Energy Transition Worldwide

Energiewende Worldwide

The energy transition movement (that started with Germany under the term energiewende) is now gathering support worldwide. However, it must be noted that the global rise of renewables (in the electricity sector) is not only attributed to Germany but is a combination of various programs implemented by different pioneering countries.

The movement is on its way, but it will take decades to change the energy economy – based on conventional energy since more than two centuries. Nonetheless, there are some tendencies towards a renewable future visible.

• In 2014, for the third time, worldwide investments in new renewable capacity exceeded investments in fossil-fuel power.
  
• Similarly, many European countries have also set ambitious renewable energy targets for their own energy transition.
  
• At the end of 2015, at least 173 countries have set up some kind of renewable energy targets and estimated 146 countries had renewable energy support policies.
  

In other countries, especially transit and developing countries like India, Indonesia and Vietnam, the energy systems are still relying on coal and continue to build more power plants in the coming years.

On the other hand, Chinas dependency on coal stagnating and, according to WWF and Agora Energiewende weltweit, instead of growing numbers of coal plants, only one third of the planed plants are realized since 2010. Technologies that proved to be mature in developed countries, new energy concepts and business cases for sustainable energy, and innovative support mechanisms give developing countries the opportunity to face the economic, climate, and social challenges.

German Energiewende and Implications for other Countries

Germany with its energiewende can serve as a pattern for other countries to leapfrog their own energy transition. However, energiewende should not be seen as a fixed model but rather a dynamic strategy that should be adopted according to the country where it is implemented. Feed in tariffs, first introduced in Germany, is the most successful policy tool, with more than 110 jurisdictions at the national or state/provincial level who have enacted feed-in policies. Similarly, the market support for renewables (via feed-in tariff), broad citizen participation as well as high level of support from domestic population along with strengthen R&D for renewables have boosted the development of renewable energy technologies to reach global competitiveness by lowering manufacturing levels and improving efficiency levels. Thus, Germany has demonstrated the need for a long-term support policy to promote energy transition.

• Find more information on the lessons learnt from German energiewende
  

In Germany the energiewende covers mostly the power, and sector. In the context of developing countries, there are other relevant topics in addition to these three sectors: mostly the development of a sustainable energy supply, and the fight against energy poverty worldwide. In the context of climate change, decarburization of the energy supply is a key issue. Energy access: around 1.1 billion people do not have access to electricity and 2.9 billion rely on traditional biomass for their energy needs therefore suffering from energy poverty. Energy demand increase: According to the IEA, energy demand will rise until 2040 by 40%; out of which around 90% will occur in developing and transitioning countries. The global energy transition is steered by international processes (UNFCCC climate process) and regulations (e.g. SDGs, Kyoto-Protocol, COP21 etc.) to combine the many different, individual transitions into one global process.

International experiences

Along with exporting the German energiewende to the international community, we can also learn a lot from international experiences such as Danish experience with civic participation, the Italian experience in the area of smart meters and lessons on steering flexible loads from the United States. Does size matter? According to conventional wisdom “larger-scale power generation means lower-cost electricity” and that suggests the biggest wind and solar power plants will be cheapest. On the other hand, economies of scales for large wind and solar projects are limited since short transmissions work best. Only because of the energy transition, there is no need to keep the “century-old and archaic business model”. That is why customer-owned, smaller systems can compete at retail level in the USA, according to a john Farrell form the Energy Democracy Initiative. He believes is matters more, who will own the power stations (customer-owned vs. utility-owned).

Portugal is on track to reach 100% renewables: In Portugal, renewables provided 95.5% of total electricity demand in April 2016. Portugal has a target to reach 31% of renewables within final electricity consumption by 2020, and already in 2014 scores with 27% of Portugal’s total energy consumption (not just electricity) coming from renewables. This has been made possible by the government policies implemented.

