MENA Taps its Green Reserves

Huge oil reserves are no longer preventing the Middle East and North Africa region from developing its abundant clean, renewable energy resources.

Abu Dhabi, UAE -- If you are looking for a powerful solar resource, then the relentless blue skies of the world's desert regions have immediate appeal. As the chairman of the Desertec Foundation's supervisory board said at its launch, the world's desert regions receive more energy from the sun in six hours than humans consume within a year.

The band of countries that make up the Middle East and North Africa region (MENA) are either desert or at best arid. There's no precise list of which countries make up the region, as it is a geographical region rather than a political alliance, but at its broadest it includes Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates (UAE) and Yemen, the overall population totalling some 355 million.

As economies have grown, so traditional, climate-adapted lifestyles have given way to ones associated with accompanying growth in consumption of energy and water. As in many other parts of the world, growing populations and their greater affluence are putting both these commodities under ever-greater pressure.

The MENA region has about 60% of the world's oil reserves and 45% of reserves of natural gas. But these reserves are not evenly distributed and the economies of the various countries reflect this, with those of the Gulf Co-operation Council (GCC) — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — among the most affluent.

While on average, around the world, the amount of water available per person is 7000 m³/year, in the MENA countries only 1200 m³/year is available per person, and half the region's population lives in areas that are classed as water-stressed. World Bank figures suggest that as the region's population grows from today's 350 million to the 500 million forecast for 2025, per capita availability of water will fall dramatically.

It's said that electricity and water do not mix — but it doesn't mean they are not connected. In fact, not just electricity but the entire energy sector is tightly bound up with water usage and availability. On the one hand, water is needed for most power generation and the extraction and refining of oil. On the other, electric power is used for processing and pumping of water, and in this region especially, for desalination. So in the largely arid landscapes of the kind found in this part of the world, water and energy are especially closely linked — so much so that many countries here put both in the hands of a single government ministry.

This region is also being eyed as a solar energy source not only for its immediate hinterland but also for Europe. The Desertec initiative is aimed at meeting 15% of Europe's energy needs, and a substantial part of the demand in Northern Africa and the Middle East, via concentrated solar plants and other renewable sources of energy by 2050.

After all this talk of water scarcity, it might seem ironic that the best-developed, non-fossil form of electric power production in the MENA region is hydro. Hydro — overwhelmingly large-scale — is particularly well developed in Iran, where some 7500 MW of installed capacity generate just over 18,000 GWh/year, and in Egypt (2800 MW, 14,000 GWh/year). Morocco (1500 MW, 1318 GWh/year) and Syria (1500 MW, 4000 GWh/year) are the other significant players. Iraq has 2225 MW installed but production is about 500 GWh/year. Algeria has 280 MW installed, which produces 226 GWh/year (World Energy Council, 2009).

But it is solar and wind technologies that are now being eyed for growth. The latest Energy [R]evolution report from Greenpeace, anticipates that, given political support and well-designed policy instruments, by 2050, 95% of the electricity produced in the Middle East (i.e. not counting North Africa) could come from renewable energy sources, with 'new' renewables — mainly wind, solar thermal energy and PV — contributing about 90% of electricity generation. The installed capacity of renewable energy technologies will grow from the current 10 GW to 556 GW in 2050. By then, renewables could meet 83% of the region's demand for heating and cooling, says the report.

Some National Developments

Many of the political leaders in the MENA region embrace greenhouse gas reduction measures. Several countries have introduced renewable energy policies. Not surprisingly, these are the ones where the developments and markets have taken off. REN21's interactive global map gives up-to-date information on renewable energy policy by country and some developments.

Algeria

Algeria's national goal is to meet 6% of its energy demand from renewables by 2015, with 200 MW wind, 170 MW solar thermal, 5.1 MW solar PV by 2015, plus 450 MW of cogeneration. One solar thermal plant is under construction, and two Integrated Solar Combined Cycle (ISCC) hybrid plants, each with 70 MW of CSP, will be developed between 2010 and 2015. Algeria currently claims 2.28 MW of installed solar, and 73.3 kW of wind.

