Renewable Purchase Obligation (RPO) in enabling energy transition

(Contest entry for Masdar Engage 2016)

Sustainable development looks to be a general priority for the Governments and corporations alike. Developing countries are looking to sustain year on year growth whilst balancing the need to minimize fossil fuel use and switch to renewable energy. Likewise big companies are exploiting the developing markets to sustain global business. Top companies are also keen on implementing their sustainability practices in the local environment. The Government has a balancing role to play between attracting investors and also fulfilling climate change commitments.

Role of Government

Governments are typically accused for a lack of policy framework but I believe Governments typically fail in enforcing policies when it comes to energy and emission reduction. Policies related to emission reduction and renewable energy is typically modified versions of policy implemented elsewhere. One of the key policies is Renewable Purchase Obligation (RPO). I advocate this policy for implementation in developing countries that look to balance growth and keep the global temperatures below 2Ā°C. If implemented this could fill the gap for energy shortage while simultaneously increasing the demand for new renewable energy projects.

Renewable Purchase Obligation (RPO)

Industrial and commercial consumers typically have the highest energy consumption. This policy initiative will require all industrial/commercial consumers to procure certain percentage of their energy from renewable energy sources. Obligated entities can either install their own power project or procure renewable energy through open access transmission network or even buy energy trading certificates. This policy initiative can also be scaled up by starting with a low percentage of 1% and then increasing them year on year. The policy if enforced will be successful in developing countries where there is a demand for energy and the price from fossil fuels is increasing while the price from renewable energy is witnessing a decline. This policy will also enable big corporations to shift towards renewable energy and will see significant emission reductions.

Major Benefits

By adopting this policy the governments could expect to see a reduction in energy emissions. Investment in renewable energy projects will increase. This will foster partnerships between renewable energy companies and MNCs in developing renewable energy projects. Demand for renewable energy will increase which will see more interest from developers in setting up power projects. A significant size of renewable energy projects will aid in climate change mitigation for the government.

Recent developments from top manufacturers demonstrate the interests from corporations in claiming to procure renewable energy power. Their sustainability claim will increase. The average power costs will decrease in long term as the share of renewable energy in their portfolio increases.

Can RPO drive the global sustainable energy transition by 2030?

It could well deliver. For example, if Indian states implement their RPO for solar we could see solar alone contributing to 8% of the grid electricity by 2019. On the contrary, irrespective of whether RPO is successfully implemented or not there is bigger problem in developing countries, its infrastructure. There is a lack of infrastructural facilities to accept renewable energy. Grid availability turns out to be the biggest issue, there will be a need to upgrade existing transmission infrastructure. Another crucial issue with respect to renewable energy like solar is the availability of land. If the Governments plug these key holes then implementing RPO would prove to be a major factor in transition from the era of fossil fuels to renewable energy and fighting global climate crisis.

This post is a contest entry for Masdar Engage Blogging contest 2016. You can review the post at Masdar Engage 2016.

Urban cities and climate crisis

As a matter of relevance the report from The Hindu appeared on the same day when Prof. John Chan was in Cambridge delivering his talk on Urban Cities under Global Warming with focus on Asia and it couldn’t have come at a better time for me when I was wondering what went wrong for Chennai during the recent floods?

Dhaka

Cty: The Hindu

Prof Chan spoke about the impact of rising temperatures in mega cities esp Hong Kong and Singapore.WP_20151211_14_04_23_Pro He and his colleagues have done extensive work in analyzing data on temperature, rainfall and sea level. And some of their key findings were

  • Of course average annual temperature is rising. More importantly just by getting skyscrapers in the city there is an increase in the average temperatureĀ  unless the designs are planned well.
  • The number of hot nights (avg night temp >28C) and cold nights (avg night temp <12 C) are rising in Hong Kong. This clearly indicates we are swinging between extremes.
  • The return period of extreme rainfalls is shorter. What was taking forty years to return now takes less than 5 years. The record for the highest rainfall is now broken in less than 5 years. That’s definitely not good.

What can be done?

  • Accept that the tipping point is now up on us. We have to just prepare to reduce the damage. Examples include how Hong Kong built a storage tank below a football field and Kuala Lumpur built a tunnel that acts as a tank during heavy rains.
  • HK field

    Cty HK Magazine

  • Analyzing temperature data is really critical. Gather data and analyze them. Lack of data for remote locations in big countries is a dampener.

And Chennai?

Experts blame the Chembarabakam reservoir for causing the damage. Maybe true. But that definitely is not the root cause. The cause is town planning. I found this article for support. If the town was better planned the disaster could have been avoided. But it cannot be done, here is why..

ET_Chennai

Cty ET

  • Urban planning requires fund to be spent on the main city. We could build something like what Hong Kong or Kuala Lumpur built in the city by spending a lot of money.
  • But, the priority for a developing country like India is enabling people get a better life. That means building a link across every small village across the country. That means our money is spent in developing this network.
  • In Chennai’s case, there has been rapid progress in the last decade. But little was done in the old part of the city which has the largest residential population and where the impact of the floods was highest. Instead most of the development happened around Chennai in the roads that led to the city. It created more jobs and made life better for a lot of people.

So, could we strike a balance? It is really tough. No wonder India was seeking climate justice at the Paris Conference. We are growing and our funds are spent in sustaining this growth but we are loosing our footing. We have no answer for climate crisis for which we had no rule to play until now. But, the reconstruction cost in recovering from a disaster like from the Chennai floods is really high. That makes me wonder should we just spend money in planning existing cities rather than expanding?

That probably calls for Sustainable Development.

Beating the Moore’s law

I had a rare opportunity to talk to Professor Michael Kelly (Fellow of Royal Society) at the University of Cambridge. Prof. Kelly has been in the forefront of UK’s energy transition and was the Chief Scientific Adviser on UK’s low carbon trajectory. My interest was to know the growth of renewable energy and its future prospects. Prof. Kelly reminded me that renewable energy wouldn’t have achieved prominence if not for the oil shocks in the 1970s.

The need for nuclear power

Prof. Kelly for quite some time has been laying emphasis on the need to power mega cities. More than 50% of the global population are expected to live in cities and powering them efficiently will be the next big thing.

Megacities

This he believes will be feasible on a sustainable scale only through nuclear power. Nuclear power offer the highest energy per square area and this will be a critical factor when the world’s population exceeds 9 billion (Read nuclear power for energy transition).

India’s solar targets

I wanted his opinion on India’s ambitious solar push and told him that we have plans to build 100GW of solar power by 2022. He was stunned at this number and immediately did a quick calculation. And what we found was India’s solar build rate has to more than double every two years. That’s beating Moore’s law for solar (if we could borrow that line from the original which states the number of transistors in an integrated circuit doubles every two years).

Solar Build rate

There is a need for energy in India and the solar targets are certainly over ambitious rather than optimistic but can we ride the tide and achieve the goal?

If we do, we beat the Moore’s law for sure!

Image cty:Wiki