- In-Depth: Germany’s 22 GW Solar Energy Record
- Solar Energy Momentum Building in the Middle East as Qatar Banks Finance $1.1 Billion Polysilicon Plant
- Sharp Hits Concentrator Solar Cell Efficiency Record, 43.5%
- Realities of the Modern-Day Grid Cancel Some of Wind Power’s Carbon Savings
- University of Barcelona’s New Wind Prospecting Balloon
- Coal Plant Shut Down, Required 35-45 Million Gallons of Water Daily
- Occupy Wall Street Spawns DIY Solar Power
- California and American West Top 2012 State Clean Energy Index
- Tropical Dams Dispel Clean Energy Myth
- Peru, South American Nations Turn to Reverse Auctions to Accelerate Renewable Energy Development
Posted: 31 May 2012 09:52 AM PDT
Last Friday, on the 25th of May 2012, Germany set a new world solar energy record in photovoltaic solar energy: 22.4 GW of photovoltaic energy on the grid covering over 30% of all energy demand! That’s the equivalent of 20 huge conventional fossil or nuclear power plants. This is clearly amazing news that made headlines around the world and was accompanied by either praise or the typical anti-solar bickering that is rather dominant in big media outlets even today (or especially today).
The latter didn’t mind even using this incredible clean energy accomplishment to repeat the usual ignorant talking points, disinformation, or flat out lies. Unfortunately, those news pieces and early articles praising the event didn’t fully exploit the opportunity to explain the true significance of having so much solar energy in the energy mix, especially when looking at the technological developments and opportunities of the coming years.
Beyond the Gigawatts
So, it’s obvious that, in my opinion, the story of this solar energy record shouldn’t stop at the number of 22.15 GW of peak output. In fact, the really meaningful story starts with a different number: 189.24 GWh. That’s the amount of electrical energy generated from more than a million PV solar systems spread all over the country on that record day. Not only was this almost 14% of Friday’s total electricity consumption in Germany, it was also, actually, not that unusual.
For the last couple of weeks, the output of PV solar peaked within an inch of the 20 GW line several times, and it never peaked very low throughout the month. The lowest peak load was 8 GW, while the average peak load of PV solar was 16 GW. So, it seems that solar is not as unreliable as conventional wisdom and media outlets often lead people to believe. Because I can tell you that we didn’t have 4 weeks straight of sunshine here in Germany, that’s for sure.
Looking at the daily power production during the first 4 weeks of May makes this even more obvious. While it is not a constant increase day by day, the weekly output is increasing steadily as we are heading towards mid-summer. During the first week of May, solar energy produced about 780 GWh of electric power; and, at the end of the month, during the record-breaking week, it amounted to 1,096 GWh or 1.1 TWh. Those were enough GWhs to meet almost 12% of the total power needs in Germany that week!
Looking into the Future
So, what does this mean for the future? (Especially considering the fact that there is enough suitable roof space left to increase solar capacity by up to 5-10 times without many problems.)
In my opinion, there are two significant developments that are currently taking place which will revolutionize the energy system in a rapid and unprecedented way. This fundamental structural change could start within the coming decade and might put the world on a more sustainable path a lot faster than the 30- to 70-year time tables that are proclaimed as ambitious goals by many politicians and energy industry “experts” around the world.
The first major development is the fact that the renewable energy system beats the conventional energy system in terms of prices already. This is not that obvious to many people because the common benchmarks used in the media are biased against renewable energy sources. This bias is usually showcased by so-called “energy analysts / experts” on TV, in articles, and in books. Their typical approach is to single out one renewable energy technology, put it into the power plant position of the conventional centralized energy system, and come to the conclusion that it’s not economical (for the power plant operator) to use renewables.
So-called experts using this kind of faulty benchmark can have only two reasons:
Either way, these so-called “experts” disqualify themselves by failing to judge fundamentally different systems with the fitting benchmarks.
For everyone remotely familiar with renewable energy systems and without links to the conventional energy industry, it is quite obvious that such benchmarks are bullshit. Renewable energy systems operate in a decentralized fashion, close to consumers / communities. They gain efficiency by combining several technologies to reach 100% supply and by utilizing synergy effects like providing energy in forms of power and heat at the same time, locally.
