REEEP presentation at Middle East Electricity Leaders Forum


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Presentation at the Middle East Electricity Leaders Forum on 8th February 2011 by Dr. Marianne Osterkorn, Director General of REEEP

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REEEP presentation at Middle East Electricity Leaders Forum

  1. 1. The Role of Energy Efficiency and Renewable Energy in a Fossil Fuel Based Electricity System Middle East Electricity Leaders Forum Dubai Exhibition Centre 8 February 2011 Dr. Marianne Moscoso-Osterkorn REEEP Director General
  2. 2. Agenda International developments MENA region’s key role Opportunities and barriers REEEP’s global activities 2
  3. 3. World leaders see the need for a paradigm change in our energy systems Today, the world is faced with serious We have to make changes in our challenges, including finding scalable lifestyles… and learn to make do with sources of clean energy, providing a less. In developing countries, poverty fresh water supply and battling eradication will have to be linked to climate change. the availability of clean, renewable His Highness Sheikh Mohammed Bin Rashid and affordable energy. I believe that Al Maktoum charting these new pathways is not beyond our collective imagination. Manmohan Singh The earlier Europe moves, the greater China has adopted and is our opportunity to use our skills and implementing its national climate technology to boost innovation and change program. This includes growth. Renewable energy mandatory national targets for technologies already account for a reducing energy intensity … and the turnover of 20 bn euros and have share of renewable energy for the already created 300,000 jobs. period of 2005 through 2010. José Manuel Durão Barroso Hu Jintao 3
  4. 4. For the next 25 it is estimated that primary energy demand will grow by around36% - strongest growth increase will take place in China, India and Middle East In this period, China is expected to add generation capacity that is equivalent to the current total installed capacity of the US. Source: IEA World Energy Outlook 2010, p. 85 4
  5. 5. Transition to low carbon economies is only possible if changes are made both inthe demand and supply side of the current energy systems  Energy efficiency along the entire value chain  Efficiency for end consumers  Optimization of the energy mix 5
  6. 6. Globally, a decoupling of energy demand from economic growth can beseen – energy intensity decreases globally In China, the ratio of energy demand to GDP is currently 1.5 times above the world average, but with a targeted energy efficiency increase of 3.3% per year, China will achieve the strongest improvements Source: IEA World Energy Outlook 2010, p. 85 6
  7. 7. Today, 80% of primary energy is wasted – huge untapped savings potential inthe power sector and end-use consumption The greenest and cheapest energy is the energy not generated – every €1 spent on more efficient energy use avoids €2 spent in energy supply investment Source: ABB 2007 7
  8. 8. The energy efficiency potential in the MENA region has not been utilized asin other growing economies Buildings, Appliances and Transport contain a energy saving potential of 40% Source: UNEP 8
  9. 9. By 2035, the share of renewables will triple and will account for one third ofthe primary energy supply In China, the share of renewables will grow from 17% to 27%. China will then have the largest hydropower and PV capacity in the world and is since 2010 first in wind power Source: IEA World Energy Outlook 2010, p. 85 9
  10. 10. De-carbonizing of the power sector is expected in all regions of the world Globally nearly USD 30 trillion of investments in new power plants and transmission and distribution grid will be necessary to meet the future demand by 2035 Source: IEA World Energy Outlook 2010, New Policy Scenario, p. 231 10
  11. 11. China has become a global leader in renewable energy, in terms both ofinvestment and manufacturing  11th five-year plan committed to reducing GDP energy intensity by 20% and increasing the share of non-hydro RES to 10% by 2010 and 30% by 2050  Strong incentives for renewables: Bidding system - Wind Concession Program, FTs and other provincial initiatives  Stringent Energy Conservation measures  USD 300 billion investment by 2020 – 300GW hydropower, 30GW wind, 30GW biomass, 1.8GW solar power Source: IEA WEO 2011  Largest installed capacity of wind - largest turbine manufacturing industry and 2rd largest global producer of solar PV  China is the global leader in solar water heating – 40 million systems covering 10 million households 11
