The Renewables White Paper

On 11 May 1998, the Ministers responsible for energy policy of each of the EU countries will meet in Brussels for the Energy Council to discuss the white paper, ‘Energy For the Future: Renewable Sources of Energy’. Greenpeace believes that Ministers must make the strongest possible endorsement of this Paper.

The White Paper was published after extensive consultation with non-governmental organisations and industry, and outlines the policies and strategies for renewables which the commission would like to see adopted by the Member States in cooperation with the EU.

The EU negotiating position at the Climate Change Protocol negotiations in Kyoto was a 15% CO₂, methane and N₂0 reduction by 2010 (with at least 7.5% by 2005). The White Paper states that at least one third of this reduction could come from a doubling of energy generation from "renewables" like solar and wind power. The Paper lays out a strategy by which 12% of EU energy would be produced from renewables by 2010. This would be achieved by accelerating the growth of renewables and reducing dependency on imported fossil fuels.

For this to happen, the EU and Member States need to introduce fair access for renewables into the energy market and to accelerate the implementation of new and existing renewable technologies. This will not only be a step towards arresting global climate change, but will consolidate the lead European companies have won in the new energy market.

 

The Commitment to Curb Climate Change: Kyoto and EU CO₂ Reduction

Climate change is now accepted as a reality and reports of its effects appear daily in the media worldwide. It has been shown that less than one quarter of the known economically recoverable reserves of oil, coal and gas can actually be burnt if ecological systems are to have a chance to adequately adapt to climate change.

The EU has a policy objective of keeping the maximum global temperature rise to 2^oC. As a first step to achieving this the EU put forward a greenhouse gas reduction target of 15% by 2010 (compared to 1990 levels) at the Climate Change conference in Kyoto. All EU Member states agreed to this target prior to the Kyoto meeting.

 

The Problem: Fossil Fuels are Heavily Subsidised, Renewables are not

The playing field is far from level: Though renewables are proven and are now often a cheaper source of energy than many fossil fuels, renewables are still held back in the European market. The electricity systems and laws often make it extremely difficult for renewables to gain fair access to national markets. Fossil and nuclear power in the EU are publicly subsidised to the tune of 15 billion US dollars per year and in addition the European tax payer picks up the environmental and human health bill for acid rain, for NO_X emissions, for particulates, and now for the ‘natural’ disasters caused by climate change.

Despite these obstacles the market for renewables is booming; solar and wind are already billion dollar industries. The jobs, income and energy security that will result from building a market dominance in renewables are undisputed. The only question is how fast it will happen. The USA and Japan have already both implemented strong domestic incentives for renewables to promote the development of their own industries. Competition is likely to remain fierce.

 

The Solution: An Action Plan for Renewables

Action on renewables in Europe is now imperative in order to deliver on EU commitments on CO₂ reduction. Any deviation from such a commitment must be looked on as a failure of resolve.

The 12% by 2010 renewables target and pathway for delivery set out by the Commission White Paper is both necessary and easily achievable. It cannot be left as an idea on the shelf of the European Commission.

 

The Time for Action: Now

European citizens recognise that climate change is a serious threat and have repeatedly stated their support for renewable energies such as solar and wind. European politicians clearly have a mandate to take action on renewables and Greenpeace demands that they use it!

The EU Strategy and Action Plan for Renewable Energy

The Action Plan is a set of targets, measures and policies for the EU and the Member States. It is aimed at providing fair market opportunities for renewables without excessive financial burdens, because, as the White Paper points out:

"Without a determined and coordinated effort to mobilise the Union’s renewable energies potential, this potential will not be realised to a significant extent, resulting in a missed opportunity to develop this sector and to reduce greenhouse gas emissions significantly."

 

1. Key Features of the Action Plan

• A doubling of the share of renewables to 12% of the EU energy mix.
• Displacement of 402 million tonnes per year CO₂ emissions by using renewables.
• An increase in solar PV capacity of over 100 fold.
• A twenty fold increase in wind energy production.
• A fifteen fold increase in solar thermal capacity.
• A three fold increase in biomass energy.

