Transcript APEC Renewable Energy Finance Forum

Renewable Energy
Commercialization
• Markets Must Adjust Due to Security
Concerns
• Alternative Investment Vehicles
• Global Market Growth for Electricity
• Global Warming
• Fossil Fuel Price Volatility
• Electricity Deregulation
Mission & Program Areas
To develop and implement solutions that balance the
need for food, income and environmental quality
• Program areas
– Energy and Environment
– Natural Resources Management
– Climate Change
– Outreach
Status so far
Sources / Systems
Achievements during
2010-11 (upto 30.06.2010)
Cummulative
Achievements
(upto 30.06.2010)
Solar Power
2.00 MW
12.28 MW
Solar PV Power Plants
0.0 MWp
2.92 MWp
SPV Home Lighting
System
nos.
6,03,307 nos.
Solar Lantern
nos.
7,97,344 nos
SPV Street Lighting
System
nos.
1,19,634 nos
SPV Pumps
nos.
7,334 nos.
Solar Water Heating Collector Area
3.53 Mln. sq.m.
• Initiatives of other agencies (NGO’s / Private sector not
included)
Commercialization of Renewable
Energy
• Identification of RE enterprise opportunities
• Develop a replicable approach for assisting local
entrepreneurs to promote RE services for productive
applications
• Augment rural incomes through value added
production and generate local employment
• Facilitating access to resources, stakeholders
• Communications and outreach
The Way Ahead…
• Understand the beneficiaries needs
– Not all rural / remote families can afford SHS
• Link up with livelihood options to make it more
affordable
• Need more public private partnerships
• Special lending mechanisms to attract beneficiaries
• Ensure all supply chain components are in place
• Capacity building of local NGO’s and providing
technical backstopping for their programs
Recent Growth Has Resulted In
Global Annual Renewable Energy
•
•
•
•
•
•
Invention and Discovery
Major Technology Changes
Major Market Needs
Government Incentives – for All Energy Systems
Government Renewable Resource Assessments
Technology/Institution Linkages
Product Segmentation
Hydrogen
SOLAR ELECTRIC
FUEL CELLS
SOLAR THERMAL
MICROTURBINES
CLEAN FUELS
BATTERIES
BIOMASS
SYSTEMS/
COMPONENTS
Photovoltaic Growth
ECONOMIC INTENSITY
120
100
D
80
60
40
20
C
B
A
0
1900
1925
1950
1975
YEARS
1985
1995
2000
Investment Criteria are Consistent
with Silicon Valley
•
•
•
•
•
•
Strong Management Team
Technology Based
Proprietary Product
Substantial Capital Appreciation
Limited Legal/Financial Downside
Venture Stage: Pre-commercialization to
Expansion
Synergies Between Climate
Change Financing Mechanisms:
Options for Third word
Countries
10
Objectives
• Identify potential synergies among
climate change financial mechanisms
– In support of clean energy, renewable energy and
energy efficiency
11
Renewable Energy
Untapped
Renewable
& Energy
Efficiency
Potential
BTU/GDP (1990 $US)
120,000
Potential
Developed
Small Hydro
(<25 MW)
75 MW
23 GW
Wind
160 GW
240+ MW
Biomass
125 GW
?? MW
Geothermal
6.7 GW
30MW
Solar
Abundant
Energy Efficiency
United States
Netherlands
India
China
80,000
40,000
0
1980
1999 Source: CRESP & EIA
7
Major Opportunities to Leverage Additional
Resources
• Global Environment Facility (GEF) Climate Change Operational Programs
– Lowers costs
– Promotes commercialization & technology transfer
• Prototype Carbon Fund (PCF)
– Learn carbon trading by doing
Both of which can enhance the potential for …
• Leveraging additional climate change
funding such as…
– Clean Development Mechanism (CDM)
13
Global Environmental Facility
Four Climate Change Operational Programs:
OP 5. Removal of Barriers to Energy Efficiency
and Energy Conservation
OP 6. Promoting the Adoption of Renewable
Energy by Removing Barriers and
Reducing Implementation Costs
OP 7. Reducing the Long-Term Costs of Low
Greenhouse Gas Emitting Energy
Technologies
OP 11. Promoting Environmentally Sustainable
Transport
14
Global Environmental Facility
What can it do?
• Remove policy barriers
– Facilitate RE Mandated Market System
– Promote sound energy prices
• Create business capacity/reduce transaction
costs
– Project feasibility studies
– Technical skills
• Reduce cost of clean energy (renewables &
clean coal) technologies
– Transfer of technologies
– Domestic production of equipment
15
Prototype Carbon Fund (PCF)
What is it?
• Pilot fund to create a global market in
carbon credits
• Principal objectives:
– GHG emission reductions through project
based financing
– Promote sustainable development consistent
with national priorities
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Likely Early Stage Projects
• Methane capture projects
– Fugitive gas capture from landfills, gas flaring
reduction, etc…
• Fuel switching and co-generation
• Renewables
– Small Hydro & Hydro rehabilitation
– Biomass
– Landfill gas
• Fossil
– Natural gas development – depending on baseline
• Energy efficiency & conservation
17
CDM Constraints
How Can GEF/PCF Help?
• Policy framework
– Renewables Mandated Market Share (MMS)
& Appropriate energy pricing  GEF
• Clean technology costs
– Project development/Tech transfer  GEF
• Capacity & high transaction costs
– Learn carbon trading by doing  PCF
• Baselines and standards
– Learn carbon market/CDM by doing  PCF
18
Forms of renewable energy
1.Wind power is renewable and produces no greenhouse gases
during operation, such as carbon dioxide and methane.
