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Paris COP21 - a self seller: extremly cheap renewables!

Category: PARIS COP21

Paris COP21 - a self seller: extremely cheap renewables!

Climate change negotiations in Paris may be stalled again. Even though 160 countries have delivered self imposed CO2 reduction targets, these are not binding. Industrialized and developing countries continue to disagree about cost allocations for CO2-reductions for 25 years now.

Finally, a breakthrough is at hand, a change in paradigms, a self seller for Paris: Renewable energies are extremely cheap by now – all countries in the world could economically profit – just decision makers don`t yet get it?

Politicians will love such a climate-for-profit-strategy, easily sellable to voters worldwide: We demand worldwide targets for extremely cheap renewables – a self seller for Paris! (1/8)

 

Zero Emission Think Tank has recently discussed the current status of the Paris negotiations with the german delegation as well as with the German Secretary of Economics and Energy Mr. Sigmar Gabriel. The problem seems to be that „yes, we know renewables are cheap, but nobody in the world believes it yet“ and „give us examples“. Zero Emission Think Tank has researched recent pricing trends, and, we have 25 years of international renewables project finance experience in the US, Canada, Germany, Spain and other countries. Here are a few key examples:

Methodology: We have researched publically available pricing data, compared them to our experiences, and, extrapolated them for 30 years, with marginal costs close to zero.

I. Windenergy in the US, South Africa, Brasil, China and India: $ 2,4-4,5 cents

Recent bidding rounds for large scale wind farms with 20 year terms obtained pricing in the range of $ 6.2 cents per kWh (South Africa/2), and 5.25 cents (Brasil/3). Many power purchase agreements (PPAs) in the US were recently signed at 2 cents, this comes out to 3.2 cents if the production tax credit (PTC) is included. Marginal costs for year 21-30 are estimated to be at about 1 cent, with resulting average 30 year pricing for wind energy of $ 2,4 - 4,5 cents.

At this pricing, windenergy is competitive in many markets, and often already today the least cost option (LCO) compared to new conventionals. So published by Bloomberg New Energy Finance (BNEF/7) for Brasil, Europe and Australia, as well as the US according to the US Department of Energy & Lawrence Berkley National Laboratory (DoE/4), and, South Africa (BakerMcKenzie/2).

However, take a look at the world windmap (5), and, as can be seen, the same high wind resources or better (resulting in 1.X cents longterm pricing) can be found in China and India, and many, many other countries – windenergy today is a cheap source of energy worldwide:

According to Bloomberg New Energy Finance (press release 6.10.2015 / 7) coal fired generation is at 7,5 (Americas), 7,2 (Asia & Pacific), 10,5 (Europe) $cents „Levelized costs of Energy”.

A RENEWABLES economic point of no return! Hence our proposed Zero Emission Profit Strategy for Paris (1). Hence our request for worldwide renewables installation targets for the climate change treaty! Politically easy to transport: Cheap Renewables – and all countries can benefit!

II. Rooftop Solar in Spain and worldwide: 1.7 cents !

4kW rooftop solar panels in Germany are about 6,000 Euros ($6,500) installed today. With 10 cents feed-in tariff and 25% autoconsumption this comes out to 10 years payback, with over 1 million rooftop solar installations in Germany today.

Now, with the same assumptions we take a look at Madrid in Spain. Twice the solar irradiation, but lower grid parity costs: We have run numbers, and, a feed-in tariff of 5 cents would allow for a 10 year payback. 5 cents is equivalent to the whole sales market pricing today, i.e. a huge opportunity for 14 million rooftops equivalent to 500,000 new jobs in solar energy in Spain WITHOUT ANY SUBSIDIES! (7)

 

And, let`s go a step further: Rooftop solar marginal costs are close to zero, so let`s assume zero costs for year 11-20, and, with the 5 cents from year 1-10, this results in 2.5 cents average price over 20 years. And what about 30 years? 1,7 cents rooftop solar in Spain today, without any subsidies!

 

And, there is yet a further next level: Have a look at the word solarmap. Madrid and Spain are in green areas in the map (arrow/5), however almost everywhere in the world there is MORE sun than in Spain (yellow and orange in the map/5):

 

Rooftop solar is extremely cheap for 95% of the world population today, with a 30 year average of 1.X cents.

Consequently, Bloomberg (BNEF) predicts investments of about $ 2.2 Trillion over the next 25 years in rooftop solar (7):

 

A RENEWABLES economic point of no return for rooftop-solar as well.Hence our proposed Zero Emission Profit Strategy for Paris (1). Hence our demand for worldwide renewables installation targets for the climate change treaty! Because it makes economic sense.

Politically easy to transport: Cheap Renewables – and all countries can benefit!

This is the key message for Paris. It is time for political leaders now to transport this message of extremely cheap renewables worldwide. After 25 years of failed climate change negotiations, it is time now to define renewables installation targets instead or in addition. A desperately needed self seller for Paris:

20% Renewables by 2020 worldwide (system integration costs are not relevant at this level)

100% Renewables by 2100 worldwide (according to the Elmau G7 target of decarbonization)

It is time to act now!

Writing history in Paris – or failing again.


Dr. Ingo Stuckmann, Director Zero Emission-Think Tank

Artikel on let`s face it, www.zepface.it

References Zero Emission-Think Tank is a non-profit NGO. It`s director Dr. Ingo Stuckmann, educated in Heidelberg and Harvard, has since 25 years of renewables project finance experience in the US, Canada, Germany, Spain and other countries.

  1. For background, 5 articles about the climate change summit in Paris have been published on the Zero Emission-Think Tank webpage: let`s face it, www.zepface.it

Climate change on the way to Paris? Paris will have repercussions for centuries to come.