The obvious truth is that local wind power, biomass, and even solar energy can deliver energy to the citizens and industries of region cheaper than what the power grid delivers by burning lignite or uranium in a multi-GW power station hundreds of miles away. Today, even electricity from rooftop PV solar systems can beat the conventional energy system when looking at a conservatively realistic 15-20 year cost calculation, here in cloudy Germany.
The second huge development is what is happening in energy storage right now. Around the world, companies and even huge corporations are investing billions of dollars in research and factories. There is a sort of gold rush atmosphere with the big electronics and chemical corporations, as well as the car industry trying to claim parts of what will soon be a multi-billion-dollar market. This development is, at the moment, primarily aimed at providing the electric car with the power it needs to revolutionize transportation throughout the coming decades. But without a doubt, this development will also provide homeowners and municipal utilities with falling prices for energy storage solutions. The first products are already entering the market right now, especially in Japan where “smart houses” are promoted on all TV channels.
Is the Stage Set for a Rapid Change?
With those developments in mind, you actually don’t need a lot of imagination to figure out that we are approaching a point of historic proportions. Within this decade, we could reach a time in which widely available products enable private households and commercial customers to produce and store their own energy for cheaper than what the conventional energy system is able to offer them. This will especially be the case as decreasing global reserves and increasing global demand for fossil fuels lead to higher prices for the conventional power system.
The application of millions of such renewable micro energy systems will lead to a situation in which an increasing number of GWh are no longer bought from the grid every week. Adding the increasing investments in energy efficiency, the natural consequence is a shrinking market for electricity generation from the current centralized fossil and nuclear power system.
Since the traditional power producers have no influence over these developments, this change will decrease the profitability of their huge investments in power plants that were build with a 30-50 year lifespan in mind. The changing market conditions will also call into question all new investments in centralized power plants, and eventually for the entire infrastructure focused on providing fossil and nuclear fuel.
The effects of this development are already clearly visible today. Among the more prominent examples are calls for a nuclear FiT in Europe, or programs to support new coal fire stations in Germany! These are just the tip of the iceberg of a structural change that has already started.
Millions of Batteries in Buildings — Utopian?
Considering the two technological developments I talked about earlier, it is very easy to show that it’s just a matter of time until the combination of energy storage for homes with rooftop solar energy and/or small-wind becomes viable and even profitable.
Today, there are still about 6.4 million oil tanks in homes and buildings all over Germany storing energy in the form heating oil. Installing such a tank costs several thousand Euros today. So, why shouldn’t independent power producers start putting up new forms of energy storage in the same numbers as soon as it makes economic sense?
How would 6 million home storage systems change the energy system? Well, 6 million 10 kW / 25 kWh would mean a distributed storage system with 60 GW maximum output/input and 150 GWh of capacity. That’s already enough storage for 10% of the current daily consumption, more than enough to power all German households through the night. It’s also coming a long way to fill the gap between renewable baseload power (hydro and biomass) and variable sources like wind and solar.
That 10-kW/25-kWh battery is not fiction by the way. It’s quite similar to the battery pack that powers the Nissan Leaf right now, Just one battery that will soon reach production volumes in the hundreds of thousands as factories in Japan, Europe, and the US crank up production by 2013.
It’s true that the $15,000 price tag for the battery is too high right now. But, since all kinds of competitors are investing in this market, economics of scale, innovation and optimization will certainly reduce the cost of such batteries in the coming years. In the case of multi-kWh batteries, this development is a lot more obvious than what happened with the price for solar cells just 7 years ago. The fall of prices surprised many analysts back then. Today, prices for solar cells are 70%-80% cheaper than what they were in 2007, putting the cost of solar systems well below $2 per Watt in Germany.
I know that there are many ifs, but I think and hope that this vision for a rapid change of the energy system will start to unfold in a overwhelming and visible fashion before this decade ends. What do you think?
Posted: 31 May 2012 05:44 AM PDT
Local banks have come together to finance Qatar’s first solar-grade polysilicon production plant, a planned $1.1 billion, 8,000-metric-ton facility being built by Qatar Electricity and Water (QEWC) and Qatar Solar Technologies (QSTec), a joint venture of the Qatar Foundation that supports efforts to transform the Gulf Coast country’s economy from a carbon-based to a knowledge-based one.
