Policy is the key

The Intergovernmental Panel on Climate Change has issued the summary of its first report on the potential role of renewable forms of energy, from dams to wind turbines and solar panels, in cutting emissions of greenhouse gases in coming decades. Does it say anything new? No. It only reiterates that without sustained and focused climate and energy policies by governments around the world, the potential of renewable energy technologies to compete with fossil fuels remains deeply limited.

As some experts say, the report fails to spell out how exactly the world will chart its clean energy route amidst clashing personal, corporate and national interests.

Anyway, some of the key points in the report are:
- Of the around 300 Gigawatts (GW) of new electricity generating capacity added globally between 2008 and 2009, 140 GW came from renewable energy.
- Despite global financial challenges, renewable energy capacity grew in 2009—wind by over 30 percent; hydropower by three percent; grid-connected photovoltaics by over 50 percent; geothermal by 4 percent; solar water/heating by over 20 percent and ethanol and biodiesel production rose by 10 percent and 9 percent respectively.
- Developing countries host more than 50 percent of current global renewable energy capacity.
- The technical potential of renewable energy technologies exceeds the current global energy demand by a considerable amount—globally and in respect of most regions of the world.
- Under the scenarios analyzed in-depth, less than 2.5 percent of the globally available technical potential for renewables is used—in other words over 97 percent is untapped underlining that availability of renewable source will not be a limiting factor.
- A combination of targeted public policies allied to research and development investments could reduce fuel and financing costs leading to lower additional costs for renewable energy technologies.

Challenges are huge but not unsurmountable as Germany shows. Against what is clearly anti-growth (in the usual sense!) and against popular opinion, chancellor Merkel has taken firm steps. Early in march, she announced an accelerated phasing out of all 17 German nuclear reactors as an immediate reaction to the Fukushima disaster in Japan. The chancellor now says she wants to slash the use of coal, speed up approvals for renewable energy investments, and reduce CO2 emissions drastically.

Germany wants to double the share of renewable energy to 35 percent of consumption in 2020, 50 percent in 2030, 65 percent in 2040, and more than 80 percent in 2050. At the same time, the chancellor vows to cut CO2 emissions (compared to 1990 levels) by 40 percent in 2020, by 55 percent in 2030, and by more than 80 percent in 2050.

The new course is a huge challenge in terms of cost and feasibility. Of the current 82 gigawatts of peak demand, about half comes from coal, 23 percent from nuclear, 10 percent from natural gas, and 17 percent from renewables. That means three quarters of Germany’s electricity sources will have to be replaced by green technology within just a few decades, if the nuclear phase-out and the CO2 goals are to be accomplished.

Since the 1990s, the Renewable Energy Sources Act has paved the way for billions of Euros flowing to consumers and investors for green power projects. Besides solar energy, the recent announcement of Baltic 1, an offshore project involving 21 offshore wind turbines, is seen as big steps in the right direction.

Experts agree that the transition will be costly and carry economic risks. Already, consumers in Germany pay about 5 U.S. cents per kilowatt hour as surcharge to finance the feed-in tariffs. Plus there is the usual opposition to the mushrooming wind turbines all over the landscape, and new fears of toxins from cadmium used in photovaltaics.

But that is not the issue here. It is simply that where there is political will, much can be done.