cooke 09 fang renewables review

7/28/2019 Cooke 09 Fang Renewables Review

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equity investors; public markets; the investments in research and development bygovernments and corporations, asset backed finance and some small scale projectinvestments by local investors. Some well-known big companies like BP, GeneralElectric (GE) and Goldman-Sachs make large investments in renewable energy,leading to the coming age of renewable energy (REN21, 2008). With the advanced

development of renewable technologies, the industry of renewable energy is predictedto continue growing in the future.

Figure 2. Global investment in renewable energy during 2004-2007.(Source: UNEP, 2008).

This report aims to review the overall level and location in development of renewableenergy technologies by 2008. In the second section, different policies or approaches to

promote renewable energy are discussed at the national or regional level. Then goodpractices for regional economic development are presented and how the greeninnovation system is established. This occurs through technology research anddevelopment, networking, market promotion, financing, policy advice and othertechnical assistant to support the growth of renewable energy industry.

2. Renewable energy technologies

Among all renewable technologies, 43% of global investments were invested in windpower technology, followed by solar power (24%), biofuel (17%) and biomass (9%)technologies in 2007 (Figure 3). Global renewable energy capacity grew at annualrates of 15%-30% for many technologies during 2002-2006 (Figure 4) (REN21,2008). Among these technologies, grid-connected solar photovoltaic (PV) is thefastest growing energy with a 60% annual growth rate. Off-grid solar PV and solar hotwater/heating are other technology applications of solar sources with a growth rate

between 15% and 20%. Wind power with an annual growth rate of 25% is consideredas an economically viable renewable source. Biofuel as a potential renewable energyfor transport also grew rapidly with a 40% growth rate for biodiesel and 15% for

bioethanol. The development of renewable energy technologies varied among thecountries around the world, depending on the history and new policy focus.


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Renewable energy replaces conventional fuels in three distinct sectors: powergeneration, heating and transport fuels.

Figure 3 Global investments by technology in 2007. (Source: UNEP, 2008)

Figure 4 Annual growth rates of renewable energy capacity during 2002-2006.

(Source: REN21, 2008).


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2.1 Wind power

Wind power is the conversion of wind energy into a useful form, such as electricitygeneration using wind turbines. By the end of 2008, worldwide capacity of wind-

powered generators was over 120 gigawatts and is predicted to be around 190

gigawatts by 2010. Although only about 1.5% of world-wide electricity use isproduced by wind power, it produces approximately 19% of electricity use inDenmark, 9% in Spain and Portugal, 6% in Germany and the Republic of Ireland(WWEA, 2009). Globally, wind power generation increased more than tenfold

between 1998 and 2008 (Figure 5). Over the last decade, wind power has madeimpressive progress and has been growing globally at an annual rate of 25%- 30%(Figure 6 & 7). Wind power has become one of the broadest-based renewabletechnologies with 27 GW added in 2008 (Figure 6) (REN21, 2008). The increase ofglobal wind power capacity in 2008 was concentrated in the top five countries: the US(2.6 GW), Germany (2.4GW), Spain (1.9GW) China (1.2GW) and India (0.9GW).Many other countries have been also very active, such as the UK and Italy.

Figure 5 Global wind energy capacity and prediction 1997-2010.(Source: World Wind Energy Association, WWEA)

The top wind companies globally are Vestas (Denmark), Gamesa (Spain), GE (USA),Enercon and Siemens (Germany), and Suzlon (India). Europe dominates the market

both as consumers and producers of wind energy. This positive development is aboveall the outcome of highly dynamic policies in Denmark, Spain and Germany (Figure7). Germany is the world's largest user of wind power with an installed capacity of 20GW in 2006 and leading nation in terms of wind power technology. Over 64, 000

people are employed in this industry (WWEA, 2009). Denmark is another leadingwind power nation in the world and today supplies almost half of the wind turbinessold around the world. The development of wind power in Denmark has beencharacterised by public-private financing collaboration in research and development

in key areas. They also exported wind energy systems to the global market, includingto the emerging market in China.


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Figure 6 Wind power capacities of the top 10 countries added in 2007 & 2008.(Source: WWEA, 2009).

Figure 7. Wind power installed in the EU by 2007. (Source:http://en.wikipedia.org)
http://en.wikipedia.org/http://en.wikipedia.org/http://en.wikipedia.org/http://en.wikipedia.org/


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Spain aimed to develop wind power technology as one of the technologies of thefuture. They established a stable regulatory framework, utilized the resource andimproved technology to develop this industry. Iberdrola, the leading Spanish energycompany, is the worlds largest wind power producer. Its capacity outside Spain grewsevenfold in 2007. It entered the US wind market in 2005 and is now one of the

largest and most active overseas players in the US. Iberdrola Renewables was spunoff from the parent company, Iberdrola, in 2007. This raised the largest-ever cleanenergy IPO in Europe with a total of 4.07 billion public offering. With NorthAmerican headquarters in Radnor, Penn., Iberdrola Renewables has obtained about22,000 MW of US wind power, which is more than half its planned wind capacityworldwide. It pulled in about 950 million in revenue and turned a 117 million

profit in 2007 (Makower et. al., 2008).

The UK has the best and most geographically diverse wind resources in Europe,Windpower in the UK reached the capacity of 2GW in 2007, ranked as 7th in the world.Currently, approximately 1.5% of UK electricity is generated by wind power. It is

targeted as one of the main technologies by the UK government to meet the target that20% of final energy is generated from renewable energy by 2020. Wind power isexpected to rise dramatically in coming years in the UK with lots of new projects,including offshore wind power, are undergoing in onshore and offshore wind farmsaround the UK (Figure 8).

Figure 8 Wind energy farm projects in the UK. (Source: BWEA).


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The lists of wind farms which have been installed, under contract and proposedaround the EU are shown in Table 1 & 2. More expensive and much larger windfarms with over 100MW capacities are planned to be built offshore in the UK by2020. These mega-projects in the UK include Atlantic Array, London Array andTriton Knoll offshore wind farms. Meanwhile, Sweden planned to build one of

Europe's largest interconnected onshore wind farm projects with a capacity ofbetween 3 and 3.5 gigawatts (GW). This project is expected to be completed by 2020,the wind farm is planned to cover an area of 450 square-kilometers in Tavelsjo, in themunicipality of Pitea in north Sweden.