Doha-based Masraf Al Rayan secured financing for the QSTec-QWEC polysilicon plant in Ras Laffan Industrial City, Stage One of which is expected to be completed in the second half of 2013. “The signing of this deal with Masraf Al Rayan is a significant milestone for QSTec and a major step in the development of a new industry for Qatar — the solar Industry,” stated QSTec CEO and Chairman Dr. Khalid Klefeekh Al Hajri.
Momentum for solar energy is building across the Middle East, as local populations continue to grow rapidly, putting greater demands on water and other scarce natural resources. At the same time, more of an environmental ethic that places greater emphasis on quality of life and preserving biodiversity and the physical environment is taking root.
Solar PV and Sustainable Development in the Middle East
Gulf Coast and Middle Eastern countries have signed on to international accords to reduce CO2 and greenhouse gas emissions and environmental degradation by developing more sustainable economies that place greater value on the natural environment and ecosystem services. Gulf Coast oil and gas exporters, including Qatar, the United Arab Emirates, Oman, Bahrain and Saudi Arabia, have announced that they are increasingly envisioning a future in which solar PV and other forms of renewable energy play a greater role in their economies.
Less oil-rich Middle Eastern as well as North African Islamic countries see solar and renewable energy resources both as a means to economic development and environmental conservation. Jordan and Morocco, for instance, are attracting investment and ramping up solar, wind, and other renewable energy project development.
The agreement between QSTec and QEWC is seen as a key building block in developing a foundation for a solar photovoltaic (PV) industry supply and value chain that could result in solar PV installations across the region and beyond.
"The interest in alternative energy sources and solar energy in Qatar is present and growing. The development and advancement of solar cell technology and the related industry should be the cornerstone for the future strategy on alternative energy resources,” commented QEWC general manager Fahad Al Mohannadi.
Qatar’s solar energy ambitions include using solar energy to realize the aim of making the stadiums being built for the 2022 World Cup, which will be held in Qatar, carbon-neutral.
Posted: 31 May 2012 05:12 AM PDT
Sharp has developed solar cells that match the concentrator solar cell efficiency world record set by Solar Junction last year. The technology’s staggering 43.5% efficiency from a triple-junction compound solar cell is 1.2% higher than the efficiency of the cells holding the record before March of 2011 (when Solar Junction busted that record).
The conversion efficiency was actually confirmed by the Fraunhofer Institute for Solar Energy in April 2012 (for some reason, these companies and researchers don’t let us know about the new records for months sometimes).
“Compound solar cells utilize photo-absorption layers made from compounds consisting of two or more elements, such as indium and gallium,” Sharp writes. “The basic structure of this latest triple-junction compound solar cell uses Sharp's proprietary technology that enables efficient stacking of the three photo-absorption layers, with InGaAs (indium gallium arsenide) as the bottom layer.”
Sharps super-efficient solar cells capture sunlight via three photo-absorption layers and then convert it into electricity.
Two of the improvements that were made to achieve the new efficiency were “[optimizing] the spacing between electrodes on the surface of the concentrator cell and [minimizing] the cell's electrical resistance.”
The work that led to the new efficiency was supported by the "R&D on Innovative Solar Cells" project, which has been promoted by Japan's New Energy and Industrial Technology Development Organization (NEDO).
Where’s all this leading? Hopefully, to solar systems so efficient that they are worth the extra cost and can compete with conventional solar cells in the solar market.
“Because of their high conversion efficiency, compound solar cells have been used primarily on space satellites. Sharp's aim for the future is to apply this latest development success into concentrator photovoltaic power systems that can efficiently generate electricity using small-surface-area solar cells and make them practical for terrestrial use.”
Source & Images: Sharp
Posted: 31 May 2012 04:52 AM PDT
Argonne scientists modeled the Illinois electric grid in an effort to determine how wind energy affects carbon dioxide emissions by testing how more wind power added to the grid would affect the system. They found that having to adjust for the inclusion of wind power adds inefficiencies that cancel out some of the carbon dioxide reduction.
