Can the World Run on Renewable Energy?

2015-04-19-IGEL-banner art

Without doubt, renewable energy is on a roll. Denmark is producing 43% of its energy from renewables, and it aims for 70% by 2020. Germany, at more than 25% now and 30% soon, is going for 40% to 45% clean power by 2025, 55% to 60% by 2035, and an incredible 80% by 2050. China, despite many challenges, is the world’s leading source of renewable investment, as well as the largest solar manufacturer.

The United States, with about 13% renewable energy generation, has some catching up to do, though California (where some developers are incorporating solar into every house they build) points the way forward. The Solar Energy Industries Association reports that the solar market in the U.S. grew by 41% in 2013, and that it made up 20% of all new generating capacity in that year.

Both solar and wind are making strides. A global Bloomberg survey predicted that solar will grow more than 20% internationally in 2014 (as it did between 2012 and 2013). And the Global Wind Energy Council projects that 2014 will be a very good year internationally for wind as well, with dramatic increases over 2013 and at least 47 gigawatts of wind installed around the world.

Room for Growth

But all this positive movement could obscure the fact that renewable energy is still a very small part of the mix both in the U.S. and globally. The big percentage increases start from a small base (even with its rapid growth, solar is still less than 1% of generation in the U.S., and the official consensus is that the world will run on fossil fuel energy for the foreseeable future). The International Energy Agency’s “World Energy Outlook 2013” reports, “Today’s share of fossil fuels in the global mix, at 82%, is the same as it was 25 years ago; the strong rise of renewables only reduces this to around 75% in 2035.”

Renewable electricity generation from technologies that are commercially available today, in combination with a more flexible electric system, is more than adequate to supply 80% of total U.S. electricity generation in 2050. –National Renewable Energy Lab

Business as usual is also predicted for the U.S. The U.S. Energy Information Administration (EIA) does envision a gradual emissions reduction through energy-efficiency and the use of renewables. The agency said, “Improved efficiency of energy use in the residential and transportation sectors and a shift away from more carbon-intensive fuels such as coal for electricity generation help to stabilize U.S. energy-related carbon dioxide (CO2) emissions.” But the agency’s projections of electricity generation by fuel to 2040 still show overwhelming dominance by natural gas, nuclear energy and coal. At the most, renewable energy could achieve parity with nuclear power, but remain well below the agency’s projections for natural gas and coal. Today’s low oil prices are another challenge to the rise of renewables.

What’s Theoretically Possible

According to Sarbjit Nahal, head of thematic investing in the global strategy division of Bank of America Merrill Lynch, and Beijia Ma, a principal in the group, significant changes are needed to advance renewable sources of energy. The UN’s Intergovernmental Panel on Climate Change (IPCC) said in a late 2014 report, “Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts.” Because of a 40% increase in demand in energy by 2035, they say, we’re “on a carbon dioxide (CO2) emissions trajectory consistent with global temperature increases of two to 4.5 degrees Centigrade, making irreversible climate change a reality.”

They’re hardly alone in this assessment. “A new world energy economy is emerging,” said Lester Brown, president of Earth Policy Institute. “Our civilization needs to embrace renewable energy on a scale and at a pace we’ve never seen before.”

And it’s at least theoretically possible. A study by the National Renewable Energy Lab (NREL) concluded, “Renewable electricity generation from technologies that are commercially available today, in combination with a more flexible electric system, is more than adequate to supply 80% of total U.S. electricity generation in 2050 while meeting electricity demand on an hourly basis in every region of the country.”

Under a rapid expansion program, the world could have nearly five million megawatts of wind power by 2020, Brown said. He added, “Combined with an ambitious solar and geothermal expansion, along with new hydro projects in the pipeline, this would total 7.5 million megawatts of renewable generating capacity, enabling us to back out all the coal and oil and most of the natural gas now used to generate electricity.”

Mark Jacobson, a civil and environmental engineering professor at Stanford, and Mark Delucchi, a research scientist at the University of California, Davis’s Institute of Transportation Studies, have devised an ambitious scenario for a renewable energy takeover. “Our plan calls for millions of wind turbines, water machines and solar installations,” they wrote in Scientific American. “The numbers are large, but the scale is not an insurmountable hurdle; society has achieved massive transformations before.”