Table 1. List of wind farms installed or under construction with over 100 MWcapacities in the EU. (Source: IEA)

Farm Capacity (MW) Country

Alto Minho Wind Farm 240 Portugal

Arada-Montemuro Wind Farm 112 PortugalBlack Law Wind Farm 124 UK

CEZ Fntnele Wind Farm 600 Romania

Crystal Rig Wind Farm 180 UK

EDP Dobrogea Wind Farm 266 Romania

El Marquesado Wind Farm 198 Spain

Gardunha Wind Farm 106 Portugal

Higueruela Wind Farm 161 Spain

Horns Rev Wind Farm (offshore) 160 Denmark

Lillgrund Wind Farm (offshore) 110 Sweden

Lynn/ Inner Dowsing Wind Farm 194 UK

Maranchon Wind Farm 208 Spain

Nysted Wind Farm (offshore) 166 Denmark

Pinhal Interior Wind Farm 144 Portugal

Princess Amalia Wind Farm (offshore) 120 The Netherlands

Robin Rigg Wind Farm (offshore) 180 UKSisante Wind Farm 198 Spain

Smla Wind Farm 150 Norway

Thanet Offshore Wind Project 300 UK

Tomis Team Dobrogea Wind Farm 600 Romania

Thorntonbank Wind Farm 300 Belgium

Whitelee Wind Farm 322 UK

Windpark Egmond aan Zee (offshore) 108 The Netherlands
http://usersn/w/index.php%3ftitle=Crystal_Rig_Wind_Farm&action=edit&redlink=1http://usersn/wiki/El_Marquesado_Wind_Farmhttp://usersn/wiki/Higueruelahttp://usersn/wiki/Higueruelahttp://usersn/wiki/El_Marquesado_Wind_Farmhttp://usersn/w/index.php%3ftitle=Crystal_Rig_Wind_Farm&action=edit&redlink=1


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Table 2 List of the proposed wind farms in the EU. (Source: IEA)

Farm Capacity (MW) Country

Atlantic Array (offshore) 1,500 UK

Belwind 330 Belgium

Borkum-West II wind farm (offshore) 400 Germany

Clyde Wind Farm 548 UK

Dobrich Wind Farm 200 Bulgaria

Docking Shoal Wind Farm (offshore) 500 UK

Enel Agichiol Wind Farm 210 Romania

Eolica Baia Wind Farm 126 Romania

Eolica Beidaud Wind Farm 128 Romania

Eolica Casimcea Wind Farm 244 Romania

Eolica Cogealac Wind Farm 448 Romania

Eolica Scele Wind Farm 252 Romania

Greater Gabbard (offshore) 504 UK

Griffin Wind Farm 204 UK

Gwynt y Mr (offshore) 750 UK

Kavarna Wind Farm 250 Bulgaria

Lincoln Gap Wind Farm 124 Australia

Lincs Wind Farm (offshore) 250 UK

London Array (offshore) 1,000 UK

Mrielu Wind Farm 300 Romania

Markbygden Wind Farm 3,000-3,500 Sweden

Ormonde Wind Farm (offshore) 108 UK

Plambeck Bulgarian Wind Farm 250 Bulgaria

Race Bank Wind Farm (offshore) 500 UKScarweather Sands Wind Farm (offshore) 108 UK

Shell Flat (offshore) 180 UK

Sheringham Shoal Offshore Wind Farm (offshore) 315 UK

Sinus Holding Wind Farm 700 Romania

Triton Knoll Wind Farm (offshore) 1,200 UK

Walney Wind Farm (offshore) 450 UK

West Duddon Wind Farm (offshore) 500 UK
http://usersn/w/index.php%3ftitle=Belwind&action=edit&redlink=1http://usersn/w/index.php%3ftitle=Docking_Shoal_Wind_Farm&action=edit&redlink=1http://usersn/wiki/Enel_Agichiol_Wind_Farmhttp://usersn/wiki/Eolica_Baia_Wind_Farmhttp://usersn/wiki/Eolica_Beidaud_Wind_Farmhttp://usersn/wiki/Eolica_Casimcea_Wind_Farmhttp://usersn/wiki/Eolica_Casimcea_Wind_Farmhttp://usersn/wiki/Eolica_Beidaud_Wind_Farmhttp://usersn/wiki/Eolica_Baia_Wind_Farmhttp://usersn/wiki/Enel_Agichiol_Wind_Farmhttp://usersn/w/index.php%3ftitle=Docking_Shoal_Wind_Farm&action=edit&redlink=1http://usersn/w/index.php%3ftitle=Belwind&action=edit&redlink=1


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In recent years, the US has added more wind energy to its grid, reaching 16.8 GW in2007. The U.S. has a significant wind turbine industry, such as GE Energy which

provided over 2.3 GW of new wind capacity in North America. Clipper is anotherprominent US provider. By mid 2008, U.S. has become the first leading country inwind power capacity, surpassing Spain (WWEA, 2009). Global electricity by

renewable wind power in 2005 is shown in Figure 9. India is among the top group ofcountries in wind power in the world. It produced 3% of all electricity in India. Withthe increase in size of new wind power projects, major wind turbine suppliersincreased production capacity in the past few years, while local suppliers are focusingon key components like gearboxes, blades and towers etc. Generally, the industrycontinues to experience supply-chain difficulties due to increasingly fast growingdemand. Thus it results in higher turbine price and an increase in turbine lead-times.

In China, wind power has been growing faster than the government had planned inrecent years, having more than doubled each year since 2005. In late 2005, theChinese government increased the official wind energy target for the year 2020 from

20 GW to 30 GW (Lema et al., 2007). The industry reached the original goal of 5 GWfor 2010, three years ahead of schedule. Policymakers doubled their wind power

prediction for 2010. China announced to build a 1000-megawatt wind farm in Hebeiin China, for completion in 2020. Goldwind has emerged as the leading Chinese windturbine manufacturer and has begun to export Chinese turbines and componentsglobally. It currently holds about 3 percent of market share in global wind turbinesales and captured some 30 percent of sales within China in 2006. By 2007, over 40Chinese firms were aspired to manufacture wind turbines commercially; many ofthem were encaged in prototype development and testing (REN21, 2008). It was

predicted that China would become the world wind power leader by 2010 (Watts,2008).

Figure 9 Global wind productions as renewable energy in 2005.(Source: OECD/IEA, 2007).


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2 Solar power

Solar energy technologies use the suns energy to supply electricity, heat hot water,and even cool air for home building and industry. Sunlight can be converted intoelectricity using photovoltaics (PV), concentrating solar power (CSP), and various

experimental technologies, like thin-film polymers in liquid form such as paint. PVhas mainly been used to power small and medium-sized applications via photovoltaicarrays.

