The Current Situation and Perspectives on the Use of Renewable Energy Sources for Electricity Generation:The Impact on the Use of Renewable Energy Sources in Sustainable Development in the European Region

The Impact on the Use of Renewable Energy Sources in Sustainable Development in the European Region

Historically, economic development has been strongly correlated with increasing energy use and growth of greenhouse gas emissions, and renewable energy sources can help decouple that correlation, contributing to sustainable development. Though the exact contribution of renewable energy sources for sustainable development has to be evaluated in a country-specific context, renewable energy sources offers the opportunity to contribute to social and economic development, energy access, secure energy supply, climate change mitigation, and the reduction of negative environmental and health impacts. In summary, it can be said, according to the Intergovernmental Panel on Climate Change (2012), that:

• Renewable energy sources can contribute to social and economic development. Under favorable conditions, cost savings in comparison to non-renewable energy sources use exist, in particular in remote and in poor rural areas lack- ing centralized energy access. Costs associated with energy imports can often be reduced through the deployment of domestic renewable energy technologies that are already competitive;

• Renewable energy sources can help accelerate access to energy, particularly for

the 1.4 billion people without access to electricity and the additional 1.3 billion using traditional biomass. Basic levels of access to modern energy services can provide significant benefits to a community or household. In many develop- ing countries, decentralized grids based on renewable energy sources and the inclusion of renewable energy on centralized energy grids have expanded and improved energy access;

• Renewable energy options can contribute to a more secure energy supply,

although specific challenges for integration must be considered. Renewable energy deployment might reduce vulnerability to supply disruption and market volatility, if competition is increased and energy sources are diversified;

• In addition to reduced greenhouse gas emissions, renewable energy technologies can provide other important environmental benefits. Maximizing these benefits depends on the specific technology, management, and site characteristics associated with each renewable energy project;

• Life cycle assessments for electricity generation indicate that greenhouse gas

emissions from renewable energy technologies are, in general, significantly lower than those associated with fossil fuel options, and in a range of conditions, less than fossil fuels employing CCS;

• Most current bioenergy systems, including liquid biofuels, result in greenhouse

gas emission reductions, and most biofuels produced through new processes (also called advanced biofuels or next-generation biofuels) could provide higher greenhouse gas emission mitigation. The greenhouse gas emissions balance may be affected by land use changes and corresponding emissions and removals. Bioenergy can lead to a voided greenhouse gas emissions from residues and wastes in landfill disposals and co-products; the combination of bioenergy with CCS may provide for further reductions;

• Water availability could influence the choice of renewable energy technology.

Conventional water-cooled thermal power plants may be especially vulnerable to conditions of water scarcity and climate change. In areas where water scar- city is already a concern, non-thermal renewable energy technologies or thermal renewable energy technologies using dry cooling can provide energy services without additional stress on water resources. Hydropower and some bioenergy systems are dependent on water availability, and can either increase competition or mitigate water scarcity;

• Site-specific conditions will determine the degree to which renewable energy technologies impact biodiversity;

• Renewable energy technologies have lower fatality rates. Accident risks of renewable energy technologies are not negligible, but their often decentralized structure strongly limits the potential for disastrous consequences in terms of fatalities. However, dams associated with some hydropower projects may create a specific risk depending on site-specific factors.

It is important to highlight that within the EU renewable energy sources are largely indigenous, they do not rely on the future availability of conventional sources of energy, and their predominantly decentralized nature makes EU coun- tries’ economies less vulnerable to volatile energy supply. Consequently, they constitute a key element of a sustainable energy future. However, for renewables to become the “stepping stone” to reaching the dual objective of increased security of supply and reduced greenhouse gas emissions, a change in the way in which the EU promotes renewables is needed. Strengthening and expansion of the current EU regulatory framework is necessary. It is important to ensure that all EU member states take the necessary measures to increase the share of renewables in their energy mix (COM 2008).

Finally, it is important to highlight that with the exception of existing hydro- electric facilities, almost all of the power generation capacity required to supply Europe in 2050 will need to be built in the next 35 years. This is a major undertak- ing regardless of the energy mix, and would pose a massive challenge even in a high-carbon scenario. Within the EU in 2020, wind power will be the single largest renewable energy source production technique, if the projected trajectory is implemented. Wind power production is expected to exceed hydropower production in 2016–2017. In terms of GWh’s, solar and biomass-sourced electricity will experience more modest growth. Hydropower production is expected to increase only slightly. Geothermal, wave, tidal and ocean energies’ share of the total renew- able energy source electricity production is expected to be only around 1 % in 2020. In addition, the following summing up should be taken into account:

• Renewable energies now account for 10.3 % of total energy consumption (in 2008 it was 9.3 %);

• Renewable energies now cover around 16 % of gross electricity consumption (in 2008 it was 15.2 %)6;

• Renewable energies now cover 8.8 % of final heat consumption (in 2008 it was 7.4 %);

