SUSTAINABLE USE OF OCEANS IN THE CONTEXT OF THE GREEN ECONOMY AND THE ERADICATION OF POVERTY, PRINCIPALITY OF MONACO, NOVEMBER, 2011

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1 SUSTAINABLE USE OF OCEANS IN THE CONTEXT OF THE GREEN ECONOMY AND THE ERADICATION OF POVERTY, PRINCIPALITY OF MONACO, NOVEMBER, 2011 Implementation of Offshore Wind Power & Potential of Tidal, Wave and Ocean Current Energy Magdalena A K Muir Research Associate, Arctic Institute of North America & Advisory Board Member, Climate, Coastal and Marine Union November 25, 2011 Preliminary Draft Outline of Paper and Presentation 1. Introduction: Global Trends and Investment for Renewable Energy Concerns about energy security are growing. At the same time, critical need to respond to climate change. Many governments have promoted renewable low-carbon energy that can strengthen energy security. Renewable energy is the fastest growing portion of energy sector. Growth in renewable energy is focused on a few of the available technologies. Rapid deployment is confined to a relatively small number of countries. In more advanced markets, managing costs and integration of renewable energy in a time of austerity has sparked political debate. Wind has grown most rapidly in absolute terms and has overtaken bioenergy. Progress in renewable electricity is focused in the more developed countries and economies such as Europe and North America, and in Brazil, India and China. These developed economies were the only region where the deployment of offshore wind reached a significant scale. Renewable energy is cost-competitive in an increasing range of circumstances, providing investment opportunities without the need for economic supports. It is a valuable component of a secure and sustainable energy economy, providing energy at a low cost with high price stability. Deployment can be delayed or prevented by barriers related to regulatory and policy uncertainty, institutional and administrative arrangements or infrastructure that may be unsuited to a more distributed energy supply or the high up-front capital costs of renewable energy. Sustainability and social acceptance can also be critical issues for some technologies. Regulatory and policy uncertainty may play a significant role, even when economic barriers are removed. Onshore wind developments demonstrate that those countries that have managed to induce a dynamic and stable market have adhered to the best practice policy principles. Countries without comprehensive and stable policy framework on the other hand, have seen boom-and-bust cycles in deployment and, accordingly, a less well-developed market, particularly in terms of the domestic supply chain. [Citation: International Energy Agency, Deploying Renewables, 2011]!

2 The focus of the renewable power market is rapidly moving away from the traditional mature markets of Europe and the US. Smaller markets are expanding far more aggressively as their power demand ramps up more quickly and more importantly there remains considerable unexploited potential for renewable power in these regions. In absolute terms Europe will be the biggest market for renewable power over the next five years, but following that China will lead. The Middle East and North African market will also grow very quickly over with most of the investment from solar technologies replacing oil-fired power plants In China, investment in renewable will continue to increase. By 2014, China will become the largest single market for renewable energy, with an annual spend of just under $50bn, accounting for 21% of the world market. The US and Canada are also expected to see no lasting slowdown, together hitting $50bn of investment by By far the most rapid growth will be seen in the rapidly developing economies of India, the Middle East and North Africa, Africa and Latin America. By 2020, the markets outside of the Europe, US, Canada and China will account for 50% of world demand. The aggregate share of renewable technologies, such as wind, solar and geothermal, and Carbon Capture Sequestration will grow from 5% in 2010 to 19% in 2030, corresponding to a 10% compound annual growth rate. Reflecting the rising production and investment, installed capacity of renewable power sources is also projected to climb, reaching 2.5TW by 2030 growth of over 800%. Therefore expect around 1.1TW of new build until 2020, with 36% from solar and 46% onshore wind, followed by 1.4TW between 2021 and 2030, of which half will be new solar installations and 37% onshore wind. Total clean energy investment in the power sector, including the cost of replacing or refurbishing aging installations, is expected to exceed $5.4 trillion over the next 20 years. Up to 2020, an average $229bn will be invested each year, increasing to $314bn from Solar will attract around half, at $1.1 trillion between 2011 and 2030, and $1.5 trillion in the next decade. Wind (onshore and offshore) will follow, absorbing a little over one-third of total investment this decade and 41% over the next. The relatively high levels of investment in wind are due to the large number of new offshore installations expected in Europe, mainly UK and Germany, before 2020, as well as the refurbishment of old wind farms in the EU, US and China over [Citation: Bloomberg New Energy Finance, Global Renewable Energy Market Outlook, November 16, 2011]. #

