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RSS FeedCharting a New Energy Future
Worldwatch Live Online Discussion
Janet Sawin: Senior Researcher
February 14, 2003 - 1:00pm EDT
Renewable energy technologies have the potential to meet
world energy demand many times over and are now ready for
use on a large scale. In State of the World 2003, Charting
a New Energy Future, Worldwatch Research Associate Janet
Sawin explains how a transition from today’s mix of
fossil fuels, nuclear, and big hydropower to renewables (including
wind and solar power), will significantly reduce the threats
that today’s fuel sources pose to the environment,
public health and welfare, and international political stability.
Join the author of Charting a New Energy Future to discuss
findings from her chapter in the Worldwatch Institute's award-winning
report, and the solutions available right now to put the
world’s economy on a more sustainable path.
Steve Conklin, Worldwatch Institute: Welcome once again to the Worldwatch Institute's State of the World chat series. Today we are joined by Worldwatch Senior Researcher Janet Sawin. Janet will be answering questions on her State of the World Chapter: Charting a New Energy Future. Welcome, Janet.
Janet Sawin: Thanks, Steve. It's good to be here.
Washington DC: Isn't it true that renewable energy is still just too expensive to succeed? If so, why should we pursue policies that amount to subsidies for what may be immature technologies?
Janet Sawin: First, wind energy in good sites is now cost competitive with most conventional forms of electricity generation. In many instances, wind energy is the cheapest option on a per kilowatt-hour basis. And the costs of other renewables are declining rapidly as well due to technological advancement and increased economies of scale. For example, the costs of solar photovoltaics (PVs), which produce electricity from sunlight, have declined by an average 5 percent per year since the mid-1970s, and they are now the cheapest option for generating electricity in many remote or off-grid locations. Renewables are already succeeding around the world, and wind energy and solar PVs are the fastest growing energy sources worldwide.
Second, there are many reasons for providing subsidies for renewable energy technologies. I’ll name just a few. Market compensation, or subsidies, for renewables just begin to account for the environmental, social and security costs of conventional energy that are not incorporated into their price. Nuclear power and fossil fuels have been subsidized for decades, and continue to receive the lion’s share of government subsidies, creating an uneven playing field for renewable energy. So, subsidies can begin to make the marketplace more “fair” for renewables. Third, renewable energy offers many advantages – from improved health, to reduced pollution and risk of climate change, to a reduction in our reliance on imported oil. Renewables also provide more jobs per unit of energy produced and per dollar spent, and many of these jobs are high-wage and in areas that are rural and economically depressed.
Washington DC: Why did you highlight Germany in your discussion of renewable energy?
Janet Sawin: I highlighted Germany in my State of the World chapter because in the space of a decade, Germany has transformed from a country that had little renewable energy capacity or experience, to a world leader in renewable energy. Germany’s experience provides proof that renewable energy can play a significant role and can provide the energy needed to fuel an industrialized society – Germany is the world’s third largest economy and now gets 4.5 % of its electricity from the wind. Germany’s experience also provides lessons regarding the types of policies that can be most effective in advancing renewable energy technologies. Germany has focused on creating a market for renewable energy, by opening the electric grid and establishing standard prices, setting technology standards, establishing low-interest loans and tax credits so that almost anyone in Germany can invest in renewable energy, and a number of other policies (highlighted in my chapter) which have been enacted on a consistent basis. This combination of policies has helped to remove barriers to renewable energy, and has attracted investment to these technologies and enabled the scale-up in production and experience needed to bring down their costs.
Germany now ranks first in the world for wind energy use, having surpassed the United States in 1997, and second (after Japan) in solar PV use, surpassing the U.S. in 2001. Germany’s renewable energy industry is worth billions of dollars and has created tens of thousands of new jobs since the early 1990s.
Minneapolis MN: Why does research on renewable energy needs seldom, if ever, focus on the amount of fuelwood used for household cooking - and ways to substitute renewable energy for that needed activity?
Janet Sawin: There has been significant work done on improving solar cookstoves and developing biogas technologies for cooking, particularly for use in the developing world, to replace direct burning of biomass.
Aberdeen, MD: What kind of economic incentives are in place to help ease the transition into renewable energy sources?
Janet Sawin: Most of the incentives in the United States are at the state level, and those vary from state to state. At the U.S. federal level, the most significant incentive is a production tax credit for wind generated electricity that was first available in 1994. The credit has expired several times, however, only to be extended retroactively, which tends to cause a lot of uncertainty and boom and bust in the market. Around the U.S., incentives range from investment and production tax credits, to rebates (a refund of part of the purchase price), to production payments – for example, California pays a certain amount per kilowatt hour for electricity production by renewable energy; this is funded through a small per kilowatt hour charge on electricity consumers. In addition, many states have enacted a Renewables Portfolio Standard, which mandates that a certain amount of capacity or generation must come from renewables, thereby creating a market for these technologies.
