Renewable Energy Report - Executive Summary 2011
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Executive Summary of EnergyLab Foundation Report on Renewaabes Energy

Executive Summary of EnergyLab Foundation Report on Renewaabes Energy

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Renewable Energy Report - Executive Summary 2011 Renewable Energy Report - Executive Summary 2011 Document Transcript

  • Renewable Energies: State of the Art Technological Solutions, Environmental Impact, Legislative Framework and Future Development Executive Summary
  • Renewable Energies: State of the Art – Executive SummaryThis booklet offers a summary of the themes that are dealt with in the book Leenergie da fonti rinnovabili: lo stato dellarte published in November 2011 andpresented in Palazzo Marini in Rome (the Italian lower house of parliament).The idea of extracting a brief summary from the longer document arose out of adesire to make available to a wider public an insight into the extensive and detailedinvestigation that the Milan-based Foundation EnergyLab has been carrying out inrelation to the theme of renewable energies in Italy. The work is the product of thecombined efforts of a group of experts that gravitate around the Laboratorio EnergieRinnovabili (Renewable Energies Laboratory), a project conceived of, developed andpromoted by Foundation EnergyLab. The contents of the booklet fully express themulti-disciplinary approach characteristic of the work of the laboratory. The researchin question lasted for over a year and the final result is the fruit of a highly articulatedand carefully orchestrated effort that engaged a range of figures from various areas ofthe academic, government and business worlds. In particular, the protagonistsincluded professors from Milan’s five universities and various research centres –members of the foundation – as well as a range of people from the government andbusiness world.EditorSilvana Stefani Università degli Studi di Milano–BicoccaAuthorsMaurizio Acciarri Università degli Studi di Milano-BicoccaLaura Ammannati Università degli Studi di MilanoAntonio Ballarin Denti Università Cattolica del Sacro CuorePaola Bombarda Politecnico di MilanoAllegra Canepa Università degli Studi di MilanoAurora Caridi Ricerca sul Sistema Energetico–RSE SpAClaudio Casale Ricerca sul Sistema Energetico – RSE SpAAndrea Cerroni Università degli Studi di Milano-BicoccaMaria Chiesa Università Cattolica del Sacro CuoreNiccolò Cusumano IEFE – Università Commerciale L. BocconiDaniele Felletti Università degli Studi di Milano-BicoccaNicola Fergnani Politecnico di MilanoMarzio Galeotti Università degli Studi di MilanoEttore Lembo Ricerca sul Sistema Energetico – RSE SpAArturo Lorenzoni IEFE – Università Commerciale L. BocconiEnnio Macchi Politecnico di MilanoGiampaolo Manzolini Politecnico di MilanoPaolo Silva Politecnico di MilanoFederico Viganò Politecnico di Milano 4
  • Renewable Energies: State of the Art – Executive Summary The Scientific MembersThe EnergyLab Foundation was founded Università Commerciale “L. Bocconi”in Milan in 2007 with the goal of creating Università degli Studi di Milano Bicoccaa network of actors in the energy field Università Cattolica del Sacro Cuoreincluding universities, the business world Politecnico di Milanoand regional and local government. It is a Università degli Studi di Milanonon-profit organization whose members RSE – Ricerca sul Sistema Energeticoinclude Milan’s 5 major universities. Thefoundation promotes research andinnovation in all areas of the energysector, operating by way of 6 laboratoriesfocusing on different themes:Renewable Energies, Smart Grids,Nuclear Security, Electric Mobility,Energy Efficiency and Access toEnergy in Developing Countries.The foundation’s legal status as aparticipatory foundation makes it possiblefor it to undertake non-profit activities,furnishing support to its members andpresent and future partners.To Contact Us:The EnergyLab FoundationPiazza Trento, 1320135 Milan (Italy)Phone +39 02 7720.5265Fax +39 02 7720.5060info@energylabfoundation.orgwww.energylabfoundation.org 5
  • Renewable Energies: State of the Art – Executive SummaryExecutive SummaryAt present climate change, environmental pollution and supply uncertainty are some ofthe main problems to be solved. Search for possible solutions is difficult and needs biginvestments and deep transformations in infrastructures for energy generation.Nevertheless, a solution in the direction of a large scale conversion towards clean,affordable and renewable energy sources (RES) must be found. In this environmentalframework, the world is progressively moving towards new technologies for energyproduction: in 2008 electricity produced by renewables was about 18% with respect toglobal electricity production (Fig. 1); in 2009, for the second consecutive year, UnitedStates and Europe installed more renewable plants than conventional ones (based onfossil fuels like carbon, oil and natural gas). In Europe about 60% of the new installedcapacity is renewable and more than 50% is located in the United States. Some scenariosforesee that from 2012 the rest of the world will follow the same trends and newrenewable plants will overwhelm the conventional ones in capacity installed (REN21,2010). Despite the crisis of other economic sectors, just in 2009 renewable plants capacityextraordinarily increased (Fig. 2), in particular, PV (+53%), wind (+32%) and solarthermal (+41%). Recent studies even foresee energy generation from renewable energy 4
  • Renewable Energies: State of the Art – Executive Summarysources by 100% (De Lucchi and Jacobson, 2011; Jacobson and De Lucchi, 2011).Security of supply and external dependence are some other critical issues. In 2007 Chinaimported oil by 47% while the United States and Europe by 94%.Fig. 1 Electricity production from renewables in the world (year 2008): 3782TWh (Total production 20260TWh). Source: IEA end-2004 to 2009 Five Year Period 2009 only 120% 102% 100% 80% 60% 60% 53% 51% 44% 41% 40% 32% 27% 19% 21% 20% 20% 10% 12% 9% 4% 4% 0% er n ) n e) r er g ed io t io we in w al w ct -ti po at sc uc po po du r id e od ity d /h al al ro in (g ti l pr er rm m lp W (u V er at el he o rP th w an ies V ot la rP ot h r od Ge la So Et rh la So Bi So la SoFig. 2 – Worldwide average increase of renewable energy sources capacity from 2004 to 2009Source: REN21 5
