Towards 100% renewable energy: Utilities in transition

Cities heading towards 100% renewable energy by controlling their  consumption | Energy Cities

The adoption of the United Nations’ 2030 Agenda for Sustainable Development, and in particular Sustainable Development Goal 7 (SDG7) to ensure access to affordable, reliable, sustainable and modern energy for all, has led to a global consensus around the need to substantially increase the share of renewable energy in the global energy mix. Renewable energy is key to sustainable development and will play a crucial role in advancing progress on various Sustainable Development Goals as well as the global climate objectives set out in the 2015 Paris Agreement under the United Nations Framework Convention on Climate Change (UNFCCC; the Paris Agreement; IEA, IRENA, UNSD, WB, WHO, 2019).

Global status and trends
Building on its first global mapping of 100% renewable energy targets in 2018, the IRENA Coalition for Action, in a joint effort with several partners, has continued to identify and evaluate national and subnational targets. The updated overview of the global status on 100% renewable energy targets includes new targets announced in the past year as well as further details on the type of targets and their legal.

Mapping of 100% renewable energy targets – national level
In 2019, a total of 61 countries had set a 100% renewable energy target2 in at least one end-use sector, up from 60 countries in 2018. Geographically, these 61 countries are distributed as follows: Africa (19), Asia (15), Oceania (10), Central America and the Caribbean (8), Europe (7), and South America (2) (see Figure 1). Of the 61 countries, 14 countries have committed to reaching a 100% renewable energy target in at least one end-use sector by 2030 at the latest, two countries by 2040 and the others by 2050.

Figure 1. Geographical distribution of national 100% renewable energy targets

The mapping of targets shows a high commitment from countries in Africa, Asia and Oceania to achieve 100% renewable energy. Many of these targets were announced through the Marrakech Communique at COP22 (the 22nd Conference of the Parties to the UNFCCC) by countries that are most vulnerable to the effects of climate change, particularly least developed countries and small island states.

In 2019, the one country to revise its renewable energy ambitions to include a 100% renewable energy target was Portugal. The country announced a strategy for achieving 100% renewable electricity generation by 2050 in its Roadmap to Carbon Neutrality, adopted by the Portuguese government in July 2019. The transformation is expected to be achieved through large increases in solar photovoltaic (PV) deployment, building on the existing high shares of wind and hydropower, and coupled with improved energy efficiency to reduce overall electricity consumption.

Targets by sector
While some of the renewable energy targets have been clearly defined in terms of end-use sectors, other targets are broader in scope. In cases where the 100% renewable energy target has not been clearly defined, the category “RE – not specified” has been used in the mapping exercise. Of the countries included in the mapping, 42 fall into this category. In the case of targets that are wellspecified in terms of end-use sector, most are focused on 100% renewable electricity, with few countries having set targets for more than one sector. In fact, the mapping exercise identified 18 targets aiming for 100% renewable electricity. Two countries with a renewable electricity target (Austria and Denmark) have also adopted targets for 100% renewable energy in the transport sector, whereas two (Denmark and Lithuania) have set a target for 100% renewable energy in heating and cooling as well as electricity. Indonesia has thus far announced a 100% renewable energy target in the transport sector. Denmark remains the only country with a 100% renewable energy target that.

Figure 2. Overview of national 100% renewable energy targets, by end-use sector

Type of target/commitment
The degree to which a country’s political leaders and policy makers are held accountable for achieving 100% renewable energy targets depends on the context in which the commitment was made and established. The targets representing the highest level of commitment would usually be those established in national law and are thus legally binding. Other targets may be formally established in policy documents such as nationally adopted energy and climate plans, including the nationally determined contributions(NDCs) under the UNFCCC. Several targets have also taken the form of highlevel policy announcements by national governments or pledges under global initiatives (e.g., the Marrakech Communiqué) but have not been fully integrated into national plans or strategies to date. To provide a comprehensive overview, the mapping in this white paper includes all types of 100% renewable energy targets in its analysis. However, to develop an understanding of the level of commitment, a first attempt has been made in this white paper to distinguish between different target types (see Figure 3).