2.2.1 Concentrating solar power (CSP)

For large-scale generation, CSP plants like the Solar Energy Generation System(SEGS) form the operational plants to accomplish the task. The SEGS facilities,located in Californias Mojave Desert, are the largest CSP plants in the world with354 MW capacities. FPL Energy Company used state-of-the-art technology to collectsolar power and convert it into electricity. The facilities cover more than 1,500 acres

of the desert and have a more than 900,000 mirrors. These solar plants could power232,500 homes and reduce 3,800 tons of pollutants per year that would have been

produced if the electricity had been provided by fossil fuels. Unfortunately, the powerplant was forced to close in 1999 due to an explosion at a storage tank (FPL Energy,2008). The global focus of concentrated solar powers is shown in Figure 10. Over5,800 MW of solar CSP projects were in planning stages worldwide by 2007 andexpected to come online by 2012 (Emerging Energy Research). CSP developers areforming different strategies to facilitate their growth. For example, Solar MillenniumCompany employs the models of developing and selling technology. Companies suchas Solel and Abengoa apply vertical integration from technology to ownership.Meanwhile, some major companies like FPL and Acciona have build up theirownerships of the portfolios of major renewable independent power producers (IPP)and utilities.

Figure 10 Global focus of concentrated solar power industry in 2007.(Source: Emerging Energy Research).


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2.2.2 Photovoltaic (PV)

Photovoltaic installations grew rapidly between 1970 and1983, but falling oil prices inthe early 1980s slowed the growth of PV from 1984 to 2000. Until recently, PVdevelopment has been accelerated due to supply issues with oil and natural gas, global

warming concerns and improving economic position of PV relative to other energytechnologies. Multi-megawatt PV plants are becoming common. Photovoltaic

production growth has averaged 40% per year since 2000 and installed capacityreached up to 10 GW at the end of 2007 (Figure11) (PVresources, 2008). Solar PVcontinues to be the fastest-growing power generation technology in the world, and is

predicted to be the main renewable energy in the future by the German AdvisoryCouncil on Global Change (Figure 12).

Figure 11. Large-scale photovoltaic power plants installation during 1995-2007.(Source: pvresources.com)

Figure 12. Projected share by source of annual global energy production in exajoules

per year. (Source: German Advisory Council on Global Change)


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In terms of photovoltatic power capacity, Germany is a leader within Europe, asshown in Figure 14. In 2006, Germany had an installed capacity with over 3000 MW

photovoltaic in total, occupying almost 90% of total European capacity. The addedPV capacity in Year 2006 along was 1153 MW in Germany. Spain ranked as thesecond in Europe with total of 118 MW PV capacities, over half added in 2006 (EC,

2007a). Among the PV manufacturing companies, Q-Cells AG is a leading exampleof Germanys preeminence in the PV market. It is based in the Solar Valley town ofThalhein, 30 kilometers away from Halle, Saxony-Anhalt. It has seen explosivegrowth since it was established in 1999. In 2007, with sales of 860 million and

production volume of 390 MW, it surpassed previous world-leader Sharp Solar ofJapan and became the worlds largest solarcell producer (EC, 2007a).

Figure14. PV capacity in Europe in 2006. (Source: European Commission, 2007a)


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The growth of solar PV installation with large-scale, up to hundreds of kilowatts andmegawatts has been accelerated during recent years. Up to the end of 2007, 80% of alllarge-scale PV plants were installed in Europe. There is about 14% in the US andabout 4% in Asia (Pvresources, 2008). Germany has become the leading PV marketworldwide since revising its feed-in tariff system as part of the Renewable Energy

Sources Act. With almost one half of all PV power installations in Germany, PVcapacity has risen from 100 MW in 2000 to approximately 4,150 MW at the end of2007, occupying 47% of global market (Figure 14).

Figure 14 Global market leaders of large-scale photovoltaic power plants.(Source: pvresrouces.com)

A new research center, the Fraunhofer Centre for Silicon Photovoltaics wasestablished in the heart of Germanys Solar Valley- at Halle. It enables morecooperation between research and industry. The Freiburg Institute for Solar EnergySystems, one of the top solar research centres in the world, is based in thesouthwestern Germany city of Freiburg, Baden-Wrttemberg. Its specialties are

silicon PVs and new generation technology. However, 80% of Germanys solar cellproduction occurs in the former East German States of Saxony, Saxony-Anhalt andThuringia. The new Centre for Silicon Photovoltaic will inherit much of its siliconexpertise and bridge closer and stronger cooperation between photovoltaic researchand manufacturing.

Fast growth in Spain has taken place over the last few years with extreme growth in2007 and 2008. After adopting a similar feed-in tariff structure in 2004, Spain has

become the second largest PV market with the highest number of large powerstations in the world Several large photovoltaic power plants were completed inSpain in 2008 (Table 3). Emerging strong growth in other European countries, such

as Italy and Greece is also visible. Italy looked set to install 20 MW in 2007 andFrance was revising their fee-in policy in order to accelerate the growth of this


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technology. The US has about 15% of the global market. California remains the clearleader, capturing 70% of the US market in 2006. Nellis Air Force Base plant in

Nevada with 14MW capacity is the biggest solar PV plant in the US. S. Korea hasrecently completed a larger scale PV power installation with 23 MV capacities,showing the promise of this future market. More larger-scale PV plants are under

construction or planned worldwide (Table 4).

Table 3. List of the largest PV power stations in the world. (Source: pvresources.com)

Power Plant Country Company Completion date60 MW Parque Fotovoltaico

Olmedilla de AlarconSpain Nobesol September 2008

46 MW Moura photovoltaicpower plant

Portugal ACCIONA EnergiaDecember 2008

35 MW Solarpark"Waldpolenz"

Germany T-Solar October 2008

34 MW Planta Solar Arnedo Spain30 MW Planta Solar Osa de la

VegaSpain Gestamp Asetym

Solar2008

30 MW Planta Solar LaMagascona & LaMagasquila

Spain Elecnor 2008

30 MW Parque Solar "SPEX"Merida/Don Alvaro

Spain Deutsche Bank AGecoEnergas delGuadianaSolarparc AGSolarWorld AG

September 2008

26 MW Planta solar Fuentelamo

Spain August 2008

24 MW SinAn power plant Korea Conergy Ltd. October 200823 MW Planta photovoltaic Spain New Energy Invest

GmbHAugust 2008

In Israel, local entrepreneurs are planning to turn Israels southern Arava Valley withhigh intensity of sunlight into Israels first hub for solar power. Arava PowerInc.,whose majority shareholders, taken collectively are the 135 members of the Valleys