  • Renewable Energies: State of the Art – Executive SummaryWorldwide, in 2009 Italy has gained the fourth position for new investments and thesecond position after Germany in the PV grid-connected sector (Tab.1). At the end of2009 Italy got a fifth position for installed capacity for both geothermal and PV energy(Tab. 1 and Fig. 3) and the sixth position for wind energy (Fig. 4).Existing capacity as of end-2009Renewables power capacity China United Germany Spain India(including only small hydro) StatesRenewables power capacity China United Canada Brazil Japan(including all hydro) StatesWind power United China Germany Spain India StatesBiomass power United Brazil Germany China Sweden StatesGeothermal power United Philippines Indonesia Mexico Italy StatesSolar PV (grid-connected) Germany Spain Japan United Italy StatesSolar hot water heat China Turkey Germany Japan GreeceTOP FIVE COUNTRIES #1 #2 #3 #4 #5Annual amounts for 2009New capacity investment Germany China United Italy Spain StatesWind power added China United Spain Germany India StatesSolar PV added (grid- Germany Italy Japan United Czechconnected) States RepublicSolar hot water/heat added China Germany Turkey Brazil IndiaEthanol production United Brazil China Canada France StatesBiodiesel production France/Germany United Brazil Argentina StatesTab.1 Renewable energy sources. The first 5 Countries (2009) 6
  • Renewable Energies: State of the Art – Executive Summary Other EU Other 7% 4% South Korea 2% Italy 5% United States Germany 6% 47% Japan 13% Global Total = 21 GW Spain 16%Fig. 3. PV installed capacity in 2009– The first CountriesSource: REN21 Existing in 2009 Added in 2009 40 10 35 30 13,8 1,9 25 Gigawatts 2,5 20 15 1,3 10 1,1 1,1 1,1 0,6 0,3 5 0 a ly a k al ce n y es m di in ar ai an I ta ug an do at In Ch Sp nm rm rt St Fr ng Po De Ge d Ki i te d Un i te UnFig. 4 - Wind installed capacity in 2009- The first 6 CountriesSource: REN21An incentive policy is central to launch new technologies. So far this system has beenadopted in more than 100 countries (Fig.5) RES represent an economic area withenormous potentials, able to attract huge public and private capitals for financing energyplants of different capacity, from roof PV panels till concentration solar plants. 7
  • Renewable Energies: State of the Art – Executive SummaryFig. 5 Incentives in 2009 – EU27Source: ECOFYS, 2010For the credit area RES are a unique opportunity, taking advantages and contributing tothe growth and showing at the same time a high environmental sensibility. Banks andfinancial Institutions should therefore develop internal high qualified skills for projectsevaluation. Actually, uncertainty in the stability of public incentives systems and theintrinsic risk due to technological innovation assigns a higher risk to renewableinvestments than to other investment fields. Furthermore, RES are a challenging researcharea, from technological, economic, financial, environmental and sociological points ofview.On the 12th of December 2008 the Directive Climate and Energy 20-20-20 had beenapproved by the European Council. The agreement stated, for EU Countries, the reductionof greenhouse gases emission by 20% and an increase in energy efficiency and renewableenergy production by 20% by 2020. The Directive 2009/28/CE had stated for Italy thecompulsory target of 17% of final energy consumptions by RES and that consumptionsdue to transports would be covered by renewable energy sources by 10%.Such a target will be reached through the reduction of final energy consumptions and theincrease in energy production from renewable energy sources in the three different areasdealt with by the Directive: electricity production, heat production and the transportsector. At the end of July 2010 Italy, as stated by the Directive 2009/28, had sent theNational Action Plan on renewables (National Action Plan) to the European Commission: itshowed the national objectives and trends till 2020 on the one hand and the measuresand actions to be enhanced or adopted in order to fulfill the objectives on the other hand.The EU 27 situation in 2005 with regard to the 2020 target is represented in Fig. 6. 8
  • Renewable Energies: State of the Art – Executive Summary Sweden Latvia Finland Austria Portugal Denmark Estonia Slovenia Romania France Lithuania Spain Bas eline (actual) 2005 Level Germany Target Greece Italy Target by 2020 Bulgaria Ireland Poland UK Netherlands Slovak Belgium Czech Cyprus Hungary Luxembourg Malta Total (EU-27) 0% 10% 20% 30% 40% 50%Fig. 6 – European targets–Quota of final energy consumptions (2005 compared to 2020)Source:REN21The main targets of the national energy strategy concern supply uncertainty, the fosteringof innovative technological chains, environmental safety. The opportunities coming fromthe fulfilment of such targets, in particular concerning energy renewable sourcesdevelopment, will be considered by national industry using the resources andcompetences already acquired in other manufacturing sectors. At a regional level bigefforts should be done spent in order to respect the European targets assigned to Italy.The current mechanism under development at regional level is called burden sharing.There is a shift from the traditional sectors planning to an integrated approach where thePlan for a Sustainable Lombardy will be transversal and include all the regionalgovernance sectors.While the burden sharing is still under definition, the Lombardy Region has adopted thenational targets:• 20% reduction of greenhouse gases emission;• Energy saving by 20% with respect to actual consumption ;• Enhancement (final target:17%) of renewable energy contribution to final energy consumption ;• consumption in the transport sector covered by biofuels by 10%. 9
  • Renewable Energies: State of the Art – Executive SummaryThe Lombardy Region, with an electricity consumption of 24 Mtep in 2007, covers 20% ofnational energy consumption.The GSE Report (2009) underlines a renewable energy production by 20,4% for theLombardy Region with respect to national level , mostly associated to hydroelectricenergy.Splitting the overall data with respect to each source, it emerges that, with regard to thecomplete absence of wind plants installed, the Lombardy Region shows significativeevidence at national level for all the other sources: hydro (25%), solar (10,5%),biodegradable wastes (56,9%), biogas (17,1%), biomasses and bioliquids (7,4%).It becomes then essential to plan specific policies in order to define the short to mediumperiod technologies based on renewable energy sources with a major diffusion potential inthe Lombardy territory, along with non secondary evaluations concerning the potentialimpacts on the local industrial chains involved and on the whole system in general.In this framework, Energy Lab Foundation adopted a “low carbon” energy policy for theLombardy Region.In particular, thanks to its Renewable Energies Laboratory, Energy Lab Foundationdeveloped a Report on the future-oriented diffusion of Renewable Energies in Lombardyby 2020, analysing a plurality of aspects, in order to define the real developmentopportunities for the Lombardy Region. This Executive Summary synthetically describesthe topics developed in the Report.All the studied technologies (hydro, solar, geothermal, biomasses, biogas) could find a realapplication in the Lombardy Region and/or foster the development of Lombardy industries.Therefore wind technology has been included too.A multidisciplinary analysis deals with technological, economical, legal and environmentalaspects and even considers local and public acceptance, the impact on the electric system,the industrial chain and the state of the art of research in the Lombardy Region.The Report objectives are manifold. The Report addresses different actors in the RESdevelopment process: private investors and finance (EAC, Incentives), the regulator(EROEI indicator for sustainability, CO2 abatement costs by 2020), the local administrator(environmental section, acceptance), the producer (technologies and costs). The legalsection is transversal since it is a part of general interest. 10