Figure 3. Overview of national 100% renewable energy targets, by type of commitment

As Figure 3 illustrates, many of the commitments to 100% renewable energy targets were established by Climate Vulnerable Forum (CVF) countries under the Marrakech Communiqué at COP22. The communiqué states, “We strive to meet 100% domestic renewable energy production as rapidly as ossible”. Of the 48 CVF countries, 6 (Costa Rica, Fiji, Papua New Guinea, Samoa, Tuvalu and Vanuatu) have taken additional steps to translate this pledge into their NDCs, most of which are conditional upon receiving appropriate international support and funding. Two non-CVF countries (Guyana and Indonesia) have also included 100% renewable energy targets into their NDCs. Of the remaining 11 countries with 100% renewable energy targets, 10 (Austria, Cabo Verde, Denmark, Djibouti, Iceland, Lithuania, Portugal, Solomon Islands, Spain and Sweden) have defined how they intend to achieve their targets in national energy plans or strategies.

The role of utilities in the energy transformation
Moving from ambitious renewable energy targets to accelerated implementation will require
proactive regulation, new market rules and collaboration between existing as well as new players in the energy market. This is key to making sure that the energy system is fit for renewable energy goals and transitional barriers are removed. In delivering energy to households, businesses and industries, energy utilities have played a crucial role in creating and shaping the current energy system. The ability of utilities to adjust to new demands will partly determine how fast the transformation can happen as well as what their role will be in a future energy system built on very high shares of renewable energy.

Overview of utilities in transition to 100% renewable energy
To further illustrate and understand the role that utilities can play in the transformation to 100% renewable energy, this white paper analyses a selected number of companies operating or having previously operated as “utilities” that are moving towards supplying 100% renewable electricity to their customers, either on their own initiative or because of government policies occurring in the jurisdictions they serve. The case studies cover different geographies, technologies, ownership structures and levels of operation including national, regional and local operations. The case studies were selected by members of the Coalition for Action based on first-hand experience from or familiarity with these utilities and build primarily on first-hand data obtained through interviews with senior representatives of the respective utilities. Table 1 below provides an overview of selected case studies, while detailed case studies are provided.

Table 1. Overview of utility case studies further

National-level utilities

Ørsted is the largest energy company in Denmark, accounting for 50% of electricity generation and 35% of heat generation. Engaged in the generation and distribution of electricity and heat to customers across the entire country, Ørsted develops, constructs and operates onshore and offshore wind farms, bioenergy plants and, to a smaller extent, waste-to-energy plants. In addition to its operations in Denmark, Ørsted is also active as a developer and operator of offshore wind in other parts of the world, with 5.6 gigawatts(GW) in operation in 2019. The Danish government holds a majority stake in Ørsted, owning 50.1% of the company’s shares (Ørsted, 2019a).

In 2018, 75% of Ørsted’s total power and heat generation was achieved through renewable energy sources(41% wind and 34% biomass), an 11 percentage pointsincrease from 2017. The remaining 25% consisted of fossil fuel generation (17% coal and 8% natural gas), as shown in Figure 7.

Figure 7. Ørsted total heat and power generation, 2018

Ørsted has committed to achieving at least 99% renewable energy by 2025 and to fully phasing out coal from its generation mix by 2023 – well before the national target of 100% renewable energy by 2050 (Ørsted, 2017). The target is set to be achieved through substantial increases in offshore and onshore wind deployment, as well as through the conversion of coal- and gas-fired power stations to sustainably sourced biomass.

Regional/state-level utilities
SA Power Networks – South Australia

Since the privatisation of the electricity sector in 1999 there has been no vertically integrated electrical utility in South Australia. Currently there are many electricity generating companies and retailers but only one distributor (SA Power Networks) and one transmission line company (Electranet). SA Power Networks is a privately held monopoly regulated by the Australian Energy Regulator. Its primary role is to maintain and operate the state’s distribution network, which serves around 860 000 homes and businesses and 1.7 million people (SA Power Networks, 2019a).

Figure 8. The changing role of SA Power Networks

South Australia is at the forefront of the Australian energy transformation, with a target of reaching 100% renewable energy in all end uses by 2050 (AEMO, 2018). For the power sector, with currently committed projects in the pipeline, South Australia is expected to reach 73% VRE in electricity generation by 2021 and effectively 100% by 2025/2026. By the end of 2018, about 53% of South Australia’s electricity came from renewables – 35.2% from wind (1 809 megawatts [MW]) and the rest predominantly from rooftop solar (930 MW), with another 135 MW from large-scale solar farms (AEMO, 2018). Natural gas supplied the bulk of the remaining generation with increasingly diminishing supply provided through interconnection with the eastern states. Some emergency local diesel supply also exists. A 500-MW brown coal power station in the state’s north closed in 2016. Prior to that, the majority of South Australia’s electricity generation was from natural gas and brown coal (AEMO, 2018).