Northern Algeria is home to the world's second ISCC plant, due for completion as REW goes to press. The €320 million ($440 million) 150 MWe Hassi R'Mel Project is being built on behalf of New Energy Algeria (NEAL) by two Abengoa subsidiaries: Abener and Abengoa Solar.

The project will adjoin an existing Sonelgaz power station at Tilghemt. At approximately 180,000 m², the two parabolic solar fields will comprise 224 parabolic collectors (Solucar) in 56 loops and the solar contribution is estimated at some 20 MWe. The solar installation will work in conjunction with two 42 MW SGT-800 gas turbines and a 80 MW SST-900 steam turbine, supplied by Siemens.

Egypt

In February 2008, Egypt's Supreme Council of Energy approved a plan for the country to produce 20% of its electric power from renewable sources by 2020. A new electricity act, currently undergoing consultation, will go some way to facilitating this. At present natural gas generates about 86 TWh/year and (large) hydro about 16 TWh.

Egypt's electricity market is semi-reformed, in that in 2000 the government-owned electricity authority became a holding company, the EEHC, with 15 small affiliated state-owned companies looking after power generation, transmission (including international interconnections) and distribution. Currently, independent power producers sell to the EEHC, but the new electricity law will allow private companies to sell their output directly to consumers. The new law will also include a feed-in tariff for renewables.

Egypt has actively pursued renewables since 1986, when the New & Renewable Energy Authority (NREA) was set up. It established laboratories for testing, certification and training, as well as assessing renewable energy resources and carrying out studies and pilot projects to evaluate different technologies. The NREA introduced some of these technologies to the Egyptian market and supported local industry initiatives. Since then, several large-scale wind power projects have been constructed.

The 2020 target includes a 12% contribution from wind energy. According to GWEC, this translates into more than 7200 MW. The government anticipates that about 400 MW/year will be private sector, while the NREA will carry out about 200 MW/year. The most recent BTM report states Egypt had 552 MW of installed wind at the end of 2009, and is likely to reach 3 GW by 2014. And in May 2010 energy minister Hassan Younes reportedly said that an international tender for wind power plants with a total capacity of 1 GW would be offered before the end of the year to local and foreign investors.

Egypt's first large-scale solar development is nearing completion 90 km south of Cairo at Kuraymat. The solar component of the ISCC plant is being built on behalf of the NREA by Solar Millennium, which installed the last of almost 2000 parabolic trough collectors — covering 130,000 m² — at the 150 MW solar farm in April 2010. The plant's location gives access to the grid and natural gas pipelines, as well as to water from the Nile. Solar Millennium hopes the project will be a model for solar farms that the Desertec group plans to one day use to supply power to much of North Africa and southern Europe.

Regarding PV, the NREA signed a protocol for co-operation with the Italian Ministry of Environment to electrify two remote settlements in the Matrouh Governorate. The government is also stimulating solar investment by offering land to potential investors.

Jordan

Jordan currently generates 1.5% of its power from renewable sources, and its policy is to reach 7% by 2015 and 10% by 2020. Pipeline projects suggest that Jordan is thinking big.

In January 2010 a new Renewable Energy Law was passed, under which the National Electric Power Company (NEPCO) will be required to purchase all electricity produced by independent and small-scale renewable plants at full retail price.

Ziyad Jibril, head of the Energy Ministry's renewable energy department, also confirmed that NEPCO will be required to cover the cost of connecting renewable energy projects, whether wind farms, solar energy stations or other technologies, to the grid.

Negotiations for Jordan's first wind farm are underway — the government wants to build 600 MW of wind by 2015 and a further 600 MW by 2020.

As for solar PV, In June 2010 Jordan's Qawar Energy — in partnership with Ma'an Development Area (MDA) — announced the launch of its US$400 million Shams Ma'an project, a 100 MW solar PV project for the MDA industrial park. MDA wants to create a solar hub in Jordan for training, research and development besides attracting solar technology firms and investors. The technology to be used in the high-profile plant is not yet finalized; it will use 360,000 to 2 million PV/CPV panels and produce around 168 GWh per year, according to MDA. Ma'an Development Area's CEO Mohammed S. Turk reportedly said that the importance of the project lies in transforming Jordan into a country able to benefit from one of its greatest available resources, the sun. The project, will cover 2 million m² in the southern part of Jordan, and is expected to be completed in 2012.