Specifically, their global plan imagines 3.8 million large wind turbines, 90,000 utility-scale solar plants, 490,000 tidal turbines, 5,350 geothermal installations and 900 hydroelectric plants. They estimate that the cost of generating power with this network would be less per kilowatt-hour than generating it with fossil fuels or nuclear power.

Other plans concur. “It is technically possible to achieve almost 100% renewable energy sources within the next four decades,” concludes the World Wildlife Federation’s (WWF) 2011 Energy Report, which sees wind, solar, biomass and hydropower as the future major players. “Energy derived from the sun, the wind, the earth’s heat, water and the sea has the potential to meet the world’s electricity needs many times over, even allowing for fluctuations in supply and demand.”

The WWF report estimates that a million onshore and 100,000 offshore wind turbines could meet a quarter of the world’s energy demand by 2050.

Moving Past Coal

Experts believe that to keep global temperatures from rising more than two degrees Celsius from pre-industrial levels, a goal of the Copenhagen Accord, the world’s energy emissions have to peak by 2020 and then quickly decline, reaching near-zero by approximately 2050.

One of the often-cited obstacles to achieving this goal is the world’s reliance on coal for both power and jobs. According to Charles Mann in The Atlantic, coal causes 25% more emissions than oil globally, but cleaning up the sector may not be as difficult as it first appears. Forty percent of the world’s climate emissions come from just 7,000 coal plants. And coal attrition is already happening. The Energy Information Administration reports that the combination of lower-cost natural gas and strong EPA standards for power plants is taking a toll. Not a single coal plant was opened in the U.S. in the first half of the year, and coal was only 39% of U.S. electricity generation in 2013, compared to more than 50% in 2004. The EIA reports that a big flurry of coal closings is expected by 2016.

Uncertainty resulting from intermittent renewables can be reduced by ramping up grid interconnections, enabling load sharing. –Abyd Karmali

The ongoing decline in coal has already lowered employment in the U.S. industry, lessening fears that a low-carbon future will kill jobs. So too has increased efficiency. Due in part to widespread mountaintop removal mining, which employs far fewer workers than underground mining, U.S. coalfield employment has slipped from more than 280,000 jobs in 1978 to less than 100,000 today—even as coal production increased in the same period to nearly a billion tons.

The global picture is complex. Although coal production internationally is still increasing robustly, and the International Energy Agency sees demand growth of 2.1% annually through 2019, employment — at seven million jobs worldwide — has seen some losses. According to the Worldwatch Institute’s Vital Signs, “Many hundreds of thousands of coal mining jobs have been shed in China, the United States, Germany, the United Kingdom and South Africa during the last couple of decades, sometimes in the face of escalating production.”

Renewable power is already helping to compensate for coal industry job loss, with the Solar Foundation reporting 142,698 jobs in that industry in 2013, up nearly 20% from 2012. Global wind power could employ 2.1 million in 2030, at which time solar photovoltaics could have created another 6.3 million jobs.

Worldwide renewable energy employs 2.3 million people, either directly or in feeder industries, in part, says NREL’s “Dollars and Sense” report, because the technology is labor-intensive (more jobs per dollar invested than conventional electric power). Overall, the Center for American Progress (CAP) estimates that making a 40% cut in greenhouse gas from 2005 levels by 2035 would create 4.2 million overall jobs, with 2.7 million net when “estimated contractions in fossil fuel sectors” are factored in. CAP said the overall effect would be a 1.5% reduction in the unemployment rate.

Despite reductions in coal use and projected increases in clean-energy employment, China’s reliance on coal remains a formidable obstacle. Coal produces 70% of China’s energy, and almost four billion tons were burned there in 2012 — a major reason that China has become the world’s largest greenhouse gas emitter. From 2005 to 2011, China (with vast natural coal reserves) added the equivalent of two 600-megawatt plants every week, and from 2010 through 2013, it added coal plants roughly equal to half of all U.S. generation. (At the same time, China is committed to renewable energy — with hydropower included, it’s already at 20%, compared to 13% in the U.S. But demand is rising and so is production: China is planning to double its power-generating capacity by 2030.)

