The age of renewables has arrived

BONN, Germany, June 4, 2004 (ENS): Pledges of increased funding for renewable sources of energy have brightened the four day International Conference for Renewable Energy which concludes here today. The nearly 2,000 participants - government ministers and business people, trade unionists, nongovernmental organizations, consumers, scientists, farmers, actors in development and poverty alleviation, and renewable energy manufacturers - heard investment promises of hundreds of millions of new dollars a year for renewables.

Renewable energy includes such sources as water, wind, geothermal and solar thermal power, solar photovoltaics and bioenergy.

"Renewables 2004 is something new," German Environment Minister Juergen Trittin told the conference on Tuesday in the building that housed the German Parliament before it moved to Berlin five years ago. "Here in Bonn, we want to combine voluntary initiatives for increasing the use of renewable energies with the United Nations sustainable development structures. This is the inner link between the Declaration, the Policy Recommendations and the International Action Programme," he said.

Presenting the case for more investment in renewables, the United Nations Environment Programme (UNEP) estimated a market potential of nearly $2 trillion in the next 15 years.
“It's time to get down to business,” said UNEP Executive Director Klaus Toepfer, a former German environment minister, stating the theme of the conference. "Sustainable development needs sustainable energy, but sustainable energy needs investment," he told delegates, urging them to develop new products for the rapidly evolving renewable energy sector.

A report by the Climate Change Working Group of the UN Environment Programme Finance Initiative says this potential can be realized only if "real concerns" by the financial sector are addressed. The report details case studies illustrating the opportunities and challenges in renewable energy finance and represents the work of key financial institutions - ANZ, Aviva, Citigroup, Dresdner Bank, Garant, HypoVereinsbank, and the Munich Reinsurance Company.

"The world needs more energy, but conventional sources are unsustainable and finite," said Thomas Loster, the chairman of the UNEP Finance Climate Change Working Group, who heads the Weather-Climate Risks Research department at Munich Re.

The most important step for policymakers is to create confidence in the long term future of the renewable energy market by policies that make "the deal on the table" financially attractive, said Loster.

The World Bank responded by announcing it will increase lending by about 20 percent a year for renewable energies. Peter Woicke, managing director of the World Bank Group and executive vice president of the bank's private sector arm, the International Finance Corp, told conference participants Thursday that will amount to about $400 million a year by 2010.

"Our strategy through program and policies will aim to ensure that renewable energy and energy efficiency are seen as economically viable and essential ingredients in the energy choices of our member nations, not marginal considerations," Woicke said.

The bank has been the largest lender for renewable energy projects in the developing world since 1990, with investments totaling about $6 billion.

Woicke said that rich nations could not prescribe sweeping changes for poor nations while doing little to improve their own energy efficiency. But poor nations should not expect power investments without improving governance, investment climates and commitments to sustainable energy pricing, he said.

"We believe it will require a market place of partnerships, public and private, national and local, corporations and civil society, that is organized around a few key principles," Woicke said. The Bank is "convinced more than ever that the transition to a cleaner energy future will be won project by project, village by village and nation by nation."

Sustainable bioenergy systems have a place in the pantheon of renewables. The United Nations Food and Agriculture Organization's Gustavo Best told delegates, "The production and use of bioenergy also contributes to poverty alleviation and food security. It can reduce land degradation and helps to mitigate climate change."

The agency is currently working with the Shenyang Agricultural University in China in developing new sweet sorghum varieties and technologies to produce ethanol to substitute for petroleum. The agency also has energy projects in Nepal and Brazil.

On Wednesday, UNEP presented the "Day of Geothermal Power" at a nearby hotel exploring all aspects of geothermal energy production: resource assessment, technology, project development and financing of geothermal projects.

As part of its growing climate change portfolio in the Global Environment Facility, UNEP has launched three UNEP/GEF geothermal energy project proposals:

In Africa' Rift Valley, the Argeo project is a program of financial, policy and technical instruments for the promotion of geothermal energy development. Several countries of the Rift Valley are being considered for geothermal investments.

A Joint Geophysical Imaging project will assess geothermal reservoirs in Kenya with potential impacts for the African Rift Valley. The resulting higher resolution and more accurate assessments will increase the probability of finding large, productive steam reservoirs. Testing is planned for this year.

The aim of the Eastern Caribbean Geothermal Development project is to overcome the barriers to the development of geothermal power and establish one or more commercially viable geothermal power plants in the region.

As the financial mechanism for the United Nations Framework Convention on Climate Change, the Global Environment Facility has provided about $900 million for more than 110 projects in 50 countries. This support has leveraged almost $6 billion in additional cofinancing.

In Mexico, for instance, the GEF is supporting the commercial development of a solar thermal power plant. The project aims to demonstrate the commercial feasibility of the solar trough technology as a major source of power. The GEF is engaging the relevant companies in a dialogue about risk sharing and the next steps toward achieving fully commercial development. The GEF is supporting similar plants in Morocco, the Arab Republic of Egypt, and India.

