This morning ministers from around the globe gathered in London for the third Clean Energy Ministerial (CEM3). Meeting to discuss international co-operation on low-carbon energy, and ways of encouraging businesses to invest in greener technologies, CEM3 is designed as a stepping stone to reaching binding carbon targets.
Opening the discussions, the UK’s Secretary of State for Energy and Climate Change, Ed Davey, took to the stage to speak about green energy investment and ambition and the importance of this year’s CEM3.
“Over the past few years, the global low-carbon sector has outshone the rest of the economy. In 2011, the trillionth dollar was invested in clean energy; investment in renewables now outstrips investment in fossil fuels,” he described.
“But as major economies face tougher fiscal conditions, indications suggest growth has slowed.”
Davey commented on how, in order to boost the low-carbon sector further, we need to create the right frameworks for investment, sending clear signals to the businesses who will lead the low-carbon transition.
“We must encourage innovation, and do what we can to bring clean technologies to market,” he explained.
He then went on to articulate the importance of working together towards these goals.
“We need to commit to our vision of a cleaner future – and show people what that future will hold.
“We should state more strongly the business case for going green. Efficiency policies are unashamedly good for growth: using fewer resources lowers operating costs and frees up capital,” Davey continued.
The Minister also highlighted the importance of learning from those who are leading and, since the UK is significantly further behind countries such as Germany and the US in terms of renewable ambition, this point seemed more significant than most for UK-based attendees.
Clean Energy Progress
Following on from Davey’s introduction, Maria van der Hoeven, the Executive Director at the International Energy Agency (IEA) stepped forward to present the findings from the IEA’s latest report on the status of clean energy deployment and related policies around the world.
Speaking about the IEA Clean Energy Progress Report, van der Hoeven commented on how governments around the world have fallen behind with their low carbon ambitions, and that something needs to be done now to change this.
In its report, the IEA ranked progress on 11 key low-carbon indicators, including renewables, nuclear energy and carbon capture and storage. Significantly, it found the world was on track to meet just one of these targets – that of renewables.
And, since renewables are leading the way to a low carbon future, the IEA says the world needs to generate 28 percent of its electricity from these sources by 2020 and 47 percent by 2035.
The IEA suggests that instead of relying on areas that have fallen flat in recent years – such as carbon capture and storage, or technologies that have proven to be unfavourable – such as nuclear, the shortfall should be made up by ramping up the commitment to renewables.
Currently, the renewables sector accounts for just 16 percent of the global electricity supply; so clearly, there is work to be done.
The of power of the sun
As the fastest growing renewable technology sector worldwide, the IEA points to solar energy as a major player in the low carbon future.
Current estimates suggest that cumulative installed capacity of solar PV reached around 40GW at the end of 2010, up from 1.5GW in 2000. At least 17GW of this capacity was added in 2010, roughly half of which can be attributed to the German market. Much of this growth was spurred by the fact that PV costs have fallen a massive 75 percent in the last three years, according to the IEA.
The other main driver behind this technology is of course photovoltaic policies, which have been implemented in various forms around the world. These policies, such as the UK, German and Italian feed-in tariff, faced major challenges in 2010 and beginning of 2011 as governments sought to cut the rates.
“While expansion in global PV capacity has been a positive development, in that it has delivered significant cost reductions, this boom was larger than expected. As a consequence, escalating policy costs raised the question of financial sustainability of policy schemes,” the IEA report outlines.
“As a result, 2010 and the beginning of 2011 saw a number of countries reducing FiT tariff rates for solar PV development, and in some cases halting capacity expansion. A key need is to design policies that adjust support to follow rapid reductions in the cost of solar technology,” the report continued.
Clearly, as the leading renewable technology, governments need to ramp up support for solar technology, especially in markets such as that of the UK, where significant solar upheaval has been experienced in recent months.
The importance of energy efficiency
As well as outlining the significance of renewable energy, the IEA also pointed to energy efficiency as the most cost-effective way to cut emissions and increase energy security worldwide.
Currently, many countries’ businesses and governments are failing to invest in energy efficiency, and again, this needs to change.
The UK has recently launched several campaigns towards this goal, such as the new EPC requirements for those wishing to take full advantage of the feed-in tariff for solar energy and the upcoming Green Deal. Both of these schemes are aimed at increasing the UK’s energy efficiency in order to reach carbon commitments.
Commenting on this morning’s proceedings, James Close, Government Services Partner at Ernst & Young, said: “This is an important meeting for the ministers attending. The choices governments make over the next five years in bi-lateral and multi-lateral forums such as the Clean Energy Ministerial will determine the shape of the energy landscape that we have to live to well beyond 2030.”
“The importance of balancing low carbon aspirations with wider economic benefits cannot be understated. In the UK, this aspect of the energy story has not been explained well by either government or by the energy industry itself – yet its understanding is key to gaining and maintaining the trust and confidence of consumers,” he concluded.
Ministers are now taking part in a closed-door discussion on emerging lessons from the CEM initiatives and related activities as the basis for a discussion about smart policies, programs, and innovation strategies to advance energy efficiency and clean energy supply. They are also likely to discuss the role of the CEM in supporting them.
This afternoon the discussions will focus on large-scale efficiency programs, electric vehicles, variable renewables integration, renewable energy finance, super efficient appliances, carbon capture and storage, solar PV and energy efficiency finance.