  12. 12. India is strongly committed to deploying renewable energy throughout itsstates  Action Plan for Climate Change and Solar Mission aims to increase the nation’s installed capacity to 20GW by 2022  Energy Conservation Act 2001: Comprehensive legislation laying roadmap for improvement in energy efficiency  Preferential tariffs, RES purchase obligations for utilities (up to 10% of power), tax incentives  Market has been estimated to be worth around USD 1 billion with future investment of up to USD 3 billion Source: Central Electricity Authority India  Huge estimated potential: 15000 MW small hydro, 45000 MW wind, 17000 MW biomass all grid connected 12
  13. 13. The EU was an early driver of ambitious clean energy policies - achieving the20-20-20 target  EU Energy and Climate Change Package towards the 20-20-20 target with a number of policy measures including:  the revised EU ETS;  a new directive on renewable energy;  a number of measures on energy efficiency, including a new building directive;  Directive on CCS and Environmental state Source: IEA WEO 2011 aid guidelines  Set plan for infrastructure 13
  14. 14. Shared responsibilities among European Member States reflect thediffering RE potential in each country Source: European Commission 14
  15. 15. Feed-in tariffs are the main regulatory acceleration force for RE in EU –Prices range from 40ct to 15 ct Feed-In tariffs Quota obligation AT, BG, CY, CZ, DE, DK, EE, ES, FR, GR, HU BG IT, IE, LT, LU, PT UK, SI, SK BE, IT, SE, NL RO, PL, UK Certificate systems UK DK, FR, IE BG, FI, SI, MT Tenders Fiscal incentives Source: OPTRES 15
  16. 16. Thanks to FIT, Germany overachieved its 2010 RES target (12.5%)  German Feed-in Law (EEG) is  Purchase price guarantee  Grid access guarantee  Purchase obligation, priority for feed-in  Grid operator buys at predefined rates  National equalization fund  Every power customer pays  Law is reviewed every four years  Federal law  Annual decrease incentivizes early actionDuring 2010, the current government has  Guaranteed for 20 yearsreduced the feed-in tariffs for solar by 16%The FT has raised electricity end consumer pricesby around 3% 16
  17. 17. Future transmission and distribution grid are challenged and significantinvestment is needed to empower them for the futureNeed for balancing highly fragmented, less New services for customers offer real timepredictable generation and loading from pricing, local energy storage and smart chargingdislocated generation sources Smart buildings optimize their internal energy flow and become power producers Grid integration of renewables has to be a profitable business model also for grid operators 17
  18. 18. Markets will be increasingly interconnected – generates advantages andchallenges 18
  19. 19. Untapped renewable resources: by 2008, just 3% of the MENA region’selectricity were produced from renewablesDespite water scarcity in the region, hydroelectricity is the only well-developed, non fossil fuelform of electricity generation in North Africa and the Middle East Source: PwC - 100% renewable electricity 19
  20. 20. Huge solar and wind potentials make MENA a prime region for harvestingthese clean energy sources Source: 3Tier 20
  21. 21. Solar energy – MENA’s geographic advantage: each square kilometer of landreceives the solar energy equivalence of 1.5 barrels of crude oil every year 21
  22. 22. The region has incident solar irradiance and land sites allowing for large scaleCSP – producing electricity and offering its synergies for water desalination Average daily sunlight hoursThe average direct normal irradiance (DNI) of 2,334 kWh/m2/y, suits most parts of the region forCSP , PV systems and SWH. 1 km2 of CSP can generate 165,000 m3 of desalinated water Source: 22
  23. 23. Some countries in the Middle East appear as the largest per capita CO2emitters globally CO2 emissions per capita (tons CO2 per capita)Qatar, Kuwait and the UAE emit more CO2 per capita than the US. Source: Al Masah Capital Limited
  24. 24. With an average global growth rate of more than 20%, SWHs have provento be another key technology to ease power systems in hot countries Growth rate 2006-2008 Main driver: Building codes and incentive schemes Newly installed capacity in 2008Eskom/SA have saved 6.4GWh through SWH since 2008 and expect a saving equivalent of578MW from the 925 000 SWH they are aiming for 2013 24