1. Contributions by Sector

	1995 capacity	1995 production (TWh)	2010 capacity	2010 production (TWh)
Solar PV	0.03 GW	0.03	3 GW	3
Wind	2.5 GW	4	40 GW	80
Biomass	44.8 Mtoe	22.5	135 Mtoe	230
Hydro	92 GW	307	105 GW	355
Solar thermal	0.26 Mtoe	-	4 Mtoe	-
Geothermal	0.4 Mtoe	3.5	1 Mtoe	7

Table 1: Target Renewable Energy Generation by Sector (units explained section 12).

2. Mechanisms and Measures

Internal market measures including:

• Fair access for renewables to the electricity market.
• Preference in dispatching and full access to the grid.
• Fair price for power, reflecting avoided external costs (social and environmental impacts).
• Directive for harmonised framework for renewable energy fraction in electricity supply.
• Premium metering and promotion of PV in new building construction.

Fiscal and financial measures including:

• Favourable tax treatment for financing projects & tax exemptions for produced power.
• Start up subsidies for new plant and job creation.
• Financial incentives for consumers to buy renewables and services.
• Renewable energy bonds to attract investors.

Bioenergy Initiatives for Transport, Heat and Electricity.

• Displacement of transport fuel imports with liquid biofuels, of up to 2%.
• Development of the use of solid biomass for combined heat and power applications.
• Promotion of Biogas.

1. The Cost of the Action Plan

John Brown, Chairman of British Petroleum.

The net investment required to see the renewable action plan fully implemented is estimated at 6.8 billion ECU per year. This is the additional capital input above that which would have been required for conventional generation.

This represents less than one half of the European wide subsidies which are given to fossil fuel use and nuclear generation, see Figure 1.

This will have the effect of reducing energy imports by over 17%, save 3 billion ECU annually in fuel costs and reduce C0₂ emissions by 400 million tonnes per year by 2010. The latter value is not yet quantified, but estimates vary from 5-45 billion ECU.

The Campaign for Take-off

To accelerate the implementation of the renewables Action Plan, the Commission has identified four key implementation targets and these are to receive Commission co-ordination, technical support and financial assistance (4 billion ECU).

1. Key Features

One Million Photovoltaic Systems - half domestic, half export.

• Nominal system size of 1kW.
• Half a million solar roof and solar facade systems across the EU.
• 40,000 systems per year in the EU, approximately 2% of new buildings.
• EU systems aimed at schools, public buildings, tourist, and recreational facilities.
• Incentives for financing including public and city funds and initiatives such as moving costs away from sole purchasers to wider customer base.
• Half a million decentralised, off-grid systems in developing countries.
• 1/3rd of the Renewable ‘Action Plan’ target of 3 GW_p by 2010.
• 40 million ECU annual investments from public funds.

10,000 Megawatts of wind power

• Targeted at large wind farms on unconventional sites - including off-shore.
• Specified goal to assist development of new or adapted technology to enable wind power to provide power from such locations.
• No public financing of remaining 30GW anticipated assuming fair access to European grids is established.
• 100 million ECU public expenditure per year.

100 Renewable communities

• Pilot communities, regions, cities and islands to be identified.
• Aim for 100% power supply from renewables.
• From new neighbourhoods and mountain communities, to large islands, like Majorca or the Canaries and ‘solar cities’.
• Preference given to mixed technologies and application.
• 40 million ECU public funding per year.

10,000 Megawatts of biomass

• Targeted at bioenergy including use of Combined Heat and Power application of biomass.
• Range of scale: kilowatts to multi-megawatt.
• Variety of technologies and use of fuel switching.
• 80 million ECU per year public funding required.

2. Distribution of Solar PV Systems in the EU



 

Figure 2 : Per capita distribution of the proposed 1/2 million ‘solar homes' in Europe.