3 2. Offshore Wind Energy and Related Electricity Grid Infrastructure Introduction While current, tidal and wave energy has greater potential globally, the highest potential and most implemented offshore renewable energy is wind. Globally, in tandem to support offshore wind, there is requirement for significant investment in and expansion of electricity grid. Coastal and marine biomass is another form of marine renewable energy but will not be discussed here. All wind resources are renewable, with low marginal costs once in operation and low carbon emissions, and thus contributing to sustainable development. Offshore wind resources are more expensive to develop and operate than onshore winds, which has so far restricted geographical exploitation of offshore wind resources. Cost of offshore wind technology declining, with future widespread mobilization in China. Construction of offshore electricity grid infrastructure for offshore wind is important, as well as stable national and regional economic and environmental regulatory regimes. All these are in place in Europe, and could readily be put in place in China. Once these offshore grids are established, they can support and integrate other forms of marine renewable energy, such as tidal and wave energy generation. Given substantive initial investment, stable economic and environmental regulatory regimes are also important for offshore wind regimes. Where exploited, and supported by electricity grid infrastructure, offshore wind development is characterized by higher wind speeds, larger turbines, and greater social acceptability than landbased wind, particularly for northern Europe. Another advantage of offshore wind development is its proximity to increasing coastal and urban settlements. As more population in the coast, and larger coastal cities and urban settlements, access to offshore wind resources and windfarms will be an increasing advantage..the London Array in the Thames estuary adjacent to London, and offshore windfarms adjacent to Copenhagen are examples for northern Europe, and parallels examples will soon be present for China. Last consideration for wind energy is how it might be used in combination with other renewable and non-renewable energy sources and energy storage mechanisms to enhance sustainable development and poverty alleviation, particularly for island, remote or off grid locations. Wind and other renewable energy sources could also provide a low cost energy source for desalination, which may be increasingly important in parts of the world, in adapting to climate change. $

4 Global Wind Resources To be inserted. Europe (preliminary draft) Europe leading globally at the current time with offshore wind, with most projects occurring in Baltic, Irish and North Seas. Europe is also leading with the development of the offshore electricity grid to support this wind, along the necessary legislation and regulatory framework to support wind power and grid (environmental assessment, marine spatial planning, public and private financing). The contribution of offshore electricity grid infrastructure is important, due to planning and social constraints on grid infrastructure inland. Potential along much of Europe s coastline and seas for wind farms, including southern Europe and Mediterranean region. The southern seas of Europe will also be used to transfer renewable energy from southern Mediterranean countries or north Africa. Most of new renewable power in Europe use weather-dependent variable sources such as wind, wave, tidal and solar. This can only be achieved in the most efficient and cost-effective way if substantive changes the existing grid to secure system stability. Grid Declaration has been agreed in November 2011 for the North Sea and Baltic Grid, ensuring cooperation occurs to enable both grid development and nature conservation. The preamble to the Declaration states: Most of new renewable power installations will use weather-dependent variable sources such as wind, wave, tidal and solar. This can only be achieved in the most efficient and cost-effective way if substantive changes and additions to the existing grid are undertaken to secure system stability. This requires: immediate actions by policymakers; preparedness for technical interventions by transmission system operators (TSOs); and the support of non-government organisations (NGOs) for the principle of grid expansion for renewables integration, and in building public understanding and acceptance thereof. Examples in Europe of engagement of local communities and people through consultation and profit sharing. %

5 Americas (preliminary draft) Canada East and West Coast of Canada offer wind development possibilities, as well as example of unique arrangements characterized by local involvement and engagement. United States Great wind potential but difficulties in achieving offshore wind authorizations and social support. Two case studies for offshore wind development to be examined in paper and presentation: Great Lakes Brazil State of Hawai i Examination of wind potential and proposals for offshore wind development to be inserted. Asia (preliminary draft) Australia and New Zealand Recent economic and engineering feasibility studies for offshore wind energy generation in Australia. Based on selection criteria including wind speed, water depth, environmental impact and development costs, Western Australia is the most suitable to host an offshore installation. However, there may not be significant interest in funding such a offshore project in the near future. There is sufficient opportunity build wind farms on land that may not be desire to go offshore at this stage. New Zealand has good wind resources. In some locations, wind flow can continuous and of relatively high speed, making these areas suited to wind energy development. Its wind resource has the potential to generate over three times New Zealand s current annual electricity demand. New Zealand has terrestrial wind farms either operating or under construction, with a current installed capacity of 615 megawatts supplying 4% of New Zealand s annual generation, as of December However, it is unlikely that wind potential will be fully implemented in the near future due to other renewable generation like hydro electricity. China Power demand growth and China s aim to diversify its electricity portfolio are the two main drivers for offshore wind development. In 2009, China got 16% of its power. Another 1% came from wind and other renewable energy and 2% came from nuclear. This reliance on coal has caused domestic problems including environmental degradation and mining accidents. As power demand grows, China will continue to exploit hydropower resources while trying to increase the proportion of power coming from nuclear and other renewable energy. &