  • Renewable Energies: State of the Art – Executive SummaryRES development constraints, like acceptance and regulation risks, are also underlined inthe Report.The different sections developed in the Report are the following:The technological section (Chapter 1) , developed by the Politecnico di Milano (POLIMI),describes, for each specific technology, its costs, its potential development, thetechnological evolution and prospects for end users. A table summarises the results at theend of the Chapter.In the legal section (Chapter 2), developed by the Università di Milano (UNIMI), theregulative framework (till May 2011) concerning the authorisation processes for theinstallation and operation of energy plants is reported, underlining the importance of fastand simplified procedures for plant realisation.A low carbon Region perspective must take into consideration environmental aspects,more and more relevant and with economical impacts, given the European targets.The environmental section (Chapter 3), developed by the Università Cattolica del SacroCuore (UNICATT) and UNIMI, analyses some relevant aspects concerning the CO2abatement costs for the different technologies and their environmental impacts. Theresults show high costs for some technologies but a good potential for a sustainabledevelopment due to others. The analysis takes into account different economicalscenarios.The economical section (Chapter 4), developed by the Università Bocconi di Milano(UNIBOCCONI), analyses the energy production costs for each technology, considering allthe different expense items and operational modes of renewable energy production plants.The analysis takes into account different economical scenarios. Another economical aspectdeals with the analysis of incentives system.The section concerning industrial and research state of the art (Chapter 5), evaluates thestate of the art of the renewable energies industrial chain (developed by UNIBOCCONI)and the local state of the art of research in the RES field, developed by Energy LabFoundation and elaborated by the Università di Milano Bicocca (UNIMIB).Renewable energies implementation is not only a means to reach the European targetsbut mainly an opportunity for local development. Social acceptance is studied in theSociological Section (Chapter 6), developed by UNIMIB and RSE S.p.A. Different critical 11
  • Renewable Energies: State of the Art – Executive Summaryaspects are underlined, from the approval level till the project realisation level on a localscale.Furthermore, RES integration in the electrical system creates other problems to the griddue to the intermittency of renewable energy production and the obstacles generated byconnection delays.The section Non programmable Renewable Energy impact on the electrical system(Chapter 7) , developed by RSE S.p.A., focuses on non programmable renewable energyplants underlining important differences even among plants characterised by variable andintermittent sources.Finally, conversion tables and synthesis tables for each technology are reported.The technologiesThe most interesting technologies that make use of renewable energy sources, uponwhich there are a lot of expectations in a framework of sustainable development at anational and international level are described. For each energy technology boththeoretical and operational principles are reported, along with different plant examplesand their potential applications.In particular, the following renewable energy sources are discussed:• biomasses (for electricity and thermal production, even in the cogenerative mode, and for biofuels production);• geothermal energy (from electricity production till district heating and heat pumps);• hydroelectric energy (mainly focusing on the real small scale applications in Europe);• solar energy (both electricity from PV or concentration systems and thermal energy production)• eolic energy (on shore, off shore and minieolic)The section ends with a synthesis table with economical data (Table 2) used as datainputs for other evaluations developed in the following chapters. 12
  • Renewable Energies: State of the Art – Executive SummaryTab. 2 - Economical dataNotes:• O&M costs by POLIMI refer to the energy produced (€/MWh). Operational hours equivalent have been derived at a national level from TERNA source, whenever available, on the basis of installed capacity and energy produced data. Concerning energy produced, the reference year is 2009 (most recent data available) while an average value between 2008 and 2009 has been used for installed capacity (referring to 2009 installed capacity, some plants that have just worked for a few days have been included thus influencing the calculated equivalent hours).• Concerning off shore wind plants, since national data are not available, the international reference (belonging to North European Countries) has been adopted;• Concerning PV, the calculated hours equivalent represent an average national value. Considering plants located in Southern Italy, a real average value could be 1500 while in Northern Italy 1000.• With reference to concentrating solar plants (CSP), a 7 hour equivalent storage has been considered and a multiple solar value (ratio between the thermal power 13
  • Renewable Energies: State of the Art – Executive Summary generated by the solar field and the one sent to the power block in order to be converted into electricity) of 2.