WHAT LIFTS NEW ENERGY

A long article, quite worth reading but very difficult to deconstruct. Best thing in the article is reference to “quota-and-trade,” British for cap-and-trade. Here are some summary observations and excerpts.

Sunlit uplands; Wind and solar power are flourishing, thanks to subsidies
31 May 2007 (The Economist)

WHO
Chinese industry, supplying a growing portion of the hardware for the solar and wind energy industries, is getting rich as the result of incentives driving international markets.
from The Economist (click to enlarge)
WHAT
- Both the solar and wind energy industries are expanding as rapidly as the traditional and new hardward used in them can be fed into the marketplace. Solar has averaged 41% growth/year in the last 3 years. Wind is growing at 18% /year.
- Increased demand has fuelled the boom, demand resulting from incentives, supply shortages and climate change.
- “Technology will in part determine who is right. If renewable energy goes on getting cheaper, it will get more attractive.”

WHEN
“Despite the current boom, there are constraints to the growth of renewables…Despite the difficulties, however, money is flowing in (see chart ). The NEX represents pure-play clean-energy companies, some of which have grown big.”
from The Economist (click to enlarge)
WHERE
“Governments are using sticks as well as carrots to push investment in renewables, requiring a proportion of the energy sold to come from renewable sources. In America, for instance, 21 states have renewable portfolio standards requiring a certain proportion of power sold—20% by 2017 in California, for instance—to come from renewable sources…But it is in China that government fiat is having the most dramatic effect. The country currently meets 7.7% of its energy needs from renewable sources (including large-scale hydro). In 2005 it announced that the figure would rise to 15% by 2020. That has led to a huge rise in demand for wind turbines.”

WHY
- “Many governments have set targets for the proportion of their country's energy that should come from renewable sources. Subsidies are one way to try to meet those targets. There are, broadly, three systems in operation: the expensive and effective (Germany's and France's feed-in tariffs), the complex and ineffective (Britain's and Italy's quota-and-trade system), and the unpredictable (America's production tax credit).”
- “Germany's and France's feed-in tariffs give generators a fixed payment for the electricity they provide.”
- “Under Britain's Renewables Obligation, a set proportion of the electricity that power distributors buy must come from renewable sources; if they fail to meet their obligation, they must put money into a pot to be shared among the renewables providers. The system is complex and the resulting price uncertain; which, along with planning constraints, explains why so much capacity has been planned and so little built.”
- “America's production tax credit gives renewable-energy producers 1.9 cents per kWh, enough to encourage plenty of investment in wind, since in breezy places it is already competitive with some coal and gas generation. But the government has failed to renew it in some years, so investment in the business has slumped.”
from The Economist (click to enlarge)
QUOTES
- “Now the [turbine] blades are up to 40 metres long and turbines produce up to 2.5MW each at a cost of 5-8 cents per kWh, depending on location (coal-fired electricity, depending on the plant, costs 2-4 cents per kWh). And there are even 5MW prototypes in existence, with 62-metre blades.”
- “The efficiency with which [solar photovoltaic cells] convert sunlight to electricity has increased from 6% when they were first developed to 15% now. Their cost has dropped from around $20 per watt of production capacity in the 1970s to $2.70 in 2004 (though a silicon shortage has pushed prices up since). “
- Ken Cohen, Exxon Mobil: “Exxon was a big investor in solar in the 1970s…We got out of it because we couldn't make money out of it. We bring nothing unique to solar, wind or nuclear. But we certainly bring much that's unique to the world's petroleum business. That's a full-time job.”
- “If the carbon price and subsidies rise, [renewable energy's] prospects should be good. But wind and solar are not as vulnerable to politics as the carbon-free technology that, in many ways, has the most potential to free the planet from fossil fuels: nuclear power.”