The Risks around Renewables? March 2012 Campbell Dunford

2009 EU Renewable Energy Directive 20% of EU Final Energy Consumption (FEC) from renewable sources by % of EU transport fuels to be renewable UK burden share: 15% of FEC by 2020 To reduce green house gas emissions by 34% by 2020; and, 80% by 2050

In a depiction of total OECD‐30 renewable electricity generation the United States, Canada and Norway are the largest contributors. Factoring hydro out of the calculation leaves the United States at the top position, but Germany comes in second and Spain third, with their large penetration of non‐hydro renewables

Perceived risks Technology Performance Supply chain Political Financial Sociological

GW Worldwide wind capacity In the EU 5 Countries have 10% < electricity from wind

Barriers and problems with wind High Capex (especially Offshore) Operations and maintenance costs Skilled staff High material costs Grid access Lack of balancing mechanisms Non availability of storage “Wind energy depends upon other sectors, including ; the electricity grid which is a fundamental enabler for high wind penetration and is under developed….electricity storage (pumped or reservoir, compressed air etc.) and cable manufacture. Current EU hydro pumped storage is only 40GW” Joint Research Council European Commission 2011

UK electricity demand: January 2005 Source: Jim Oswald, et al., “Will British Weather Provide Reliable Electricity”, Energy Policy 36 (August, 2008)

Modeled output of 25 GW of UK wind Source: Jim Oswald, et al., “Will British Weather Provide Reliable Electricity”, Energy Policy 36 (August, 2008)

Load minus wind output = Residual load Source: Jim Oswald, et al., “Will British Weather Provide Reliable Electricity”, Energy Policy 36 (August, 2008)

Worldwide solar electricity production MWhrs Total installed capacity estimated at 55GW

Barriers and problems with solar pv Grid access High entry costs Raw materials/recycling Lack of storage CONCENTRATED SOLAR GENERATION Still fragmented but major aspirational plans Best system availability to date (with storage) = 4,000-5,000 hours But; high capex (up to £5M per MW) and issues with storage and connectivity

Hydropower worldwide 16% of global electricity production 88% of global renewables Capacity circa. 810 GWs High quality and instantly despatchable power. Provides valuable storage

Problems and barriers to hydropower Site Availability Capex Population issues Rainfall

Geothermal worldwide Currently 3% of global electricity Expected to reach 5% by Highly attractive energy source but: Problems Drilling costs Uncertain success rate Legislation on resource ownership

Marine energy? Potential? Globally 800,000km coastline 2% with sufficient power density Maybe up to 500GWs? But still at demonstration phase Wave: Problems with technology, and variability Tidal: Attractive, despatchable power

Unseen consequential risks Other generation uneconomic Investment shortfall Curtailment Negative prices Market control

Costs of technologies Onshore wind1.6 Offshore wind3.0– 4.2 (excludes O & M, grid connection, and insurance) Solar PV3.0 Concentrated solar4.8 HydroN/A Geothermal3.2 – 8.5 Heat pumps1.0 – 2.5 Wave4.0 Tidal3.5 Costs in Million Euro’s per MW SOURCE: JOINT RESEARCH CENTRE 2011 TECH MAP AND I.E.A.

Greatest threats to renewables? Loss of political will? Rampant cost effects Dominance of abundant gas Enhanced coal?

Possible scenarios? Fossil fuel will still be 50% energy in 2050 Coal will be widely used Wind – only in large landmass economies Solar – on demand side to reduce costs Marine – will become a useful team player