Country Examples: Energy Transition Worldwide

Brazil

Brazil is the largest energy consumer in South America with hydropower supplying 80% of the total electricity generated in 2012. Brazil’s renewable energy targets are embedded in its Ten-year energy expansion (PDEE) plans, which are updated yearly. It aims for renewable energy to account for 42.5% of the country’s primary energy supply by 2023. The legal framework for the electricity system is the Electricity Law of 2004 (Law 10848), which led to the creation of regulated markets via auctions of power purchase agreements (PPAs). The Brazilian National Development Bank (BNDES) also provides preferential financing for renewable energy projects that meet local content requirements. Regarding grid access, the renewable energy projects receive tariff discounts of at least 50% in the transmission and distribution. The Brazilian energy system, however, is subjected to contradictory regulations. The investment in new generation follows a competitive least cost approach (via energy auctions) while the final consumer price is determined by the government by directly intervening to control inflation. Thus energy is not regulated holistically and makes the energy market subject to other political issues in the country.

For a list of all auctions till date, click here.

China

China has also made significant contribution to the solar sector by playing a central role in mass production of PV cells and modules, thus overcoming the scarcity of modules between 2004 and 2008. It is now a leading country in terms of investments in renewable energy; accounting for approximately 30% of worldwide investments in 2014. Support for renewable energy electricity generation is among the key policies that are driving the significant installations of solar and wind capacities in China. This can be supplemented by the support from regional and local authorities (e.g. in the form of favorable access to land).

The Renewable Energy Law 2005 (amended in 2009) provides an umbrella framework for regulating renewables in China. In August 2013, China introduced Feed-in-tariffs (FITs) at both state and provincial levels to boost the growth of distributed solar rooftop installations. The National Energy Administration has also started to deregulate the electricity market for small distributed solar generation (including rooftop PV projects) such that, the solar projects below 6 MW capacity are exempt from applying for a power generation license. Regarding the wind energy, a national subsidy for distributed wind has been under development but has not been officially released. However, distributed wind is benefitting indirectly from a number of distributed PV support policies.

Costa Rica

In 2015, Costa Rica claimed to run 285 days only on renewable energy (with renewables supplying 100% of the electricity produced). The majority of renewables also came from hydropower with the rest coming from geothermal, biomass, wind and solar. The electricity market in Costa Rica is regulated by the government owned company Costa Rican Electricity Institute (ICE), which is the sole provider of electricity. However, the law authorizes private companies and persons to generate for auto-consumption but to distribute and sell electricity to third part, they have to sell the electricity to ICE under Act No. 7200, which will then sell to its affiliates. The electricity distribution is carried out by 8 companies, 2 government companies, 2 local government companies and 4 cooperatives.

There are no specific policies or incentives to encourage the use of renewables in Costa Rica although the government has its goal of becoming carbon neutral by 2021. The Government has also acknowledged its dependence on hydropower and plans to reduce its dependency by investing in geothermal and wind. The government has also imposed tax exemption for equipment used in renewable energy generation. To promote distributed energy in Costa Rica, the government has implemented revised net metering in April 2016. For PV systems installed under this scheme, the owners can sell their surplus electricity to ICE but the owners using the net metering will be charged a grid fee of between $0.02 and 0.05) per kWh of meter movement backwards. Similarly, since 1989, majority of Costa Rica’s electricity has been generated by hydropower.

The example of almost 100% renewables in Costa Rica in 2015 is an example that energy transition is possible. However, it should be noted that more than 90% of its electricity is derived from Hydropower and with changing climate patterns, it is important for Costa Rica to diversify its energy mix.

Dominican Republic

According to IRENA, the Dominican Republic has the potential to increase its share of renewable energy (based largely on solar PV, wind and bioenergy) in power generation from 23.6% in 2014 (reference scenario) to as much as 44% by 2030. Dominican Republic has introduced the Law 57-07 which aims to increase the share of renewables in the power generation mix to 25% by 2025. The share of renewables in the power generation in 2012 was 14%. To achieve this goal, the government has introduced a lot of policy instruments such as tax incentives and feed-in tariffs. A rural electrification program also supports the deployment of renewable off-grid projects, and the country is also extending its grid infrastructure to ensure universal electricity access.