• Concerning geothermal and solar plants, being the applications manifold, more detailed evaluations for the different energy technologies are reported in the specific paragraphs.The legal aspectsDuring the last years, the European institutions have defined a transition path towards ahigh energy efficiency economy characterised by low CO2 emissions. According to thesegoals the diversification of the energy sources and, especially, the increase of renewablesources in the energy production will be playing a relevant role.Specifically, with the Directive 2009/28/CE the CO2 emission cut as well as the increase inenergy efficiency targets (both by 20%) have become compulsory. Italy has adopted thisDirective with the Legislative Decree 2011/28 that redefines different aspects concerningthe authorisation procedure aimed at building and operating power plants.So far the location and construction of power plants for renewable energy production hasrepresented a controversial issue. As a matter of fact, on the base of the allocation ofcompetences stemming from the Italian Constitutional Reform (2001), the Regions areentitled with administrative and legislative competences that make it possible todifferentiate their policies and, sometimes, to influence the development of renewableenergy production.It would be mentioned, as an example, the Moratorium bills concerning the authorisationprocedures approved by Regions such as Puglia, Sardegna and Molise and successivelyruled unconstitutional by the Constitutional Court.Therefore specific guidelines have been enacted (10th September 2010) aimed at defininga common procedure (the “single procedure”) and the minimal conditions required for therelease of the single permission, including the assessment of the harmonization conditionsof the new plants with the surrounding landscape.The most recent Legislative Decree deals with these aspects. It still foresees the “singleauthorisation procedure” for the plant construction (in addition to the “enabling simplifiedprocedure” and the notice concerning “free building activities”). 14
  • Renewable Energies: State of the Art – Executive SummaryHowever it provides modifications concerning both the procedure timing and the optionalrequest of an Environmental Risk Assessment (ERA): 180 days including the procedurewhich leaves out the ERA and 90 days after the time due for the ERA, when requested.Furthermore, the regions (and under specific conditions the provinces when delegated) are entitled to provide the authorisation concerning the connection between power plants and the national grid by a different sort of single procedure. This procedure must be coordinated, i.e. carried out at the same time, with the related power plant authorisation procedure. Environmental impactEnergy production from renewable sources addresses to a sustainable developmentframework; however, a renewable energy source does not imply the absence ofenvironmental impacts.This Report compares different energy technologies describing, from a qualitative point ofview, their potential environmental impact. Moreover, interesting quantitative indicatorsare considered, i.e. the avoided CO2 emissions during plant operation and their energyefficiency along their estimated lifetime.Hydroelectric plants that require human intervention, such as building dams, artificialbanks, but also the regulation and reduction of flow, might alter energy exchangesamong the different watercourse sections. That is the reason why the concept of minimumvital flow for watercourses has been introduced. Other possible impacts are linked to thehydroelectric plant structure, due to the realisation and operation of its differentcomponents. As other civil structures, different land and landscape use as well as tourismand noise effects have to be considered. 15
  • Renewable Energies: State of the Art – Executive SummaryIn general, environmental impacts associated to large hydroelectric plants can beproportionally referred to small plants as well. PV plants do not generate chemical oracoustic pollution. However, during production processes the environmental impact issimilar to the one belonging to a chemical plant since in the production process toxic orexplosive substances are used and need the presence of security systems and specificinstruments in order to protect the health of both workers and the production site.Furthermore, in building and installing the system components, the high energy quantityneeded comes from fossil fuels thus determining a negative environmental impact beforeentering into operation.Land occupation is another important critical aspect for photovoltaic energy systems.Even for thermal solar panels, that convert solar energy into thermal energy, the maindirect environmental impacts derive from the system’s components production andtransport while the main indirect impacts are linked to raw materials and electricity use.As solar panels, this technology has visual impact problems that can be reduced choosingforced circulation plants located inside residential houses.On the contrary, CSP do not lead to relevant environmental problems since the toxicthermal fluids used in the past have been substituted by the molten salts technology, amixture of sodium and potassium nitrates largely used in agriculture as fertilisers: they areeasily disposed of, non-toxic and non-flammable and they solidify very fast in case ofaccidental leaks. Nonetheless, the high soil occupation due to these plants, as well asorographic, geological and landscape constraints limit their technological potential.Among all the technologies considered, undoubtedly wind energy is characterised by theleast environmental impacts. Actually, wind plant operation does not imply toxicsubstances use nor air and water environmental pollution generation.Public opposition is the first obstacle for wind plant diffusion if compared to their visualand acoustic impacts, mainly when they are installed in cultural heritage or protectedareas.As the other renewable energy sources, a geothermal plant generates less CO2atmospheric emissions with respect to a traditional power plant. Nonetheless, a negativeenvironmental impact is due to fluid uptake from the subsoil such as CO2, H2S, CH4 andNH3, along with chemical elements uptake (mainly heavy metals) by geothermal sources. 16
  • Renewable Energies: State of the Art – Executive SummaryConcerning geothermal probes associated to heat pumps, the environmental impactderives from the deep or superficial soil drilling. Furthermore, some researches havedemonstrated that when heat demand is not accompanied by a soil “regenerative” action,the geothermal field is predestined to progressively reduce its potential.Among the energy technologies that could interest the Lombardy Region, a major rolecould be played by biomasses: in this Report we have especially considered agriculturaland forestry residues, along with energy crops with a low environmental impact belongingto Short Rotation Forestry (SRF) cultivations.In order to restrain the environmental impacts due to atmospheric emissions of toxiccompounds, biomass combustion must be oriented to small and high efficient plants thatuse wooden material (preferably pellets) or to big centralised cogenerative plants for alittle community of end users (Tab.3). Technology Fossil PM10 CH4 N2O COVNM NH3 SO2 NOX CO2 Open fireplace - 71,1 9,03 - 0,51 2,68 100 0,81 0,35 2,68 Traditional stove - 650 4,03 - 2,12 2 20 0,81 - 0,03 2 Low emissions - 869 3,03 - 2,72 1,44 9,89 0,41 - 0,17 1,44 wood stove Pellet stove (BAT) - 998 0,53 - 3,09 2,79 0,91 0,11 0,08 2,79 CHP plant - 962 0,0002 - 2,40 - 1,3 - 0,36 - 0,006 - 1,35 - 1,3 8 MW e CHP plant - 814 0,096 - 2,207 0,0528 - 0,20 0,02 0,05 0,54 8 MW e - SRF CHP plant - 896 0,003 - 1,69 - 0,80 - 0,15 0,34 - 2,41 - 0,80 100 MW eTab. 3: Comparison between atmospheric emissions avoided or generated by biomass combustion withrespect to the use of fossil fuels (expressed in kg·t-1 of dry biomass)Even biogas plant diffusion is limited by factors that negatively impact on theenvironment. The anaerobic digestion market is actually strongly influenced by limitationsin spreading soils with nitrogen-based compounds.The last energy technology considered is represented by second generation biofuels,among which bioethanol and biodiesel in particular, since agricultural and forestry residuesused for biofuels production leads to high greenhouse gases emission reduction withrespect to the use of fossil fuels along an LCA analysis; nonetheless, atmosphericparticulate and polycyclic aromatic hydrocarbons (PAHs) emissions reduction stronglydepend on both biodiesel percentage and engine type. 17