Technology and regulatory hurdles persist

The intermittency of wind and solar power remains a major hurdle, one that’s addressed by Jacobson and Delucchi. To tackle intermittency in renewable energy resources, Jacobson proposes interconnecting geographically dispersed wind, solar and water resources (through a smart grid), and where possible using hydro power to fill in supply gaps. He also advocates demand-response management, over-sizing peak generation (and producing hydrogen with the excess), and storing electric power on site (in batteries) or in grid-connected electric cars.

Abyd Karmali, managing director, climate finance, at Bank of America Merrill Lynch, agreed that uncertainty resulting from intermittent renewables can be reduced by ramping up grid interconnections, enabling load sharing. “Also having the right mix is key, such as using hydroelectric for baseline power where possible,” he said.  “And, of course, it’s also a misconception to say that only renewable energy suffers from volatility — fossil fuel plants get knocked out for various reasons, and that’s not predicted in advance.”

Daniel Esty, director of the Yale Center for Environmental Law and Policy, believes that better battery storage — a holy grail for scientists worldwide — is the key to solving the intermittency problem.

According to Arthur van Benthem, assistant professor of business economics and public policy at the University of Pennsylvania’s Wharton School, current regulatory policy presents another critical obstacle to a low-carbon future. “Incentives for demand response such as real-time pricing for end users are often lacking, but would be instrumental to shift consumption from peak to off-peak hours.” In addition, says van Benthem, “The renewable industry will be at a persistent disadvantage as long as we don’t remove the elephant in the room: the fossil fuel electricity sector should pay the full social cost of their operations. In plain English, we need a carbon tax.”

A Ground-level View

Some countries are already working toward phasing out fossil fuels, with Germany being the most prominent example. The country, which gets 15% of its energy from nuclear power now, wants to phase it out by 2021 — with help from legislation such as the Renewable Energy Sources Act, which provides feed-in tariffs and other financial support. And its goal is to supply 80% of its electricity from renewables by 2050.

In the first quarter of 2014, clean sources produced 27% of Germany’s electricity, with 40.2 billion kilowatt-hours of generation. Nearly half of all new electricity generation in Europe is wind or solar, said George Washington University’s GW Solar Institute. But among the challenges to Germany’s success are power-price surcharges that have raised utility bills for some (and led to unrest among German manufacturers), and at least short-term increases in coal use and imports of renewables are ramped up.

“The easiest way to reduce our large-scale carbon footprint is to become a lot more efficient, and there is still a lot of low-hanging fruit that businesses are beginning to recognize.” Eric Orts

Germany’s renewable portfolio is about double the 13% in the U.S., and Europe’s commitment to a 40% carbon cut by 2030 will ratchet up its efforts substantially. Still, some states get a large percentage of their energy from renewables, often because of large hydro-electric resources.

The U.S. Energy Information Administration expects that electricity generation from renewable sources will increase to 16% in 2040. Renewable portfolio standards (which set percentage goals for renewable energy) are operating in 30 states (plus the District of Columbia), and form a significant incentive if they’re heeded.

Corporations are also in the lead. Renewable energy is already providing power for 94% of Apple’s corporate operations. Walmart launched on-site solar for its American operations in 2005, and made its first major wind power agreement in Mexico the next year. By 2013, Walmart had 335 renewable energy projects worldwide, producing 2.2 billion kilowatt-hours annually and meeting nearly a quarter of the company’s energy needs. Walmart’s goal is to reach seven billion kilowatt-hours and be close to 100% renewable by the end of 2020.

