WWEA bulletin issue 3 2014

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From The Editor

Dear Members and Friends of WWEA,

This new edition of our WWEA Quarterly Bulletin documents several of the latest trends of wind power

in the world:

WWEA President Prof. He Dexin outlines the role of wind power with regard to the recent G20 meeting

in Australia. WWEA suggests that the governments of the G20 countries should focus even more on the

expansion of renewable energy and that they should seek to develop a global renewable energy investment

programme.

Unfortunately, as reflected in WWEA’s Half-year Report, the OECD countries have recently reduced their

efforts to switch their energy supply to renewable energy - and several countries have weakened their related

policies. Some countries are now considering the switch from very efficient and successful feed-in tariff

schemes to tender systems. The risks of such a shift are clearly presented in Eva Hauser’s article, where she

demonstrates that tender systems go hand in hand with a reduced number and variety of investors, and in the

longer term result in higher costs for wind power.

Fortunately, wind is still growing fast in the so-called developing countries, most notably in China, India

and Brazil – the latter having become the third largest national wind turbine market in 2014. We welcome the

development and growth of these emerging markets, which go hand in hand with the growth of WWEA itself:

indeed, WWEA is very happy to have recently welcomed our 600th member, FWT GmbH.

The success of wind power is part of a general global trend towards renewable energy, as presented in

REN21’s Global Status Report 2014, a summary of which you will find here as well.

In addition, country reports from Japan and Cuba illustrate the prospects of these two quite diverse

markets. However, both countries still have quite a lot in common, as both are island states without major

fossil resources, and so are well placed to benefit from ongoing improvements in the wind energy sector.

With best wishes

Stefan GsängerSecretary General of WWEA

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Editorial CommitteeEditor-in-Chief: Stefan Gsänger

Associate Editor-in-Chief: Shi Pengfei

Paul Gipe

Jami Hossain

Editors: Martina Hinkova Shane Mulligan

Yu Guiyong

Visual Design: Jing Ying

ContactMartina Bachvarova

[email protected]

Tel. +49-228-369 40-80

Fax +49-228-369 40-84

WWEA Head Office

Charles-de-Gaulle-Str. 5, 53113 Bonn, Germany

A detailed supplier listing and

other information can be found at

www.wwindea.org

Yu Guiyong

[email protected]

Tel. +86-10-5979 6665

Fax +86-10-6422 8215

CWEA Secretariat

28 N. 3rd Ring Road E., Beijing, P. R. China

A detailed supplier listing and

other information can be found at

www.cwea.org.cn

Published by

World Wind Energy Association (WWEA)

Produced by

Chinese Wind Energy Association (CWEA)

ISSUE 3 June 2014

01 From the Editor

News Analysis04 G20 Meeting in Brisbane:Global Wind Energy Infrastructure Development 06 WWEA welcomes 600th member:FWT energy GmbH Research08 Introducing competitive bidding processes for renewable energy plants – will it be worth it? Report14 WWEA half-year report 201420 Global Renewable Energy Generation Capacity Jumps to Record Level Regional Focus26 Future perspective and current status of wind energy in Japan after Fukushima34 The Cuban policy for the prospective development of renewable energy resources 2014-2030

Contents

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israWEA

Israeli Wind Energy Associationח ו ר ת י ג ר נ א ל ת י ל א ר ש י ה ה ד ו ג א ה

Hosted by:Jerusalem, Israel

WWEC 2015

14th World Wind Energy Conference & Exhibition

SAVE THE DATE26-28 October, 2015 – Jerusalem, Israel

www.worldwindconf.net

Innovation for 100% Renewable Energy In Harmony with the Environment

ParagonGroup

Organized by

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News Analysis ISSUE 3 June 2014

G20 Meeting in Brisbane:Global Wind Energy Infrastructure Development

The issues of increasing greenhouse gas emissions, air pollution, climate change and energy shortage have seriously impacted the global ecological environment and the sustainable development of social economy. Speeding up the global energy transformation, increasing investment in new clean and renewable energy supplies, promoting environmental improvement, and transforming energy consumption patterns, have become common goals among countries around the world.

According to statistics from WWEA, by the end of 2013 wind power generation was being commercially developed in 103 countries around the world. The total global wind power capacity has reached 318.529GW, of which the total wind energy capacity in Asia and Europe account for around 110 GW each. Today the total global wind energy capacity accounts for about 4% of the global electricity supply, and Europe has a higher proportion of wind power in the whole power structure, with Denmark, Spain, and Portugal at 34%, 21% and 20% respectively. However, new investment in wind turbines in 2013 was at its lowest level in five

years, and the global newly installed wind power capacity was 35.5GW – 25.5% lower than in 2012. But while the wind power markets of some OECD countries have slowed down, they are still growing fast in some other countries, in particular in China and India. In addition, some emerging wind power markets are coming up, especially in Latin America, such as Brazil and Mexico as well as some African countries, such as South Africa and Egypt.

We can observe, then, that the world wind power market is changing. In the industrialised countries, the development trend of fossil energy and nuclear energy has partially impeded the deployment of wind power. In June of 2014, an IRENA report put forward that the largest portion of the investment in global energy supply is still related to fossil fuels. At the same time, wind power is booming in some developing and emerging countries.

Considering the current state of the world, many of the most pressing challenges mankind is facing are related to energy utilisation, and wind power, together with the other renewable energies, is offering the key

He Dexin

to resolving many of these challenges. Without taking into account externalities like climate change, air pollution, or nuclear contamination, when we compare new energy investments, wind power is today the cheapest option to generate electricity; the cost of wind power is cheaper than that of gas, oil, coal and nuclear power. This economic advantage has been recognised by many scientists and economists for some time, and by an increasing number of governments and authoritative international organisations such as IRENA. Therefore, the development and utilization of wind power has taken a very important place in the global energy revolution. On August 1st this year, the German government has started conducting The German Renewable Energy Act (amendment) (EEG2014). In July of this year, the EU decided to invest 1 billion Euros to develop clean energy projects, and also some countries are making plans for developing a high proportion of renewable energy. According to the forecast from BTM, from 2014 to 2018, wind power development will maintain a compound annual growth rate of 4%, and the total global wind power installed capacity in 2018 is

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News AnalysisISSUE 3 June 2014

set to reach 572GW. According to the forecast of IEA, by 2035, global energy will increase by 5660GW, of which, renewable energy will increase 2930GW, and wind energy and solar energy will make up 64% in total.

The World Wind Energy Association (WWEA) was founded as an international non-profit organization in 2001. Headquartered in Bonn, Germany, it now has 550 members from 104 countries. Each year, WWEA holds the annual World Wind Energy Conference (WWEC) in a different country, building its information network to provide technical support and consulting services. WWEA also establishes sound wind energy development policy frameworks and encourages technical developments and so plays an active role for pushing the growth of world wind energy development.

At present, the sustainable development of global wind energy still faces some important constraining factors, the joint efforts of all countries are needed to cope with these. Here we have some suggestions:

First, governments should provide a stable policy environment and supporting regulations for developing renewable energy so as to avoid the obstacles to wind power technology and industry development.

Second, wind power is an important component of energy system in the future, it will generate more and more positive impacts on economic and social development, such as providing job opportunities, developing the local manufacturing and improving climate environment, etc., and governments should continue to increase the wind power support in the period of economic slowdown.