The Cost of the ‘Campaign for Take-off’

The Campaign for Take-Off is intended to leverage commercial investment towards its goals using EU promotion and financial support from the European Community, the EU Member States and the private sector.

The total cost of the Campaign for Take-Off is estimated as 20.5 billion ECU, of which 16.5 billion will be private investment and 4 billion public. A breakdown of the costs of the four key actions is shown in Figure 3, with the components of fossil fuel saved and fraction of public funds required also shown.

The campaign for take-off will result in a CO₂ reduction of approximately 40 million tonnes per year, the financial value of which has yet to be established.

It is worth noting that for the conventional application of wind energy, no public investment assistance is expected to be required for 3/4 of the action plan target beyond the initial ‘Campaign for Take-Off’ phase. It is considered that ‘fair access’ and the appropriate mechanisms to deliver this will be sufficient once the Action Plan is underway.

1. Employment Creation

The fuel costs for solar and wind power are zero. That means that almost all of the cost of a wind farm or solar array goes into manufacturing jobs or installation jobs. Figures produced by Shell and BP show that solar manufacturing produces over 6 times more employment than the same investment in oil.

One Megawatt of installed wind capacity creates jobs for between 15 and 19 people in an industrialised country. Therefore the target of 40,000MW of wind power for example is expected to deliver 960,000 person-years of employment.

 



Figure 4 : Jobs created in each of the renewable sectors.

Full implementation of the Renewables White Paper will result in massive employment creation within the European Union. Several European Industry bodies have estimated job creation in the renewable and associated industries due to the Renewables Energy Action plan at up to 1.6 million. These are shown by sector in Error! Reference source not found.. The independent TERES II study estimates that implementing 12% renewables will have a net effect of creating 500,000 jobs (after job reductions in other sectors are subtracted).

Jobs and The European Wind Power Industry.

• The industry is worth over $1.5 billion dollars in annual sales.
• In 1997, 1520MW was installed around the world.
• One Megawatt of installed capacity creates 15 to 19 jobs.
• Annual industry growth since 1995 has averaged 27% globally, and 36% in the EU.
• Europe currently has unrivaled market dominance. In 1996, eight out the top ten turbine manufacturers were European, over 80% of the global demand.

• Due to policy failures the US dominance over the wind power industry in the 1980s has all but collapsed due to the absence of steady and sustained policy incentives. In 1997 Germany took the title from the USA for the country with largest installed capacity.
• Wind power in Europe has developed at a phenomenal rate. With 4,700 MW total capacity, this is 100 times the 473 MW that existed in 1990.
• A modern wind turbine takes less than 4 months on an average site to generate as much energy as was used in its manufacture.

Jobs and The Solar Goldmine.

The solar PV industry has experienced rapid growth over the last few years. Japan, USA and Europe are engaged in a highly competitive race to capture a multi-billion dollar market. Without any specific action to encourage the introduction of solar, Europe is likely be left behind.

• In 1997, a 25% growth rate made this a record year of expansion for the global solar PV industry, now worth in excess of US $1 billion.
• Conservative forecasts predict that global annual sales will reach $8-18 billion by 2010.

• The 1996, European Commission report into solar energy pointed out that with a continuation of current growth rates, photovoltaics would be maintaining 453,000 jobs by 2010.
• According to the US Department of Energy, "Photovoltaics is a high technology which, as a domestic industry could create or support as many as 3,800 well paying jobs for every US $100 million of PV sales."

• The Japanese government plans to build 70,000 solar homes, installing 400MW of solar PV by the turn of the century and 4,600MW by 2010. Four of the main Japanese solar companies: Kyocera, Sharp, Sanyo and Mitsubishi, have announced plans to increase combined production to 210-240MW by the year 2000. This is more than a tenfold increase in domestic production over 1996.

• "We will work with businesses and communities to use the sun's energy to reduce our reliance on fossil fuels by installing solar panels on one million more roofs around our nation by 2010. Capturing the sun's warmth can help us to turn down the Earth's temperature." US President Clinton, UNGASS (the third UN summit on the state of the environment), June 1997. The US Government estimates that their Million Roofs program will create approximately 70,000 new high technology jobs by 2010.