Many other countries have adopted grid access and standard pricing laws (also called feed-in laws), which guarantee access to the electricity grid and a set price for renewably generated electricity. This type of law has been very successful in driving markets for renewable energy and creating a broad base of support for these technologies. Other options that are very effective are long-term, low interest loans, which reduce the risks and the up-front costs of investing in renewable energy.
Kaktovik: I should perhaps first state that I am a licensed energy auditor in Alaska, for years was on an energy advisory committee for Juneau, Alaska, for which I pushed for conservation and renewable sources (we now have one of the best hydropower systems in the nation), have developed energy conservation school materials, and was a board member of an Alaska institute that advocated for renewable energy development, for which we strongly pushed for hydrogen fuel development back in the early 1990's. That background is perhaps necessary as a foundation for my question. I currently am teaching in the only community within the 1002 area of ANWR, the focus of much national debate regarding oil development. I know that if ANWR were fully developed and that if the largest expected amounts of oil were found and sent down our pipeline to Valdez and the world, this would be an insignificant amount of oil for the nation or planet. I feel quite certain, now that I have lived here and have come to know the people of Kaktovik, that they would do all in their power to diminsh environmental harm if oil development were to take place, and that they would likely be fairly successful, though of course, there are still reasonable concerns regarding the calving grounds of the Porcupine Caribou Herd, and regarding denning activity of polar bears, and other reasonable environmental concerns as well. (We had a large male polar bear near our home two night ago, and had about 100 bears within 5 miles of the village a couple of months ago! The people here love the bears, and voice strong concern for their protection.) The people of Kaktovik have been very poor until only recently. Right now a water and sewer project is being completed, to replace chipping ice from a lake for drinking water and hauling 5-gallon buckets from homes to dispose of human excrement. The need, of course, is to establish a sustainable economic system here, which, of course oil can't provide. But the oil wealth could help to establish the necessary components for creating a sustainable community. Much of the success of the existing industrialized countries is in many ways a consequence of having cheap energy for a certain amount of time, and now these countries have the where-with-all to make a transition to renewable energies, including an educated electorate, a scientific and engineering infrastructure, etc., that are necessary for establishing modern, high-quality, sustainable systems. Yes, the people here have sustained themselves for millenia with whales, which they still hunt (we got 3 this year), caribou, etc., but no one wants to give up health clinics, education, water + sewer services, and other modern comforts and improvements. Of course, the issues are more complex than the simple aspects I state here, but my question is, "What do I say to my students and to my friends in Kaktovik, when I know that in the big picture, ANWR makes no sense, but in the local picture, it has the potential to provide a transition into the modern world? How can I tell people who grew up in semi-subterranean sod houses and suffered terrible times of starvation, disease, and other deprivations, that now that it is their turn to consider selling some of their fossil resources so that they can rise up out of poverty, they should take the moral high ground and say no?"
Janet Sawin: You’re correct in saying that the oil reserves in the Arctic National Wildlife Refuge would do little to nothing to increase our energy security. The U.S. has about 3 % of the world’s oil resources and consumes about 25% of them. The relatively small amount of oil in ANWR would do little to quench our thirst and would have no impact on global oil prices.
The issue of people’s desire to develop, to finance schools, hospitals, etc. is an important and difficult one, and I can imagine that there’s a great deal of controversy over this in parts of Alaska. To answer your question, I guess there are two main points that you could make. The first is that Alaska has significant renewable energy potential, and development of these resources could bring economic development, investment, jobs, etc. as well. And these would be for the long term. And second, while the oil in ANWR might play a relatively small role overall, the burning of fossil fuels such as oil is causing global warming, which is already creating changes in climate around the world. It is those regions closest to the poles – including Alaska – that will see some of the most significant and early impacts. Indeed, many scientists believe they have already begun. And such changes can have both economic and cultural impacts on indigenous people who depend so much on the climate.
Lansing, Michigan: Janet: Thank you for participating in the on-line discussion. Michigan PSC Staff are currently working on an annual report to our Commissioners about the Michigan Renewables Energy Program. This group (MREP) has been up and running for a year now (see:
Janet Sawin: I know that this is a bad time, economically, for most U.S. states. But I believe that investments in renewable energy could help to improve the economic situation in most if not all parts of the country. Not only do renewable technologies provide needed energy without the health, environmental and other costs of conventional nuclear or fossil fuel energy, but they provide a number of other benefits as well. Most significantly, with regard to your question, they help to stimulate local economies by attracting investment and tourist money, and they create employment. Germany alone now has about 40,000 jobs in its wind industry, and many of those were added over the past 1-2 years. The U.S. has more renewable energy resources that almost any other country on earth, so we have a lot of potential for developing these resources and the technologies.