Kibbutz Ketura, is planning to develop in the distributed grid-connected solar energyfield. The scale is up to 500 MW and cost as much as US$2.5 billion to build and putinto operation (Burger, 2008). The region is at the border of the Negev desert plateauin Israels far south and is a relatively sparsely populated region. It has alreadyevolved as an agricultural centre with major underground aquifers, desalination, andinnovative water resource management. Now the company has taken a leading role inIsraels emergent renewable energy and distributed power movement. It is lobbyinggovernment at all levels for solar and other renewable power to play a greater role inIsraels energy and national security. The region is home to 53 Kibbuz communities.Kibbuz residents tend to be well-educated and ecologically conscious. Localcommunity stakeholders are working together to advocate to government increases inIsraels feed-in-tariff rate to stimulate solar power development. It is evidence of a

fruitful mix of environmentalism, entrepreneurship and politics in green innovation.


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Table 4. List of large systems of PV power stations in planning or under construction.(Source: pvresources.com) (* Under construction; ** Proposed)

Name CountryPower

(MW)Description

Topaz Solar Farm USA 550 Thin Film Silicon from OptiSolar **

High Plains Ranch USA 250Monocrystaline Silicon fromSunPower with tracking **

Solar power station inVictoria

Australia 154Heliostat concentrator using GaAscells from Spectrolab**

KCRD Solar Farm USA 80 Scheduled to be completed in 2012 **Moura photovoltaic

power stationPortugal 62 376,000 solar modules*

Waldpolenz Solar Park Germany 40550,000 First Solar thin-film CdTemodules*

DeSoto County Florida USA 25 To be constructed by SunPower forFPL Energy, completion date 2009.*

Davidson County solarfarm

USA 21.5 36 individual structures**

Cdiz solar power plant Spain 20.1 *Kennedy Space Center,Florida

USA 10To be constructed by SunPower forFPL Energy, completion date 2010.**

Solar installations in recent years have also largely begun to expand into residentialareas. Build-integrated PV has attracted attention recently. For example, Googleinstalled a 1.6 MW array at it head office in California. Over 9,000 Sharp photovoltaicmodules now cover the rooftops of the Googleplex to generate 30 percent of Google's

peak demand power, or enough to light about 1,000 California homes. Google expectsto save more than $393,000 annually in energy costsor close to $15 million over the30-year lifespan of its solar system. It is estimated the system will pay for itself inapproximately 7.5 years (Baker, 2006). A 9 kW 'building-integrated photovoltaics'

panel was installed on the roof of a grounds maintenance building at the White Housefor the National Parks Service. It demonstrated the promotion of renewable energy inan application in government or public building.

The photovoltaic industry is a growing and profitable sector in the economy and

continues playing an important role in the global pursuit of clean and renewableenergy technology solution. Its potential is enormous and it is a highly popular sourceof power, but remains costly compared to other forms of electricity production. Table5 shows the average estimated capital costs per 1,000MW to build a range of power

plants. Solar costs significantly more than conventional, fossil fuel-based powergeneration, while geothermal and wind are able to provide similar cost effective

power as coal plant. In order to compete with conventional sources, solar technologiesneed to reduce costs and increase energy efficiency from the sun (Makower et. al.,2008). Although there are some government subsidies and supports, the price of solarenergy has remained high mainly due to increasing price of silicon.


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Table 5. Typical construction cost per 1000 MW ($ billions) of different resources.(Source: Clean Edge, Inc., 2008).

Resource Coal Plant Geothermal Wind Nuclear SolarCost ($billions) 0.75-1.4 1.6 1.4-1.8 2-6 5-10

Table 6. Top 10 solar power clean technology companies in Europe.(Source: Library house,http://www.libraryhouse.net/.)Company Business Product status Based Funded Employees

G24iAdvanced solarcells that mimic

photosynthesisDevelopment UK, Cardiff 2006 60

ConcentrixSolar

Concentratorsfor photovoltaiccells

DevelopmentGermany,Freiburg

2005 Undisclosed

Wrth Solar

GmbH &Co KG

Copper-indium-

diselenide solarcells

Shipping Germany,Marbach 1999 183

SolarionFlexible thinfilm solartechnology

ShippingGermany,Leipzig

2000 20

QuantaSolNano-scalesolar celltechnology

DevelopmentUK,London

2006 5

HeliatekOrganic solarcells

DevelopmentGermany,Dresden

2006 13

WhitfieldSolar

Solarconcentrationsystems

Development UK,Reading 2004 5

4d-TechnologieGmbH

Solar-thermalcollector system

ShippingGermany,Leipzig

2005 Undisclosed

NorsunThin crystallinesilicone wafers

DevelopmentNorway,Oslo

2005 Undisclosed

CSG SolarThin-film solartechnology

ShippingGermany,Thalheim

2004 55

Solitem

Trough-shaped

solar collectorsfor heating andcooling

Shipping Germany,Aachen 1999 50

Thin-films solar cells consist of plastic or other substrates as a silicon-coated material.These technologies are being developed as a means of substantially reducing the costof photovoltaic systems. But they face major technical hurdles in terms of theirefficiencies in natural environments. Thin-film gained acceptance as a mainstreamtechnology during 2006/2007. It only requires one-hundredth as much silicon asconventional cells. Many private investments are tackling this area. Table 6 lists the

top 10 solar power clean technology companies in Europe, based on data selectedfrom the company data in Library House, UK. The selected group of private cleantech
http://www.libraryhouse.net/http://www.libraryhouse.net/http://www.libraryhouse.net/http://www.libraryhouse.net/


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companies represents the strongest prospects for the future. Beyond the US andEurope, there are a few manufacturers in China and Japan expanding the thin-film

production. For example, Sharp of Japan announced its plan to complete a new 1 GWthin-film production plant by 2010 (REN21, 2008). A sharp increase in this field has

been shown recently.

