For the past eight months, Worldwatch has been working in partnership with the International Renewable Energy Agency (IRENA) to begin developing a set of renewable energy indicators to measure and assess progress toward meeting renewable energy goals. This exciting and challenging project has allowed us to dive deeper into an examination of the real-world conditions shaping the evolution of the renewables sector today.
As the first phase of this unique venture draws to a close, Worldwatch has identified three key areas where measurements could have a profound impact toward transforming the global energy sector:
- Barriers to renewable energy development and deployment;
- Enablers to scale up renewables development and deployment; and
- The positive impacts of renewable energy deployment on broader national priorities and development goals.
Certain renewable energy technologies, such as wind and solar, have matured to the point where they are now at grid-parity with traditional fossil fuel generation sources, with even more set to approach this point in the coming years. At the same time, many technical restrictions are quickly becoming a thing of the past. Yet despite all these positive developments, the renewables sector still has not witnessed the robust growth needed to reach the full potential of these technologies.
Renewables, of course, have a tremendous technical potential to supply large amounts of power to the world. The National Renewable Energy Laboratory estimates that, in the United States alone, the technical potential of solar photovoltaics (PV) and concentrating solar power (CSP) is 200,000 gigawatts, or enough to generate nearly 400,000 terawatt hours of energy each year. As of year-end 2011, however, only 507 megawatts of CSP and 4 gigawatts of solar PV were installed in the United States.
Barriers to renewable energy deployment
A number of non-technical barriers to renewable energy seem to be challenging policymakers, project developers, and anyone else looking to scale-up the development and deployment of renewables. These must be addressed if the gap between renewables’ potential and today’s capacity is to be closed. Throughout this project, Worldwatch has identified and categorized a wide range of barriers that must be addressed for the sector to flourish.
Cost and finance issues continue to severely constrain growth. To many, renewables are seen as prohibitively expensive based on their overall cost per unit of energy produced. Yet energy prices worldwide fail to account for the heavy cost to societies incurred by generation from dirty fuel sources, making these technologies artificially cheaper. If these real societal costs, such as environmental degradation, reduction of crop yields, and adverse health effects, were taken into account, this would add an estimated 17.84 U.S. cents per kilowatt hour (kWh) to ‘cheap’ coal-generated power.
Coal, of course, is not the only fuel source to have a severely detrimental impact on societies. Accounting for the true cost of energy generation in energy pricing would greatly increase the cost competitiveness of renewables and highlight the impact that energy generation has on our societies. In addition, financial barriers such as the cost of and access to capital can also increase the expense and difficulty of developing renewable energy projects.
These cost and finance issues are far from the only challenges that stakeholders face today. Policy and regulatory barriers—including perverse policy incentives such as the estimated $775 billion in global fossil fuel subsidies— entrenched interests, and knowledge barriers all represent significant constraints on the sector. The impact of these non-technical barriers is often very difficult to assess and is not fully understood in many cases.
Enablers for renewable energy
Admittedly, the barriers discussion presents a very pessimistic outlook for the renewable energy sector; however, there is an equally strong positive vision that governments can promote in order to drive sectoral growth. Renewable energy enablers, when successfully implemented, can mitigate barriers and spur tremendous positive systemic shifts.
Well-informed policymakers can use enabling mechanisms such as the establishment of long-term visions and targets, concrete policies and measures (such as feed-in tariffs, renewable portfolio standards (RPS) or climate policies), and the adoption of principles of good governance and administration to remove barriers at the sub-national, national, and international levels.
There is no silver bullet capable of singlehandedly spearheading transformative changes in the energy sector. Instead, it is critical that governments be supported in their attempt to find the mix of enablers best suited to their own national energy sectors. Governments must look to effectively harness the policy toolbox at their disposal to select the appropriate mix of mechanisms to mitigate country-specific barriers. Barriers and enablers are intrinsically linked, yet it is in understanding this link where renewable energy indicators could benefit policymakers.
The societal benefits of renewables
The third area that Worldwatch is exploring shifts the focus from how best to deploy renewables to assessing how renewable energy technologies can be important for societies. Renewable energy technologies offer far more than simply an alternative form of energy generation. For governments, the expansion of the renewable energy sector itself is not the end goal, but rather the means through which a range of national priorities, goals, and aspirations can be achieved.
Renewable energy technologies have significant impacts on energy priorities, economic priorities, social development, and environmental integrity. Renewables can be particularly beneficial in expanding energy access, in line with the goals of the United Nations’ Sustainable Energy for All initiative, reducing the harmful emissions driving global climate change, and positively benefiting the lives of marginalized people and communities by fostering social and economic change.
The ability to measure, assess, and benchmark the degree to which renewable energy technologies contribute to a nation’s progress toward meeting these crucial goals would prove to be a seminal moment for the renewable energy sector and for international development efforts worldwide. Likewise, the ability for policymakers to measure and assess the barriers to development and deployment and the effectiveness of policy mechanisms on creating change could be a powerful tool.
Worldwatch’s work has highlighted the diverse ways that renewable energy indicators can have a profound impact. This is simply a first step in the development of what could be a new and influential tool.
Evan Musolino is a Research Associate on the Climate and Energy team at Worldwatch Institute.