Your question regarding getting the biggest bang for the smallest amount of money is one that might be better answered off line. It’s difficult to get into detail in this sort of format.
In general, however, production incentives are generally preferable to investment incentives (except in the case of technologies such as PVs, which are still relatively expensive) as they encourage the desired outcome – energy production. In addition, rebates and payments are preferable to tax credits because they benefit people of all income levels and result in more even growth over time. Above I mentioned one of California’s policies – the production payment funding through a systems benefit fund. That might be a good option for Michigan as well. Let me also mention that consistency is essential and appears to be cheaper as well. You might want to take a look at my chapter in State of the World, where I go into more detail about various policy types and their effectiveness.
Bellville, Western Province, South Africa: In South Africa our main grid electrical supplier is ESKOM, a parastatal organisation. They continuously brag about producing the cheapest electricy in the world from coal. Their interest in renewable energy is but window dressing. They are at the moment developing a pebble bed nuclear reactor, as a future energy solution. I would like to hear your comments on this. For the record, I am doing research on nanomaterials for use in PV technology, and can see a huge application for solar in Southern Africa, if we can convince ESKOM.
Janet Sawin: First, despite what it might cost Eskom to generate electricity with coal, and consumers to purchase the electricity, coal is not cheap. There are significant “external” costs associated with the burning of coal, from the environmental and health costs associated with mining it, to the pollutants released when it is burned. Coal has more carbon than other fossil fuels, so plays a major role in increasing the threat of global climate change. The impacts of climate change could be significant and costly, for South Africa as well as the rest of the world. In fact, the number of weather-related disasters worldwide has doubled during the past decade alone, and many scientists link this increase to rising global temperatures. This trend will likely worsen as the level of CO2 in the atmosphere rises. More immediate consequences range from smog to acid rain, to asthma. The European Union did a 10-year study that concluded that the measurable health and environmental costs resulting from coal amounted to 2-15 cents per kilowatt hour, depending on the technology and coal used.
Nuclear power is also not cheap. In fact, it’s one of the most expensive means for generating electricity even without accounting for the risks of nuclear accidents, weapons proliferation, and problems associated with nuclear waste. Also, as has been made clear to us in the U.S. over the past year or so, there’s the possibility that nuclear plants can become targets for terrorist attacks.
Lansing, Michigan: In your paper in State of the World 2003, Charting a New Energy Future, you state (page 89, near the bottom of the left-hand column): "Using renewables stimulates local economies by attracting investment and tourist money and by creating employment... ." What are examples of the relationships between renewable energy and tourism? Is there any good documentary evidence of renewable energy development resulting in significant increases in tourism? Does this simply mean that people interested in renewable energy will travel to visit the wind farms to see how they work?
Janet Sawin: Most of the examples that I have heard to date are from Europe, where there has been such interest that I’ve read about plans to build hotels, restaurants and souvenir shops at offshore wind energy sites to house and feed tourists.
I have also heard of instances in the U.S. – for example, the wind farm in Palm Spring, California. When he became mayor, Sonny Bono fought hard to take down all the wind turbines, as he thought the city would be better off without them. But he soon realized that they actually attracted tourists (and their money) to Palm Springs, and he became a strong supporter. There is still at least one company in the city that gives tours of the wind farm each day, and it is listed as a major tourist attraction in the city’s literature.
I think part of the interest in visiting renewable energy projects comes from novelty, some comes from interest in seeing how they work and/or possibly wanted to replicate the results elsewhere, some comes from the belief that they offer aesthetic value – a few weeks ago I met a woman who had recently seen her first wind turbines, and she said that to her they looked like angels.
Edgewater, Fl.: How do you justify supporting nuclear energy when disposal of wastes poses such an environmental dilema? Can we ethically ignore the potential effects to future generations in order to save our own hides?
Janet Sawin: I completely agree with you that we cannot and should not justify supporting nuclear energy. There are too many other options that are cheaper, safer, more secure, provide more jobs and economic growth, etc.
Atlanta, GA: Obviously the most important transition to renewable energy should be the developed countries since they are the largest consumers energy in the world. But, also important is the introduction and use of renewable energy sources in developing countries and communities in order to ensure that they don't travel down the same path the developed countries have. Are there significant efforts in sustainable development and introduction of renewable energy systems to developing countries, and if so, can you describe them and their successes and downfalls?
