Making a virtue of necessity
Mounting concern about the negative environmental impact of the use of fossil fuels and the need to have a truly sustainable energy sector have led to reconsideration of the respective shares of primary energies in the overall electricity generation chain. This has resulted in efforts to increase the contribution of "new" RE sources, i.e. wind, solar, marine energy and biomass, in addition to hydropower, which currently accounts for the lion's share of electricity produced from renewable sources.
This trend has led to the rapid and massive expansion of non-hydro RE resources. Renewables are now the fastest-growing power source on a percentage basis. RE made up less than 1,5% of electricity generation capacity in 1990, but its contribution had increased nearly 4,5-fold (in volume) by 2010, whilst electricity production less than doubled during the same period.
The IEA (International Energy Agency) forecasts that the share of RE sources in total power production will rise from 20% in 2011 to 31% in 2035 in its so-called 450 Scenario (i.e. assuming any policies adopted have a 50% chance of limiting the global increase in average temperature to 2oC).
A noted and well-documented benefit of the growing use of REs in electricity generation (in parallel with the phasing out of many obsolete coal- and oil-fired power plants) is a slower growth of CO2 (and greenhouse gas) emissions from the energy sector.
However, with the share of RE-generated total emissions remaining at 40%, the volume of the CO2 released that Is attributable to these sources will increase from 13 Gt (gigatonnes) in 2011 to 15,2 Gt in 2035, in parallel with a 70% surge in total electricity generation, according to the IEA.
Growing investment in RE sources and financial incentives such as tax-breaks or feed-in tariffs to ensure their rapid expansion are having an impact on many industries and on consumers alike.
RE power generation technologies now account for around half of all new power capacity additions worldwide.
This rapid deployment of renewables, helped by subsidies to bring the price of RE-generated electricity in line with that from other sources, causes costs to decline equally rapidly, making renewables increasingly competitive.
For instance, the price of crystalline silicon PV (photovoltaic) modules dropped by more than 60% in 2010-2011 owing to overcapacity, according to IRENA (International Renewable Energy Agency). The same can be observed for installations: in Germany the costs of installed rooftop systems fell by 65% between 2006 and 2012, making solar PV competitive with residential electricity tariffs.
The ensuing declining LCOE (levelized cost of electricity) of REs has unwanted consequences: utilities complain of falling profits because subsidized renewables are rendering some of their conventional power plants unprofitable, even though they are still needed for backup.
As a result, some countries are considering or have decided to cut financial incentives for RE installations. In January 2014 the German government announced that it would be gradually scaling down its subsidies for new wind turbine installations after rising wind and solar power costs sent consumer utility bills soaring; in April 2014, the British government stated that it would phase out its solar farm subventions early.
The RE sector has a huge and growing global economic impact. According to a BNEF (Bloomberg New Energy Finance) April 2014 report, more than USD 1 100 billion was invested in RE and energy smart projects between 2010 and 2013 (this includes corporate and government R&D and spending for energy storage projects).
Forecasts for the longer term must be taken with great caution. The same source, BNEF, gives various possible scenarios, which depend on economic growth, subsidies, policies and fossil fuel prices, among other things, to estimate that yearly capital requirements for REs could be as low as USD 470 billion (USD 6 100 billion cumulative) or as high as USD 880 billion (USD 9 300 billion cumulative) by 2030.
Another sector that will benefit greatly, and increasingly so, from the expansion of the RE industry is that of MRO (maintenance, repair and operations/overhaul). The MRO sector for RE industries is set to expand as RE installations get older. In the wind turbine industry, for instance, annual maintenance costs of turbines average 1%-3% of the original investment, but the price of a new set of rotor blades, a gearbox or a generator is typically 15%-20% of the cost of the turbine, according to the Danish Wind Industry Association.
The overall economic impact of the global MRO sector is difficult to assess, as many of the RE technologies are still at a research/development stage (in particular in the marine energy domain), but is likely to become very significant.
Growing job opportunities
As it expands rapidly, the RE sector is set to provide more and more employment opportunities. This is reflected in the growth observed in recent years. In 2009, more than 3 million people were estimated to be working directly in the sector, according to ILO (International Labour Organization) data.
Direct jobs are those related to the RE sector’s core activities, such as manufacturing, equipment distribution and site preparation and installation. But employment opportunities also extend to indirect jobs in activities that supply the industry.
In its Renewable Energy and Jobs Annual Review 2014, IRENA estimates that RE jobs reached 6,5 million in 2013. IRENA data includes employment in the PV, wind, thermal solar power, biofuels and biomass domains, as well as in small hydropower, but not in the large hydropower or marine energy sectors, which are still essentially at a developmental stage.
Employment in the RE sector is characterized by a skills gap and a certain imbalance between developed and developing countries.
Employers in many countries have identified some RE occupations as "difficult to fill", according to the ILO. They include project developers, engineers, technicians and installers. Employment in the PV sector grew rapidly from 1,4 million jobs in 2012 to nearly 2,3 million in 2013, mainly concentrated in Asia, which produces some 85% of the world's modules.
Wind power was the second largest RE employing industry (excluding biofuels) with over 830 000 jobs worldwide.
Manufacturing of RE systems is concentrated predominantly in developing countries, but some production is moving to developing ones, with installations and maintenance providing more job opportunities. One example is Bangladesh, the world leader in installations of small solar home systems (their number had grown to 2,8 million serving 20 million rural people by December 2013).
The number of direct RE jobs (mostly in installations, but also in panel assembly and operations and maintenance) in Bangladesh reached 100 000 in 2013, with the goal of creating an extra 100 000 "green jobs" by 2020. This demonstrates that RE industry employment opportunities not only benefit developed countries, but also extend to developing ones.
The wide-ranging environmental, economic and employment benefits of the fast expanding RE sector are obvious on a global scale, despite sometimes being difficult to quantify. However, one thing is certain: none of these positive results could be achieved without the extensive standardization work carried out by the large number of IEC TCs (Technical Committees) and SCs (Subcommittees) involved in the development of the RE sector and all its associated technologies.