In concentrating solar thermal power, MENA Cleantech has its first solar project in the pipeline: the 100 MW JOAN1 project is expected to enter operation in 2013 and will be the largest CSP project in the world using direct solar steam generation. In a recent interview, MENA Cleantech founder/CEO Samer Zureikat said he hopes to have the contracts in place for this project by the end of 2010 and to commission the plant in 2013. Back in October 2009 it was announced that JOAN1 will use Ausra's reflector technology.

Morocco

Morocco is developing both wind and solar, and is the only North African country to have a grid interconnection with Europe at this stage. According to BTM, Morocco had 254 MW of wind power installed at the end of 2009 and is forecast to increase this to just over 1 GW by 2014. During 2009 it installed just 10 MW, however.

In November 2009, Morocco announced an ambitious solar programme, to install 2 GW of solar capacity by 2020 — a combination of PV and CSP — to provide 20% of the country's electricity from solar. The estimated cost will be $9 billion. Energy Minister Amina Benkhadra has said Morocco is open to all kinds of partnership to achieve the goals. The Moroccan Agency for Solar Energy (MASEN), a public-private venture, has been set up to lead the project.

The country is currently commissioning its first ISCC project, the 470 MW plant at Ain Beni Mathar, which will have a 20 MWe solar component. The installation features a 180,000 m² solar field, with 224 solar collector assemblies in 56 loops. Abener, in collaboration with Abengoa Solar and Teyma has engineered, designed and built the plant under the terms of a turnkey contract with Moroccan state energy company ONE.

A second solar plant, the Ouarzazate solar independent power project, is in the more distant pipeline — a 500 MW plant whose EPCs should be awarded in the second quarter of 2011 according to MEED Projects.

Saudi Arabia

The Saudi Electric Company anticipates that electric loads will more or less double between 2009 and 2020. While it has not developed significant renewable energy as yet, Saudi Arabia does plan to develop solar over the next 5—10 years, even expressing ambitions to export solar energy, according to media reports.

As part of its solar programme, Saudi Arabia is focusing on solar water desalination. Typically oil fuelled, there are 28 or so desalination plants, which supply some 70% of the country's drinking water as well as electric power. However, solar desalination using various solar technologies has been trialled and operated at small scale in various parts of the world.

In April, IBM and the King Abdulaziz City for Science and Technology (KACST) in Saudi Arabia, announced a research collaboration to create a water desalination plant powered by the ultra-high concentrator photovoltaic (UHCPV) technology that is being jointly developed by IBM and KACST; this technology is capable of operating a CPV system at a concentration greater than 1500 suns.

The new desalination plant has an expected production capacity of 30,000 m³ per day and will be built in the city of Al Khafji to serve 100,000 people. It will also use a particular type of nanomembrane developed by the partners.

PV panels installed by Abu Dhabi's Masdar (Source: Masdar)

United Arab Emirates

The UAE, led by initiatives of Abu Dhabi, have taken a leading role in providing clean energy in recent years — both within the region and elsewhere — largely through the Masdar Initiative and its component parts. Abu Dhabi has a target of achieving 7% of its generation capacity from renewable sources by 2020, and is now home to IRENA, the International Renewable Energy Agency.

In June 2010, Masdar appointed a consortium of Total and Abengoa Solar as a partner to own, build and operate what will be the world's largest CSP plant and the first of its kind in the Middle East, Shams 1.

Located about 120 km southwest of Abu Dhabi, Shams 1 will be the largest CSP plant in the world, covering an area of 2.5 km², with a capacity of approximately 100 MW. Its solar field will consist of 768 parabolic trough collectors, which will be supplied by Abengoa Solar. Construction is due to begin later this year and to take two years. The project is registered under the United Nations' Clean Development Mechanism (CDM) and is eligible for carbon credits. This is the first CSP plant registered under the CDM and the second project registered for Masdar.

Outlook

It seems the time really has come for this region to move beyond oil and develop its potential as a renewable energy powerhouse. The scale of the plans in the committed countries is impressive, and political motivation to achieve growth while reducing carbon emissions seems clear. There's certainly scope for the region as a whole to follow the leaders.