• Renewable energies now meet 5.5 % of fuel demand (in 2008 it was 5.9 %);

• Investments in 2009 reached €20.0 billion (in 2008 the investment reached

€15.3 billion). Global new investment in renewable power and fuels was US$244 billion in 2012, down 12 % from the previous year’s record. Despite the setback, the total in 2012 was the second highest ever and 8 % above the

The Current Situation and Perspectives on the Use of Renewable Energy Sources for Electricity Generation-0041

2010 level. If the unreported investments in hydropower projects larger than 50 MWe and in solar hot water collectors are included, total new investment in renewable energy exceeded US$285 in 2012. This is lower than the equivalent estimate for 2011, however. The decline in investment—after several years of growth— resulted from uncertainty over support policies in Europe and the United States, as well as from actual retroactive reductions in support. On a more positive note, it also resulted from sharp reductions in technology costs7 (Fig. 2.14);

• Value added through the operation of renewable energy installations: €16 billion (in 2008 was €15.3 billion);

• Overall, the use of renewable energies prevented a total of about 108 million tons of greenhouse gas emissions;

• The renewable electricity sector within the European region is a quite advanced

sector with already well developed market and business structures. Most of the activities reach beyond general awareness raising and promotion. Issues like favorable, reliable, and forward-looking policy frameworks, investment security, access to electricity grids and fair regulation, operation and maintenance etc. dominate the picture;• Although the sector is generally very dynamic and well developed, it still faces considerable regulatory, administrative, and grid barriers;

• The dissemination efforts in promoting the use of renewable energy sources for electricity generation in the European region have generally improved consider- ably, but still need to be given even higher priority; in times of a growing flood of information, information needs to be well targeted, concise and well prepared in order to reach the respective target groups;

• Electricity customers (residential customers and also business firms) are interested in green power products and look for independent eco-labels as a guidance to their purchase decision;

• The prospect of success for voluntary green power offers especially depends on

the market condition;

• The regulatory framework should include incentives for distribution system operators to integrate distributed generation. The remuneration schemes for operational and capital expenditures and the benchmarking procedures should take into account the connection and management of distributed generation. Additional incentives should be considered to promote innovation and research and development activities by distribution system operators;

• Deep connection charges that include reinforcement costs should be avoided.

Either a shallow charging policy could be adopted or the use of system pricing methodology could be reformulated to allow the financial recognition of the dis- tributed generation contribution to the network costs;

• Participation of distributed generation in ancillary service and balancing markets can be enhanced, if market rules accept aggregation of small individual generators. The timeframe for announcing estimated production in balancing arrangements should become smaller;

• EU member states apply very different, inconsistent and non-transparent procedures and rules for interconnection and connection charging of new distributed generation and renewable energy sources market entrants. This creates unnecessary risk and uncertainty to project developers, and it leads to market distortion. As a result of the above, there is an urgent need for novel, consistent and pan- European approaches to distributed generation, interconnection rules and connection charging across the whole of the EU;

• Current national systems for tracking electricity, mainly focus on national markets, vary considerably among countries and their design and interaction with related policies lead to significant volumes of multiple counting and loss of information;

• The design of a tracking standard for electricity is a delicate issue for market participants and should be developed carefully in order to produce useful results, e.g., for electrical disclosure, but at the same time not to create negative impacts on the liquidity of electricity markets:

• The preferred tracking system should feature an efficient mechanism for explicit tracking, preferably based on certificates, combined with an option to use a residual mix, consisting of statistical generation data, which is corrected by those attributes that have been tracked explicitly;

• Wind power, solar PV and geothermal sectors will achieve the European targets set in the EC White Paper. Other sectors need more incentive from the individ- ual EU member states;

• In different EU member states there still exist a variety of different, non-trans-

parent cost allocation and cost reimbursement principles for grid integration of renewable electricity system and operation. Practical guidelines to harmonize existing legislation in this context are presented in the recommendation report of the project GreenNet-EU-27 (20052006);

• From the grid-operators’ points-of-view, at present there exist no incentives

for large-scale grid integration of renewable electricity, since the correspond- ing grid-related costs are hardly eligible in the grid regulation/grid tariff deter- mination procedures. Practical guidelines to overcome these disincentives are also outlined in the recommendation report of the project GreenNet-EU-27 (20052006);

• Comprehensive quantitative analyzes (renewable electricity modelling, and

empirical renewable electricity case studies) provide evidence that the overall costs of large-scale intermittent grid integration of renewable electricity (includ- ing system operation costs and grid reinforcement/extension costs) are still below 10 % of the long-run marginal costs of the renewable electricity genera- tion technology itself;

• Solar photovoltaic policy measures and starting positions vary strongly from

country to country. Therefore, close cooperation, deepened cross-national discussions and actions are absolutely necessary, also after finishing the project. Although the core group of the Photovoltaic Policy Group already gathered eight countries, it is desirable that the results are disseminated and used in non- participating EU countries.

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