Third, wind energy utilization is a kind of systematic engineering, and the application of wind energy should be planned and implemented and included into the whole energy system. Continuously improve the power grid and support facilities’ accommodation capacity to renewable energies and wind power’s quality and decrease wind power cost.

The third industrial revolution should take the following points as the core issues: continual distributed renewable energy development; and smart grid construction. At the same time as exploring the development mode, more powerful support measures also need to be created in order to use energy technology innovation and market mechanisms to drive the sustainable development of wind power.

Fourth, utilizing wind energy and protecting the earth are the

common goals of all mankind, and governments have the responsibility to upgrade the public’s understanding about renewable energy utilization. We should further strengthen international exchange and cooperation in the field of wind energy. The developed countries especially should actively support technical progress and capacity building in the developing countries.

WWEA suggests that the G20, for the benefit of their countries and of the whole world, should agree on a global renewable energy investment programme which supports the integrated utilisation of wind power. Such a programme could not only help to achieve the aims of the Millennium Development Goals and the UN Sustainable Energy for All programmes, but could also pave the way for an effective global climate agreement. It also could provide a powerful economic boost for today’s global economic situation.

Acknowledgements: We would

like to express our heartfelt thanks to

the staff from CWEA and WWEA for

providing me many valuable related

materials for this article.

(He Dexin,President Emeritus of WWEA and Research Professor of CWEA.This Article is Prof.He's contribution for the G20 meeting.)

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News Analysis ISSUE 3 June 2014

WWEA welcomes 600th member: FWT energy GmbH

Founded in the year 2001, the World Wind Energy Association has been continuously growing and represents today a very big network of members in 104 countries. WWEA’s member associations represent again more than 50’000 members. WWEA has recently been able to welcome its 600th direct member: The wind turbine company FWT energy GmbH

& Co. KG, holding company of the new group with its operative companies FWT Service GmbH, FWT Production GmbH and FWT trade GmbH, based in Waigandshain, Germany. FWT is focusing on wind turbine O&M, turbine production, and related services, employing today close to 100 people.

WWEA is still continuously growing, in spite of slow down of the world market for wind turbines

WWEA President He Dexin: “We are very pleased to welcome FWT as our 600th member. The company represents very well the dynamic and international wind sector: Although it was founded only in 2013, its roots are going back more than 25 years and it is active on several continents. We look very much forward to working closely with FWT, together with all our members, in supporting the growth of the wind sector all over the world. WWEA is advising national governments and international organizations on wind deployment policies, and having such companies as our members makes our expertise even more based on practical experience and facts. The success of FWT demonstrates that still today new companies have great prospects on the wind market, given they follow the right strategies."

Photo:Gao Shifeng

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News AnalysisISSUE 3 June 2014

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About FWT energy GmbH

The roots of the new player in windbusiness, FWT, are closely linked with

Fuhrländer AG. After insolvency of Fuhrländer AG licensees and customers

of Fuhrländer were concerned about the purchase and delivery of major

components for turbines and production, since delivery by Fuhrländer was

stopped. That was the start of FWT Trade, which was founded as trading

company in order to deliver licensees (therefore the company name FWT

Trade GmbH). In the meantime the scope of works offered by FWT trade

comprises a wide range of solutions in purchase, logistics and trading

with components. In February 2013, FWT started with service activities,

customized service and maintenance of turbines (FWT Service). Finally the

company started with the production of the first new wind turbine (FWT

Production) in June 2013. The actual product family comprising wind turbines

of the multi-megawatt-class of 2.0, 2.5 and 3 MW.

“Many offer service & maintenance – FWT goes one step further!”

– According to this motto FWT is placed on the wind power-market,

while being located on the former company grounds of Fuhrländer AG in

Waigandshain. In the field of maintenance, FWT Service offers everything

desired by operators: rotor blade service, endoscopy of transmission gears,

maintenance of inverters, tower inspection, provision of lifts and much more.

FWT is active in France, Germany, Belgium, Spain, India, USA, Bulgaria, Ukraine, Sweden, Azerbaijan, Ukraine, Kazakhstan, Iran and China. Currently 22 turbines (FWT 2000) are being delivered for the first wind project in Kazachztan, a flagship project of Expo 2017 in Astana.

WWEA Secretary General Stefan Gsänger: “We cordially welcome FWT

as new corporate member! This dynamic company fits perfectly to our broad existing network of national associations and companies from the different wind branches. We are especially proud that our members can equally be found in new and emerging wind markets, in particular in developing countries, but also in the well-established markets in Europe or Asia. We will continue to support our members from the different parts of the world to find new partners, to intensify international interaction and cooperation, and to jointly work for increasing the share of wind power and renewable energy in the global energy supply. FWT is a perfect partner for this!”

Research

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Eva Hauser, IZES gGmbH, [email protected]

The introduction of auctions for renewable energy procurement, foreseen by the European Commission (in its “Guidelines on State aid for environmental protection and energy 2014-2020”1 )to begin from 2017,will mark an important policy change for many member states. 2

The European Commission’s objectives in publishing these new guidelines include strengthening “the internal market, promoting more effectiveness in public spending through a better contribution of State aid to the objectives of common interest, greater scrutiny on the incentive effect, on limiting the aid to the minimum necessary, and on avoiding the potential negative effects of the aid on competition and trade.” (Guidelines, para.12).

In general, proponents of tenders give three main reasons for the favourability of auctions in comparison with other instruments employed to finance the expansion of renewable energies:

Introducing competitive bidding processes for renewable energy plants

• First, the supposedly higher (static) economic efficiency compared to the administrative setting of tariffs,

• second, a more targeted controllability of renewable energy expansion and

• third, the conviction that decisions on the financing of renewable energies would be taken more neutrally by ‘the market' than by politicians or by the administration charged with this task.

In general, all newly built renewable energy plants should only receive ‘aid’ via a competitive bidding processes, but different exceptions may be applied: they can be limited to specific technologies (cf. Guidelines, para.126) and they may be restricted to plants whose installed capacity is lower than 1 MW or, for wind energy, not exceeding 6 MW or 6 generation units. Furthermore, the European Commission already defines (in Guidelines,

will it be worth it?

Research

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para.126) three possible exceptions to this general rule, each depending on member states demonstrating that:

• only one or a very limited number of projects or sites would be eligible,

• a competitive bidding process would lead to higher support levels (for example by strategic bidding) or

• a competitive bidding process would result in low project realisation rates (as a consequence of underbidding).

These exemptions show that the European Commission itself seems to be aware that competitive bidding processes may not always lead to lowering prices or to high project realisation rates. Therefore, it is quite interesting to look at other countries where auctions for renewable energies have already been introduced.

In a recent study about auctions for wind turbines, we took a closer look at whether and to what degree expectations have been fulfilled in some European and non-European states that useauctions to determine the amount of remuneration tariffs or the number/ capacity of

wind turbines being installed. Having considered the recent examples of

the Netherlands, Italy, South Africa and Brazil, we observethere is no uniform picture of auctions leading to lower remuneration tariffs for wind turbines.

Generally, it is not advisable to directly compare the prices that have been determined in auctions across countries. These prices depend on many different factors like wind conditions, interest rates, costs of grid connection, accessibility of plant sites, costs of authorisation procedures, possible compensations for inflation,and also on the delay between the deposal of the bids and the start of the operation of a wind power plant.