Renewables Continue Remarkable Growth

Renewables had another banner year in 2009, with policy, investment and market development activity across a spread of nations - as recorded in the REN21 Renewables 2010 Global Status Report.

London, UK By 2010, renewable energy had reached a clear tipping point in the context of global energy supply, concludes the 'Renewables 2010 Global Status Report'. With renewables comprising fully one quarter of global power capacity from all sources and delivering 18% of global electricity supply in 2009, the latest release of the definitive assessment of the state of the global renewable energy industry from the Renewable Energy Policy Network for the 21st Century (REN21) details the current status and key trends of global markets, investment, industry and policies related to renewable energy.

Investment in new renewable power capacity continued to increase during 2009, despite challenges posed by the global financial crisis, lower oil prices, and slow progress with climate change policy. For the second year in a row, more money was invested in new renewable power capacity than in new fossil fuel capacity. The renewable generating capacity installed over the past two years accounts for nearly 50% of total generating capacity added to the world's grids over this period.

Furthermore, the rapid adoption beyond the industrialised world means that today more than half of the existing renewable power capacity is in developing countries.

These trends reflect strong growth and investment across all market sectors including power generation, heating and cooling, and transport fuels. Grid-connected solar PV has grown by an average of 60% every year for the past decade, increasing 100-fold since 2000. During the period from year-end 2004 through 2009, consistently high growth year-after-year marked virtually every other renewable technology as well. During those five years, annual growth rates averaged 27% for wind power capacity, 19% for solar water heating, and 20% for ethanol production. Indeed, as other economic sectors declined around the world, existing renewable capacity continued to grow during 2009 at rates close to, or exceeding, those in previous years. Market growth for some technologies - including wind and concentrating solar power, and solar water heating - exceeded their five-year averages in 2009. Annual production of ethanol and biodiesel increased 10% and 9%, respectively, despite layoffs and ethanol plant closures in the United States and Brazil. Biomass and geothermal for power and heat also grew strongly last year.

Much more active policy development during the past several years culminated in a significant policy milestone in early 2010 with more than 100 countries having some type of policy target and/or promotion policy related to renewable energy in place. Most countries have adopted more than one policy and there is a significant diversity of policy mechanisms in use at national, state/provincial and local levels to advance renewable energy. In addition, many of the new targets enacted in the past three years call for shares of energy or electricity from renewables in the 15%-25% range by 2020.

Renewable Energy Extends Its Reach

Recent trends also reflect the increasing significance of developing countries in advancing renewable energy. Collectively, developing countries now account for almost half of the countries with some sort of policy to promote renewable power generation, and they have more than half of global renewable power capacity. Today China leads the world in several indicators of market growth. India ranks fifth worldwide in total existing wind power capacity and is rapidly expanding many forms of rural renewables such as biogas and solar PV, while Brazil produces virtually all of the world's sugar-derived ethanol and has been adding new biomass and wind power plants. Renewables markets are growing at rapid rates in several other developing countries such as Argentina, Costa Rica, Egypt, Indonesia, Kenya, Tanzania, Thailand, Tunisia and Uruguay, to name a few.

The geography of renewable energy is changing in ways that suggest a new era of geographic diversity. For example, wind power existed in just a handful of countries in the 1990s but now operates in over 82 countries. Outside of Europe and the US, other developed countries like Australia, Canada and Japan are seeing recent gains and broader technology diversification. The developing world is experiencing a similar trend and, for example, today at least 20 countries in the Middle East, North Africa and sub-Saharan Africa have active renewable energy markets. This geographic diversity is boosting confidence that renewables are less vulnerable to market dislocations in any specific country.

Meanwhile, leadership in manufacturing is shifting from Europe to Asia as countries like China, India and South Korea continue to increase their commitments to renewable energy. In 2009, firms in China produced 40% of the world's solar PV cell supply, 30% of the world's wind turbines (up from 10% in 2007), and 77% of the world's solar hot water collectors.

Figure 1. Installed capacity by region and technology for 2009

Renewables Investment Remains Robust

Greatly increased investment from both public-sector and development banks is also driving renewables development. Excluding large hydro, total investment in renewable energy capacity was about US$150 billion in 2009, up from the revised $130 billion recorded in 2008. Investment in new renewable power capacity in both 2008 and 2009 represented over half of total global investment in new power generation. However, investment in utility-scale renewable energy additions dropped 6% in 2009 from the 2008 level, despite 'green stimulus' efforts by many of the world's major economies and increased investments from development banks in Europe, Asia and South America.