G24 Innovations, based in Cardiff, U.K since 2007, specialises in portable solartechnology on jackets and lightweight panels for applications such as mobile phonechargers and laptop computers. It is pioneering dye-sensitised solar cells that can beused in these devices. The company is currently researching the options for onsite

power generation as it strives to be the first manufacturing facility in the world tomake renewable products solely through the use of renewable energy. G24is dyesensitised thin film manufactures a uniquely thin, extremely flexible and versatilenano-enabled photovoltaic (solar) material that converts light energy into electricalenergy, even under low-light, indoor conditions. The technology has created a newrange of possibilities for solar energy to replace expensive and environmentally

unfriendly batteries. The company recently appointed John Hartnett as CEO fromCalifornian portable cell technology firm, Palm Inc. This brings a deep understandingof global markets and a wealth of Silicon Valley experience. For future perspective,G24i was described as the future of the region economy by Welsh Assembly minister.

2.3 Bioenergy

Biomass is organic material, either raw or processed, with intrinsic chemical energycontent. Biomass can further be divided into more specific terminology, with differentterms for different end uses: heating/cooling, power (electricity) generation ortransportation. The term 'bioenergy' is commonly used for biomass energy systemsthat produce heating or cooling and/or electricity and 'biofuels' for liquid fuels fortransportation. Given that the sector could make a major contribution to the securityof supplies, biomass has become a major factor in energy, environmental andagricultural policies. Bioenergy still requires continuing public support due to highercosts and other market barriers. Although much progress has been made, this has not

been enough given the potential of biomass and the available technologies. Futurecost competitiveness relates to uncertain future fossil fuel prices and environment-related policies.

Biomass resources are composed of a wide variety of forestry and agricultural

resources, industrial processing residues, and municipal solid and urban woodresidues. Biomass includes any biological material, derived from plant or animalmatter, which can be used for producing heat and/or power, fuels including transportfuels, or as a substitute for fossil fuel-based material and products (DEFRA, 2007).For example, it includes material from forest (round wood), dedicated crop-derived

biomass (willow and poplar), agricultural residues (straw and animal manures) andwastes from food and industry. The typical biomass resources and key elements areidentified in biomass supply chain, as shown in Figure 15. Varied processes are usedto convert biomass into fuel or other renewable raw material, depending on the type of

biomass involved and the nature of the end use. There is scope to convert the energypotential of biomass more efficiently through more sophisticated processes. Biomass

energy can also be converted from wastes such as food and wood together. Greateruse of recycling waste resources will reduce dependence on landfill and associated


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greenhouse gas emissions. Development of biomass use with environment treatmentwill be an important element in the move towards a bioeconomy.

Figure 15. Biomass supply chain (Source: DEFRA, 2007)

According to the report by the Biomass Task Force in UK (DEFRA, 2005), 1 millionhectares for bioenergy crops could provide 8 million tonnes of energy crops in thefuture. About 350,000 hectares of dedicated energy crops are planned to be plantedacross the UK according to the UKs Department of Environment, Food and RuralAffairs (2007). Fast-growing grasses such as miscanthus (called elephant grass) andcoppiced trees-willow and poplar are identified as bioenergy crops. These crops are

perennial and may achieve phenomenal yields in ideal conditions, but they are not atcommercial-scale operation yet (Taylor, 2008). More research and development is

being invested across the world on the technologies to convert biomass into bioenergyand improve the efficiency of the processes involved. Brazil is the world leader in

producing ethanol from sugarcane, while corn is the main crop for ethanol productionin the US. The US and Brazil are the leaders of biofuel production in the world, withover 8,900 Mtoe of biofuel production in 2005 (Figure 16). The global market for

biodiesel, derived from oil crops or animal fat, is expected to increase in the next tenyears. Europe currently represents 80% of global consumption and production,Germany is the leading country in diesel development. The US is now catching upwith a faster rate in production than Europe and Brazil is expected to surpass US andEuropean biodiesel production by 2015 (Emerging Markets Online, 2008). There isalso strong interest in other countries, for example, France, Italy and the developingcountries such as China and India. Future prospects and perspectives on biofuelswere reviewed in previous report (Zhang & Cooke, 2008). Here we only focus on

biomass energy for heating and electricity in this report.


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Figure 16. Global biofuel production in 2005 (Source: OECD/IEA, 2007).

Stoves and boilers have a long tradition in many European countries. Chips, woodpellets and wood logs have been used for domestic heating in rural areas in thedeveloping countries such as china, India and Africa. However, the efficiency of thetraditional fire wood boiler was poor and indoor air pollution has significant impactson human health. The revival of biomass use was actively support by R&D efforts toimprove wood combustion technology. Improved biomass boilers/stoves save from10-50 percentage of biomass consumption compared to conventional ones and candramatically improve indoor air quality, and also reduce greenhouse gases. Small-scale thermal gasification is a growing commercial technology in some developingcountries. In China, household-scale biogas has been applied for rural home lightingand cooking. Biogas digesters can be supplied by local small companies or built by

farmers themselves. Gas from a gasifier can be burned directly for heat or forelectricity. In a few Chinese provinces, biogas from thermal gasifiers also providescooking fuel through piped distribution networks. By 2006, India had achieved 70MW of small-scale biomass gasification systems for rural power generation (REN21,2008). Rural areas present a significant market development potential for theapplication of these systems. There is a growing interest in the district heating plants.Larger scale biomass systems have been explored in the industrial sites and localcommunities in recent years with respect to efficiency and emissions.

Combined heat and power is a carbon-efficient process which puts to use the heatproduced as by-product of electricity generation. CHP increases the overall efficiencyof fuel utilisation compared to conventional forms of generation and results inreduction of CO2 emission. The more consistent the demand for heat, the moreeconomic CHP can be. Thus, the best sites for CHP are energy intensive industrial sitein continual operation. Community-scale projects are most effective where a range ofdifferent heat and cooling demands are aggregated within system with constantdemand (DEFRA, 2007). The costs of generating electricity using CHP are oftenhigher than standard generation, even though there is a financial return from the by-

product heat. In order to meet the carbon emission target, many governments supplyfinancial supports to encourage the growth of CHP capacity. The technology formedium scale CHP ranged between 400 KW to 4 MW is commercially available now.


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The use of biomass for power generation has increased in the past years with afavourable European and national political framework. In the EU-25 electricitygeneration from biomass grew by 23% in 2005 (EREC, 2008) In Denmark, the CHP

plants supplied about 70% of the yearly electricity production and one fourth of this isgenerated by small-scale CHP plants, which are located outsides the centrally

supplied areas. The Danish government support the increase of CHP plants with aninvestment subsidy. The subsidy was around 13/MWhe for the electricity sold to thegrid. An additional subsidy of 23/Mhe for the CHP plants using biomass material(Alakangas & Flyktman, 2001).This has led to the emergence of a regional innovationsystem in flexi-build biomass and biogas district heating schemes, which is centred onthe North Jutland region of Denmark where 100-120 firms are branded InnovativeRegion; Flexible District Heating.

