions vehicles

Building-Sector Policies: Solar Hot Water and Efficient Construction

• Mandatory solar hot water in new construction

o Now exists in Spain: 30-70% of hot water energy needs

o Also exists in Israel; China considering

• German Renewable Energy Heating Law

o All new residential buildings should obtain at least 14% of household heating and

hot water energy from renewables (starting in 2009)

o Existing buildings to be retrofitted to obtain at least 10% of heat/hot water

• Subsidies, tax credits, grants for solar hot water, biomass, and geothermal heat

• Residential and commercial building codes (specify materials or specify performance)

• Mortgage-based or retrofit consumer loans for building efficiency retrofits

• Efficiency standards for building equipment (HVAC), lights, motors, etc.

• Tax incentives and architect/engineer training/promotion for passive solar design

Power Plant Emissions Policies

• Emissions standards (i.e., grams SO2 per kWh)

• Emissions limits (caps) (i.e., tons of SO2 emissions per year)

• Emissions fees/taxes (i.e., $/ton of SO2, either on total emissions or excess above a limit)

• Emissions limits plus trading rules (“cap and trade”) – typically for SO2

• Emissions “set-asides” (i.e., permits for SO2 emissions set aside and given to renewables)

• Emissions technology performance standards (i.e., 99% efficient electrostatic precipitator)

These policies may affect fuel switching from coal to natural gas, but renewables?

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