All told, again excluding large hydro, the world invested $101 billion in new utility-scale renewable energy development in 2009, compared with $108 billion in 2008. In 2009 there was also investment of some $50 billion worldwide in small-scale projects such as rooftop solar PV and solar hot water. An additional $40-$45 billion was invested in large hydropower.

Renewable energy companies invested billions of dollars in plant and equipment to manufacture solar modules, wind turbines and other generating devices during 2009. Venture capital and private equity investment in clean energy companies totalled $4.5 billion, down from $9.5 billion in 2008, while public market investment in quoted clean energy firms reached $12.8 billion, up from $11.8 billion. Government and corporate research, development, and deployment spending on clean energy technology in 2009 is estimated at $24.6 billion, up around 2% from 2008, the bulk (68%) of which went to energy-efficiency technologies.

Germany and China were the investment leaders in 2009, each spending roughly $25-$30 billion on new renewables capacity, including small hydro. They were followed by the US, investing over $15 billion, and Italy and Spain with about $4-$5 billion each.

The wind energy sector continued to be the hands-down leader, receiving 62% of the global total invested - $62.7 billion in 2009, up from $55.5 billion the year before. Most of the growth was due to China's rapid capacity expansion, increased investment activity in the wind sector in Latin America, and a handful of large utility-backed offshore wind deals in the UK.

These gains were offset by a $5.6 billion drop in solar power asset investment, to $17.1 billion in 2009, and a plunge in biofuels spending, down to $5.6 billion from $15.4 billion in 2008. Lower investment in PV in 2009 was due to several factors. One was the behaviour of prices along the value chain, with PV module prices falling by some 50% over the year, bringing the dollar value of financial investment down with them. Other factors included the Spanish government's cap on PV project development at the end of the boom associated with the pre-September 2008 tariff, and the shortage of debt finance for utility-scale projects in Europe and the US, which also affected wind farms. Concerns about scheduled reductions in feed-in tariff support for PV in some countries actually spurred on developers rather than holding them back. Indeed, Germany witnessed a spectacular end-of-2009 spurt in small-scale PV project construction.

In 2007, biofuels commanded 22% of global asset finance, with investment totalling $19.6 billion. However, the sector slipped to $15.4 billion in spending in 2008 and just $5.6 billion in 2009, representing only 5% of global project investment. An oversupply in US ethanol continued to smother investment in the biofuels sector in 2009. Things may soon turn around as both Brazil and the United States continue to follow ambitious biofuels targets. Brazil's state-owned oil company Petrobras has moved into the ethanol sector, and US plants bought under bankruptcy auctions in 2008 and 2009 have begun slowly to resume operation.

The decline in asset investment in biofuels relegated the sector to fourth place among the renewable energy sectors in 2009. Stepping up to third place, after wind and solar, was biomass (including waste-to-energy), with a rise in investment to $10.4 billion, from $9 billion in 2008.

In Europe, Brazil and elsewhere, the brightest feature for project investors during 2009 was the expanded role of public sector banks. The European Investment Bank (EIB) and Germany's KfW Banking Group, in particular, significantly raised their lending to renewable energy. The European Bank for Reconstruction and Development (EBRD) played an active role in project finance, albeit not on the scale of the EIB and KfW, as did the Brazilian National Bank of Economic and Social Development (BNDES) for Brazilian projects (though its lending declined relative to 2008 levels).

This strong contribution by the public sector was all the more needed, because many commercial banks - from Europe to the United States and elsewhere - found it impossible to sustain the 2008 level of lending to renewable energy projects. Overall, development assistance for renewables in developing countries surged in 2009, up to $5 billion from $2 billion in 2008. For example, the World Bank Group, including the International Finance Corporation and the Multilateral Investment Guarantee Agency (MIGA), saw the largest increase to date in finance from previous years. Finance rose fivefold in 2009 as $1.38 billion were committed to new renewables (solar, wind, geothermal, biomass and hydro below 10 MW) and another $177 million to large hydropower.