The use of biomass has steadily increased in Sweden over the past 25 years, whilebiomass accounts for 53% of the fuel mix in district heating in Sweden (Ericsson etal., 2004). In Austria, the biomass plant in Simmering, Vienna, uses only wood as fuel

with 66 MW capacities. It provides a good model for the up-and-coming forest-basedbioenergy industry. This biomass plant uses about 190,000 tonnes of wood harvestedin a sustainable way from forests within a 100-kilometer radius to supply Viennasdistrict heat. More than a 1000 large-scale biomass plants are already operating inAustria with an installed capacity of over 1000 MW in 2005, and the number grewfurther in recent years. It was reported that heating with biomass pellets remains two-thirds cheaper than heating oil. A household could save about 1800 per yearonaverage (Biopact, 2008). Not only Austria, but also Germany as well as easternEuropean countries such as Bulgaria and Romania all have huge forest resources todevelop a bioenergy industry.

In the UK, bioenergy for heat and electricity contributed 82% of the electricitygenerated from renewable resources in 2007 (Figure 17) (BERR, 2008). Thetechnologies include combustion, co-firing, thermal and different biologicalconversion technologies. The contribution of renewable resources to total UKelectricity was approximately 4.9% in 2007 (Figure 18). However, it is only half wayto achieve the target of 10% of electricity generated from renewable resources by2010. Over the past decades, the UK government has supported the development of

biomass energy through several biomass projects across the UK (Figure 19). Somebiomass plants have been generating power supply for years, while some large-scaleplants are under construction and more projects are under planning permission

approval from local governments (Table 7).

The largest biomass power plant in the world with 400 M investment and 350 MWcapacities is under construction in Port Talbot, Wales and is expected to be completedin 2011. The plant will burn wood from sustainable resources in North America andwill generate enough clean electricity to power half of the homes in Wales,representing 70% of the Welsh Assemblys total renewable energy target for 2010. At

the end of 2008, Welsh renewable energy company Eco2 won planning permission tobuild the UKs largest straw-fired power plant in Sleaford, Lincolnshire. This plantwill create 80 jobs and bring 6 million to local formers in fuel supply contracts and20 million for local construction firms. Eco2 Company plans to develop up to 10

biomass facilities across Europe with total of 1 billion investment. Community


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bioenergy projects offer the opportunity of using local resources to support the localeconomy and benefit job creation in local business.

Figure 17. The contribution of bioenergy to the generation of electricity fromrenewable resources in the UK in 2007. (Source: BERR, 2008).

Figure 18. Growth in electricity generation from renewable resource in the UK during1990-2007. (Source: BERR, 2008)


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Figure 19. Distribution of biofuel and solid biomass installations in the UK.(Source: DEFRA, 2007)


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Table 7 List of major biomass projects in the UK. (Source: http://www.renewables-map.co.uk/)

Status Site Name Capacity Region Commissioned

Projects currently Generating1 Llanwyddyn 0 Wales1 Newtown 0 Wales 20081 Elean business park 0 England1 Bluestone holiday village 0 Wales1 Caddsdown - Biomass 0.05 England1 Aberaeron 0.55 Wales1 Westfield 9.8 Scotland January 20011 Eye Airfield 12.7 England July 19921 Glanford 13.5 England November 1993

1 Sembcorp biomass power station 30 England September 20071 Ely power station 38 England December 20001 Thetford 38.5 England June 19991 Stevens Croft 44 Scotland March 2008

Projects planning approved and / or under construction

2 Old quarrington 0.5 England2 Sleaford 40 England2 Brigg renewable energy plant 40 England2 Port Talbot renewable energy plant 350 Wales 2011

Projects which are proposed and / or going through planning process

3 Penpont biomass project 0.25 Wales3 Oakland farm 0.3 England3 Mod Poole 0.5 England July 20083 North Wiltshire biomass power 5.528 England3 Victory mill biomass project 6 England3 Byreshield Grains Woodgen 6.085 England3 Arbre 8 England 19983 Eggborough power station 8 England3 Nunn Mills road 8.825 England3 Consett power station 10 England3 Hexham biofuel power station 10 England

3 Phoenix parkway 14.25 England3 Newbridge power 15 Wales3 Kingmoor marshalling yard plant 20 England

The biomass system for heating and electricity applied so far generally use forestryand wood processing residue. The application of the agro-residue or recycled waste isattracting more interest in many regions. Biogas is produced from organic materialunder anaerobic conditions in landfill or in anaerobic digestion facilities (fermenters).Various types of organic material include liquid manure, silage, left over food andother waste. Biogas can be either used in a power generator to produce electricity andheat, or be used as transportation fuel. A recent publication by the European Union

projected the potential of waste derived bioenergy to contribute to prevention of
http://www.renewables-map.co.uk/details.asp?pageid=416&pagename=Llanwyddynhttp://www.renewables-map.co.uk/details.asp?pageid=416&pagename=Llanwyddynhttp://www.renewables-map.co.uk/details.asp?pageid=417&pagename=Aberaeronhttp://www.renewables-map.co.uk/details.asp?pageid=417&pagename=Aberaeronhttp://www.renewables-map.co.uk/details.asp?pageid=450&pagename=Glanfordhttp://www.renewables-map.co.uk/details.asp?pageid=450&pagename=Glanfordhttp://www.renewables-map.co.uk/details.asp?pageid=457&pagename=Arbrehttp://www.renewables-map.co.uk/details.asp?pageid=457&pagename=Arbrehttp://www.renewables-map.co.uk/details.asp?pageid=457&pagename=Arbrehttp://www.renewables-map.co.uk/details.asp?pageid=450&pagename=Glanfordhttp://www.renewables-map.co.uk/details.asp?pageid=417&pagename=Aberaeronhttp://www.renewables-map.co.uk/details.asp?pageid=416&pagename=Llanwyddyn


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global warming. It concluded that 19 million tons of oil equivalents are available frombiomass by 2020, 46% of which would be derived from bio-wastes: agriculturalresidues, farm wastes and other biodegradable waste streams (Marshall, 2007).Global

bioenergy production from waste was shown in Figure 20. The US is a leading nationin this area, producing over 3,600 Mtoe bioenergy from organic waste in 2005. The

European countries such as France, German and UK, and Japan are also exploringvarious technologies producing power from waste resources.