Hawaiian Electric Companies – United States

The Hawaiian Electric Companies – Hawaiian Electric (HECO), Maui Electric (MECO) and Hawaii Electric Light (HELCO) – provide electricity services for the majority of the islands that make up the US state of Hawaii (Figure 9). The companies are all investor-owned utilities and together serve 95% of the state’s 1.4 million residents on the islands of Hawaii, Lanai, Maui, Molokai and Oahu (HSEO, 2018). The renewable share of electricity generation reached 26.6% for the three utilities in 2018, up from 23% in 2015.

Figure 9. Overview of electricity providers in Hawaii

Launched in 2008, the Hawaii Clean Energy Initiative (HCEI) was established in Hawaii as a partnership between the State of Hawaii and the US Department of Energy. This initiative’s initial goal was for the state to produce 70% of its electricity from clean and renewable energy by 2030. An RPS of 15% electricity sales by the end of 2015 was also established. The HCEI has since been strengthened and in 2015 the Hawaii State Legislature reinforced the state’s commitment to clean energy by increasing the RPS requirement to 100% renewable electricity by 2045, with interim targets of 30% by 2020, 40% by 2030 and 70% by 2040.

Going from 9.5% renewable electricity generation in 2009 to over 25% in the past decade has required extensive efforts from the utilities, and significant work remains to reach 100% (Figure10).

Figure 10. Hawaiian Electric Companies’ progress towards achieving the 2020 RPS target

The Hawaiian Electric Companies have incorporated renewables in the forms of residential and
commercial rooftop solar, utility-scale solar, battery storage, wind, hydro and geothermal. The
companies’ combined annual oil use for power generation has declined by 88 million gallons
(330 million litres), or about 19%, since 2008, and total carbon emissions have been reduced by about 925 000 metric tonnes between 2010 and 2018 (Hawaiian Electric, 2019b). Recently, contracts have been signed for eight new solar-plus-storage projects for over 275 MW of solar and more than 1 GW of battery storage, all at prices well below the cost of fossil fuel generation (HSEO, 2018). In 2019, the companies issued a second request for proposals seeking about 900 MW of additional renewable electricity capacity.

In 2012, in the aftermath of the Fukushima disaster and Germany’s decision to completely phase out nuclear energy, Stadtwerk Haßfurt set itself the overarching target of achieving 100% locally produced renewable energies by 2030. The immediate response from Stadtwerk Haßfurt was influenced by the town of Haßfurt’s proximity to the Grafenrheinfeld nuclear plant, which was shut down in 2015.

Figure 11. Renewable energy projects implemented (red) and underway (blue), Stadtwerk Haßfurt

The 2030 target is currently planned to be realised across the following sectors: energy generation and distribution, heating and cooling, and industry and sector coupling.

In 2004, the City of Aspen adopted an ambitious goal to supply 100% of the city’s electricity needs from renewable energy resources by 2015. A total of 75% had been achieved by 2014, and by August 2015 the city’s electricity supply from renewables through Aspen Electric was 100% (NREL, 2015). Early in the project, it became clear that some critical definitions and assumptions about the 100% renewable goal needed to be clarified before options could be identified. Although the city had clearly stated a goal of 100% renewable energy, the specific technologies and project types that would be considered eligible as “renewable” energy had not been defined. Clarification was needed about other details that impacted the options available to the city, such as whether the purchase of renewable energy certificates needed to be bundled with an energy purchase. Renewables were determined to include solar, wind, and both small and large hydro. Biomass, landfill gas, sewage gas and directed biogas would be considered on an individual project basis dependent on the conditions of each unique
project. Wind and landfill gas became the primary technologies to complete the 100% renewable energy goal (NREL, 2015). Aspen Electric and the City of Aspen partnered with NREL in developing a pathway towards achieving a 100% renewable electricity supply through a combination of their own hydroelectric facilities and PPAs with wind and landfill gas suppliers. The results of this transformation are shown in Figure 12.

Figure 12. Aspen’s electricity supply transformation, 2014-2015

The city ran into several barriers that related to the different levels of renewables included in
the supply. For example, one barrier came up at around 35% wind energy, which resulted in
an energy imbalance. Thus, to further increase wind energy penetration, the city would have
to buy more wind energy than it actually needed. Around 2014 this barrier was overcome when MEAN agreed to allow Aspen a different method to buy additional wind that eliminated the surplus under most conditions.

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