The older technology running in the background is what hampers wind’s carbon-dioxide-reducing properties. Because wind doesn’t blow all the time, the grid operators sometimes have to turn on extra fossil-burning plants to keep up with the demand.
"Turning these large plants on and off is inefficient," explained study author Lauren Valentino. "A certain percentage of the energy goes into just heating up the boilers again."
"Illinois gets its strongest winds at night, when demand is low," said co-author Audun Botterud, an Argonne energy systems engineer. “At the same time, we have a high fraction of very large, inflexible power plants in the system.”
Botterud notes that the best solution would be to find a way to store unused energy created when the wind is blowing and use it for peak times when the wind may have died down, but there is not yet a good and cheap way to store such energy.
Posted: 31 May 2012 04:48 AM PDT
The Meteorological Station
Wind power meterology has been described as an applied science that concerns itself with “siting of wind turbines, regional wind resource assessment, and short-term prediction of the wind resource.” A key tool in these assessments is onsite wind measurements and every future and present wind farm will therefore have a measurement station. On land, this only requires some instruments appropriately located. Offshore, however, it may require a foundation similar to those used for the turbines themselves at a cost of several million dollars.
The cost of foundations, time, and the necessary environmental impact study add to the overall cost. In deeper water, foundations to the ocean bottom are not practical and floating platforms are considered an attractive alternative. The University of Barcelona is also considering a cheaper way for meteorological stations.
The Barcelona System
Andriy Lyasota, a Russian aeronautical engineer currently pursuing a master’s degree in energy engineering, has been developing the system, which combines a wi-fi connection with a balloon shaped like a fish. The prototype balloon, pictured above, is approximately 3 meters long and is designed to withstand winds of up to 150 km/h and reach a height of 150 meters. The equipment carried aloft is expected to weigh approximately 4 kilos and, using a GPS, supposed to determine wind strength and direction, irrespective of the balloon orientation. The balloon would be tethered to a common floating buoy. The system is expected to substantially reduce prospecting costs while minimizing the environmental impact.
Data collection tests have been very promising, but “…we must ensure that it can last up to a year in extreme conditions," says Andriy Lyasota. It may be that this system will not only be used for future floating wind turbines but a closer cousin: a deep-sea, tethered wind turbine farm.
Posted: 31 May 2012 04:36 AM PDT
A nuclear plant in New York uses vast quantities of river water also, and doing so kills close to one billion organisms each year. (Two new nuclear reactors could use 55-88 million gallons of water daily from the Savannha River.)
Impacts on local ecology from the use of such massive quantities of water every day are obviously disruptive. In 2009, the Savannah River was ranked number four in a top ten list of waterways for total toxic discharges.
It isn’t only river ecology that is at issue; it is human health as well. According to Source Watch, the annual health impact of particle emissions from the Savannah River D-Area Power House were: three deaths, four heart attacks, forty-seven asthma attacks, two hospital admissions, two cases of chronic bronchitis, and three asthma ER visits.
A biomass co-generation facility was opened at the site in March to help replace the power generated by the old, polluting coal plant. This new plant’s operation has been estimated to help prevent 100,000 tons of greenhouse gas emissions from entering the atmosphere each year.
Image Credit: Debs, Wiki Commons
Posted: 31 May 2012 04:23 AM PDT
Back in the Fall of 2011, during the first wave of Occupy protests, a team from Revolt Labs apparently built solar-powered chargers for Occupy Boston protesters to help them charge their portable electronics. This was done using what I used to construct my own 5-volt USB charger: a 5-volt 7805 voltage regulator which is capable of charging all USB devices using a vehicle’s cigarette lighter outlet, or most cordless phone chargers.
This commonly available $0.56 device (yes, 56 cents) will accept any voltage ranging from 7 volts to 35 volts, from solar panels, hand-cranked generators, UPS batteries, car batteries, and any other DC power source, and put out the standard 5 volts DC required by most cellphones, mp3 players, and other portable electronics.
USB-charged devices automatically draw the correct charging current, which is 500 mA from the charger. Rechargeable laptop or disposable batteries can also be integrated into USB chargers like mine so that they can act as a backup battery for portable electronics (I’ve done this as well), a car charger, and a 120-volt charger. Just an idea for anyone who wants to do that.