  • Renewable Energies: State of the Art – Executive SummaryCO2 avoided emissions can be used to select the best technologies for Lombardy fromboth environmental and energy production points of view.Besides the environmental analysis mainly based on avoided emissions the EROEI (EnergyReturn On Energy Investment) indicator has been considered in order to evaluate the“energy use efficiency” due to an investment in an energy production plant based on RESalong its lifetime. The EROEI indicator is calculated as the ratio of the net energy returnedby the plant during operation on the overall energy consumption during all the plantlifetime. The break even point for a sustainable energy technology is then given byEROEI=1. Different papers at international level show a range of EROEI values calculatedfor different energy technologies, depending on different methodological approaches andinput datasets (Fig. 7). The competition between RES and traditional technologies basedon fossil fuels is evident, considering that high “energy efficiency ratios” correspond toplants with higher EROEI values.Fig. 7: Range of EROEI values associated to different energy technologies 18
  • Renewable Energies: State of the Art – Executive SummaryRenewable energy contribution to the regional targetsSince a “burden sharing” concerning the amount of renewable energy to be produced by2020 among the Italian Regions has not been defined yet, the Lombardy Region has fixedthe target of 17% of its final energy consumption using RES (including a minimumcontribution of 10% of biofuels for the transport sector), then imposing to the Region thesame national target.The fulfilment of the defined target will then be possible with an increase of the actualrenewable energy plants capacity and/or with a reduction of the regional energy finalconsumptions.Actually, the increase of the energy efficiency of actual and future energy productionplants will imply a reduction of final energy consumptions: therefore, the regional targetmust even take into account this last factor in the quantification of the energy producedby renewable energy sources in the Lombardy Region by 2020.From the results contained in the Report it emerged that, with respect to the regionaltarget concerning the abatement of about 8000 ktCO2 beyond 2020, the renewablesources contribution will cover a minimum percentage of 50%, in the hypothesis that 10%is represented by the use of biofuels in the transport sector (see Fig.8 for the energyproduced by each technology). Fig.8: Scenario concerning renewable energy production in the Lombardy Region in 2020 19
  • Renewable Energies: State of the Art – Executive SummaryIt’s interesting to calculate the CO2 avoided emissions (t/y) per MW installed, resultingfrom the average equivalent hours of each plant considered in the study (Fig. 9). As canbe seen fro Fig. 9, mini and small hydroelectric plants, along with plants fuelled withbiomasses and biogas plants, play a major role in terms of CO2 abatement.Fig. 9: CO2 avoided emissions by a 1 MW plantCO2 abatement costs for the different energy technologiesFrom the CO2 abatement cost for each energy technology, the increase in costs dependingon the market interest rates considered (4%, 6% and 10%) appears evident (Fig. 10, 11and 12). First of all, it’s interesting to note that the solar thermal technology is definitelycompetitive since it is characterised by very low CO2 abatement costs even showingnegative values associated to lower WACC values (4% and 6%). 20
  • Renewable Energies: State of the Art – Executive SummaryOn the contrary, technologies, such as PV, that have always been strongly fostered witheconomical incentives in the Lombardy Region, show very high CO2 abatement costs.Small wind energy technology, despite the absence of data concerning its potential by2020 in the Lombardy Region, appears very penalised, figuring in the very last position ina scale of technologies characterised by increasing CO2 abatement cost values.Neglecting technologies with a null potential in the Lombardy Region (i.e. onshore andoffshore wind plants and concentrating solar plants), from the analysis of CO2 abatementcosts it emerges that the only production of electricity due to the combustion ofagricultural and forestry residues is not convenient. On the contrary, while solar thermalplants, small and mini hydroelectric plants and low temperature geothermal plants play animportant role undoubtedly presenting an interesting development potential by 2020 inthe Lombardy Region.Fig. 10: Minimum and maximum CO2 abatement costs for different RE technologies (Interest rate = 4%) 21
  • Renewable Energies: State of the Art – Executive SummaryFig. 11: Minimum and maximum CO2 abatement costs for different RE technologies (Interest rate = 6%) Fig. 12: Minimum and maximum CO2 abatement costs for different RE technologies (Interest rate = 10%) 22
  • Renewable Energies: State of the Art – Executive SummaryEconomical evaluation and incentivesWith reference to the economical evaluation, for each technology the Equivalent AnnualCost (EAC or levelised cost), i.e. the net overall cost value for the energy producer for aninvestment along the real lifetime of a specific energy production plant, has beencalculated (€/MWh).An average lifetime of 15 years has been considered, apart from considering a possibleresidual time for specific cases like hydroelectric plants. As costs data the same reportedin the technological session by POLIMI have been used (Tab.2).Three economical scenarios associated to different interest rates values (4%, 6%, 10%),each one split in low cost and high cost sub scenarios, have been considered.Results are summarised in Fig. 13: the minimum values of the bars represent the EACcalculated for the low cost sub scenario at 4%, while the maximum values represent theEAC calculated at 10% for the high cost sub scenario. 600 500 400 €/MWh 300 200 100 0 ) ) ) ) ) ) ) ) ) ) ) W W kW W W W W W kW kW kW M M M M M M M 0 0 (3 0 0 0 (5 7 0 7 (5 (2 0 00 0 (2 (2 (1 (1 (2 (5 V d ro re (1 h in y rP s s d ar s yd ho as as as in W ga V la in Fl m H rP om W ff s So io B io al la O B Bi al B rm So d rm id l id in e qu e th W So th eo Li eo G GFig. 13: EAC ranges (€/MWh) calculated for different technologies and scenariosIn literature incentives for energy produced by RES is calculated depending on the extraproduction cost with respect to conventional fossil fuels. Nevertheless, other barriers(economical-financial, political, cultural and environmental) prevent RES diffusion, thereby 23
