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APD P&E: Preben Maegaard WWEA

APD P&E: Preben Maegaard WWEA

Preben Maegaard, Secretary General of the World Wind Energy Association…

Shoots the breeze…

…on the Asia Pacific region

1. If you take the Asia Pacific region and how it uses wind power and other renewables, first we must say that in some east Asian countries they are far ahead of the rest of the world in terms of use of solar energies – specially in China. China has a very strong programme on solar thermal energy and now produces 15 million square meters per year. This is actually for 15 times more than the rest of the world together. In my opening speech at the World Wind Energy Conference earlier this month, I brought up the issue that with a very strong and concerted support – such as that we now see from the energy authorities in China – it would be a very promising for renewables in case China took such leadership within other forms for renewable energy as well. In future China will be the most important country in the Asia Pacific region because of its size, energy consumption and its fast growing economy. If China were to apply similar initiatives and stimulation to wind energy as it already did to solar energy it would go a long way to solve the pollution problems especially caused by coal combustion. It is a real and a growing problem in the Chinese cities and the population and the authorities are concerned about it.

2. …on Japan

Japan is absolutely the leading country in the world within photovoltaic solar energy and also has a leading role to play in terms of the acceptance of renewables by being the example for many people as a highly developed country. But the use of wind energy is still low in Japan as it just a few hundred megawatt of wind energy installed. Also Korea is now taking its first step into wind energy. But even China has less than 1000 megawatt installed but have now announced plans of 20.000 MW. The perspective for the future is colossal because China has vast land resources for wind power which on the other side is quite limited in Japan in comparison. So the East Asian countries I still find in the early stage of the learning curve in applying wind energy. But I see also a response from the conference WWEA had earlier this month in Beijing that there is a realistic and strong interest now in wind energy in several of these countries. It surprised me at the conference to see the attendance and enthusiasm of really many Chinese engineers. We had many parallel international workshops at the conference where the Chinese had the large majority. The clearly see the career opportunities within the wind industry The increase in prices for fossil fuels has also promoted more interest in renewables because this is a way you can stabilise the price of energy.

3. …on China

I see clearly that in China they will further develop wind energy when they can manufacture the equipment themselves. It’s not realistic to believe that they will base their development of wind energy on imported equipment when their other sources of power production are based on their own technology and their own fuels. It they were to base wind technology on imported products the cost would be too high. But I did see very interesting examples of well constructed 750 kW windmills in China, Made in China. Soon a 1.500 kW windmill will be launched by one of the large suppliers of equipment for conventional power plants. It is built on license from a German manufacturer. China also has a growing production of components for windmills like blades and gearboxes. According to the prices they were giving us, the cost per installed mega watts was about half – or less than – the price of similar equipment in Europe. This is very significant, because when they have built up their own production capacity and have been through this part of the learning curve, I think they will have a very strong use of wind energy, but based on their own production. They already have the capacity to manufacture all parts of windmills, and are even exporting windmill parts to European factories. So to get access to the Chinese market goes through license agreements with Chinese corporations and training of Chinese engineers and workers.

4. …on funding

Well, what we see is that access to appropriate incentives is the most important factor in implementing wind energy and other renewables. If you look at Europe, three countries Spain, Germany and Denmark , represent 80 percent of all wind energy in western Europe. And it’s not because these three countries have better wind conditions to other countries – there are other countries who do have better wind conditions i.e. Norway, Ireland, Scotland, UK and parts of France – but they have little wind energy compared to the top three. The difference between the three leading countries and the others is that they have feed-in tariff schemes that guarantee prices for supply of electricity to the public grid. This means that the independent power producers can go to the bank and make their financial schemes in a way that allows long-term investment at conditions more or less similar to the conditions the conventional power producers can obtain. Without guaranteed tariffs this is not possible at a large scale is well documented and reflected very clearly in practise in the top three countries. We also saw it in Austria when they introduced the feed-in tariff model last year and instantly we could see a strong growth and use of wind energy. Austria instantly had the highest growth rate for wind energy in Europe. I contrast the installation of wind energy in my own country, Denmark, came to nil when the present government introduced the market model a few years ago. After twenty years continuous wind energy development, the independent power producers could suddenly not get through with the financial engineering. When we look to the east Asian countries and the Asia Pacific countries, still none of them have applied these principles for wind energy and that is an aspect that really needs to be addressed.

5. …on incentives

Apparently there are lots of sufficient incentives at the moment, but also there is also a need for more general planning when you talk specifically about Japan. Japan has big nuclear power programmes and it is clear from observing many other countries that when they have strong nuclear power programmes it impacts negatively on renewable energy programmes. The three leading nuclear power countries in western Europe – France, Belgium and Finland –have no wind power plans of any significance. But this would be different if you go to China where you have a growth situation. This is not a substitution situation. As they have a strongly growing demand for electricity they need more power so there is a difference between industrialised countries and developing countries. You find more substitution of power sources in industrialised countries, whereas in developing countries, renewable energy will always be additional because they have a constant shortage of power capacity and that is also the case in China. Wind energy could be the preferred solution in combination with hydropower and other renewables.

But when we talk about funding we should consider the Clean Development Mechanism, CDM, coming from the Kyoto Protocol. Realistically I do not expect this to have any strong influence, as the support from the CDM would only amount to around 10 percent, whereas we could expect a cost reduction of 50 percent if we manufacture locally. We strongly need instruments to develop production capacity within countries like China and this is much more valuable and less bureaucratic than 10 percent financial support from the industrialised countries. It is very important that we create new international institutions for transfer of technology and training. I have been involved in the plans of an International Renewable Energy Agency that can take up tasks now neglected by the international community. But the resistance against such plans is immense.

Wind energy has made enormous progress within the last 20 years and this has surprised everyone. The windmills are becoming bigger and bigger, we now have plants that can deliver up to 5MW – enough for the power consumption in a provincial town. That is an incredible development. Also the price per produced kWh has been going down and the capacity has been going up and we are now close to the cost of conventional power production. As far as renewables go, wind energy has become a cornerstone. Without wind energy there would be little hope for renewables for the transition from the fossil fuels. Wind energy is also very important for the economy, with the production of new jobs and so on.

6. …on liberalisation

Well I think that it will effect wind energy in a negative way. We know that the old energy sector was always dominated by monopolies and you cannot have a liberal economy where there are monopolies. Some of the old monopolies have disappeared but the new ones are often even bigger and stronger. In practise they cause many obstacles for renewable energies. There are problems because you bring in new small scaletechnologies in to a structure where you have already established operators. I have not seen any country so far where liberalisation has led to the increased use of renewables. Based on empirical studies I believe liberalisation will be an obstacle to the use of renewable energies.

7. …on R&D

We of course need much stronger investment in research and development in all renewable energies. And this is not just in the Asia Pacific area, this is needed worldwide. If we take the figures we know from the OCED countries, only around seven percent of research and development for energy is going to renewables. Maybe 70 percent is still being spent on nuclear fission and fusion and the rest is going to fossil fuels and of course that should be reversed because there is so much hope in renewables. In fact young people who want to work with renewables can except for a few countries hardly find a faculty anywhere in the world to develop their professional education in the renewable technologies. But companies will also hesitate until they see that there is a strong political will to invest in renewables – only then will the companies invest heavily in R&D.

8. …on the future

We just had this conference in Beijing with more than 1000 registered attendees and many more visitors. The main thing to point out is that information is very important. There needs to be more initiatives and conferences to get renewables on the agenda and to affect national policies. But on the whole I think that giving more information about renewable energies at all levels is important.

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© Copyrights 2007 Preben Maegaard