The DIY Revolt Labs project generates 10 watts of power, sufficient to sustain small electronics such as cellphones. And, of course, cellphones and socket-free recharging are particularly important to protesters. Another even more portable and helpful device for charging portable electronics, which can fully sustain cellphones, is a 12-watt solar-powered foldable charge available from Wagan Tech for $130. The price is $11 per watt of power generation capacity, which is high, but can be expected from foldable solar panels.
For protesters who are on the move, the portability may be worth it, and they can use it personally at home too. For protesters who need more to power their laptops and other devices, and who need extra energy storage capacity, there is an 80-watt power cube I took a look at in a local store recently, also available on Amazon.
Any other ideas?
h/t Hack A Day
Posted: 31 May 2012 01:54 AM PDT
California is the top clean energy state in the United States for the third consecutive year, and the American West region continues to lead the national clean tech economy, according to a new ranking from industry analysts Clean Edge.
The 2012 State Clean Energy Index, the third-annual such analysis, aggregates various industry data into one scoring system. Overall scores are awarded on a 100-point scale based on three categories – installed technology (clean electricity, clean transportation, energy intelligence & green building), policy outlook (regulations & mandates, incentives), and invested capital (financial, human & intellectual).
#1 — California
California dominated the rankings with a 91.1 score, more than 10 points higher than the second-ranked state, even though it lost 4.2 points from 2011. The Golden State "has established itself as the world's preeminent testing ground for clean technology of all kinds," and led the country in nearly all aspects of market expansion, including new wind and solar, hybrid and electric vehicles (EV), and green building.
However, the state's most notable achievement comes in attracting venture capital. California-based clean energy startups saw $9 billion in investment over the past three years, more than the combined total of all 49 other states.
#2 — Oregon
Oregon held onto its second-place rank, gaining 0.5 points for a 79.9 score. Clean Edge credits the state's success to consumer-driven demand for clean tech products and services, the highest national participation rates for voluntary green pricing programs, the largest concentration of LEED-certified buildings, and one of the highest rates of hybrid-electric vehicles per-capita.
#3 — Massachusetts
Massachusetts jumped 4.3 points to retain its third-place rank with a score of 76.1. Clean Edge attributes the state's strength to an existing base of energy efficiency measures, a $500-million infusion of venture capital investment in 2011, and the Boston metro region's network of universities. The index considers this concentration of education and startups second only to Silicon Valley.
#4 — Washington State
Washington State, buoyed by a 9-point increase, jumped from sixth overall in 2010 to the fourth-ranked state in 2011 with a score of 69.0. This ranking was due to newly added wind capacity and strong hydropower output, which helped to generate more than 84 percent of all in-state electricity from low-carbon sources (up from 72 percent in 2010). In addition, the state's focus on building out an EV charging network could make it an industry epicenter moving forward.
#5 — Colorado
Rounding out the top five was Colorado, which maintained the fifth-overall rank from 2010 with a five-point score increase to 65.1. Clean tech infrastructure continues to grow in the state, especially in green building, wind power, and solar photovoltaics. Interestingly, Colorado also checks in as the third most attractive destination for venture capital investment, thanks largely to the U.S. Department of Energy's National Renewable Energy Laboratory.
Clean Edge also noted four impressive national trends:
Remainder of top ten
The index also highlights interesting factors that helped determine the rank of the rest of the top-ten states:
Even though national support for clean energy technology may be uncertain, state-level support remains strong and the green economy continues to grow. "The state-level scene shows a diversity that crosses political boundaries and regions," said Ron Pernick, Clean Edge managing director. "The next decade will determine which nations, states, and cites lead in clean tech."
Posted: 31 May 2012 01:46 AM PDT
Tropical reservoirs are a “methane factory, continuously removing carbon from the atmosphere as carbon dioxide and returning it as methane, with a much greater impact on global warming.”