Janet Sawin: There are a number of developing countries that have begun major efforts to promote the use of renewable energy. For example, India aims to electrify 18,000 villages by 2012, and plans to do this entirely with renewable energy. India has also had incentives for wind energy, and now ranks fifth in the world for wind energy capacity and manufactures many of its own wind turbines. China has set specific targets for renewable energy in its five-year plan. Brazil, which experienced a major energy crisis about two years ago (the country relies primarily on hydropower for electricity, and had a drought which reduced production) enacted a law to promote the development of wind and biomass energy to help meet new capacity needs. In addition, Brazil’s ethanol program, which began in the 1970s, now displaces an estimated 220,000 barrels of oil daily. These are just a few examples, but hopefully this will help.
Hilo Hawaii: What are the approximate costs (per kwh) of various renewable generation methods? Storage and reliability are the main issues with wind, solar thermal, and photovotaics. With current technology, I could see hydrogen as a means of storing energy on a village scale or for areas with little topographic features, but still it must be very expensive for perhaps the next two decades. Why does Worldwatch favor hydrogen over the established and proven pump storage method considering most human settlements are near mountains? What are the advantages (and costs) of hydrogen over biodiesel, ethanol, and biogas?
Janet Sawin: The cost of generating energy with renewable technologies varies from one technology to the next and from one location to another, depending on the available resources. Wind energy is now the cheapest, at 4-6 cents per kilowatt hour in good sites – and this is a conservative estimate as some producers are now signing contracts for under 3 cents/kWh. Biomass in the U.S. is about 7-9 cents/kWh, and photovoltaics generally range from 25-50, depending on location.
First of all, hydrogen and biofuels, pumped storage, etc. are not mutually exclusive, and renewable energy and fuels can be used to produce hydrogen. Worldwatch believes that hydrogen offers tremendous potential for the future. Hydrogen can be used to generate electricity and to fuel transportation; it can be stored and transported. It would facilitate the transition from the consumption of limited, non-renewable polluting fossil fuels to unlimited renewable resources. Hydrogen is clean burning, and if it is produced with renewable energy it avoids the significant external costs associated with the extraction, transport, refining, and burning of fossil fuels. As you mention, hydrogen production is relatively expensive today and we need to develop the proper infrastructure. But costs are expected to decline dramatically over coming years, particularly as governments and industry in the U.S., Japan and the European Union are committed to investing large amounts of money in research and development for hydrogen production and the infrastructure necessary for its transport and use.
Hilo Hawaii: I've been reading recently that proposals for large wind turbines have raised objections from area residents. What are the common reasons for their concerns? Is this mostly NIMBYism, or are these concerns justified?
Janet Sawin: In many, perhaps most cases, such opposition is greatly a result of NIMBY-ism combined with lack of information – or misinformation. Some concerns about large wind projects are valid, and thus it’s critical that environmental and other appropriate assessments be carried out. The most common concerns are potential impacts on birds and other wildlife, and aesthetic impacts. Regarding the aesthetic impacts, it is often a case of perception. As I mentioned above, there are people who think wind turbines look like angels; I’ve also heard people describe them as beautiful sculptures. The environmental factor that has caused the most controversy and concern is bird mortality. But this problem is site specific, and the impact of wind turbines on birds is relatively low compared with other threats to birds – including vehicles, buildings, and cell phone towers. Further, climate change, caused by the burning of fossil fuels, could bring about the extinction of entire species of birds, and this needs to be taken into consideration.
You didn’t ask this question outright, but because NIMBY-ism is a common reason for objections to wind projects, I’ll offer some suggestions for reducing it. Many countries have dealt with this problem by enacting siting and permitting regulations that address potential issues of concern such as noise and visual or environmental impacts, setting aside specific locations for development or restricting areas at higher risk to birds, for example. Some European countries have required municipalities to reserve specific areas for wind turbines and have set restrictions on proximity to buildings, lakes, among other things. The U.S. needs to enact siting regulations for both on and offshore wind, and this would help to reduce both opposition to wind energy and uncertainty about if and where turbines can be sited.
It is also essential for all stakeholders – including the local population – to be involved in a project from the very beginning. Involvement could range from education and consultation about how and where a project will be sited, to actually sharing in the ownership of a project so that members of the local community have a real stake in its success. In both Germany and Denmark, most wind turbines are owned completely or in part by farmers, lawyers, doctors… a wide range of people. A large wind farm off the coast of Copenhagen is co-owned by a utility and several thousand Danes who have purchased shares in the project. As a result, wind energy enjoys strong, broad political support in these countries.
Finally, I’ll just add that several surveys (all done in Europe, as far as I know – I am not aware of any yet in the U.S.) have demonstrated that people who own shares of projects, and those who live closest to wind turbines, view wind power more positively than those who have no economic interest or experience with it.
