Policy Department Renewable Technologies

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Policy Department A: Economic and Scientific Policy ____________________________________________________________________________________________ Table 10: State-of-markets of different energy technologies in Europe (LBST) Technology Market deployment share Market potential Offshore wind < 1% 2,900-3,200 TWhe/yr Photovoltaics < 1% 1,100-1,700 TWhe/yr (1) Concentrating solar power < 1% 1,450-2,240 TWhe/yr Bioenergy (heat, electricity, transport fuel) 40-75% 1,100-2,000 TWh/yr (2) Ocean power ~0% 200 TWhe/yr (3) Geothermal power > 1% 460-520 TWhe/yr (1) In case of photovoltaics it is assumed that two third of the adequate roofs (thereof, one third is reserved to solarthermal collectors for heat generation) and additionally 0.1% of the total land area in EU 27 is occupied with photovoltaic panels, e.g. on noise barriers along motorways. (2) The lower value is based on the assumption that today’s biomass use for the generation of heat, electricity and 1st generation biofuels is kept constant and the remaining technical biomass potential is used for the production of BTL and upgraded biogas. In 2007 about 665 TWh of heat (therof solid biomass: 642 TWh), 88 TWh of electricity (solid biomass including solid waste: 64 TWh; biogas: 20 TWh; plant oil: 4 TWh) and 94 TWh of transportion fuel (1st generation ethanol: 22 TWh; oil seed based biofuels: 72 TWh) were generated in the EU 27 [Witt 2009]. In case of bioenergy it has been assumed that about 10% of the arable land in EU 27 is available for energy crops. The upper value is based on the assumption that all biomass is used for heat and electricity production whereas short rotation forestry and plants for biogas generation are used as energy crops. (3)Technical potentials according to [OEA 2010]: Ocean wave power: 142 TWh/yr; Tidal power: 36 TWh/yr; Osmotic power 28 TWh/yr Source: LBST own compilation Impact on Industry structure Renewable energies are inherently more decentralised than conventional fossil or nuclear energy given the fact, that renewable energy sources are much more dispersed. A noticeable example is solar energy. While the production of solar thermal and photovoltaic (PV) systems is done at industrial scale, the installation and the maintenance of such system is a domain of small and medium enterprises (down to the level of one person offering installation and maintenance services for such systems). With rooftop photovoltaic (PV) systems, the cost of electricity production is generally higher compared to e.g. wind power. This is in principle of no harm in so far as the comparative costs of electricity to households or small enterprises are much higher than the cost at the wholesale electricity market. It is assumed that PV in central Europe could be cost competitive with household electricity – so called ‘grid parity’7 – as early as by mid this decade. Currently, the average German household is paying some 20 ct/kWhe (including taxes) compared to the German feed-in tariff of some 31 ct/kWhe for rooftop PV systems that takes effect in July 2010. At latest when the ‘grid parity’ threshold is reached, economic benefits will, at an increasing pace, shift from conventional energy companies as we know them today to local solar system installation and maintenance service providers. Local economies would gain shares in the value chain of renewable energies. Whether the big players will then expand their energy production portfolio ‘downstream’, remains to be seen in future. 7 The concept of ‘grid parity’ resembles the cost break-even between renewable power production and the cost of electricity from the grid mix. Due to the cost of power trading, transport and distribution along the value chain, different power markets exist, i.e. the cost of electricity to the consumer is subject to the voltage level and electricity volume demanded. IP/A/ITRE/ST/2009-11 & 12 38 PE 440.278

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