Zero Emission Plan for Paris - A simple & fair model for capping worldwide carbon emissions.

Paris and the RENEWABLES (economic) point of no return - Zero Emission Profit-Strategyegie.

A Self Seller for Paris Instead of disagreeing about the allocation of costs for carbon emission reductions, time has come for RENEWABLE ENERGIES to provide a Zero Emission Profit-Strategy for the climate change treaty in Paris. Politicians will love this “climate-profit” strategy, as it is easily transported to their voters worldwide.

Climate change conference in Paris – a silver lining at the horizont Summary of the situation

  1. South Africa:

Financial benefits of renewables in South Africa in 2014, CSIR Energy Center 21 Jan 2015

http://www.cshttp://www.nytimes.com/2015/09/23/science/global-companies-joining-climate-change-efforts.html?_r=1ir.co.za/docs/Financial%20benefits%20of%20Wind%20and%20PV%20in%202014-%20CSIR%20-%2021Jan2014_FINAL.pdf , Note: pricing on slide 20: 0.74 Rand with an exchange rate of 0.074 is 5.5 Euro cents or $ 6.2 cents.

South Africa saved $ 69 million with solar & wind energy in 2014:

http://cleantechnica.com/2015/02/17/south-africa-saved-69-million-solar-wind-energy-2014/

New Wind in South Africa cheaper than new clean coal:

http://www.bakermckenzie.com/files/upload/The%20future%20for%20clean%20energy%20in%20Africa%20(Final).pdf

  1. Brasil: Windenergy is below $5,34 cents or 4,7 Euro cents / originally 1,77 Reais per kWh: Preparing for the servicing boom, August 2015, www.WindpowerMonthly.com

Comments: Fluctuations in exchange and interest rates can easily result in +/- 1 cent in non-$/non-Euro countries, e.g. on 18 September 2015 windenergy pricing was at 3,8 Euro cents instead of the 4,7 Euro cents cited above.

  1. USA: Wind prices fall 66% (since 2009) to record low 2 $cents/kWh, powerpoint presentation slide 49 in: 2014 Wind Technologies Market Report by US Department of Energy (DoE) and Lawrence Berkley National Laboratory, http://energy.gov/eere/wind/downloads/2014-wind-technologies-market-report

Note 1: Fair enough, the Production Tax Credit (PTC, $ 2.4 cents for the first 10 years) should be added to the $2 cents pricing. So pricing is as follows: $4,4 cents for year 1-10, $ 2 cents for year 11-20, and, 1 cent extrapolated for year 21-30 results in an average $2.46 cents.

Note 2: Fair enough, it should also be mentioned that conventional energies were subsidized with 6.5% of the global economic output or $ 5 Trillion in 2014:

Global energy subsidies fuel climate change, says IMF study.

http://www.ft.com/cms/s/0/7c6512a6-fd27-11e4-b072-00144feabdc0.html#axzz3i12rS6ku

  1. World Windmap and World Solarmap:

http://www.vaisala.com/en/energy/support/Resources/Pages/Free-Wind-And-Solar-Resource-Maps.aspx

 

World windmap: Very cheap windenergy can be produced in large scale projects at $ 2,4-4,5 cents per kWh at wind speeds above 8 m/s (light red in map / US, China, India, Europe, Brasil Australia and many more countries), extrapolated for 30 years. Even in non-coastal areas in Germany wind energy can be produced at 6 Euro cents or $ 6.6 cents* (green in map): Windenergy is a cheap form of new energy with $ 2.4-6.6 cents worldwide.

*average price is 8 Euro cents for 15 years, 4 cents for 5 years, and, 1 cent thereafter, i.e. 30 year projection.

World Solarmap: Rooftop solar works in Madrid/Spain with 25% autoconsumption and $ 5.5 cents whole sales pricing for a 10 year payback. Extrapolated with marginal costs close to zero for 30 years, the average cost per kWh is about $ 1.86 cents. Looking at the world solarmap shows that 95% of the world population has as much sun as Spain has (green in map, arrow), and, often much more (yellow and orange in map)

Rooftop Solar* is extremely cheap worldwide with 1.X cents!

 

  1. Let the sun shine in – 500,000 new Jobs in Spain, Zero Emission Think Tank article on let`s face it, www.zepface.it

  2. Wind is already the cheapest new form of energy in Europe, Australia, Brasil” and “Wind to be cheapest new energy by 2026 in almost all markets”, New Energy Outlook by Bloomberg New Energy Finance (BNEF) http://www.bloomberg.com/company/new-energy-outlook/, also cited in www.windpowermonthly.com August 2015, p.21

Wind is also competitve in the USA now – see DoE report (4)

 

UPDATE BNEF: “Wind and solar boost cost-competitiveness versus fossil fuels” Press release October 6, 2015: According to BNEF the Levelized cost of electricity (LCOE) per kWh are: Coal-fired generation 7,5 $cents (Americas), 7,3 $cents (Asia-Pacific), 10,5 $cents (Europe), compared to 8,2 $cents for Windenergy. Note: These relatively high costs for wind energy are already viable for low windspeeds (green areas in windmap/5), good and outstanding wind resources are much cheaper (yellow-red in windmap/5) as described in the main article above.

Note: These studies do not consider conventional energy subsidies and consequently unfair market conditions for renewables. Without subidies for conventional energies, windenergy is very cheap above average windspeeds of 8m/s (light red in world windmap/5), including China & India and very many other countries.

 

(8) Zero Emission Plan for Paris by Zero Emission - Think Tank

 

Proposal for a simple & fair distribution of CO2-certificates between industrialized and developping countries. The latter receive higher allocations initially, to finance already cheaper renewable energies within cheap distributed systems. Schematic drawing.

 

Article on www.zepface.it

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