This article is taken from the 'The Green Investing: Towards a Clean Energy Infrastructure Report', published by the World Economic Forum with the collaboration with New Energy Finance.
The four-year surge in investment activity in clean energy has spanned all sectors, all geographies and all asset
classes. What has begun to emerge as a result is shape of the new lower-carbon energy infrastructure. No one can describe with certainty what the world’s energy system will look like in 2050. A substantial proportion of our energy will undoubtedly still be supplied by fossil fuels, but we can now be fairly certain that a future low-carbon energy system will include a meaningful contribution from the following eight renewable energy sources:
1. Onshore Wind
2. Offshore Wind
3. Solar Photovoltaic (PV)
4. Solar Thermal Electricity Generation (STEG)
5. Municipal Solid Waste-to-Energy (MSW)
6. Sugar-based Ethanol
7. Cellulosic and Next Generation Biofuels
8. Geothermal Power
Although these energy technologies – which constitute only a subset of the full range of opportunities – may not yet be fully cost competitive with fossil fuels, the economics of experience curves and oil and gas depletion are working powerfully to level the playing field. Renewable energy technologies are becoming cheaper
as they reach scale and operating experience. This trend has been obscured recently by surging commodity prices and supply chain bottlenecks, but with new industrial capacity coming on-line we are about to see prices drop as they come back in line with costs now that we are moving into a buyer's market. Solar PV electricity costs may become comparable with daytime retail electricity prices in many sunny parts of the world in the next 12 to 36 months, even without subsidies. Wind is already cost competitive with natural gas-fired electricity generation in certain locations without subsidies. Renewable energy is not generally subject to risks associated with fuel input costs. Increasing fuel prices by 20% increases the costs of generation by 16% for gas and 6% for coal while leaving renewable energy technologies practically untouched. The volatility of fuel prices alone should act to encourage utilities to build some proportion of renewable energy into their portfolios. And higher capital costs for many renewable energy technologies – and no fuel costs – mean that they will benefit more from reductions in effective interest rates than natural gas or coal. Indeed, in a world in which effective interest rates for energy projects drop 300 basis points, while fuel prices and carbon credit prices each rise by 20%, onshore wind becomes cheaper than natural gas, and geothermal and waste-to-energy not only beat natural gas, but are even cheaper than coal based power. Nuclear power is also set for a renaissance in many countries around the world. Nuclear’s share of total electricity production has remained steady at around 16% since the 1980s. Its contribution is clearly set to grow over the medium to long term, although it will always be limited by issues of cost, storage, safety and public resistance.
Thursday, September 23, 2010
Thursday, September 2, 2010
LEADERSHIP AND MANAGEMENT COMMITMENT
“Leadership is a process of creating environment that influence others to achieve group goals. People support an environment they try to create. – Dale Carnegie”
Managing your energy related issues in the organisation has always been misapprehended. Management team has always thought that energy has to be managed in a different unique way, and usually they will leave it to the technical team. The major issue in most organisations are lack of leadership and management commitment from the upper level management toward energy conservation and energy efficiency. Leaving the energy manager alone to handle the energy issues will be a major failure to the organisation. The leadership and management commitment element is the thrust to the successful energy management system.
To inculcate the energy efficiency and conservation culture, management has to demonstrate a visible leadership and commitment. The Figure 1‑1 below shows the pyramid of energy management system. The company vision toward energy efficiency has to be clear and well understood by the workers.
Figure 1‑1: Energy Management Pyramid
Dow Company Case Study
The 2015 energy intensity target for Dow is 25% reduction, on top of the 38% already achieved since 1990, is clearly a stretch goal. Dow has created a Strategy Board of very senior leaders charged with driving energy efficiency as part of Dow’s approach to climate change and energy policy. This leadership team establishes the company’s energy policy and goals and sets priorities. Each individual business then develops its own goals in support of the overall business strategy, provides resources and capital funding, and measures individual leader performance in delivering energy efficiency.
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