Expanding the Reach of Policies and Targets

Growth in renewables is inevitably supported through government policy. Renewable energy policies existed in a few countries in the 1980s and early 1990s, but policy support began to emerge in many more countries, states, provinces, and cities during the period 1998-2005, and even more so during 2005-2010.

Many countries have adopted national targets for shares of electricity production. Targets are typically for 5%-30% of electricity from renewable sources, but they range from 2%-90%. Many historical targets have aimed for the 2010-2012 timeframe, but targets aiming for 2020 and beyond have multiplied in recent years.

Developing nations now make up more than half of the countries worldwide with renewable energy targets. The 'Renewables 2007 Global Status Report' counted 22 developing countries with targets, a figure that had expanded to 45 by early 2010. Developing countries' targets are also becoming increasingly ambitious. For example, China aims for 15% of final energy consumption from renewables by 2020, even as total energy demand continues to grow at nearly double-digit annual rates.

Several countries have adopted targets at state/provincial and regional levels - and at other levels as well - with many mandated through renewable portfolio standards (RPS) and other policies.

In 2008, all 27 EU countries confirmed national targets for 2020, following a 2007 EU-wide target of 20% of final energy by 2020. It appears that many countries won't meet their 2010 targets by the end of the year, although this won't be known immediately due to data lags. Nonetheless, some EU countries were close to or had already achieved various types of national 2010 targets early in the year, including France, Germany, Latvia, Spain and Sweden.

City and local governments around the world are also enacting renewable energy promotion policies. Hundreds of cities and local governments have established future targets for renewables; urban planning that incorporates renewables into city development; building codes that mandate or promote renewables; tax credits and exemptions; purchases of renewable power or fuels for public buildings and transit; innovative electric utility policies; subsidies, grants, or loans; and many information and promotion activities.

Figure 2. Growth in renewables capacity, annual and five-year average

Supporting Renewable Electricity Generation

At least 83 countries - 41 developed/transition countries and 42 developing countries - have some type of policy to promote renewable power generation. The 10 most common policy types are feed-in tariffs (FiTs), renewable portfolio standards, capital subsidies or grants, investment tax credits, sales tax or VAT exemptions, green certificate trading, direct energy production payments or tax credits, net metering, direct public investment or financing, and public competitive bidding.

The most common policy currently in use is the feed-in tariff, which has been enacted in many new countries and regions in recent years. By early 2010, at least 50 countries and 25 states/provinces had adopted FiTs over the years, more than half of which have been enacted since 2005.

Strong momentum for feed-in tariffs (FiTs) continues around the world as countries enact new policies or revise existing ones. For example, France adopted a tariff for building-integrated PV that was among the highest in the world (€0.42-€0.58/kWh). Other countries that adopted or updated FiTs included the Czech Republic, Germany, Greece, India, Ireland, Japan, Kenya, Slovenia, South Africa, Taiwan, Thailand, Ukraine and the UK. In some countries, tariffs were reduced in response to technology cost reductions, market slowdowns and concerns about foreign manufacturer market share; indeed, reductions were more prevalent in 2009 and early 2010 than in previous years.

Renewable portfolio standards (RPS) - also called renewable obligations or quota policies - exist at the state/province level in the US, Canada and India, and at the national level in 10 countries: Australia, Chile, China, Italy, Japan, the Philippines, Poland, Romania, Sweden and the UK. Globally, 56 states provinces, or countries had RPS policies in place by early 2010. Most RPS policies require renewable power shares in the range of 5%-20%, typically by 2010 or 2012, although more recent policies are extending targets to 2015, 2020 and 2025. Most RPS targets translate into large expected future investments in renewable generation, although the specific means (and effectiveness) of achieving quotas can vary greatly across countries or states.

Investment tax credits, import duty reductions and/or other tax incentives are also common means for providing financial support at the national level in many countries, and at the state level in the United States, Canada and Australia. Many tax credits apply to a broad range of renewable energy technologies, such as Indonesia's new 5% tax credit adopted in early 2010, and a new 2009 policy in the Philippines for seven-year income tax exemptions and zero-VAT rates for renewable energy projects.