Thus argue the scientists Philip Fearnside and Salvador Pueyo, whose latest article just appeared in the journal Nature Climate Change. In their commentary, Fearnside and Pueyo dispel the myth that dams are clean by illustrating the different pathways of methane release from both upstream and downstream of a dam – pathways that current methods of reservoir emissions measurement mostly ignore. (Methane is 25 times more potent a greenhouse gas than carbon dioxide over 100 years, and 72 times more potent over 20 years.)
In addition, they focus on Brazil, where the largest reservoir emitters reside, and where errors in calculations by energy companies have underestimated reservoir emissions by as much as 345 percent. The authors single out Electrobrás, one of the leading Brazilian energy giants in the Amazonia dam-building spree. “Various mathematical errors have resulted in Brazil's electrical authorities estimating the magnitude of emissions from reservoir surfaces at a level of only one-fourth what it should be,” write Fearnside and Pueyo.
Setting aside such sloppy math, researchers have shown for years that tropical dams are far less green than most people think (not to mention the loss of river biodiversity, forests, farms and fields). Dams in the tropics have two principle greenhouse gas emissions sources:
So why are these hydroelectric dams in the Amazon being promoted as clean energy, despite the overwhelming evidence? According to the authors, the Brazilian government is not only promoting them for their supposed benefits in mitigating global warming, but also to take advantage of mitigation funds such as the Kyoto Protocol's Clean Development Mechanism (check out the Global CDM Hydro Hall of Shame for the worst of these projects). Unfortunately, these tropical dams are expected to have cumulative emissions greater than those of fossil-fuel plants for several decades to come, “making them indefensible on the basis of global warming mitigation,” says Fearnside and Pueyo.
Ahead of the Rio+20 conference, which is in less than a month, dispelling this myth is more critical than ever. This is especially true for Brazil, which has the dirtiest dams and plans to add 30 more to the Amazon within its borders by 2020. Among them is the controversial Belo Monte Dam, which will flood tens of thousands of hectares and displace more than 20,000 people, including indigenous communities. Electrobrás also plans to build 18 more dams in Peru and other Amazonian countries. All told, this is equivalent to building one dam every four months in Amazonia.
Of course Brazil is not the only country with tropical dams. Countries in the Mekong region are building dozens of dams – many of which are also seeking to benefit from limited mitigation funding mechanisms like the CDM. Sarawak in Malaysian Borneo aims to build a series of tropical dams on rainforest lands that support thousands of indigenous peoples. A dam can’t go up without trees being felled or flooded, so displacing forests with dams means we lose these critical carbon regulators and do irreparable damage to our planet’s lungs.
And of course, the picture is not complete without seeing the human story behind many of these dams. Mongabay puts it well when it states:
“It is possible to reduce the climate impact of a tropical dam by minimizing the size of its reservoir and capturing methane emissions. Yet neither of these fixes address [the] social conflict that often arises from forced displacement in dam catchments.”
Clearly, it’s time to do away with the belief that tropical dams produce clean energy. Not doing so would lead to countries under-reporting their emissions and allowing global temperatures to continue to increase. It would also allow decision-makers to continue greenwashing hydropower while overlooking the hidden costs of hydroelectric dams on rivers and riverine communities.
Posted: 31 May 2012 01:23 AM PDT
Peru and other governments in South America, including Brazil and Uruguay’s, are making headway as they strive to develop renewable energy resources that reduce CO2 and greenhouse gas (GHG) emissions and environmental degradation while at the same time boosting economic activity and jobs growth. In doing so, they’re turning to reverse auctions, as opposed to Feed-in Tariffs (FiTs) or other incentives, as a market-based mechanism to foster growth of renewable energy capacity.
Demand for energy in Peru is growing at 9% per year, with total required energy capacity estimated to increase to 6,140 MW between 2012-2020, according to a 2011 energy market analysis conducted by consulting company CINYDE S.A.C. for World Bank Group member the International Finance Corp (IFC). That’s the equivalent of building a new 500-MW generation plant every year.
Meeting growing energy demand will require investments of between $10.83 billion to $13.32 billion in Peru over this period, according to the IFC report, and Peru’s government is looking to renewable energy investments to be a substantial portion of that.
Renewables and Peru’s Growing Energy Demand
Peru has set a goal of renewable energy supplying 33% of the Andean nation’s electricity by 2021. It’s also set a 15% energy savings goal between 2009-2018. That’s relative to 2018′s projected demand across the residential, industrial, services, public, and transportation sectors, the IFC explains.
