Saturday, March 25, 2006

Renewable energy a job generator in Germany

Berlin expects employment figures in Germany's renewable energy sector to nearly double by 2020, banking on the country's technology edge and a large pool of qualified personnel.

"The renewable energy market is a German success story," Sigmar Gabriel, the country's environment minister, said Wednesday in Berlin. "We expect up to 300,000 people working in this sector by 2020." That would be nearly double the present amount.

In 2005, renewables employed some 170,000 people, up 13,000 from the previous year. Gabriel said bringing down Germany's high unemployment (12.2 percent or over 5 million jobless) is the job of all ministries, not only the economy and work portfolios.

The extra jobs will also be closely linked to rising exports of renewable energy technologies, said Frithjof Staiss, of the Stuttgart-based Center for Solar Energy and Hydrogen Research. Solar, hydrogen and bio-mass energy are an ever-growing market, he said. As fossil fuel reserves are gradually diminishing, experts expect the renewable energy sector to gain in importance -- and Germany should have an edge when it comes to selling its know-how and qualified workers to other nations, Staiss said.

"No country in the world spends more money on technological progress in this sector than Germany," he said, adding Germany was the world leader in exporting wind and solar energy technologies. Rising energy demand from all parts of the world, especially China and India, should be seen as chances to boost German exports, he said. And don't forget the current oil powers, who will one day lose their position when oil runs out. "These countries have enormous potential in other fields, such as solar energy," Gabriel said, referencing countries in North Africa and the Middle East.

Growth in the renewable energy sector also benefits other German industries, Staiss said. "The wind sector strengthens engineering, plastics and metal industries, growth in the solar energy sector benefits glass manufacturers," he said. Relying on a study commissioned by the German environment ministry and several independent economic and environmental organizations, Gabriel said expected additional investments in renewable energy plants in Germany will amount to more than $90 billion.

The statements come just a few weeks ahead of a German energy summit initiated by new Chancellor Angela Merkel on April 3. The summit marks the start of a yearlong discussion over the future of Germany's energy mix.

It remains to be seen whether the summit will tackle the most controversial issue: An agreement put forth by the former Social Democrat/Green Part government has Berlin shut down all nuclear energy plants by 2020. Merkel and several conservative ministers, among them Economy Minister Michael Glos, are calling for an extension of the plants' running times.

Gabriel, a Social Democrat, said he was against hampering with the agreement and "happy that my fellow minister's remarks are made geographically further and further from Berlin," in a reference to a call issued by Glos in Asia to keep the safest atomic plants up and running.

Gabriel defended the study's numbers against criticism that growth in the renewable sector would bring unemployment to the traditional sector, especially in the nuclear power generation industry. Taking into account job loss there, the net growth would still amount to 30,000 to 40,000 jobs, he said. "We have created a real market for the future," he said.

Renewable energy sources account for 11 percent of the German net electricity generation; the ministry expects that figure to more than double. The industry allows for additional sources of employment also in structurally weak economic regions, such as in eastern Germany, Gabriel said. Separately, Germany with the help of renewable energy sources in 2005 spared the world's atmosphere from more than 83 million tons of carbon dioxides, according to the environment ministry.

However, several renewable energy sources are not yet economical: They are funded with taxpayer money by a renewable energy law introduced in 2001. And electricity from renewables costs Germans $1.81 more per month than from fossil energy sources.

Friday, March 10, 2006

First biofuel index launched

Swiss investment bank UBS and Diapason Commodities Management have jointly launched the first biofuel index for trading in commodities used in the production of biologically-derived fuels.

The index is published in US dollars, euros, Swiss francs and Japanese yen. The index is composed of futures contracts on ten physical commodities related to the production of ethanol and biodiesel. The index is weighted to reflect the importance of different feedstocks as well as the liquidity of the underlying futures contracts.

Bioethanol is an alcohol-based fuel made from the fermentation of crops such as sugar beet or wheat. It can be mixed in petrol to reduce emissions. Biodiesel is produced from vegetable oil and can be used in diesel engines. Production of these two major forms of alternative fuel is increasing rapidly as more countries attempt to cut carbon emissions and find alternative forms of energy.