There is another point that needs to be taken into account when examining auction results: Feed-in-tariffs may be determined following an annual regression path which can vary according to a regional pattern, i.e. to wind conditions. For example, Germany (like other countries) applies a bandwidth of tariffs according to the so called ‘reference yield model’. Assuming the recently adopted EEG 2014 with its regression path and

Figure 1 Weighted average auction results for wind turbines since 2009 [in R$/MWh]

Research

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a future inflation rate of 2 % over the twenty years of guaranteed payments for electricity fed into the grid, wind turbines installed in Germany with a commissioning date in 2016 will receive revenues ranging from 46 €/MWh up to69 €/MWh (discounted values). This represents a bandwidth between the most and the least profitable location in absolute terms of 23 €/MWh, or about50 %.

In those countries where the remuneration tariff has been fixed in auctions (with the exception of the Netherlands, where a different auction mechanism applies, see below), prices went down during the first two or three auction rounds; in Brazil, where the tendering system has been in place for a longer period, a subsequent increase of the prices can be observed:

• Due to technology-neutral tendering in the Netherlands with sequential bidding windows, in which the market premium is augmented in each sequence (taking place roughly every 6 weeks except during summer time), a direct comparison is not possible. In the Dutch auctions, it is thus not the remuneration level that is determined, but the capacity that may be realised with the available amount of money.

• In the first two bidding rounds in 2012 and 2013 in Italy, the tariff fell from 140 €/ MWh

while the quota system was applied before the introduction of auctions to approximately 108 €/ MWhin the second round and to tariffs ranging from roughly 85 – 90€/ MWh in this year’s auction round. The auction result list shows that six among the fifteen bidders admitted in 2014 had participated in the 2013 round.This may have enabled them to lower their bid prices, as parts of the necessary project development or authorisation costs had already been paid in 2013.

• In contrast, in Brazil, where some eleven auctions have taken place since 2009, the prices have tended to go up since December 2012 (see Figure 1). It is worth noting that in Brazil there is a compensation for inflation (based upon annual price indexes), which offers wind turbine operators an annually adjusted remuneration starting from the commissioning date.

• In South Africa, the average of the first onshore wind auction results in 2011 was nominally 1.143 South African Rand. In the last completed bid window, in April 2013, the average revenue fell to 737 South African Rand. The bid phase of the fourth round is completed; its preferred bidders are to be published at the end of 2014.

These results are quite interesting from another point of view: wind energy auctions in

Figure 2 Shares of wind turbine producers in the three past bid windows

Research

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South Africa until now led to a narrowing of the number of successful turbine manufacturers and project developers during the first three auctions. While there were rather equal shares of five manufacturers who were successful in the first bid window, only three bidders won in the second round – with one manufacturer winning more than 50% of the allocated capacity. In the third round, four bidders were successful, but two received only a minor share (see Figure 2). When looking at the successful developers, the market concentration becomes even more visible. In each of bid windows 2 and 3, there was one developer that received nearly half of the contracted volumes (see Figure 3). This raises the question whether auctions lead to oligopolistic structures that undermine competition and finally lead to higher support levels (as stipulated in the European Commission’s energy aid guidelines).

The example of Brazil - being the only country with more than six years of experience from eleven auction rounds - shows in fact that auctions do not necessarily achieve a continuous tariff reduction.

It is worth noting that there is little long-term experience in the countries currently working with renewables’ auctions that would allow a comparison

with the regression paths generally pursued when using feed-in-tariffs.

The same applies to implementation rates, i.e. the de facto construction and commissioning of the wind turbines contracted during the auctions. As the auction schemes have only been introduced a few years ago (2009 in Brazil, 2011 in the Netherlands and South Africa, 2012 in Italy)and considering the specific challenges and procedures of wind turbine construction, it is too early for a final appreciation of implementation rates reached with auctions. Nonetheless, the results of an intermediate evaluation are rather disappointing.

• In the Republic of South Africa, only two out of the eight wind farms contracted in 2011 are in operation in June 2014. The remaining six are announced to be operational by the end of 2014.

• In the Netherlands, eleven wind parks were contracted in 2011. Eight of them have become operational by February 2014,meaningthat one quarter has not (yet) been realised. In 2012, only one single installation succeeded in the auction,which was subsequently completed. It will thus be interesting to follow possible changes of the implementation rate of former years and of the

Figure 3 Shares of developers in the three past bid windows

Research

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projects decided upon in 2013.• An evaluation of the Brazilian experience will

also take some more time as – by April 2014 – some 1.700 MW of wind turbines stemming from auctions are in operation, while more than 10.000 MW have been auctioned since 2009 (2010: 593 MW; 2011: 2966 MW; 2012: 289 MW und 2013: 4710 MW). When speaking in sheer numbers, only the capacity auctioned in 2009 has been installed– with roughly a five-years time lapse. It would therefore be worth tracing each wind park contracted since 2009 and whether it has been constructed or not. Of those not built, it would be useful to trace the reasons for this as they could either be related to problems of grid connection, grid deficiencies, or underbidding in the auction or others.

For a meaningful evaluation of auctions as a means to steer the expansion of renewables in a (more) targeted way, it will benecessary to observe several complete construction cycles. Only a medium-term analysis can show whether auctions are a successful instrument to achieve the goals set up in the EU member states following to the renewables directive 2009/73/EC, as possible low project realisation ratesmay be seen tojustify exceptions to the rule of generalised auction procedures.

The possibility of low realisation rates leads to another issue that deserves the attention of decision-makers and the specialist community concerned with renewables’ tendering systems. Two main issues that need to be addressed are:

• First, how should the regulating bodies deal with possible non-fulfilment of contracts that are issued? One strategy to ensure renewable goals are reached could then be to auction capacity that includes a buffer, thereby exceeding the political targets. If so, the question is whether there would be enough suitable project prospects to still enable sufficient competition during several auction rounds?

• Second, there is the question of how a

necessary system of penalties can be designed. In the current tendering systems, bidders are usually asked to submit bid bonds when participating in the auction, the bonds are then refunded when the plants go into operation on time. As shown by the examples of England/Wales and Ireland, which applied auctions in the 1990s and at the beginning of the last decade, tendering systems without an effective control of the bidders’ seriousness lead to very low realisation rates (~ 20%). On the one hand, bid bonds and penalties should not form an obstacle for smaller players (co-operatives or SMEs), but on the other hand they are necessary for the evaluation of the soundness of the bidder and the seriousness of their proposals. To this end, further studies are needed to investigate the effect of bid bonds on different types of bidders, and the real enforcement of penalties in auction systems in detail, since this topic is (despite the recognised slippages and delays) currently only poorly understood.

Finally, when introducing tenders,political decision-makers need to ensure that their system does not only procure static efficiency (lowering prices per megawatthour), but also the ‘dynamic efficiency’. This means that auctions should also contribute to the different challenges raised by an increasing use of renewable energy in the context of the overallenergy system transformation. Some of the issues concerned are:

• a successful technological development of the renewable energy technologies;

• the grid and system integration of renewable energy (including the provision of ancillary services);

• a systemically favourable regional distribution of new renewable plants (to maintain a nation-wide (even Europe-wide) balance of investments and security of supply);and

• widely accepted rules regarding the distances to residential areas or for dealing with forest sites and conservation issues, to ensure public

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References:

1. The full text of the Guidelines (hereafter „Guidelines“) can be found at http://ec.europa.eu/competition/

sectors/energy/legislation_en.html

2. This article is based on three related studies (in German) of the IZES gGmbH on this topic. All references cited

in this article may be found in these studies.

