09 Mar The Importance of Renewables
Renewable energy is a fundamental part of the world’s ongoing energy transformation. On the one hand, it is a critical part of reducing global emissions and keeping global temperature increase below 2ºC, as agreed in Paris. On the other hand, renewables are increasingly competitive with conventional technologies while they achieve a myriad of socioeconomic benefits. Hence, renewable energies fuel economic growth, increase energy security, create new employment opportunities, enhance human welfare and contribute to achieve development goals, among other benefits.
Necessary to stop climate change and comply with international agreements
Human activities are releasing critical amounts of carbon dioxide and other greenhouse gases (GHG), which trap heat and steadily drive up our planet’s temperature, eventually compromising our climate. Climate scientists agree that human-caused climate change is happening based on massive scientific record and climate change effects are easily observed and are evidenced by data as global temperatures increase of 0.9°C (compared to 1880’s levels), rising sea levels (around 17 cm in the last century) or, noticeable Greenland and Antarctic ice sheets melting. There has been a “step change” in momentum on climate change in the past decade, with large developing countries led by China aiming at reducing their emissions alongside accelerated action by the U.S. under President Barack Obama.
The Paris Agreement, ratified in November 2016, aims at avoiding the worst effects of climate change and opens up a path towards a decarbonized economy.
As anthropogenic GHG result primarily from the combustion of fossil fuels, effective action in the energy sector is, consequentially, essential to tackle climate change issues. According to the International Renewable Energy Agency (IRENA), reaching a 30% renewables share by 2030, coupled with higher energy efficiency, would be enough to prevent global temperatures from rising more than 2°C above preindustrial levels. It is becoming increasingly clear that the investments required to reduce emissions will be modest in comparison with the benefits from avoided climate change damages.
According to IRENA, the cost of doubling the renewable energy share by 2030 would be US$ 290 billion per year which is expected to be at least 4 and up to 15 times less than the external costs avoided.
Therefore, renewable energy is a cornerstone for achieving climate targets and onshore wind, because of its maturity and competitiveness, is expected to be at the forefront of the required transformation of our energy sector.
Renewables are the cheapest option in many parts of the world
In Spain, according to the Spanish Wind Energy Association, 2016’s average wholesale electricity price would have been 15.3€/MWh higher (28%) if the 23 GW wind fleet had not been producing energy.
Nowadays, some renewable’s technologies (wind and solar PV in particular) are competitive with conventional technologies.
According to the levelised cost of energy (LCOE), onshore wind already generates the cheapest source of electricity in some regions while solar PV is also becoming increasingly competitive as stated by many experts and prestigious analysts, including Bloomberg Energy Finance, IRENA or Lazard. Despite the substantial cost reduction of onshore wind since the early 1980s, there is still significant further potential for the next decade as costs are expected to keep falling due to improved turbine designs, the use of larger and more reliable turbines, increased hub heights and rotor diameters capable to unlock higher capacity factors at the same wind resource. According to IRENA, by 2025, the LCOE of onshore and offshore wind could see declines of 26% and 35% respectively, while solar PV’s could fall by as much of 59%. Additionally, since renewables energies do not use fossil fuels, they are not exposed to their inherent price volatility, being their LCOE foreseeable and stable.
Levelized Revenue Requirements (€16/MWh):
The increased competitiveness of wind was highlighted in the latest energy auctions held all over the world: in 2016, the price of wind energy, not only reached historical minimums (below 40US$/MWh), but was often lower than any other technology. On the other hand, increasing the supply of renewable energy tends to lower the average price per unit of electricity because they have very low marginal costs as they do not have to pay for fuel, therefore reducing wholesale prices and ultimately, the cost for consumers.
Fundamental pillar of sustainability and energy independence
The limitless nature of wind resource contributes to its sustainability: the use of wind resource allows to slow down the pace of fossil fuel depletion and to maintain the balance between the existing natural resources and their consumption, besides having a reduced environmental impact as they do not pollute or generate waste, contributes to air quality and does not require water or fuels. Another advantage is that wind resource is also endogenous, improving countries’ energy supply security by decreasing the vulnerability of many countries due to interruption or alteration of the energy supply and enhances the energy independence, bringing significant cost savings by reducing gas and oil imports. This is very relevant for most of the countries, particularly in Europe, as the largest share of fossil fuel reserves is concentrated in a small number of countries (mainly in the Middle East).