Smaller companies, too, are making important strides. Steve Melink of Milford, Ohio, founded Melink Corporation, originally a HVAC testing firm, in 1987. In 2004, he attended a green building conference and had a “moment of inspiration. It opened my eyes that we were not on a sustainable path.” Today, Melink has deployed more than 100 strategies to get to its current net-zero energy status. In fact, the company’s embrace of sustainability led it to create a lucrative new business in solar leasing, including installation of two three-megawatt systems in Indianapolis and the $12 million 1.56-megawatt solar canopy system it recently built over the parking lot at the Cincinnati Zoo. According to Sophia Cifuentes, the zoo’s sustainability coordinator, having the solar system has resulted in 50 days a year that are effectively off the grid.

 The Challenge of Getting There

Transportation is actually the fastest growing source of CO2 globally, and as such can offset the gains from installed renewable energy. The world car population topped one billion in 2011, and the International Transport Forum thinks it could reach 2.5 billion by 2050. Clearly, that’s not a sustainable number. Daniel Sperling, founding director of the Institute of Transportation Studies at the University of California, Davis, believes that the 87 million barrels of oil produced globally each day could climb to 120 million barrels under that scenario.

The transition to electric vehicles has the potential to blunt the oil consumption and climate impacts of the world’s cars, but there’s a long way to go. In the U.S. in 2014, 119,710 plug-in vehicles were sold out of 16.5 million total, and the numbers are smaller around the world. Electric cars are currently expensive, but with battery prices dropping, their momentum is likely to increase. Lower-cost (and longer range) cars, which cost much less to operate than conventional cars, will be attractive to buyers globally. Lowering emissions becomes a virtuous circle when the power running zero-emission electric cars comes from plants fueled by renewable energy.

Making cars more energy-efficient, as in the U.S. goal of 54.5 mpg fleet averages by 2025, is important, as is moving away from cars altogether. Mass transit is key, but other innovative urban policy is also pointing the way forward: The U.S. remains highly auto-centric, but cities such as Helsinki and Hamburg in Europe have ambitious, technology-aided, plans to go car-free or as close to it as possible. In place of private cars will be telephone-dispatched bus services, ride sharing, municipal bicycles and multiple rail options.

Virtually all the experts agree that the transition to a clean energy economy will be difficult. Carl Pope, the former executive director of the Sierra Club, points out that if clean energy investments result in a 5% reduction in global fossil fuel demand, the law of supply and demand would result in a sharp 25% to 30% drop in fossil fuel prices, increasing non-renewables’ appeal to consumers.

Robert Giegengack, professor emeritus of earth and environmental science in the School of Arts and Sciences at the University of Pennsylvania, agrees the transition won’t be easy, “but it is inevitable.”

Moving to renewables could take as long as 100 years, Esty said. Eric Orts, the director of Wharton’s Initiative for Global Environmental Leadership (IGEL) and a law professor at the University of Pennsylvania, also sees a fairly hard road ahead, but it’s an achievable goal. “I don’t think it’s an easy transition at all,” he said. “But I do think it’s possible, and we definitely need to move in that direction.”

Orts adds, “Even with wind and solar, it’s not simply zero emission — there are manufacturing costs, mining and maintenance issues. It should be said that the movement toward renewables has to be coupled with energy-efficiency efforts. The easiest way to reduce our large-scale carbon footprint is to become a lot more efficient, and there is still a lot of low-hanging fruit that businesses are beginning to recognize.”

Citing Knowledge@Wharton

Close


For Personal use:

Please use the following citations to quote for personal use:

MLA

"Can the World Run on Renewable Energy?." Knowledge@Wharton. The Wharton School, University of Pennsylvania, 23 April, 2015. Web. 26 August, 2016 <http://knowledge.wharton.upenn.edu/article/can-the-world-run-on-renewable-energy/>

APA

Can the World Run on Renewable Energy?. Knowledge@Wharton (2015, April 23). Retrieved from http://knowledge.wharton.upenn.edu/article/can-the-world-run-on-renewable-energy/

Chicago

"Can the World Run on Renewable Energy?" Knowledge@Wharton, April 23, 2015,
accessed August 26, 2016. http://knowledge.wharton.upenn.edu/article/can-the-world-run-on-renewable-energy/


For Educational/Business use:

Please contact us for repurposing articles, podcasts, or videos using our content licensing contact form.