Hauser, E./ Kochems, J.: Ausschreibungsmodelle für Wind Onshore: Erfahrungen im Ausland. Kurzstudie für den

Bundesverband Windenergie, 2014, not yet published

Grashof, K.: Herausforderungen bei Ausschreibungsverfahren für Onshore-Windenergie und PV,

Anlage C zu IZES/BET/Prof. Bofinger, Stromsystem-Design: das EEG 2.0 und Eckpfeiler eines zukünftigen

Regenerativwirtschaftsgesetzes, 2013, unter http://www.izes.de/cms/upload/pdf/EEG_2.0_Anlage_C_zum_

Endbericht_Ausschreibung_IZES.pdf und

Hauser, E/ Weber, A./ Zipp, A./ Leprich, U.: Bewertung von Ausschreibungsverfahren als Finanzierungsmodell

für Anlagen erneuerbarer Energienutzung. Bericht für den Bundesverband Erneuerbare Energien, 2014, unter

http://bee-ev.de/Publikationen/IZES20140627IZESBEE_EE-Ausschreibungen.pdf

acceptance of the technology.

It becomes obvious that the requirements described above for a successful auction design weaken one of the claimed motivations for tenders: the transfer of responsibility over administrative determinations from politicians to the 'neutral' market. Even if auctions help politicians to dispose of the task of fixing the feed-in-tariff rates, this happens at the cost of even more requirements imposed to the regulator or auctioneer,which must be satisfied in order todevelop a functional and sustainable auction design – not to mention that many tendering systems include a ceiling price that needs to be determined by the administration, just as with the previous feed-in-tariffs.

In conclusion, it may be stated that international experience clearly demonstrates that renewable auction systems contain

substantial trade-offs between the political goals of cost efficiency, high realisation rates and a high diversity of market actors. So far, there has been no case of a renewable tendering scheme in which these three goals have been simultaneously and convincingly achieved. Therefore, it seems appropriate to intensively monitor auction results in non-EU-countries, as well as in EU member states already using or introducing tendering systems. In the meantime, it seems advisable

a) to widely use the exceptions concerning ‘small scale’ installations, i.e. renewable energy plants in general with an installed capacity below 1 MW or wind energy projects up until 6 MW or 6 generation units and

b) to cautiously design and test tendering mechanisms during several complete construction cycles - possibly starting with large plants and actors.

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Report ISSUE 3 June 2014

The worldwide wind capacity reached 336’327 MW by the end of June 2014, out of which 17’613 MW were added in the first six months of 2014. This increase is a substantially higher than in the first half of 2013 and 2012, when 13,9 GW and 16,4 GW were added respectively. The total worldwide installed wind capacity by mid-2014 will generate

around 4 % of the world’s electricity demand.

The global wind capacity grew by 5,5% within six months (after 5 % in the same period in 2013 and 7,3 % in 2012) and by 13,5 % on an annual basis (mid-2014 compared with mid-2013). In comparison, the annual growth rate in 2013 was lower at 12,8 %.

Reasons for the relatively positive development of the worldwide wind markets certainly include the economic advantages of wind power and its increasing competitiveness relative to other sources of electricity, as well as the pressing need to implement emission free technologies in order to mitigate climate change and air pollution.

WWEA half-year report2014

Worldwide Wind Market recovered: Wind Capacity over 336 Gigawatts

- 17,6 GW of new installations in the first half of 2014, after 14 GW in 2013- Worldwide wind capacity has reached 336 GW - Asia overtakes Europe as leading wind continent - China close to 100 GW of installed capacity- Newcomer Brazil: third largest market for new wind turbines- 360 GW expected by end of 2014

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ReportISSUE 3 June 2014

Top Wind Markets 2014: China, Germany, Brazil, India, and USA

The five traditional wind countries – China, USA, Germany, Spain and India – still collectively represent a 72 % share of the global wind capacity. In terms of newly added capacity, the share of the Big Five has increased from 57 % to 62 %.

The Chinese market showed a very strong performance and added 7,1 GW, substantially more than in the preceding years. China reached a total wind capacity of 98 GW in June 2014 and has undoubtedly by now crossed the 100 GW mark.

Germany performed strongly as well, adding 1,8 GW within the first half year. This new record no doubt comes partly in anticipation of changes in the renewable energy legislation, which may lead to a slow-down of the German market in the coming years.

For the first time, Brazil has entered the top group by becoming the third largest market for new wind turbines, with 1,3 GW of new capacity representing 7 % of all new wind

Figure 1 Total Installed Capacity 2011-2014 [MW]

turbine sales. With this, Brazil has been able to extend its undisputed leadership in Latin America.

India kept clearly its position as Asian number two and worldwide number five, with 1,1 GW of new wind capacity.

The US market, after its effective collapse in 2013, has shown strong signs of recovery, with a market size of 835 MW, slightly ahead of Canada (723 MW), Australia (699 MW) and the United Kingdom which halved its market size and installed 649 MW in the first half of 2014.

The Spanish market, however, has not contributed to the overall growth in 2014, as it has come to a virtual standstill, with only 0,1 MW of new installations in the first half of 2014.

As was the case in 2013, four countries installed more than 1 GW each in the first half of 2014: China (7,1 GW of new capacity), Germany (1,8 GW), Brazil (1,3 GW) and India (1,1 GW).

The top ten wind countries show a similar picture in the first half of 2014, although on a slightly

higher performance basis. Five countries performed stronger than in 2013: China, USA, Germany, France and Canada. Five countries saw a decreasing market: Spain, UK, Italy, Denmark and, to a lesser degree, India. Spain and Italy saw practically a total standstill, with only 0,1 MW and 30 MW respectively of new capacity installed. Poland is now in the list of top 15 countries by installed capacity while Japan dropped out.

Dynamic Markets to be found on all Continents

It is important to note that for the first time, the most dynamic markets are found on all continents: the ten largest markets for new wind turbines, next to China, India and Germany, included Brazil (1’301 MW), USA (835 MW), Canada (723 MW), Australia (699 MW), UK (649 MW), Sweden (354 MW) and Poland (337 MW). New wind farms have also been installed in South Africa and further African countries, so that this continent has obviously entered the race to catch up with the rest of the world.

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Asia: The new leader on total installed capacity

With 36,9 % of the global installed capacity, Asia is now the continent with the most wind energy installed, surpassing Europe, which accounts for 36,7 %.

Again in 2014, China has been by far the largest single wind market, adding 7,1 GW in six months; this is significantly more than the same period of the previous year, when 5,5 GW were erected. China accounted for 41 % of the world market for new wind turbines. By June 2013, China had an overall installed capacity of 98,6 GW, almost reaching the 100 GW mark. India added 1,1 GW, a bit less than in the first half of 2013. However, considering new and ambitious plans of the new Indian government, the

Indian wind market has very positive prospects.