2.Hydropower-energy in water can be harnessed and used. Since
water is about 800 times denser than air, even a slow flowing
stream of water, or moderate sea swell, can yield considerable
amounts of energy.
3.Solar energy is the energy derived from the sun through the form
of solar radiation.
4.Geothermal energy is energy obtained by tapping the heat of the
earth itself, both from kilometers deep into the Earth's crust in
some places of the globe or from some meters in geothermal
heat pump in all the places of the planet .
Renewable technologies
1.Ocean thermal energy conversion uses the temperature difference
that exists between deep and shallow waters to run a heat engine.
2.Osmotic power is the energy retrieved from the difference in the salt
concentration between seawater and river water.
3.Microbial fuel cell is a bio-electromical system that drives a current by
mimicking bacterial interactions found in nature- converting chemical energy to
electrical energy by the catalytic reaction of microorganisms.
Renewable energy commercialization
o
o
o
o
o
World's largest photovoltaic power plants
Use of ethanol for transportation
Geothermal energy prospects
Wave farms expansion
Developing country markets
Constraints and opportunities
1.Availability and reliability- There is no shortage of renewable energy -
however, converting that energy to a usable form in acceptable ways and
transporting it to consumers has so far limited the use of renewables.
2.Land area required-One environmental issue, particularly with biomass and
biofuels, is the large amount of land required to harvest energy, which otherwise
could be used for other purposes or left as undeveloped land
3.Hydroelectricity-Hydroelectric power can be far less expensive than electricity
generated from fossil fuels or nuclear energy, and areas with abundant
hydroelectric power attract industry.
4.Wind farms-Wind power is one of the most environmentally friendly sources of
renewable energy. It generates the energy used in its construction in just 3 months of
operation, yet its operational lifetime is 20–25 years.
RENEWABLE ENERGY
TECHNOLOGY & MARKET
ISSUES, PRIVATE SECTOR
PARTICIPATION
RENEWABLE ENERGY –
Technology & Market Issues
The total energy from the sun incoming
on the earth is around 174 peta watt which
is many times more than the total power
demand of all nations.
The global market size according to data
graph group Approx. potential wind 49
GW, small hydro 14GW, bio-mass 27 GW,
solar at least 650 GW.
Projected RE in 2050, 70%
Investment in green energy has quadrupled in 4
years. While during the last global financial crisis
there has been hesitation and in US there is a
slight drop, but there is increase in the growth of
Renewable Energy in EU, China, BRIC, Chile,
Peru, Philippines etc.
One thing is clear that Govt. is playing a key role
and together with private investment the future is
bright.
Largest investment has been in wind power but
the best growth has been in solar power.
Coal price increase helped to bridge the gap
 Success of Renewable Energy and its rapid
uptake depends on concern for remaining fossil
fuel reserve and connected issues of import
dependence as also energy security,
environmental protection and Govt. support and
financial incentives.
 The cost of solar panels have fallen rapidly,
sometimes > 40%. This is due to scale, process,
new design, innovation, new materials
 Private investment in the wind farms already planned
around 4400 MW in wind, about 400 in solar. Attempts
are also being made for installing a 5 MW Geo-thermal
Plant in Gujarat.
 Renewable Energy commercialization involves 3
generations of Renewable Energy :
the first one
including Biomass Hydel power and Geo-thermal power
are already matured and competitive.
 2nd generation technologies are market ready and being
deployed at present such as Solar heating, Solar PV,
Wind Power, Solar Thermal and modern forms of Bioenergy.
 3rd generations technologies requires continuous R&D
for such needs as Bio refinery, Hot dry rock Geo-thermal
power and Ocean energy.
 Barriers of policy and political leadership are to be
removed.
 98 countries have set up their own targets for their own
Renewable Energy future.
 Total investment in Renewable Energy about 211 BUSD
in 2010, up from 160 BUSD in 2009. The top countries
were China, Germany, US, Italy and Brazil.
 Pakistan has abundant sun light, average 300 sunny
days in a year.
 Remote area, remote villages are important. Also daylight farming needs power.
 We have abundance of sun shine, but ignorance about
solar power. Germany which is cloudy many times has
largest solar power installation because of smart
governance.
 ROI in desert base plants in barren lands will be much
higher.
 In many areas cases, solar energy cheaper than drawing
cables or transmission lines from long distance.
 Nobody believed in the future of laptop, flat screen TV or
mobile which are now high selling items.
 Past 3 years solar panel cost have dropped by half.
Reasons are large scale production, method of
production, new materials etc.
 Some say by 2020 or even earlier, solar electric power
will match the conventional power cost, helped by rising
cost of coal
 The main criterion will always be not the cost of
equipment but the tariff for energy. New and efficient
solar panels are being devised. Also, solar systems are
very easily expandable.
• Scaling and integration are two major
issues for Pakistani players.
• Pakistan is already seen as a low cost,
high-tech hub for solar component mfr.
• According to one PSA study solar pv costs
at present (about Rs.150/- per Wp) is far
more attractive option for electrification for
a village than extending the grid by around
12 km.
We need the proposed ultra mega
power projects but Renewable
Energy in another 5 years will
compete head on with coal / oil fired
units. The challenge will remain which
will mean not compromising growth
by investment in Renewable Energy,
particularly wind, solar and bio-fuel.
Conclusion
I consider that renewable energy is being more and
more used and in the future conventional energy
will be replaced by it due to the fact that it is far
more reliable does not produce residue and costs
less to create and distribute.