A BP study shows that an investment of US$550 million into a 500 MW solar PV factory will reduce costs by 80%. It shows that the factory can be built utilising existing technologies and "subject to appropriate investment, there are no barriers to achieving 500MWp per annum production of photovoltaic modules using crystalline silicon". Industry analysis shows that cost reduction on this scale would generate an annual global market of at least US$100 billion.

Some Other commercial Renewables

1. Biomass

Biomass is a term that is used for natural organic material, such as straw or wood, that may be used to produce energy. If the rate of consumption is equal to the rate of renewal of the supply of biomass then its use for energy production will have no net effect on atmospheric carbon dioxide levels. Biomass in common use includes timber, forestry waste and agricultural residues. Biomass fuels can be used to substitute traditional fossil - including solid, liquid and gaseous forms. This energy can be used to generate electricity or applied more efficiently in Combined Heat and Power (CHP) programs.

Biomass should be sustainable and in keeping with protected area strategies which recognise the need to preserve and protect the integrity and viability of natural native ecosystems. In a world where there is intense short term pressure for production of food, wood and other crops there is a need to maintain a long term vision that recognises the intrinsic value of biodiversity. Hence, crops grown for energy should not require excessive volumes of water, nor be dependent on the use of chemical fertilisers or pesticides, nor result in excessive land take. Moreover, because of the inherent risk associated with them, Greenpeace does not support the use of Genetically Modified Organisms for energy or food crops.

It must also be recognised that the incineration of municipal solid waste (MSW) cannot be regarded as a source of renewable energy. The bulk of the energy value MSW of is not renewable, but instead arises from the presence of plastics and other petroleum derived residues, and paper not manufactured in a sustainable way. In addition the environmental impacts of emissions of toxic chemicals from the combustion of MSW pose unacceptable risks to human and environmental health.

2. Solar Thermal

Solar thermal systems use the same approach as a child with a pocket lens burning a hole in a piece of paper. The lens is replaced by a series of mirrors and the piece of paper is replaced by a tube of water. The tube acts as a boiler. For power generation the intensity of heat in the boiler is increased and the resulting steam is used to drive a steam turbine and generator. Solar thermal power stations are not yet in the mainstream, the most common use of solar thermal energy is for providing hot water. It is already popular in a number of countries including Israel, Australia, Greece and China, and in some other countries a solar hot water heater is now a standard building requirement.

3. Small Hydro-Electric Power

Environmentally sound hydro-electricity has come to mean run-of-river turbines, or installations that make use of the flow from small dams and reservoirs. Greenpeace draws a destinction between these small hydro facilites and much larger multi-megawatt schemes. Greenpeace does not consider that large hydro schemes that involve the damming and flooding of existing valleys can be considered a sustainable source of energy. Further, the decomposition of submerged forests results in a net increase in atmospheric carbon. This form of carbon release to the atmosphere includes substantial fractions of methane which is a far more potent greenhouse gas than CO₂. Also, the life-time of large facilities is often limited by the silting which gradually reduces its energy capacity. Enviromentally, there is a loss of biodiversity associated with loss of dry land and habitats, flooding results in the forced dislocation of resident peoples and such schemes also have a significant down stream effect on the eco-systems supported by the original river which become severely disrupted or even destroyed.

 

Barriers to renewables : market distortions

1. Subsidies in Europe

Levels of subsidies to the fossil fuel and nuclear industries have reached astronomical proportions both in the EU and elsewhere. In 1997, Greenpeace commissioned a detailed investigation of direct government and European Community subsidies to the fossil and nuclear industries, see Error! Reference source not found.. The effect of public money spent on the climate change causing energy industries results in serious market distortions to the cost of generated energy, thereby adversely the ability of the commercial renewable technologies to compete.

