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Table 1.1. Year 2000 renewable energy use (W/cap.), cf. Figs. 2.2-2.14.

Table 1.1. Year 2000 renewable energy use (W/cap.), cf. Figs. 2.2-2.14.

As Table 1.1 shows, at a global average of 222 W/cap., the traditional use of biomass for combustion is still the dominating use of renewable energy, although it takes more efficient forms in many industrialised countries. Only slightly less (146 W/cap.) is the use of food energy in biomass of animal or vegetable origin (the nutrient value of food being, in any case, more than that of the energy it provides). Next comes hydropower (50 W/cap.) and then geothermal power, which only in part can be classified as renewable (as many steam reservoirs are exploited at a rate that will exhaust the reservoir over periods of decades). At the level of 1 W/cap., i.e. two orders of magnitude under the energy in food intake, one finds biomass waste (used for power or heat), biogas, liquid biofuels (used in the transportation sector), wind power and geothermal heat (used for district heating). At the bottom comes solar heat, tidal power and solar power, with the latter below 0.01 W/cap. However, the fastest growing markets are those of wind and solar power, with both currently adding 35% of installed power each year.

The market characteristics of the various renewable energy forms exhibit differences linked to the nature of each source. For food energy, the price is influenced by variations in production due to climatic variations, the choices made in regard to area use, livestock holdings, fish quotas and the competitive behaviour of the food processing and marketing industry. Yet the bulk prices of different commodities seem remarkably consistent with their energy content, varying only between some 70 US or euro-cents per kWh (heat value) and 200 c/kWh. Translating OECD data (OECD, 2002) to energy units, the current wholesale price of cereals such as rice or wheat are around 70 c/kWh, while the wholesale price of typical meat and diary products are about 100 c/kWh. Only specialised gourmet products obtain higher prices in the marketplace. Consumer retail prices are typically five times higher than the bulk prices just quoted. This is more than 30 times the current consumer price of a kWh of electricity produced from fossil fuels.

Wholesale market prices for biomass waste and fuelwood range from about 1 c/kWh (of "burning value", i.e. energy of combustion) in India (FAO-Asia, 2003) to 2 c/kWh in industrialised countries (e.g. straw, wood chips 1.6 c/kWh and wood pellets 1.9 c/kWh; Danish Energy Agency, 1996; Alakangas et al., 2002). For comparison, the cost of coal before considering externalities is 0.5 c/kWh (Danish Energy Agency, 2002). The production cost of biogas is 3.6-7 c/kWh (Danish Energy Agency, 1992), while that of wind power is 3-7 c/kWh (depending on wind conditions) and that of photovoltaic solar power is 40-130 c/kWh (IEA-PVPS, 2002). The photovoltaic market enjoys substantial public start-up subsidies (often in the form of subsidising customer investments or offering attractive buy-back rates for excess solar power). This is the case in countries such as Germany and Japan, while in Switzerland, the market has largely been created by industries buying photovoltaic panels for reasons of aesthetics or image greening.

Hydropower costs 1-5 c/kWh, while coal- and gas-based power costs about 5 c/kWh to produce (Danish Energy Agency, 2002). To this comes distribution costs from centralised production units to the customers and, in many countries, taxes and environmental externality payments, leading to customer prices in excess of 14 c/kWh. As a result, wind power, being exempt from pollution and CO2 fees, and biomass-based power are in many countries sold at prices very similar to that of fossil-based power. Also geo-thermal power is usually competitive with other forms of electricity, while the viability of geothermal heat depends on local costs of district heating distribution.

Current oil production costs vary from well under 1 c/kWh at some Middle East wells to near 2 c/kWh from off-shore facilities in the North Sea. The bulk sales price (currently - February 2003 - around 2 c/kWh) is not strongly coupled to production prices, but is determined by market and political considerations. Some countries are willing to wage war against oil-producing countries in order to control prices. Refined products such as gasoline are currently sold at prices around 4 c/kWh, with diesel fuel slightly lower, plus taxes and environmental fees where they apply (Danish Energy Agency, 2002; IEA 2002). Liquid biofuels have production costs of 3-7 c/kWh (ethanol from sugar cane the lowest, ethanol from sugar beet the highest, methanol from woody biomass at 4-5 c/kWh). Hydrogen from woody biomass is about 3 c/kWh (Turkenburg et al., 2000). Natural gas market prices are currently 10% higher than those of oil (IEA, 2002).

Because of the cost of often advanced equipment, it is clear that prices of renewable energy only in particular cases can match those of fossil fuels, even with expected progress in technology and production facilities. The case for increasing the role of renewable energy sources is therefore linked to uncertainty of future fossil fuel prices (for political and resource depletion reasons) and increased awareness of the indirect costs of pollution caused by fossil and nuclear fuels, including in the fossil case emissions of substances contributing to excess greenhouse warming (cf. Chapter 7).

The source data for the Figs. 1.2-1.14 are given in tabular form in Table 1.1. It should be kept in mind that several of the numbers involve estimates and modelling, as direct energy production is not always monitored.

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