Report sees renewable energy moving into mainstream

14 May 2004 - With oil and gas prices soaring amid deepening instability in the Middle East, renewable energy is emerging as a bright spot in the global energy economy-and is poised for a worldwide takeoff. According to a new study from the Worldwatch Institute, solar power generation has more than tripled globally in the past five years, and wind power generation has nearly quadrupled.

"Political will and the right mix of policies-not vast resource potential-have made wind and solar power the world's fastest growing energy sources over the past decade," says Worldwatch research associate Janet Sawin, author of Mainstreaming Renewable Energy in the 21st Century. In Germany, Japan, Spain, and a handful of other countries, clear government commitments to renewable energy have overcome barriers and created the demand for these technologies that has led to dramatic growth, while advancing renewable technologies and driving down their costs.

With a fraction of the U.S. potential in wind power, Germany has more than twice as much installed wind capacity and is a world leader in solar and other renewables as well. And Japan, which has far less sunshine than California, uses and manufactures more solar cells than any other country.

"The experiences of Germany and Japan hint at the great potential for renewables in the United States, which is both geographically large and resource-rich," says Sawin. "The technologies are ready-what we need is strong political leadership to vault renewables into the mainstream."

Already, new renewables-including wind, solar, geothermal, and modern bio energy-supply enough electricity for more than 300 million homes worldwide. In 2003, an estimated $20.3bn-about one-sixth of total global investment in power generation equipment-was invested in new renewables. Within the next decade, this is expected to approach $85bn annually. The growth rates of some renewables are closer to those of computers than the single-digit growth rates of today's energy economies. "Some people dismiss this rapid growth rate in an industry they consider tiny, but this thinking is short-sighted and mirrors the attitude of IBM toward Microsoft in the early 1980s," says Sawin.

The impressive growth potential of renewables is attracting big league corporate investors. Japan's Sharp Corporation produces 27 percent of the world's solar cells, while General Electric is now a world leader in the global wind business-two years after acquiring a dynamic young wind company.

Renewables have proved they can meet the energy needs of industrial and developing countries alike, and are offering real solutions to a world facing accelerating global energy demand and rising concerns about energy supplies and environmental impacts. In China, where lights have been going out in major cities because power supplies are not keeping up with exploding demand, renewables have the potential to provide clean energy from domestic sources and diversify China's energy economy. Recognition of these advantages has led the Chinese government to consider an ambitious new renewables policy.

The global transition to a new energy system will require significant upfront investments to develop new technologies and to bring costs down. But over the long term it will provide benefits like improved global air and water quality, increased security of energy supply, new jobs, and a reduced threat of climate change, which a U.S. Pentagon report has identified as a security threat.

Recent surges in gasoline prices have reminded motorists of another kind of insecurity that is inherent in our heavy dependence on fossil fuels. Those fuels, which continue to benefit from an array of government subsidies, also carry a range of hidden costs in the form of damage to human health and natural ecosystems.

Around the world, a growing number of nations have recognized the economic and environmental benefits of renewable energy, and are enacting tax breaks and other policy measures to partially offset the advantages enjoyed by fossil fuels. Among the nations where policy changes may allow dynamic new renewable energy markets to emerge in the next five years are Brazil, China, and India.

In another sign of coming change, nearly 90 nations have formally committed to increasing their share of energy derived from renewable resources by joining the Johannesburg Renewable Energy Coalition, which rose out of the energy debate at the World Summit in 2002.

As part of this effort the German government will host Renewables 2004 in June 2004-officially called the International Conference on Renewable Energies- in Bonn. This historic event will be attended by thousands of scientists, engineers, business executives, non-governmental leaders, and government officials, and is expected to accelerate the technological and economic momentum that is already taking energy sources like wind, solar, and bio-power into the heart of the world's energy systems.

According to the report's author, Janet Sawin, the last decade of rapid policy development has provided a blueprint for a portfolio of integrated policies with the proven ability to get renewable energy off the ground, allowing new dynamic markets to emerge. The greatest growth in renewables has occurred in a handful of countries-Germany, Japan, Denmark, and Spain-and a number of U.S. states including Pennsylvania, Minnesota, Texas, and California. Among the key elements of a strong renewable energy policy the report points to:

* Access to the market must be ensured. Governments must provide renewables with ready access to energy grids at prices that reflect full costs of conventional energy and provide sufficient incentive to stimulate renewable energy market growth;

* Financial incentives (including tax credits, rebates, payments, and low-interest loans) are also important for encouraging investment in renewables by reducing investors' risk and compensating for high capital costs;

* Education and information dissemination are essential for informing potential leaders, investors, and customers about the potential of renewables, the state of technologies, and available government incentives, as well as to dispel myths;

* Public participation and ownership in the renewables development process increase political support and the likelihood of success;

* Clear industry standards and siting regulations help prevent inferior hardware from entering the marketplace, thereby increasing investor and customer confidence while addressing potential sources of opposition such as noise and visual impacts.

"Policies must be sustained and consistent to avoid boom-and-bust cycles that shake investor confidence and inhibit the development of strong domestic industries," Sawin concludes. "Those countries that stay the course will end up not only with a more efficient and cleaner energy system but will reap economic rewards in the form of new industries and jobs."

View full report: www.worldwatch.org/press/prerelease/wwp169embargoed.pdf)

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