  • Renewable Energies: State of the Art – Executive Summaryincreasing the risk profile. Therefore, the incentives, increasing the project revenue,decrease the risk and give rise to a market signal for individuals and Institutions. Thereare different kinds of incentives: in the Report only incentives linked to electric energyproduction are considered. Actually, RES for thermal energy production have been scarcelyconsidered by the legislator although they present the biggest increase margins andattention has been limited to taxation mechanisms (as the costs detraction by 55% forsome applications in the domestic sector).At present, the incentive system is as follows:• Green certificates;• Feed in tariff for RES electricity except PV (“ Tariffa Omnicomprensiva”);• Feed in tariff for PV systems (“Conto Energia”);• CIP6 subsidy.These financial mechanisms are funded through the A3 component of the nationalelectrical bill (representing 68% of the system charges) by the end user.The high increase of capacity installed, with particular reference to PV installations thathave access to the “Conto Energia” incentive system, costed about 3,4 billion euros in2010; forecasts for 2011, according to recent announcements of the President of theAuthority for Electricity and Gas (AEEG), indicate a cost of 5 billion euros. Overall Unitary % Total GWh subsidy subsidy subsidy Type of subsidy (MLN€) (€/MWh)CIP 6 6300 780 123,8 23,0%Green certificates 17800 1580 88,8 46,5%Tariffa omnicomprensiva 1220 212 173,8 6,2%Conto Energia 1967 826 419,9 24,3% 27287 3398 806,3 100,0%Tab. 4: Overall and unitary subsidies with respect to energy produced in 2009Source: IEFE elaboration from AEEG dataThe Lombardy Region is directly involved in RES promotion through the expense of 201,6M€ that would generate 493,7 M€ of investments till 2013. The contributions areessentially in capital account and are activated through call for proposals. 24
  • Renewable Energies: State of the Art – Executive SummarySome of these economical burdens are going to increase with the increase of plantcapacity. Therefore, AEEG has invited the Government to “shift a significant part of theburdens due to the RES incentive system from the energy bill to general taxation, in orderto guarantee progressive and proportional criteria for public costs funding”, apart fromrevisiting the incentives criteria (mainly Green Certificates), considered too generous for adecline of generation costs. In our opinion this is a dangerous choice: if, at present,incentives are accepted since they are not politically influenced and are directly bought bythe consumer, the shift to general taxation would create uncertainties in the attendedcash flow, linked to funds availability of the financial administration. In order to calculatethe RES net impact on public accounts we can consider the revenues (in terms of VAT forexample) coming from new investments , along with the occupational impact.The adoption of the Directive 2009/28/EC foresees a deep revision of the actual systemstarting from January 2013. A lot of specific issues will be defined through ExecutiveDecrees to be emitted during the next months. It must be underlined that everyinstrument presents its pros and cons that must be considered with respect to both thefixed targets and the Reference Institutional context. Therefore, the research of theeffectiveness and efficiency of the incentives system must proceed with a credible andrealistic promotional diffusion policy.State of the art of research and industries operating in the RES sectorAt present, databases that exhaustively contain information on industries operating in therenewable energy chain at a regional level are not available, mainly for cross-membershipof industries with existing merceological categories .It is then extremely difficult to extract and map the value chain of RES area where productand service are so strictly related.Furthermore, this area is quite young and constantly changing and the frequentdiversification of industries belonging to similar areas are not easily captured by statisticalsources.Mapped industries are 240, representing 0,05% of the overall regional industries, thatwere 499.005 in 2008 (Istituto Tagliacarne, 2010). Data are referred to 2010.Turnover data are general; at this level it is not possible to define the turnover due toactivities just related to renewables. 25
  • Renewable Energies: State of the Art – Executive SummaryThe data available for number of employees and for the turnover data, are given for thewhole company so is not possible to define the exact number of employees working onactivities in RES field for industries with more product lines. The same can be stated forindustries located in the Lombardy Region but operating at a national (and/orinternational) level.In order to reduce the possible imbalance generated by the mapping procedure, thebiggest industries with a limited local territorial occupation and with scarce dataconcerning their business dimension in RES were excluded. This choice had excluded wellknown energy producers on a national scale (i.e. General Electric, Siemens, ABB).From the analysis (Tab. 5) it emerged that the total gross turnover of industries withavailable data, about 91% of the sample, amounts to 5,6 billion euros, representing1,76% of the total added value generated in Lombardy in 2008, with single industrialcontributions well beyond the regional average.If we consider the net profit as of 2009, 70% of industries produced revenues.Considering the types of activities, the most relevant for the income are planning andinstallation (3,9 billion euros) followed by manufacturing (2,4 billion euros) andprofessional (1,8 billion euros) activities. With reference to energy sources, solar energy isthe leader producing the largest revenues (3,4 billion euros). Activities Biogas Biomasses Wind Geothermal Hydro Multi Solar Total sourcesFinancial 25 19130 19155InsuranceManufacturing 49770 266966 59500 197926 536129 1268636 2378927Professional 60436 763 2885 47706 76888 188678Wholesale 44925 18 262418 1012060 1319421RetailPlanning 12030 731 2050 135661 247921 398394InstallationProduction 15752 264189 8986 43330 931699 22888 1286845Total 77552 637247 9774 61568 244141 1913614 2647524 5591420Tab. 5: Turnover (expressed in k€) per source and activityIn the different EU Countries, especially in Germany, investments in research havedetermined industrial development while Italian industries operating in this field have not 26