Two other important markets, in Japan and Korea, are still growing at very modest rates of less than 2 % in the first half of 2014. Unfortunately in both countries the nuclear lobby has still managed to prevent the breakthrough for wind power, despite the clear economic and industrial advantages.

EuropeGermany is still the unchallenged

number one wind market in Europe, with a new capacity of 1,8 GW bringing it to a total of 36,5 GW. UK (649 MW new), Sweden (354 MW new) and France (338 MW new) belong to the five biggest European markets as well, while Spain and Italy saw dramatic

Figure 2 New Installed Capacity H1 2014New Installed Capacity H1 2014: 17’613 MW

declines in new capacity installed, to almost zero.

The future of wind power in the Europe will also depend on decisions by the European Union regarding renewable energy targets for 2030. It is worth noting that the current crisis around Ukraine is in fact strengthening the case of renewable energy proponents, as it suggests that the European countries should increase their energy autonomy through the increased use of domestic renewable energy sources, rather than relying on imported fossil fuels.

North AmericaThe US market has recovered

from the dramatic slump in the second half of 2013, adding 835 MW between January and June 2014, compared to 1,6 MW in the same period last year. It is expected that, due to the improved competitiveness of wind power and its increasing support, the market will further recover in the second half of 2014 and continue in 2015.

Canada installed 723 MW during the first half of 2014, 92 % more than in the same period of 2013, and has become the sixth largest market for new wind turbines worldwide. The victory of the pro-renewables proponents in the elections in the key province of Ontario gives hope that this positive tendency will continue, in spite of rather negative signals at the federal level.

Latin AmericaThe biggest Latin American

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market, Brazil, has become the 13th largest wind power user worldwide, after installing 1,3 GW in the first half of 2014 and reaching a total capacity of 4,7 GW. With a most impressive growth rate of 38,2 % during the first half of 2014, the country has become the third largest market for new wind turbines, after China and Germany, and ahead of the US and India. Brazil is expected to reach the 5 GW mark by September 2014 and to enter the list of top 10 countries with more installed capacity by the end of 2014. Other Latin American countries are emerging as wind markets as well, though at a much more modest level.

OceaniaPositive developments happened in

Australia, where an additional 699 MW was installed, representing a 23% growth in comparison with end of 2013, similar

to the rate of growth in 2011 and 2012. However, due to the most recent and very dramatic switch of the new Australian government, it has to be expected that this boom will not continue in the near future. No new wind farms have been

registered in New Zealand.

Worldwide prospects for end of the year 2014 and beyond

In the second half of 2014, it is expected that an additional capacity of 24 GW will be erected worldwide, which would bring new installations for the year to 41 GW. The total installed wind capacity is expected to reach 360 GW by the end of 2014, which is enough to provide some 4 % of the global electricity demand.

The mid-term prospects for wind power investment remain positive. Although it is not clear whether the world community will be able to reach a strong climate agreement in 2015, wind has now reached a level of competitiveness and reliability, which makes it a natural option for governments, electricity producers, and consumers around the world.

Photo:Jun Wei

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Photo:Xia Weixiong

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The evolution of renewable energy over the past decade has surpassed all expectations. Global installed capacity and production from all renewable technologies have increased substantially; costs for most technologies have decreased significantly; and supporting policies have continued to spread throughout the world.

Developments in the early 2000s showed upwards trends in global renewable energy investment, capacity, and integration across all sectors; yet most mainstream projections did not predict the extraordinary expansion of renewables that was to unfold in the coming decade. Numerous scenarios

Christine Lins, Executive Secretary, REN21

projected levels of renewable energy for 2020 that were already surpassed by 2010.

Today, governments are increasingly aware of the potential impacts of renewable energy on national development. While the primary objective of developing a renewable energy sector is often to maintain or expand energy services, the far-reaching impact of these technologies adds further value to their use: reducing the health and environmental impacts of energy use, mitigating climate impacts, improving educational opportunities, creating jobs, reducing poverty, and increasing gender equality.

Global renewable energy generation capacity

Global perceptions of renewable energy have shifted considerably since 2004. Over the last 10 years, continuing technology advances and rapid deployment of many renewable energy technologies have demonstrated that their potential can be achieved. Renewables advanced further towards realising that potential in 2013.

Continued Renewable Energy Growth

By the end of 2013, global renewable power capacity exceeded 1,560 gigawatts (GW), equalling an 8.3% increase over 2012. Hydropower rose by 4% to approximately 1,000

jumps to record level

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GW, accounting for about one-third of renewable power capacity added during the year. Other renewables collectively grew nearly 17% to an estimated 560 GW. For the first time, more solar PV than wind power capacity was added worldwide. Overall renewables accounted for more than 56% of net additions.

Around the world, policy support

and investment in renewable energy have continued to focus primarily on the electricity sector. Consequently, renewables have accounted for a growing share of electric generation capacity added globally each year. In 2013, renewables made up more that 56% of net additions to global power capacity and represented far higher shares of capacity added in several countries around the world. In the EU,

renewables accounted for the majority of new capacity for the sixth year running.

China, the United States, Brazil, Canada, and Germany remained the top countries for total installed renewable power capacity; leading countries for non-hydro capacity were China, the United States, and Germany, followed by Spain, Italy, and India. China’s new renewable power capacity surpassed new fossil fuel and nuclear capacity for the first time.

In the heating and cooling sector, trends included the increasing use of renewables in combined heat and power plants; the feeding of renewable heating and cooling into district systems; hybrid solutions in the building renovation sector; and the growing use of renewable heat for industrial purposes. Heat from modern biomass, solar and geothermal sources accounts for a small but gradually rising share of final global heat demand, amounting to an estimated 10%. The use of modern renewable technologies for heating and cooling is still limited relative to their vast potential.

The growth of liquid biofuels has been uneven in recent years, but their production and use increased in 2013. Liquid biofuels provide about 2.3% of global transport fuel demand. In 2013, global production rose by 7.7 billion litres to reach 116.6 billion litres. New plants for making advanced biofuels, produced from non-food biomass

Figure 1 Estimated Renewable Energy Share of Global Final Energy Consumption, End 2013

Figure 2 Estimated Renewable Energy Share of Global Electricity Production, End 2013

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feedstocks, were commissioned in Europe and North America. However, overall investment in new biofuel plant capacity continued to decline from its 2007 peak.

The combined modern and traditional renewable energy share in final energy consumption remained at19 %, about level with 2011, even as the share of modern renewables increased. This is because the rapid growth in modern renewable energy is tempered by both a slow migration away from traditional biomass and a continued rise in total global energy demand.

Status of Wind Power

More than 35 GW of wind power capacity was added in 2013, bringing the global total above 318 GW. Following several record years, the wind power market declined nearly 10 GW compared to 2012, reflecting primarily a steep drop in the U.S. market.