Figure 20. Global renewable energy production from waste (organic) in 2005.(Source: OECD/IEA, 2007).

2.4 Geothermal

Geothermal energy is the energy stored in the form of heat below the earths surface.

It has been used for heating since ancient times and for electricity generation sincegeothermal-generated electricity was first produced at Larderello, Italy in 1904.Geothermal energy has some advantage characteristic to be used for electricitygeneration and direct heat use: extensive global distribution; environmentally friendly;independent of season; effective for distributed application and can providesustainable development. Geothermal provides about 10 GW of power capacity in2006 at 2-3% growth rate per year. Philippines and the US are the leading countrieswith over 8,700 Mtoe productions (OECD/IEA, 2007). As shown in Figure 21, Italy,

Mexico, Indonesia, Japan, New Zealand, Iceland and Turkey all have producedsignificant geothermal energy. Iceland gets one-quarter of all its power fromgeothermal (REN21, 2008). Sweden, Switzerland, Germany and Austria are theleading countries in terms of market for geothermal heat pumps in Europe (EREC,2008). The Enhanced Geothermal System (EGS) has demonstrated that electric powercan be produced from geothermal energy throughout Europe at economically andecological acceptable conditions, and not only in high ground temperature regions(EREC, 2008). The costs to set up and drill the hot water from under the surface of theearth are extremely high, but the costs are falling. In some regions, it is almostcompetitive with conventional fuels. It is reported that German has passed favourablelaw making geothermal projects financially viable to stimulate geothermal energy

industry. There are 150 plants projects are in the pipe line to generate electricity inGermany. Bavaria has the most potential in Germany (Nambudripad, 2008).


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Figure 21. Global renewable energy production from geothermal in 2005.(Source: OECD/IEA, 2007).

2.5 Hydropower

The technology is mature and most potential sites in Europe have been fullydeveloped and represent 84% of installed renewable electricity in OECD. The largehydroelectric dams are in general competitive and dont need any particularassistance, but the building of small hydroelectric power stations should be developedfurther (REN21, 2008). Small hydropower is the main contributor to renewable powercapacity in developing countries, for example in China (Figure 22).

Tidal power and wave power are two additional forms of tapping into the energy ofthe ocean, they are not very common at the moment but pilot plants are being installedin Europe.

In total, existing renewable electricity capacity (excluding large hydro) worldwidereached to over 200 GW in 2006, increasing 14% from 2005 (Figure 22). Small hydroand wind contribute three quarters of the total capacity (REN21, 2008). The top sixcountries were China (52GW), Germany (27 GW), the US (26 GW), Spain (14 GW),India (10 GW) and Japan (7 GW). It was expected to reach 240 GW in 2007, addinglarge hydropower together to represent about 5% of global power generation (REN21, 2008). The top five countries of renewable energies in 2006, ranked in terms ofexisting capacity and added capacity in 2006 were listed in Table 8.


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Figure 22. Global renewable power capacity in 2006 (Source: REN21, 2008)

Table 8. List of top five countries in renewable power capacity in 2006.(Source: REN21, 2008).

3. Renewable energy policy and governance

Policy targets for renewable energy exist in at least 66 countries worldwide, includingall 27 European Union countries, US, Japan and developing countries such as China

and India. Central and regional governments have set up incentives to promote thedevelopment of renewable energy. Many such incentives go directly to developers ofrenewable energy projects such as capital investment subsidies, tax incentives andlow-interest loans. Recently, some governments such as UK and Belgium haveapplied renewable obligation to encourage the increase use of renewable energy. EU-wide target is 20 percentage of final energy is from renewable energy resources by2020 (Figure 23), while China is targeting 15% of primary energy is from renewableenergy by 2020 (European Commission, 2007b).


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Figure 23. Policy target of renewable energy in the EU. (Source: European Commission, 2007b).


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3.1 Direct subsidies and tax incentives

Over many years, renewable energy resources have been explored all over the worldin order to overcome energy crisis and combat climate change. But the price ofrenewable energy is typically more expensive than traditional energy resource (for

example, Table 5). A variety of the incentives from national and regionalgovernments promote the generation of the electricity from renewable resources.Many such incentives go directly to developers of renewable energy projects,including direct subsidies, tax benefits, low-interest loans, public-private co-investment, net metering and simplified interconnection procedures. Taxation has

been an important means to promote biomass more competitive with fossil fuels. Insome countries, biofuels have been exempt from taxes and except value-added tax(VAT). Biomass became less expensive than coal in 1991 in Sweden and in 1997 inFinland as a result of carbon-based taxes. High level of taxation on fossil fuels hasalso clearly made biomass at least costly fuel for district heating system in Sweden(Ericsson et al., 2004).

Production subsidies have become important biofuels policies with fuel taxexemption. The largest production subsidies are in US. A number of US states offer

production incentives and sales tax reductions or exemptions for biofuels (see thereview, Zhang & Cooke, 2008). For example, Iowa State pays up to 50% or $30,000of costs of installing E85 tanks and fuel lines; and pay up to 50% or $50,000 for

biodiesel infrastructure (Waltz, 2007). In the US, the federal government provides a51 cents/gallon tax credit for ethanol blending through 2010, and a 43 cents/gallon taxcredit for biodiesel through 2008. Ireland announced over $ 370 million in extrasubsidies to encourage biofuel production through 2010. Fuel-tax exemptions oftencoincide with other types of tax benefits for biofuel investment and trade. Themaximum available investment subsidy in Finland since 1999 is 30%, depending onthe type of project. In addition, the electricity from renewable resources receives asubsidy per kWh produced, equivalent to the Finish electricity tax (Ericsson et al.,2004). Increasingly, nations have been encouraging retail electric utilities to increasetheir use of renewable energy generation through government legislations. Theschemes are different versions of Feed-in tariff or renewable portfolio standard(RPS) by imposing renewable energy quotas.

3.2 Feed-in Tariff

Feed-in tariff or Feed-in Law is an incentive structure to encourage using renewableenergy through legislations. A FiT is a revenue-neutral way of making the installationof renewable energy more appealing. The electricity generated from renewableresources is bought by the utility at above market price, and then the difference cost

between retail price and renewable energy is spread over all customers of the utility.This results in large incentive for people to install renewable energy systems. It is amechanism to instigate a change in the way power is generated, gradually shiftingfrom present polluting way to renewable resources. This type of program was firstimplemented in the US in 1978. It was introduced in Germany in 1990, and wasrefined in year 2000. The German FiT model has proven to be the worlds most

effective practice for boosting development of renewable energy technologies. In2005, 10% of electricity in Germany came from renewable sources and 70% of this


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was supported with FiT (Stern, 2007). The model is associated with a large growth insolar power in Spain, solar and wind power in Germany and wind power in Denmark.