A driver for growth and regional development
Renewable energy generates wealth, support the creation of new jobs and strengthen industrial network. Compared with fossil fuel technologies, which are typically mechanized and capital intensive, the renewable energy industry is more labour-intensive as on average, more jobs are created for each unit of electricity generated from renewable sources than from fossil fuels. According to IRENA, the renewable sector employs, directly and indirectly, over 8 million of people around the word, of which, the wind sector represents more than 1 million jobs. Since most of the facilities are in rural areas, wind energy creates local wealth: the largest share of the jobs created are local and local taxes, in particular, land taxes, often represent a large share of the income of the municipalities in which wind farms are built. In developing countries, renewables are becoming increasingly important: an estimated 1.2 billion people still do not have access to electricity according to IEA, which severely jeopardizes their well-being and economic development, presenting a strong case for increased deployment of renewables, since off-grid renewable solutions offer the most cost-effective way to extend energy access to all.
Improved public health and environmental quality
Building wind and solar facilities helps to improve public health mainly by displacing noxious emissions from coal-fired power plants. Air pollution is becoming a severe problem in many regions of the world, in particular in big cities, due to smog, which is highly toxic for the health, reduce visibility and contribute to acid rain, which can damage vegetation and crops. Air pollution has emerged as the deadliest form of pollution and the fourth leading risk factor for premature deaths worldwide, according to the World Bank. Those deaths cost the global economy about US$225 billion, the World Bank study finds, pointing toward the economic burden of air pollution.
PARIS AGREEMENT ALREADY RATIFIED BY COUNTRIES THAT REPRESENT AROUND 89% OF THE
The global low-carbon transition is already underway and gaining momentum, following the adoption of the first universal climate change agreement and its ratification in November 2016.
The Paris Climate Change Agreement, the result of the most intricate, farreaching and critical international climate negotiation ever attempted, came into force the 4th November 2016, much earlier than expected thanks to the early ratification of a large number of countries.
The Agreement is undoubtedly a turning point in the history, cementing the combined political, economic and social will of governments, cities, regions, corporations and citizens to avoid the worst effects of climate change.
The Paris Agreement sparked an unprecedented wave of action and pledges to boost renewable energy industry all around the world. But even if undoubtedly the Paris Agreement gave hope, 2016 was also marked by unprecedented climate concerns. On the one side, 2016 was the hottest year on record and a new high for the third year in a row, according to the UN.
Additionally, the World Meteorological Organization has now confirmed that the average global concentration in the atmosphere of the main greenhouse gas, carbon dioxide, reached the symbolic and significant milestone of 400 parts per million for the first time in 2015 and broke new records in 2016.
Against this backdrop, non-State actors are increasingly aware of the need to address climate change. The preparation of the Paris Agreement has shown that fighting against climate change is no longer an issue for governments to solve alone and that companies have a key role to play.
Spurred by rising expectations of society and corporate targets, an increasing number of companies have grasped the challenges and opportunities of moving towards a low-carbon economy and addressing climate change is becoming a key part of their corporate strategy. In the US, for example, corporate buyers (including Google, Facebook, Amazon, Apple and many others), contracted for almost 2.5 GW of new renewable energy PPA capacity in 2016.
The electricity sector will play a central role in the transition towards a low-carbon economy. It can almost totally eliminate CO2 emissions by producing electricity from renewable sources, and offers the prospect of partially replacing fossil fuels in transport and heating. Indeed, according to “Climate Action Tracker”, which provides independent scientific analysis, all 1.5°C pathways foresee a fully decarbonized power system by 2050, which implies a power system consisting entirely of renewables and other zero or low carbon sources.
What is the Paris Agreement?
It is a climate accord reached by nearly 200 countries in December 2015. The Agreement commits world leaders to keeping global warming below 2°C seen as the threshold to avoid the worst effects of climate change, and endeavor to pursue a safer target of 1.5°C. Each country submitted national pledges to achieve the goals and the agreement includes a mechanism for periodical revisions of those targets. The agreement also include a long-term goal for a net zero emissions, which could effectively phase out fossil fuels. The accord also places a legal obligation to provide climate finance to developing countries.
YES TO WIND POWER
In the wake of the of success of the Yes to Wind Power campaign launched in 2015 in Spain, it grew in 2016 by expanding into the markets of Italy, Romania, Poland and France.
In order to demonstrate the benefits of renewable energy, especially wind power, the campaign aims above all to show that renewable energy is the most effective way to mitigate climate change in the short term and fulfill commitments made at COP21. In addition, it highlights the competitiveness of this type of energy. To inform society about these issues, this social media campaign centered on the Energy Hipster character who, in 2016, began answering questions and sharing the answers with the entire community on Facebook and Twitter. Through the Energy Hipster and the campaign webpage, journalists, opinion leaders and the general public across these four countries had access, in their language, to up-to-date scientific information in a format easy to read and understand.