As of the launch, the index is weighted 83.01% toward ethanol and 16.99% toward biodiesel. UBS said in a statement: "This innovative index adds a new dimension to the liquid commodities indices and can serve as a suitable basis for a variety of structured financial products. Its launch means that investors will, for the very first time, have access to an efficient and liquid investment instrument that gives them exposure to the market performance of alternative fuels."

Wind turbines could power China says expert

Wind could become China's second-largest source of electricity according to a Chinese energy expert.

Wang Weicheng, an energy professor at Tsinghua University in Beijing, told reporters that China has the potential to install up to 100 gigawatts of wind power.

"By 2020, wind power capacity is predicted to reach 30 gigawatts," said Wang in a meeting at China's annual parliament. "Around the mid-21st century, wind power is very likely to take the place of hydropower as the second-largest source of electric power generation after coal."

He added that wind power could surpass nuclear stations as a source of energy within 20 to 30 years.

Wang's comments come as China has been aggressively expanding its interests in renewable energy sources including wind, solar, biofuels, tidal, and small hydroelectric dams.

In February 2005, the government passed a renewable energy law that both requires power operators to buy electricity from alternative energy providers and provides economic incentives to such producers. China is striving to reduce its dependence on traditional coal, which supplies 65-70% of the country's energy needs but is responsible for a number of its energy-related environmental problems. According to a recent report by the World Health Organization (WHO), seven of the world's ten most polluted cities are in China and almost two thirds of the country's largest cities fail to meet the organization's air quality standards. With its use of unwashed coal, China is the planet's largest emitter of sulfur dioxide and acid rain plagues about a quarter of the countryside. The World Bank estimates that pollution is costing the country 8-12% of its $1.4 trillion GDP in direct losses.

China has expressed a strong interest in cleaner coal-based technologies like coal liquefaction and gasification, but the government appears to put official hope in renewable energy, setting a target of 12% of its power generation capacity, or 20 gigawatts, coming from renewables by 2020—up from a mere 3% in 2003. The government's interest in reducing China's use of coal and petroleum products extends beyond environmental and health concerns; it sees both the strategic value of mitigating its reliance on foreign oil and the economic advantages of being on the technological leading edge of energy production.


Currently the world's largest wind energy producing countries are Germany (18,000 megawatts--18 gigawatts), Spain (8,000 MW), and the United States (7,000 MW) according to, but a recent study out of Oxford University argues that Britain may have best wind power potential in Europe. Meanwhile, the Australian wind energy industry has close to 6000 MW of projects in the pipeline says the Australian Wind Energy Association.

The passage of the Renewable Energy Promotion Law appears to be the first step in making this goal a reality. The legislation, which took effect earlier this year, gives funding and tax incentives to renewable energy projects. Environmentalists hope the sheer size of the Chinese market will spur further interest in the economic prospects of renewable energy well beyond the borders of China.

"China's anticipated entry into the global renewable energy market is expected to have a profound impact on the global industry," said Li Junfeng, Secretary General of the Chinese Renewable Energy Industry Association, in a release from environmental group, Greenpeace. 'We have spent a lot of time and energy learning from the successes and failures of our partners in Europe and around the world. We believe that this law can start a renewable energy revolution in China."

China is off to a quick start in its renewable energy push. The market for wind energy in China grew by 35% in 2004 and in 2005, the country added 500 megawatts of new wind power capacity. This year the country plans to start construction of an offshore wind power complex designed to have a generating capacity of 1 gigawatts when completed in 2020. The government is reportedly even more optimistic than Wang, stating that wind power potentially could generate 253 gigawatts in the future.

Beyond wind power, the Chinese government has sponsored research into the development of fuel cells, tidal power station technologies, and biofuels. The country, which already has the world's largest biofuels plant, is working with European agencies to see how plant matter and animal waste-based fuels might serve as alternatives to fossil fuels.