The top 10 countries accounted for 85% of year-end global capacity, but there are dynamic and emerging markets in all regions. By the end of 2013, at least 85 countries had seen commercial wind activity, while at least 71 had more than 10 MW of reported capacity by year’s end, and 24 had more than 1 GW in operation. Annual growth rates of cumulative wind power capacity have averaged 21.4% since the end of 2008, and global capacity has increased eightfold

Figure 3 Wind Power Total World Capacity, 2000-2013

Figure 4 Wind Power Capacity and Additions, Top 10 countries, 2013

Figure 5 Market Shares of Top 10 Wind Turbine Manufactures, 2013

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over the past decade. Asia remained the largest market for the sixth consecutive year, accounting for almost 52% of added capacity, followed by the EU (about 32%) and North America (less than 8%). Non-OECD countries were responsible for the majority of installations

Offshore wind is still small compared with global onshore capacity, but it is growing rapidly. A record 1.6 GW was added to the world’s grids for a total exceeding 7 GW in 14 countries by year’s end. More than 93% of total capacity was located off Europe, which added 1,567 MW to the grid for a total of 6,562 MW in 11 countries.

Increased Policy Support and Shifting Investments

Supporting policies clearly played a central role in driving global renewable energy capacity to a new record level last year. The number of emerging economy nations with policies in place to support the expansion of renewable energy has surged more than six-fold in just eight years, from 15 developing countries in 2005 to 95 early this year.

These 95 developing nations today make up the vast majority of the 144 countries with renewable energy support policies and targets in place. This rise in developing-world support contrasts with declining support and renewablespolicy uncertainty (and even retroactive support reductions)

Figure 6 Global New Investment in Renewable Power and Fuels, by Region, 2004-2013

Figure 7 Jobs in Renewable Energy

elsewhere in the world.

Robust policies coupled with continuing technological advances, falling prices, and innovations in financing have made renewables increasingly affordable for a broader range of consumers worldwide. Global new investment in renewable power and fuels was at least USD 249.4 billion in 2013, down 14% relative to 2012 and 23% lower than the record level in

2011.

The second consecutive year of decline in investment—after several years of growth—was due in part to uncertainty over incentive policies in Europe and the United States, and to retroactive reductions in support in some countries. Europe’s investment was down 44% from 2012, and for the first time ever, China alone invested more in renewable energy than all

24


of Europe combined. The year 2013 also saw an interruption to the eight consecutive years of rising renewable energy investment in developing countries.

Lower costs and efficiency improvements made it possible to build onshore wind and solar PV installations in a number of locations around the world in 2013 without subsidy support. Considering only net investment in new power capacity, renewables outpaced fossil fuels for the fourth year running.

Even with the overall downward trend in world investment, there were significant exceptions at the country

level; for example, Canada, Chile, Israel, Japan, New Zealand, the United Kingdom, and Uruguay all increased their investment in 2013. Despite the overall decline in China’s investment, for the first time ever China invested more in renewable energy than did all of Europe combined. Moreover, it invested more in renewable power capacity than in fossil fuels.

The impacts of these developments on employment numbers in the renewable energy sector have varied by country and technology, but, globally, the number of people working in renewable industries has continued to rise. An estimated 6.5 million people worldwide work directly or indirectly

in the sector.

Conclusion

The past decade has set the wheels in motion for a global transition to renewables, but a concerted and sustained effort is needed to achieve it. With increasingly ambitious targets and innovative policies, renewables can continue to surpass expectations and create a clean energy future. As this year’s GSR clearly demonstrates, the question is no longer whether renewables have a role to play in the provision of energy services, but rather how we can best increase the current pace to achieve a 100% renewables future with full energy access for all.

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About the GSR

First released in 2005, the annual Renewables Global Status Report provides a comprehensive and

timely overview of renewable energy markets, industries, investments, and policy developments worldwide.

It enables policymakers, industry, investors, and civil society to make informed decisions.

The report covers recent developments, current status, and key trends on all renewable technologies

and end-use sectors. By design, it does not provide analysis or forecast.

The Renewables Global Status Report relies on up-to-date renewable energy data, provided by an

international network of more than 500 contributors, researchers, and authors.

www.ren21.net/gsr

Photo:Yang Zhicheng

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ISSUE 3 June 2014

IntroductionThe severe nuclear disaster at Fukushima

Daiichi nuclear power plant, following a huge earthquake and the massive tsunami on March 11th, 2011, has highlighted the controversy over the safety of nuclear power plants. Uncertainty about the significant risks of nuclear power, along with issues of energy security, climate change, and economy, have caused a fundamental reconsideration of energy efficiency, renewable energy, electrical liberalization, unbundling transmission and demand-side management(DSM), including smart grids.

Although occasionally there have been calls for the expanded utilization of renewable energy, the amount introduced in Japan is still only about 10% of total generated electricity, including the large size hydro power facilities as shown in Fig.1. Furthermore, the status of Japan’s energy mix, and especially nuclear power generation, has changed completely after the disaster at Fukushima. The portion

Hironao MatsubaraInstitute for Sustainable Energy Policies(ISEP), Japanhttp://www.isep.or.jp/en

Future perspective and current status of wind energy in Japan after Fukushima

of thermal power generation from fossil fuel reached 88% in FY2013, compared with under 1% nuclear power generation and 10% renewable energy, including large hydro. Additionally, despite Japan’s current major reliance on fossil fuels, the highly probable rise in prices for fossil fuels will force us to alter the existing energy policy toward one based on the renewable energy.

In these circumstances, the “New Energy Basic Plan” was decided by the Cabinet in April 2014 as a result of intense debate after Fukushima [1]. The government plan has in fact provided ardent support for expanding renewable energy, but has unfortunately not presented any concrete ideas as to how this will be achieved in the medium to long term. On the other hand, the circumstances surrounding the renewable energy industry have changed dramatically since Fukushima, and the environment for the strong growth of renewable technology is becoming ever more favorable. The year 2012 was positioned as the first year for great renewable energy

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ISSUE 3 June 2014

expansion, and 2013 has already witnessed some improvements in the adoption of green technology, though some problems are still to be overcome.

The building of strategies and organizations with the goal of introducing renewable energy has commenced in many regions across Japan. These organizations have added to the recognition and importance of renewable energy.The drive toward more renewable energy is especially high in the Tohoku region, which includes the Fukushima area, where authorities aim to utilize renewable energy to revitalize the economy. Various projects are already underway, including the concept of community power which utilizes the participation of local resources including firms, people, and energy sources. In February 2014, the International Community Power Conference was conducted in various locations inside Fukushima prefecture [2].The main topic of the discussion was the possibility of achieving100% reliance on renewable energy in an economy led by local companies and actors.

Perspectives on the renewable energy policies of Japan

Following the Fukushima nuclear accident in 2011, the status of renewable energy in Japan has begun to change significantly. In 2013, a dramatic increase in the use of renewable energy in the power sector, especially solar power, is expected to follow the introduction of the feed-in tariffs, as shown in Fig.2. Other renewable energies such as wind energy have several issues caused by excessive regulations or limitation of power system. The current status of renewable energy policies such as feed-in tariffs in Japan’s power sector is being investigated, and the Ministry of Economy, Trade and Industry (METI) proposes wide disclosure of the results [3]. Additionally, the status of renewable energies is summarized annually in the “Renewables Japan Status Report 2014” [4], a private initiative by the Institute for Sustainable Energy Policies(ISEP)model after the Global Status Report produced by REN21[5].