  • Renewable Energies: State of the Art – Executive Summaryreached a similar expansion yet mainly because of the incentives system strongly built oncapacity installed than on research.Nevertheless, at a national level public investments in research in the energy fieldincreased more than in other traditionally strong sectors, like manufacturing, building andservice areas. Energy efficiency and saving are the mainly fostered sectors where there isa major feedback in terms of patents. In the IRES Report (2010) Italy is ninth in terms ofpatent applications in the energy sector mainly due to research on cogeneration and fuelcells.The development of renewable energy sources, if considered along all the value chain,fosters different occupational opportunities at different levels in terms of ability,competence, responsability and remuneration.Lombardy Region is the one that fosters research most. Unfortunately, regionaldisaggregated data concerning the energy sector or, more specifically, renewable energysources are not available.Therefore, an analysis focused on the identification of the main actors operating at aregional level in the energy sector has been carried out by Energy Lab Foundation in 2008thanks to the project “MApping of Competences (MAC1)”, funded by Lombardy Region.Results of this survey are available on the following website:http://mappaturacompetenze.org where a quite detailed picture of the state of the art ofresearch in the five Universities of Milan is represented.In 2010 the mapping procedure was opened to other Universities or Research Centresoperating in the Lombardy Region (MAC2). Since the beginning of 2011 results areavailable and this work, still developed by Energy Lab Foundation will constitute a uniqueand useful instrument for the quantification of the real consistency of research on RES inLombardy. Furthermore, it could be a big opportunity for industries interested in findingcompetences in the energy sector useful for new products development. The mostinteresting data on research consistency in the Lombardy Region can be summed up inthe following figures and tables.Considering the 480 research areas linked to the energy sector 1379 human resources areoccupied (professors, researchers, technicians and temporary resources) among 75University Departments and 19 Research Centres localised on the regional territory(Tab.6). Along with this permanent personnel staff, there are a high number of people 27
  • Renewable Energies: State of the Art – Executive Summarybelonging to non permanent personnel staff (fellow researchers and staff with temporarycontracts). Researchers 507 Professors 807 Technicians 23 Other 42 Total 1379Tab. 6 Human resources working in the energy sector in LombardyA look at the research institutions involved, divided with respect to their subject area,underlines the strong presence of scientific and technological subjects (Tab.7). Economical 39 Financial 15 Juridical 5 Medical – Sanitary 3 Scientific - technological 66 Sociologic 15 Humanistic 6Tab. 7 Research institutions involved with respect to their reference areaThe Energy Lab Foundation analysis emphasizes that, at a regional level, research in theenergy sector is strongly directed towards RES and other interrelated technologies.If we analyse the single specific research lines under macro areas of interest, among 1031research lines registered, 230 (22,3%) concern “renewable energy sources andtechnologies” (Tab.8).It must be underlined that each research area could be described by a maximum numberof 3 keywords: therefore, the overall number of research lines reported under this issuecould be higher than the actual number of active research lines (480).If we insert the more generic word “renewables” in the research by keywords the numberof research lines becomes 293 instead of 110 resulting from the insertion of “nonrenewables”. 28
  • Renewable Energies: State of the Art – Executive SummaryObviously, this result is even due to the fact that manifold aspects are associated to theterm “renewables” , linked to 3 main streams: technologies, sources and vectors, marketand environment.Research lines for each macro area Total 1031Environment, health and climate change 85 8,2%Building activities and other uses 76 7,4%Energy: social and cultural aspects 36 3,5%Non renewable energy sources and technologies 109 10,6%Renewable energy sources and technologies 230 22,3%Markets and Finance 22 2,1%Policies and planning 80 7,8%Regulation 49 4,8%Energy efficiency and saving 169 16,4%Systems, grids and infrastructures 125 12,1%Transports and mobility 50 4,8%Note: Each research line could belong to a maximum of 3 areas of interestTab. 8 Research lines for each macro area of interest resulting from MAC1 and MAC2 databases in theUniversities and Research Centres located in the Lombardy Region.The mapping procedure evidences important local academic competences, frommanagerial aspects till the evaluation of impacts of renewables on the market and newinvestment opportunities.The multidisciplinary competences offered by the Universities located in the LombardyRegion represent a great opportunity for local small to medium enterprises (SMEs) thatwant to transfer new technologies from the labs to new production and/or investmentlines in a continuously expanding market.Universities and Research Centres located on the regional territory offer all thecompetences for a highly qualified formation of new professional figures requested by the“green economy”.Social impactDespite the fact that an economic development based on a low emissions scenario musttake into consideration renewable energy sources, social consensus is another essentialfactor for its success. The importance of public acceptance and, even before, publicperception of renewable energy sources are well known. Nevertheless, this aspect hasnever been considered all over the world since the eighties when the first applications 29
  • Renewable Energies: State of the Art – Executive Summarybegan. A public acceptance extremely in favour of renewable energy sources had alwayswrongly lead to the opinion that consensus was not a problem. The problem startedpassing from a general to a local point of view.Some fundamental aspects concerning distributional equity (“How costs and benefits aresubdivided at local level?”), procedural equity (“How much local groups and citizens areinvolved in the decisional process?”), trust in local institutions and project financers arelinked to local consensus. If we also consider market acceptance (another importantaspect of public acceptance), small producers, apart from covering their needs, canbecome suppliers of energy services to third parties, at least in under use or overproduction periods.The producer, a hybrid and still under developed figure, could have a major role incommunicational events, both for economic returns and for their active citizenshipfunction. In this case, we would even see the development of the prosumer, i.e. a hybridfigure between the producer and the foreseen consumer.A comparison between Italy and the rest of Europe (Eurobarometer, 2006, Fig.14 and 15)is reported. Apart from oil consumption, the use of fossil fuels results similar. In Italy areduced acceptance of renewable energy sources can be seen, with particular reference tobiomasses, showing a difference of 5-6% from average EU data. Furthermore, thepercentage of no answers is higher in Italy than in the rest of Europe. A lack ofinformation and communication is therefore evident, mainly because technologicalcharacteristics are not always exhaustively explained as well as their benefits in terms ofenvironmental and occupational impacts.An Italian survey conducted in Padua confirms the need for information on renewableenergy sources at all levels. 30