There’s a lot in the way of renewable energy potential in Peru. It’s estimated that the Andean nation is currently tapping into just 4.7% of hydro energy potential, 0.65% of wind energy potential, 6.1% of biomass potential, and only 1% of solar energy potential.
Source Cum.Demand Installed Investment Cost Total Investment Potential (MW) ($MM/MW) ($MM)
Solar PV 540 2.5 – 3.0 1,350 – 1,620
* Source: IFC CINYDE analysis, based on information from the MINEM, KFW study (cited in footnote 3), and projections of future energy auctions.
As of 2011, Peru relied on hydropower for 56% of its electricity needs. Natural gas and oil derivatives-fueled power plants met the remaining 44%. A signatory to the Kyoto Protocol, Peru has pledged to cut CO2 and greenhouse gas emissions by reducing fossil fuel use and ramping up renewable energy.
On the demand side of Peru’s energy ledger, industrial and mining sectors consume the vast majority of electricity. Some 100 such companies consumer nearly 80% of Peru’s total electricity generation. That makes them primary players in Peru’s efforts to reduce CO2 and GHG emissions by making use of renewable energy and increasing energy efficiency.
Peru is producing natural gas from offshore wells and using that to generate electricity. These are being subsidized by the government, resulting in artificially low prices and the distortion of energy market prices. That’s hindering the development of alternative, renewable energy resources, according to the IFC.
Moreover, energy prices in Peru are forecast to increase. Its current sources of natural gas are projected to be depleted in roughly 20-30 years, and natural prices will rise significantly once the full costs of exploration are included in the market price.
Reverse Auctions & Emergence of Peru’s Renewable Energy Ecosystem
A varied mix of organizations has come together to forge a renewable energy “ecosystem” in Peru. Seminal to this has been the involvement of the World Bank Group, which has served as the thin edge of a wedge that has established the mechanism through which Peruvian renewable energy projects can qualify for UN Framework Convention on Climate Change (UNFCCC) Clean Development Mechanism (CDM) funding.
Initiatives undertaken in concert with Peru’s government and the latter’s own legislative initiatives have established the legal and operational framework for Peru’s private sector renewable energy industry to develop.
Joining a growing number of developing countries turning to reverse auctions as the preferred means of meeting their renewable energy development goals, Peru conducted its first renewable energy auction tender in 2010, giving local private sector project developers and banks the opportunity to participate in new investment opportunities. In the 2010 auction, Peru’s Ministry of Energy and Mines, working through regulatory supervisor OSINERGMIN, awarded contracts to install a total 411.7 MW of clean, renewable energy: three wind energy (142 MW), four solar energy (80 MW), two biomass (27.4 MW), and 17 small-scale hydro power projects (162 MW). Another contract for an additional small-scale hydro power project of 18 MW was awarded in a second round auction later that year.
The average offer price for the reverse auction tender came in at a much lower than expected 8.12 cents/kilowatt-hour. Tenders to supply hydroelectric power (6.02 cents/kWh) and biomass (6.35 cents/kWh) were the lowest rates. Wind energy tenders averaged 8.04 cents/kWh, and solar 22.11 cents/kWh, OSINERGMIN reported.
Peru’s Legislative Decree 1002 of 2008 established renewable energy resource development as a national priority, setting targets for their contribution to the nation’s total domestic electricity consumption. The law also affords renewable energy priority in grid energy dispatch and established power purchase agreements (PPAs) of up to 15 years, along with a take-off tariff applicable throughout the term of the PPA.
Peru’s latest 2011 renewable energy auctions resulted in awarding contracts to build hydro projects (680GWh/yr), wind energy (416GWh/yr), solar energy (43GWh/yr) and biomass (12GWh/yr).
Last week, Spanish renewable energy project developer and construction company Montealto announced it had begun installing 62 wind turbines at two wind farm sites where rated capacity is to total 110 MW. The two wind farms, one in Cupinisque and another in Talara, will generate electricity sufficient for more than 240,000 homes while avoiding some 241 tons of CO2 emissions.
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