Tritten, a Green Party member, opened the conference on Tuesday by presenting the challenge the world must address. "Together we face the task of ensuring that the number of people living in absolute poverty is halved in the next 10 years, and of preventing global temperature from rising more than 2 ° Celsius compared to pre-industrial times up to the end of this century."

"Renewable energies hold a vital key to this," Trittin said. "We must satisfy the growing need for energy – without imposing too heavy a burden on our atmosphere."

Trittin has been the architect of the German phaseout of nuclear power, which is now mandated by law to take place over the next 20 years. "It is now less expensive to build a wind park on the northern German coast than a new nuclear power plant," Trittin told the conference.

And Trittin is a firm supporter of renewables, which, he told delegates, provide 120,000 jobs in Germany today and save Germany 53 million metric tons of the greenhouse gas carbon dioxide every year.

In Bonn, all activities will be brought together in a concrete Action Programme, Trittin explained. The implementation of this Action Programme will be reviewed in the framework of the United Nations Commission on Sustainable Development in 2006 and 2007.

The International Action Programme now contains 132 projects. The Action Programme contains significant new financial commitments – from individual countries and from the World Bank and the Global Environment Facility.

Chancellor Gerhard Schroeder committed Germany to a large new investment. "In cooperation with the Kreditanstalt," he told the conference delegates, "the Federal Government will set up a special facility for renewable energies and energy efficiency with a volume of up to 500 million euros. Starting in 2005, over a period of five years the facility will be used to offer low-interest loans for investments in developing countries to public and parastatal institutions, banks and also private sector organizations."

In the Action Programme countries have set themselves new targets for increasing the use of renewables with specific timeframes.

Germany has doubled the share of renewable energies in electricity generation within five years, Trittin told delegates. "Now we want to cover 20 percent of our current energy demand with renewables by 2020. This 20 percent target is part of the Renewable Energy Sources Act. We have thus made it legally binding."

Costs for renewable technologies are going down, while demand is increasing. "Nowadays wind power installations cost 30 percent less than 10 years ago," said Trittin. "Photovoltaic systems have even become more than 50 percent cheaper."

At the conference, Germany signed a 2.6 million euro strategic partnership agreement with the Inter-American Development Bank to promote renewable energies and increase energy efficiency in Latin America and the Caribbean. The German Minister for Economic Co-operation and Development, Heidemarie Wieczorek-Zeul, and President of the Inter-American Development Bank Enrique Iglesias, signed the agreement Thursday.

But the fact that the "Political Declaration of the International Conference on Renewable Energies" did not exclude large hydropower from its definition of renewable energy, has frustrated some conservation groups. On opening day, 260 citizens’ groups from 61 countries called for large hydro to be excluded from renewables initiatives and targets.

Patrick McCully, campaigns director of International Rivers Network says that lobbying pressure from energy ministers, in particular from Brazil and Uganda, succeeded in ensuring that the Political Declaration, approved by 154 countries, did not set explicit limits on the inclusion of hydropower within renewables programs.

Brazil and Uganda plan to build large hydro projects that are opposed by civil society groups within their countries due to their social and environmental impacts, high economic costs, and inability to provide affordable energy to the poor.

"The big hydro lobby is hijacking concern over poverty and climate change to promote their destructive technology," said McCully. "If big hydro projects are included in renewables programs this will crowd out funds for new renewables, increase vulnerability to climate change, further degrade rivers, and lead to more forced evictions of riverine people."

Creating more large reservoirs in the tropics would also increase emissions of greenhouse gases, McCully contends. "Critics of large dams will continue to push the adoption of new renewables and strive to ensure that the big hydro lobby does not hinder their implementation," he said.

Participants flying to Bonn for the Renewables 2004 conference enjoyed a carbon neutral flight, as the greenhouse gases generated by their air travel has been calculated and will be offset by a solar energy project being developed in India. Trittin says the German government decided to make this meeting one of the first climate neutral conferences of its scale by purchasing Certified Emission Reductions (CERs) through the German Technical Cooperation (GTZ) and will retire them afterwards.

To generate the CERs, one of the first bundled small-scale Clean Development Mechanism (CDM) projects under the Kyoto Protocol has been selected. Ten to 12 solar community kitchens will be installed in institutions such as hospitals, schools and religious ashrams in several Indian states.

The technology uses concentrated sunlight to generate steam for cooking, and will replace kerosene, diesel or unsustainably harvested firewood. The project will provide daily carbon neutral meals for around 30,000 people. The project will meet the strict criteria of the Gold Standard, a quality label for CDM projects promoted by environmental NGOs.

The project is under development by the Swiss company Factor Consulting + Management AG in cooperation with Gadhia Solar Energy Systems based in India.

"The age of renewables," Trittin said, "has begun."

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