Direct Subsidies (million USD)	Member States	European Union	Total
fossil fuels	9681	531	10247
nuclear energy	4178	428	4675
renewables	1247	131	1488

Figure 9 : Subsidies to the Energy Industry by sector from ‘Energy Subsidies in Europe’ An Analysis by the Vrije University of Amsterdam, for Greenpeace, 1997.

2. The Unseen Costs of Power

The true cost of any power source includes external costs. Such costs do not appear on the operators’ balance sheets, however, and are therefore generally unseen or hidden. Of these, the ‘externalities’ that lend themselves to monetary quantification include economic effects, environmental impacts and health effects. Some results from independent analysis of the extent of these hidden costs are shown in Error! Reference source not found..

When the additional costs are taken into account, the price of power looks quite different. The situation clearly demonstrates that still the energy polluter is not paying. Instead, many commercially proven, non-polluting technologies are being held out of the market based on artificial pricing of the competition.



Figure 10 : Externalities associated with production of energy.

 



Figure 11 : Price of power with social and environment costs incorporated, (NEPI, 1994 and Grubb & Vigotti, 1997). Note that Solar PV is not included in the current UK Non Fossil Fuel Obligation portfolio upon which these figures are based.

3. Fair Access Denied

Renewable generation facilities for wind, biomass, small-hydro and solar thermal are often widely spread throughout a region. Unlike a big power station, the same amount of power produced by renewables would be comparatively ‘distributed’. Thus the renewable power is often located near to local users and therefore reduces costs to the utility which buys it. With a PV array the source is located right at its point of use! These reduced transmission costs are part of the intrinsic value of renewables, but are rarely factored into the price a renewable generator is paid for the power they produce.

In order to reap the benefits from renewable energy, the electricity transport infrastructure system in Europe will need to evolve to a true network - like cell phones or the internet - rather than one which is built for localised ‘mainframe’ generation. This cost of reinforcing the local grid is currently unfairly passed on to the builder of a renewable energy project.

A vision of the future electricity grid must put renewables as a priority and provision for the coming expansion must be made at both EU and Member State level.

Greenpeace Demands

Greenpeace demands that the White Paper on Renewables is endorsed strongly by the European Union. In particular Greenpeace demands that the EU:

1. Commits to a legally binding target for the EU and the Member States that as a minimum 12% of energy use be provided by renewable forms of energy by 2010, recognising that this is fundamental to the EU’s ability to meet its commitments to reduce emissions of greenhouse gases.

 

 

2. Institute or amend appropriate directives to enable Member States and the European Community to prioritise renewable implementation in order to deliver the 12% target.

 

 

3. Fully supports the rapid implementation of the ‘Campaign For Take-Off’ which is outlined in the European Commission’s White Paper on and commit the required resources to this project.

 

 

4. Sets minimum levels for the portion of energy procured from renewable sources for companies retailing electricity to consumers, increased incrementally so as to be consistent with the EU targets for renewable generation.

 

 

 

5. Halts the EU and Member State subsidies to fossil fuels and nuclear power, including all current financing of nuclear fusion research. Such funds should then be made available for renewable investments.

Glossary Of Terms

1. Units of Energy and Power

The brightness of a light bulb is a measure of its power (watts), but the energy it uses depends on how long it is on for (watt hours). Similarly the more solar panels, the more instantaneous solar power one has (kW)- the solar energy is the product of how much power they have produced and for how long (kWh).

 

W = watt = standard unit of power

W_p = watt, peak = maximum power than be generated

kW = kilowatt = 1,000 watts

kWh = kilowatt hour, a device producing one kilowatt of power which runs for one hour will have produced a total of 1 kilowatt hour (1 kWh) of energy.

MW = megawatt = 1 million watts

GW = gigawatt = 1,000 million watts

Mtoe = million tonnes of oil equivalent (often used for forms of energy generation that are not used to make electricity, i.e. the amount of heat energy that would be generated by a million tonnes of oil)

 

Currency Conversion

1 ECU = 1.1 US dollars