6 The Chinese government has pursued the dual purpose of building a wind manufacturing industry along with the wind generation assets, thereby capturing the added value that a complete supply chain can bring. To achieve these associated goals, the government has implemented supply- and demand-side policies. Demand-side supports have included wind installation targets, and political directives for state-owned banks and utilities to support wind energy. Supply-side supports included research and development grants and incentives to large state-owned manufacturing companies to encourage them to diversify into the wind sector. A local content requirement was implemented for wind turbines, effectively forcing foreign companies to set up manufacturing in China and to bringing many of their component suppliers with them. Some of these took the form of joint ventures, which brought further advantages in technology transfer. The price difference for Chinese turbines, coupled with implicit government encouragement to buy domestic, has caused market share of domestic manufacturers to expand. Globally, four of the top fifteen wind turbine manufacturers are Chinese (in terms of estimated 2010 production). The government has been encouraging larger (>2MW) turbines and offshore turbines. In addition to encouraging corporate research and development, and requiring newly tendered projects to use larger turbines, policy moves has also been designed. Discussion of wind potential and proposed offshore wind development. India Examination of wind potential and proposals for offshore wind development to be inserted. Western Asia and North Africa Examination of wind potential and proposals for offshore wind development to be inserted. Small Island Developing States and Least Developed Economies (preliminary draft) Examination of wind potential and proposals for offshore wind development to be inserted. '

7 3. Ocean Energy and Related Electricity Grid Infrastructure (preliminary draft) The oceans represent a vast and largely untapped source of energy in the form of surface waves, fluid flow, salinity gradients, and thermal. Marine current power is the energy obtained from ocean currents. Osmotic power is the energy from salinity gradients. Ocean thermal energy is the power from temperature differences at varying depths. Tidal power is the energy from moving masses of water. Tidal power generation comprises three main forms, namely: tidal stream power, tidal barrage power, and dynamic tidal power. Wave power is the power from surface waves Europe!#$%&#'%(&)(*)(+,#&),&,-./)0(',&'%#1)#&2)0-(0(3#13)*(-)(+,#&),&,-./)2,4,1(0$,&')'()5,) %&3,-',26) Case studies of UK and Portugal for current, wave, and tidal. Americas Examination of wind potential and proposals for ocean energy development to be inserted. Case studies Asia Nova Scotia Bay of Fundy, Canada (tidal) State of Hawai I, United States (ocean thermal energy) Cuba (current) Australia and New Zealand inserted Ocean energy wave, tide and ocean thermal energy sources - is an underdeveloped but substantial renewable energy source for Australia. Australia has wave energy resources along its western and southern coastline, especially in Tasmania. Australia s best tidal energy resources are located along the northern margin, especially the northwest coast of Western Australia. Tasmania Areas in the Pacific Ocean are prospective for ocean thermal energy. Many of Australia s best tidal and wave energy resources are distant from the electricity grid. The proximity of the resource to major population centres and the electricity grid is better for wave energy than tidal or ocean thermal energy. (

8 China inserted India inserted. Western Asia and North Africa inserted. Small Island Developing States and Least Developed Economies inserted. 4. Sustainable Cities and Regions and Role of Offshore Wind and Ocean Energy (preliminary draft) Case studies of Water and Energy Nexus: Renewable Energy and Desalination London and Copenhagen and offshore wind farms. Galapagos Islands and sustainable energy development in a fragile environment. )

Medium Term Renewable Energy Market Report 2013

Medium Term Renewable Energy Market Report 2013 Renewable Energy Market Report 213 Michael Waldron Renewable Energy Division International Energy Agency OECD/IEA 213 OECD/IEA 213 MTRMR methodology and scope Analysis of drivers and challenges for RE