  • Renewable Energies: State of the Art – Executive SummaryFig. 14- Consensus (EU 25 average data) on different energy sources_DK = Don’t KnowSource: Eurobarometer, 2006Fig. 15- Consensus Italy (Average national data) on different energy sources_DK = Don’t KnowSource: Eurobarometer, 2006Impact of non programmable renewable energy sources on the electric systemThe integration of RES in the electric system determines specific problems mainly whenwe are dealing with intermittent and non programmable sources. 31
  • Renewable Energies: State of the Art – Executive SummaryThese problems could all be ascribed to the often decentralised localisation of plants, onthe one hand, that have to be installed where the source is available, and, on the otherhand, to the intermittency of electric power generated.Among non programmable RES we can cite, in particular, flowing water hydroelectricplants (without accumulation systems or storage basins) , wind plants and concentratingand PV solar plants.Depending on plant capacity and, therefore, the voltage of the connecting grid, problemscould arise in the national transmission system or in the local distribution grids.In the transmission grids, the diffusion of RES non programmable plants could lead toadditional costs in order to implement the grid with new lines and stations, thus avoidingthe formation of bottle necks that could need, under certain conditions, forced limitationsof RES production.Fig. 16: Trend of additional costs [€/MWh] for grid reinforcement as a function of wind power penetrationinto the electrical system (percentage of total energy production) under three cost assumptions representingdifferent European grids (Source: GreenNet-Europe, series of three projects supported by the Frameworkand IEE Programmes of the European Commission from 2003 to 2009t)Furthermore, source variability and limited predictability could lead to an increase ofsystem costs to assure a balance of power generated and power absorbed by the endusers in order to guarantee the continuity of frequency and voltage inside the ranges thatcharacterise the electric service quality. 32
  • Renewable Energies: State of the Art – Executive SummaryFig. 17: Extra balancing cost depending on Wind penetration(Comparison of international studies, except Germany)Source: GreenNet-Europe, series of three projects supported by the Framework and IEE Programmes of the European Commission from 2003 to 2009tIn energy distribution grids particular problems arise linked to the fact that the installationof distributed generation plants transform grids from passive to active thus needing newdevelopment and management systems till the realisation of the so called “smart grids”.With reference to the integration aspects , the Report focused on non programmable RESplants, even showing great differences from one source to another due to their variabilityand intermittency.For example, it’s evident that watercourse variations for a flowing water hydroelectricplant are very slow and follow the seasons in a quite foreseeable way even if they showyearly differences.Difficulties in energy balancing and generation dispatching into the system are thenlimited. On the opposite side we have wind plants whose source, wind, presents verystrong variability and intermittency, even if there are some seasonal foreseeable trends(Fig.16 and 17).Furthermore, power generated by a wind plant is proportional to the cube of the windvelocity and because of this sensible fluctuations of wind velocity are transformed instrong variations of electric power delivered to the grid.An intermediate position is occupied by solar plants, whose source is very variable, but ina quite predictable way depending on seasons, days and hours. 33
  • Renewable Energies: State of the Art – Executive SummaryA non predictable component for these plants can be ascribed to meteorological events(such as cloud formation) that influence solar plant production for just a few hours orwhole days.The influence of this last component onenergy production is generally lessimportant for wind plants.Big concentrating solar plants are oftencharacterised by a natural gas generatorthat works as an auxiliary power unit ora storage system of thermal energy thatcan be used during night time or periodswith no solar insolation.Concerning PV plants, the low capacitythat characterises most of the plants,along with their disperse locations andthe presence of a storage system (batteries), should reduce consequences due toproduction fluctuations.Summing up all the specific characteristics of the different energy plants, in the Report theaspects of integration of non programmable RES to the electric system refer to theextreme case study, represented by wind plants, that should embody, if not all, most ofthe aspects related to other non programmable energy sources.References• Accenture and Barclays (2011), Carbon Capital – Financing the low carbon economy• Delucchi M.A., Jacobson M. Z. (2011), Providing all global energy with wind, water and solar power, Part II: Reliability, system and transmission costs, and policies, Energy Policy 39, 1170-1190• ECOFYS (2010), www.ecofys.com• Eurobarometer (2006), Public Opinion in the European Union, European Commission 34
  • Renewable Energies: State of the Art – Executive Summary• GSE (2010), Le attività del Gestore dei servizi energetici, Rapporto 2009• IRES (2010), Annual Report• Istituto Tagliacarne (2010), Unioncamere, Atlante della Competitività delle Province e delle Regioni• Jacobson M. Z., Delucchi M.A. (2011), Providing all global energy with wind, water and solar power, Part I: Technologies, energy resources, quantities and areas of infrastructure, and materials, Energy Policy 39, 1154-1169• Ossenbrink H., Renewable Energy: Photovoltaic, Solar, Electricity Biofuels, JRC European Commission, http://ie.jrc.ec.europa.eu/• REN21 2010, Renewables 2010 Global Status Report, Paris, REN21 Secretariat, United Nations Environment Programme 35
  • Renewable Energies: State of the Art – Executive Summary 36