  25. 25. MENA governments have increasingly seized upon the recognized benefits of usingrenewables for power generation and its synergies for water desalination  UAE: 7% renewables by 2020, Masdar City in Abu Dhabi (USD 22 billion investment), where all stages of renewables and energy efficiency development are applied from research to commercialization; establishment of IRENA  Saudi Arabia: recently passed a decree establishing the King Abdullah bin Abdulaziz City for Atomic and Renewable Energy in Riyadh  Qatar: Green transport initiative and Lusail City, a green real estate development  Egypt: 20% non-hydro renewables; 3% electricity by 2020 (wind, CSP, PV); tender, FT, investment tax credits for SWH Source: Al Masah Capital Limited  Algeria: 6% renewables by 2015 (wind, CSP, PV); 10% by 2027: FT, investment tax credits for SWH  Tunisia: 10% renewables in 2011; 40 projects by 2016 (PV, CSP); tax exemptions, investment tax credits  Morocco: 10% renewables of primary energy by 2012 and 20% of electricity (wind, SWH, CSP); VAT exemption for equipment, FT, investment credits for SWH  Other initiatives: MSP, Desertec 25
  26. 26. The costs gap between renewables and conventional power is significantlydecreasing, due to reduced manufacturing costs and economies of scaleThe retail prices of PV panels fell to about USD 2/W in 2010, from nearly USD 30/W in the 1990s.The costs of wind energy decreased from USD 3,000/kW in the 1980s to USD 2,200/kW in 2010. Source: PricewaterhouseCoopers 26
  27. 27. Already in the near future, CSP can become profitable at different times of day andyear, providing peak load electricity Large-scale CSP development in the MENA region could entail exports to neighboring countries, as well as to Europe. Source: 27
  28. 28. The removal of distorted fossil fuel subsidies is critical to allowingrenewables to fairly compete in a hydrocarbon-based power systemGlobally, fossil fuel consumption subsidies amounted to USD 312 billion in 2009, with oilproducts accounting for almost half of the total. Source: IEA World Energy Outlook 2010, p. 581 28
  29. 29. ConclusionAdvantages to utilizing the potential for renewables in the MENA region: Growing demand for electricity and water require more generation capacities Depletion of fossil fuel reserves leads to higher fossil fuel prices, resulting in higher value to divert hydrocarbon to export Attract high technology into the region and create new jobs Strong utility structureBarriers to develop the market: High subsidies on fossil fuel – price transparency Challenge for the existing power grid – positive business model for generator and grid operator required Need for further research and capacity building Enabling policies and regulations required Importance the visionary support of the political leaders 29
  30. 30. REEEP’s mission aims to accelerate market development for renewableenergy and energy efficiency in developing and emerging economies REEEP’s 350 partners comprise of key governments and private sector entities REEEP supports one of the largest global networks of stakeholders in renewables and energy efficiency, interconnecting 3,000 “Friends of REEEP” and working with 150 top experts throughout the world REEEP runs the world’s most effective, dedicated sustainable energy information platform, with 100,000 users per month: Over the last 7 years, REEEP supported governments, communities and the private sector in 130 projects to accelerate renewables and/or energy efficiency The regional presence in major emerging markets, such as India, China, Brazil south Africa but also LDCs guarantees strong local ownership and delivery of best fits for local needs REEEP is unique in combining the symbiotic benefits of renewables and energy efficiency 30
  31. 31. REEEP is currently implementing 65 projects in 29 countries – 8 in the MENAregion Projects covering more than one country are listed in all covered regions 31
  32. 32. Its project activities have made REEEP a successful change agent forsustainable energy systemsPolicy - China Energy Efficiency - BrazilConducted research to underpin a possible 30% Integrated 40,000 solar water heating systemsrenewable energy target in China by 2030 into low-income housing loansRegulation - Mexico Standards & Labeling - GhanaDeveloping regulatory instruments to attract Funded public awareness campaign surroundinginvestment in geothermal energy introduction of appliance efficiency labelingBusiness - India Finance - Mozambique and UgandaDesigned the mechanisms for tradable renewable Coached clean energy entrepreneurs and facilitatedenergy certificate system, enabling inter-state trade investor matchmaking 32
  33. 33. Lead Time Average time for planning and construction of power systems Source: Wuppertal Institute 33
  34. 34. ‫ / شكرا‬Thank youREEEP International Secretariat Vienna International Centre Room D1738 Vienna, Austria +43 1 26026 3425 34