Source: METI, ISEP

Figure 1 Trends of power generation in Japan

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ISSUE 3 June 2014

Fig.3 shows annual power generation by renewables each year, with data partly estimated based on the cumulative installed capacity and the capacity factor of each renewable energy source, excluding large hydro. However, since FY2013, aggregate data on power generation can be obtained from statistical data collected by the utilities. The amount of total power generation by renewable energy source, excluding large hydro, climbed to over 4.7%, and the growth rate has reached 15% annually, while the total

generated electricity in 2013 was estimated to be 1103TWh, or almost the same as the previous year. Photovoltaics have grown at a significant pace of 83% annually, but the sluggishness of wind turbines (7%) compared to installation figures in other countries demonstrates the lack of progress made in wind power expansion.Fig.4 shows ratios of power generation from all kinds of energy sources, including private electric generation in Japan. The ratio of thermal power generation from fossil fuel reaches 88% in FY2013, which

Figure 2 Cumulative capacity of renewable power generation in Japan

Source: ISEP

Source: ISEP

Figure 3 Renewables Power Generation in Japan

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ISSUE 3 June 2014

can be contrasted with under 1% from nuclear power generation and 11% from renewable energy, including large hydro.

The policy of FIT which will enable the widespread use of renewable energy was enacted by the National Diet in August 2011, and began as of July 2012. In order for this FIT scheme to function effectively, however, the appropriate purchase price and purchase period needed to be set. In March 2012, the “Procurement Price Calculation Committee” was launched to discuss feasible purchase prices and purchase periods. The final purchase prices and periods were subsequently decided

by the minister of METI. The price set for the newly implemented facilities in FY2014 was reached through the same process in March 2014 [6]. The purchase price of photovoltaic energy was the only change in FIT prices, due to the falling costs of the technology. Tariffs for new installations are revised every year based on advice of the committee, as shown in Table.2. Tariffs for Solar PV over 10kW drop to 32 in FY2014 from 36 JPY/kWh in FY2013. New classifications and rates for offshore wind and for small hydro were introduced in FY2014.

The current FIT system started in July 2012, and reached a certified capacity of 30GW

Table 1 New Tariffs for each technology and scale of the new project in FY2014Solar PV Wind Geothermal

Capacity [kW] <10 >=10 <20 >=20 Offshore <15000 >=15000

Tariffs [JPY]*1 37 32 55 22 36 40 26

Length [Years] 10 20 20 20 20 15 15

Small Hydro Biomass

Capacity [kW] <200>=200

<1000

>=1000

<30000

No limit

(depend on Fuel)

Tariffs [JPY] *1 34(25) *2 29(21) 24(14) 13 – 39

Length [Years] 20 20 20 20

*1: excluding consumption tax, *2: with existing channel

Source: ISEP, METI

Figure 4 Ratio of power generation in Japan

Source: METI

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ISSUE 3 June 2014

by the end of 2013, and over 70GW by May 2014, as shown in Fig.5 [4]. This figure is 5 times the size of the renewable generation capacity of 1990, which was around 13 GW. However, 96% of the certified capacity of facilities were photovoltaic and 53% of them were photovoltaic larger than or equal to 1 MW. The capacity of newly operating facilities is about 10GW, which is 15% of certified capacity. In contrast, the capacity of certified wind energy facilities is about 1’123 MW, and 106 MW in newly operating by May 2014. In addition, existing wind facilities with capacity of about 2’528 MW were certified in the FIT scheme. Power generation by wind energy was 4,9 TWh in FY2013, which is comparable to the 4,3 TWh power generation of non-residential PV solar by FIT scheme.

In FY2013, the total cost for FIT payments was estimated at about 480 billion JPY(Japanese Yen) and the total surcharge at about 313 billion JPY, the difference an avoidable cost of about 167 Billion Yen. However, the actual FIT payment was 579 billion JPY in FY2013 and actual electricity produced by FIT certified power plants was 18 TWh, which had been

estimated at 16 TWh[3]. The latest economic effect of the clean energy market in Japan is about 3500 Billion Yen, as estimated by UNEP [7]. Employment is estimated to be over 100 thousand[8], however a detailed estimation of employment by renewable energy cannot be obtained in Japan yet.

These FIT policy rules were set except for rules concerning "Priority Access", but the current situation revealed that for electricity companies it is difficult for them to connect with a non-functioning system. To fully expand the use of renewable energy such as photovoltaic and wind energy, "priority access" must be given to renewable sources of electricity. Furthermore, reforming the system regulations is essential, especially with regarding the distribution of electricity. The regulations that must be reformed include the separation of electricity generation and transmission, along with the maintenance of the energy supply network. The parliament approved a new bill for the electricity system reform on the 11th June 2014, to implement full liberalization of entry into the electricity retailing starting in 2016[9].

Source: ANRI METI

Figure 5 Cumulative FIT certified capacity in Japan

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ISSUE 3 June 2014

Source: ANRI METI, ISEP

Figure 6 Economic effects of renewable energy by FIT scheme in Japan (FY2013)

The current status of wind energy in Japan

While the total installed capacity of wind power was 2,7 GW at the end of FY2013, its annual installation capacity was still sluggish at about 65 MW, as shown in Fig.7. After starting FIT scheme, the rate of annual installations has slowed down due to various constraints, including the matter of environmental impact assessment (EIA) and grid connection issues. However, by end of FY2013, FIT certified wind farms reached a total of 1 GW, which will be built in a few years. The cumulative capacity of wind power will thus reach 3,7GW after the installation of the current FIT certified projects.

Many of these projects are undertaking the process of Environmental Impact Assessment(EIA) which is required since 2012 for larger capacity projects over 7,5 MW. The total capacity of wind farms in the EIA process reached 5,8 GW by July 2014. If all wind projects were successful through the EIA process, the cumulative capacity of wind power would be expected to reach 9.5GW in the next several years in Japan. These EIA processes need to be improved especially for shortening

of the duration.

Moreover, grid issues are especially critical in the regions where conditions are good for wind but the local grid condition is inadequate. For these grid issues, several improvements are being worked on by government and power market industries over the next few years. For example, a new organization for operating a power grid intra-regionally will start to work in April 2015 as the first step of electricity system reform.

Future Perspective of wind energy in Japan

Although the Japanese Government has not yet decided on the target of renewable energy capacity, the Japan Wind Power Association (JWPA) has released the roadmap and scenarios for the wind energy including offshore based on calculations of wind energy resources and availability in Japan [10]. The capacity target for wind power capacity in the road map by JWPA is shown in Table.3. Annual new installations are estimated to grow to 3GW per year by 2030 and the wind power market will keep adding more than 3,5GW per year

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ISSUE 3 June 2014

after 2030.Fig.8 shows the potential of renewable

energy power generation in each region of Japan. The research projects to investigate the renewable energy potential were conducted by the Ministry of Environment (MoE) up until

2013[3]. The total potential of wind energy seems much larger than the long-term target of wind capacity by JWPA. The Regions of Hokkaido and Tohoku have far more potential for offshore wind power than the installed total power capacity of each regional utility.