Energy production payments or credits, sometimes called 'premiums', also exist in a handful of countries while capital subsidies and tax credits have been particularly instrumental in supporting solar PV markets. Net metering (also called net billing) is an important policy for rooftop solar PV and laws now exist in at least 10 countries - including a growing number of developing countries. A few jurisdictions are also begining to mandate solar PV in selected types of new construction through building codes.

Supporting Renewable Heating & Transport

More countries are also adopting policies to support renewable heat and transport. The primary focus of heat-related measures has been solar water heating, and mandates for solar hot water in new construction represent a strong trend at both national and local levels. For years Israel was the only country with a national level mandate, but Spain followed in 2006 with a national building code that requires minimum levels of solar hot water in new construction and renovation. Solar thermal systems must meet 30%-70% of energy needs for hot water, depending on climatic zone, consumption level, and backup fuel. Many other countries have since followed suit. South Korea's new 2010 mandate requires on-site renewable energy to contribute at least 5% of total energy consumption for new public buildings over 1000 m², for example. Other countries with solar hot water targets include Morocco and Tunisia.

Capital subsidies for solar hot water are now a common policy in many states and countries. At least 20 countries, and probably several more, provide capital grants, rebates, VAT exemptions, or investment tax credits for solar hot water/heating investments, including Australia, Chile, Japan, New Zealand, Portugal, Spain, and Uruguay.

In the transport sector, mandates for blending biofuels into vehicle fuels have been enacted in at least 41 states/provinces and 24 countries at the national level. Most mandates require blending 10%-15% ethanol with gasoline or 2%-5% biodiesel with diesel fuel. Mandates can now be found in at least 13 Indian states/territories, nine Chinese provinces, nine US states, five Canadian provinces, two Australian states, and at least 14 developing countries at the national level.

In addition to mandated blending, several targets and plans define future biofuel use. Countries with production or use targets include the US, the UK, Japan, China and South Africa. Targets for renewable energy's share of transportation energy exist in at least four EU countries at the national level (Belgium, Croatia, France and Portugal), as well as the EU-wide target of 10% of transport energy by 2020, covering both sustainable biofuels and electric vehicles.

Basis for Optimism

Almost all renewable energy industries experienced manufacturing growth in 2009. It must be conceded, however, that many capital expansion plans were scaled back or postponed.

The REN21 Renewables 2010 Global Status Report reveals that for the second year in a row, in both the United States and Europe, more renewable power capacity was added than conventional power capacity from fossil fuels or nuclear. China added a staggering 37 GW of renewable power generation capacity in 2009, more than any other country in the world, to reach 226 GW installed. Globally, nearly 80 GW of renewable power capacity was added, including 31 GW of hydro and 48 GW of non-hydro capacity.

Indeed, wind power additions reached a record high of 38 GW - China was the top market, with 13.8 GW added. Solar PV additions reached a record high of 7 GW - Germany was the top market, with 3.8 GW added. And many countries saw record biomass use - notable was Sweden, where biomass accounted for a larger share of energy supply than oil for the first time. And biofuels production contributed the energy equivalent of 5% of world gasoline in 2009.

Even the most cynical observer must acknowledge this is a success story by any means, let alone under the current economic climate. Renewable energy is now breaking into the mainstream of energy markets thanks to hundreds of new government policies, accelerating private and public investment, and numerous technology advances achieved since the first Renewables Global Status report was released in 2005.

Despite the continuing advances highlighted in this year's report, the world has tapped only a fraction of the vast renewable energy resources available to us. Further strengthening of policy support can help drive the massive scale up in renewables needed for the sector to play a major role in building a stable, secure and enduring low-carbon global economy.

David Appleyard is chief editor of Renewable Energy World. Janet Sawin is research director (2008-2010) and lead author of the REN21 Renewables Global Status Report. She is also a partner at Sunna Research and a senior fellow with the Worldwatch Institute. Eric Martinot is research director emeritus and lead author of the REN21 Renewables Global Status Report. He is also a senior research director at the Institute for Sustainable Energy Policies and a senior fellow with the Worldwatch Institute.

Most of the investment data was provided by Bloomberg New Energy Finance (BNEF). See also the UNEP/BNEF report Global Trends in Sustainability Energy Investment 2010, which was released jointly with the REN21 report.