India

More than 300 million people in India still lack access to energy. Energy security remains one of the top challenges for the Indian economy. The current energy mix is dominated by coal followed by gas and oil.

What could India learn from the energiewende?

• India should recognize its enormous solar and wind potential and rethink renewables as a mainstream energy rather than a niche.
• India should frame an ambitious long-term national vision by identifying a sustainable energy mix for India.
• India should promote public-private partnership to foster the investment in renewables. In a survey from 2010-11, it was concluded that there is a high enthusiasm about renewable energy but actual knowledge about its functioning is very low. Therefore, there is a need to educate people about renewable energy as well as involve them via public-private partnerships.
• India should improve policy processes with regard to vertical planning processes between local, regional and national level and improving cooperation between governments (national and local), businesses and NGOs during the planning and implementation period. India should identify the right mix of grid connection, off-grid solutions and direct renewable use for India. The government of India has already started building electricity transmission infrastructure to ensure connectivity to a large number of solar and wind parks.
• India should consider whole cycle assessment and whole price scheme providing holistic costs of energy generation. India should promote green jobs.
• India should extend the energy transition beyond electricity to the sectors of transportation, buildings and agriculture.

Taiwan

The Taiwanese governemt has set a goal to increase renewable energy in electricity generation share to 20% by 2025. Apart from the electricity sector, there also exist other policies such as a ban of sell of combustion engine vehicles in transportation sector by 2040. For more details, see Energy Transition in Taiwan.

Tunisia

Tunisia is experiencing only the beginning of energy transition where the contribution of renewables to the total electricity mix is less than 3%.

South Africa

South Africa has a large coal mining industry and 93% of its electricity was generated from coal in 2011. Since the adoption of the South Africa’s Constitution in 1996, three government policy paper have created the foundation for South Africa’s Renewable Energy program namely White Paper on Energy Policy (1998), Renewable Energy White Paper (2003) and National Climate Change Response Policy White Paper (2011). The White Paper on Energy Policy (1998) recognized the need for access to affordable energy services for all South African citizens. It also gave the commitment to support and promote the development of renewable energy in the county. Renewable Energy White Paper (2003) committed to setting a renewable energy target:” “Government will work towards the establishment and acceptance of broad targets for the reduction of energy-related emissions that are harmful to the environment and to human health”. National Climate Change Response Policy White Paper (2011) established the overarching policy framework for South Africa’s climate change response and prioritized energy as one of the sectors for mitigation action.

As part of its “Vision 2025”, South African government plans to get 30% of its energy mix from clean energy by 2025. To do so, the government has already rolled out auctions for renewable energy projects under the Renewable Energy Indented Power Producer Procurement Program (REIPPP). However, short term energy supply needs and a delay in decision making is putting the energy transition on hold.  

South Africa’s main challenge is to overcome supply shortages while diversifying the energy mix.

To learn more about the renewable energy program, click of Renewable Energy in South Africa_s.pdf here.

Uruguay

With the National Energy Policy 2005-2030, approved in 2008, Uruguay already made a commitment to achieve long-term policy goals of diversifying the energy mix, reducing the dependency from fossil fuels, improving energy efficiency and increasing the use of renewables. The policy also included the goal of 50% primary energy from renewable energy sources by 2015.

In 2013, 83% of generated electricity came from renewables, including large hydro. Auctions are the major instrument for the promotion of renewable electricity in Uruguay. 

Further Information

• For information in English about energiewende, please refer to: http://energytransition.de/2015/03/first-international-governmental-energiewende-conference/
• For information about German power system refer to: https://www.agora-energiewende.de/fileadmin/downloads/publikationen/CountryProfiles/Agora_CP_Germany_web.pdf
• This paper from Standford University includes roadmap for 139 countries: http://web.stanford.edu/group/efmh/jacobson/Articles/I/CountriesWWS.pdf
  
• Solar Revolution - The Role of Photovoltaics for the Energy Transition
• Energy Transition in Germany “Energiewende”