Source: JWPA, NEDO

Figure 7 Trends and pipeline of wind power capacity in Japan

Source: MoE

Figure 8 Potential of renewable energy power generation in Japan

Table 2 Roadmap of wind energy in Japan by JWPAYear FY2013 FY2020 FY2030 FY2050

Onshore 2.6 GW 10 GW 27 GW 38 GW

Offshore(Fixed) 0.046 GW 0.6 GW 6 GW 19 GW

Offshore(Floating) 0.004 GW 0.1 GW 4 GW 18 GW

Total 2.7 GW 11 GW 36 GW 75 GW

Source: JWPA

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ISSUE 3 June 2014

References

[1]METI Japan “The New Strategic Energy Plan”, http://www.meti.go.jp/english/press/2014/0411_02.html

,April 2014

[2] ISEP “International Community Power Conference 2014 in Fukushima”http://www.isep.or.jp/en/cp2014/

February 2014

[3]ANRE, METI Japan “Announcement Regarding the Present Status of Introduction of Facilities Generating

Renewable Energy as of April 30, 2014, and a New Measure for Publicizing Future Information”, http://www.meti.

go.jp/english/press/2014/0806_02.html, August 2014

[4]ISEP “Renewables Japan Status Report 2014”http://www.isep.or.jp/en/library/2958 , March 2014

[5] REN21,“Renewables 2014 Global Status Report” http://www.ren21.net/gsr , June 2014

[6]ANRE, METI Japan, “Settlement of FY2014 Purchase Prices and FY2014 Surcharge Rates under the Feed-

in Tariff Scheme for Renewable Energy”, http://www.meti.go.jp/english/press/2014/0325_03.html , March 2014

[7] UNEP “Global Trends in Renewable Energy Investment 2014”http://fs-unep-centre.org/publications/gtr-

2014 , 2014

[8]Yoshiyasu Ono, et al. “Energy Conversion and Its Effect on Employment” Osaka Univ. ISER Discussion

Papers No.846, 2012

[9]METI “Electricity System Reform”http://www.meti.go.jp/english/policy/energy_environment/electricity_

system_reform/index.html 2011-2014

[10] JWPA “Wind Power Energy Resources and Mid/Long Term Target Ver4.3”http://jwpa.jp/page_196_

englishsite/jwpa/detail_e.html , July 2014

Summary

After the Fukushima nuclear accident in 2011, energy policy and with it the status of renewable energy in

Japan is about to change significantly. Economic impacts, including employment effects from the FIT scheme,

should be estimated annually in each region of Japan. In FY2013, the dramatic introduction of renewable

energy in the power sector, such as solar power, came as expected from the start of the feed-in tariffs. Other

renewable energies such as wind energy and so forth have several issues caused by excessive regulations or

limitations of the power system in Japan. Still, wind energy, including offshore, has a very large potential in

Japan. Ambitious targets and clear policies for each technology of renewable energy are needed, and especially

for wind.

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ISSUE 3 June 2014

The Cuban government has taken an important step toward solving the difficult energy situation prevailing in the country, with the approval of a policy directed to increasing the use of renewable energy sources (RES) and to improvingoverall energy efficiency in the country.

The author of this article has the purpose of giving a brief outline of information on this policy, to outline the importance of this step. In future publications, the author promises to enlarge on this theme.

The approval of the Economic and Social Guidelines of Party and Revolution (ESGPR) in 2011, and the need to upgrade the Cuban economic model (with the objective ofbecoming more in tune with the conditions of the international environment), are

Prof. Dr. Conrado Moreno Figueredo

Center of Study for Renewable Energy Technologies (CETER)

Higher Polytechnic Institute of Havana Jose A. Echeverria (CUJAE)

The Cuban policy for the prospective development of renewable energy resources 2014-2030

important factors inopening the way for more renewable energy sources in all aspects of the Cuban life.

The ESGPR is a comprehensive document, which contains more than 300 guidelines. Many directives in the approved ESGPR are focused on the development of RES. Some examples include:

247. To develop the use of the different renewable energy sources, fundamentally the use of windenergy, hydraulics, biomass, solar, biogas and others;

246. To foment cogeneration and tri-generation in all the activities where there are possibilities to do so: in particular, to increase electricity generation in the sugar agroindustry using industry wastes.

267. To prioritize the maintenance and

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ISSUE 3 June 2014

renovation of the tourist infrastructure to increase the use of renewable energy sources.

113. To prioritize, in relationships with international collaborating organizations, material and technological support in the development of objectives for the use of the diverse renewable energy sources.

Those directives are in response to the current energy situation in Cuba, which is characterized by:

• High dependence on imported fuel (53%) and therefore low energy security

• Limited use of renewable sources of energy (approximately4% of total consumption)

• Low efficiency in the use of the energy sources, which means higher costs in both production and consumption

• High average cost of kWh delivered in the year 2013 (more than 0.20 USD/kWh)

• Obsolete technologies at use in thermoelectric plants

• Absence of legislation to provide incentives for the use of RES

• Lack of a co-ordinated policy for the development of RES

• Characteristics of the current load curve are not suitable for increasing the use of the RES

At the end of 2013, theProposal for the Prospective Development of RES 2014-2030 and its Schedule of Implementationwas elaborated, presented and approved in the National Implementation Commission of ESGPR.

The proposal pursues the following objectives:

• To transform the structure of the energy sources used for electricity generation and consumption, increasing the use of RES and diversifying among fossil fuels

• No increase to dependence on imported

fossil fuels• To focus one fficiency in the generation,

distribution and consumption of electricity, looking to reduce the cost of the energy supplied to the National Electric System

• To reduce environmental contaminationIn July 2013, the Minister Council and

the National Assembly of Popular Power (the Cuban Parliament) approved the Proposal for the Prospective Development of RES 2014-2030 and therefore this proposal was converted into the Cuba´s Policy for the RES 2014-2030.

The main actions approved for satisfying this policy are:

1. To increase the share of RES in the energy matrix with the implementation of:

Oil 51％

Total RES4.0％

Natural Gas10％

Diesel3％

Fuel ICE19％

Fuel Thermoelectricplants13％

FIGURE 1 ELECTRCITY GENERATION BY FUEL SOURCE

FIGURE 2 ORIGIN OF FUEL SOURCES FOR ELECTRICITY GENERATION

Domestic47％

Imported53％

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ISSUE 3 June 2014

• 755 MW in Bioelectrics (eg.,Sugar Factories producing sugar whil esupplying electricity for internal consumption and selling the surplus to the public electric grid).

• 633 MW in wind parks located in 13 sites at the eastern part of the island

• 700 MW in photovoltaic parks• 56 MW in small hydroelectric plants

2. To prepare national industry for the production of parts, components and equipment related to the RES technologies

All these actions will allow the country:• To increase the share of the RES from

4% up to 24% by 2030• To reduce the use of imported fuel for

electricity generation• To reduce the cost per kWh supplied• To reduce environmental contamination

from electricity generationTo carry out this plan, Cuban experts

consider that USD 3700 million are needed,toward which foreign investment should play an important role. Jointed with this, at the end of the last year the Foreign Investment Law was approved, which aims to facilitate the introduction of foreign investors in the country’s energy program.A specific Renewable Energy Law is in stage of preparation seeking to increase investment in renewable energy.

With these developments, Cuba is moving to embrace the thoughts affirmed by the director of the International Agency of the Renewable Energy (IRENA),MrAdnan Z. Amin, at the III Conference of the Small Island Developing States (SIDS) that took place between 1-4 September in the Samoan Archipelago (Oceania): that renewable energy constitutes a “future option” for the SIDS. Photo:Ning Jia

Documents

WWEA bulletin issue 3 2014