The system involves fixed and long-term payments, usually 10-20 years. Theguaranteed incentive did effectively encourage the long-term investment in renewable

energy developments. By 2007, at least 37 nations have adopted such policy withsome modification to account for technology differences, environment impacts andinflation (REN21, 2008). Spain modified feed-in tariff premiums to de-couple

premiums from electricity prices and avoid windfall profits when electricity price rosesignificantly. Many new FiTs directed at specific energy technology such as solar or

biomass. For example, Italys new FiT provides an increasing provision for solar PV,aiming to produce 3,000 MW of solar PV by 2016. France increased tariffs to 25-30eurocents/kWh for solar PV installation. Strong momentum for FiT continues aroundthe world. The policies have effects not only wind power, but also have impacts onthe development of other renewable energy such as solar PV, biomass and smallhydropower.

In Canada, the government is offering incentive programmes to make "green" energya more economically viable option. For example, In Ontario, the power authorityoffers Renewable Energy Standard Offer Program (RESOP) to allow residentialhomeowners with solar panel installations to sell the energy they produce back to thegrid (i.e., the government) at 41/kWh, while drawing power from the grid at anaverage rate of 20/kWh. The program is designed to help promote the government'sgreen agenda and lower the strain often placed on the energy grid at peak hours. Theaverage payback period for a residential solar installation (sized between 1.3 kW and5 kW) is estimated between 18 and 23 years, including the cost such as parts,installation and maintenance (Ontario Power Authority, 2007). The program has beensuccessfully to promote the renewable energy. The authority has received applicationsfor over 1,000 MW of renewable energy since it was launched 2 years ago.

3.3 Renewable Portfolio Standards (RPS) or Renewable obligations (RO)

Renewable portfolio standards policies, also called renewable obligations or quotapolicies exist in several countries: Australia, China, Italy, Japan, Poland, Sweden, theUK, and some states in the US, Canada and India. The RPS policies required powersuppliers to generate a portion of the power from renewable sources. The requiredrenewable power shares ranges between 5-20% by 2010-2012, recent extending to

2020. By 2008, there are 25 states with RPS policies; some more states are planningto adopt this policy in the US (REN21, 2008). In China, RPS is part of its exitingpolicy framework for supporting renewable energy development. The share of non-hydro renewable is targeted to reach 1% of total power generation by 2010 and 3% by2020.

Under RPS, the supply of renewable energy is achieved by obliging supplier todeliver to consumer a portion of their electricity from renewable energy sources. Inorder to do this, they collect green electricity certificates. If the power supplier can not

produce required portion of green electricity, they have to purchase green electricitycertificates from renewable energy developers by paying higher price. This is based

on the liberation market with perfect competition where there is a multiplicity ofbuyers and sellers in a market where no single buyer or seller has a big impact on the


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market price of green electricity certificates. In theory, the competitive market willstimulate a more efficient use of resources compare to FiT system where prices are set

by government. To achieve the quotas, each country chooses different way. Most RPStargets are transformed into large expected future investments. Most of theseinvestments were either made by public companies or secured by public credit

guarantees (Jger-Waldau, 2007). The fundamental problem with RPS is that there isno long-term guarantee and the market-based system would favours large, verticallyintegrated generators and multinational electric utilities. This system disadvantagelocal ownership, but local entrepreneurs can be employed by government, electricgenerators, municipalities and other users.

The renewable obligation is the main mechanism for promoting renewable energy inthe UK. Under this system, suppliers can meet their obligation either by directsourcing, by buying an equivalent level of green energy certificates, or pay a buy-out price of 3p/kWh. The extra incentive results from the payment of the buy-out

price would encourage the investment in renewable sources. This system is to

maximise the level of competition within public support system which try toguarantee a minimum level of renewable capacity. The RO is intended by the currentLabour administration to be the central support mechanism for renewable for 25years. However, there is potential for such mechanism to be altered because of future

political consideration, and thus no contract binding long-term security. This makemore difficult to secure financing for renewable energy projects under the RO system.R&D funding in renewable energy have long records in the UK. But there are gaps inmoving technologies along the innovation chain (Foxon et al., 2005). The failure toattract private capital is the barrier for the renewable energy development in the UK.Up to date, this policy results in only 0.3% increase rate of annual renewable energyas a contribution to total final energy consumption in the UK (BERR, 2008).Comparing efforts in an international context, the UK has performed poorly withrespect to most of its policy goals when contrasted with nations such as Denmark,Germany and Spain (Connor, 2003). It may suggest that this market mechanism ornear-market mechanism alone will not achieve the increase in the use of renewableenergy to meet the UKs commitments.

Recently, offshore wind energy and bioenergy have been promoted to develop inorder the UK meeting its targets for increase renewable energy use. The UKgovernment has announced a major programme of building offshore wind farms (seeTable1), expecting to produce around 20GWe offshore wind power by 2020. It was

suggested that landfill gas, energy from biodegradable waste and from biomass couldconstitute almost half of UK renewable energy by 2010 if target are meet (BERR,2008). By now, if we assume that these offshore wind projects were all to go aheaddespite planning permission issues, the renewables could provide about 30% ofelectricity by 2020, and assume that 60% of biofuel target is achieved (although theUK has limited forest resources compared to countries such as Sweden and Austria),then the UK would be generating about 6.5% of its final energy from renewablesources in 2020. The UK would still have an 8.5% shortfall in its EU RenewableDirective target of 15% from renewable sources by 2020 (Toke, 2008). Thus, UK mayhave to pay high price for green energy certificates in order to meet the target by2020.


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4 Regional renewable energy developments

4.1 Regional governance

In order to achieve the target of renewable energy, every country has designed

different strategies to accomplish the general goal. The regional government tries toeffectively develop renewable energy industry according to its own region advantagesand build the new energy sector based on traditional local economy. Finland andSweden have successfully exploited their vast biomass resources to develop bioenergyfor electricity production (Ericsson et al., 2004). The region governments are notlooking to expanding their domestic use of renewable energy, but also to developrenewable technology manufacturing industry to accompanying the global renewableenergy market. Lewis & Wiser (2007) found that policies that support wind powermanufacturing company with a sizable, stable domestic market are most likely resultin the establishment of an international competitive wind industry, such as DenmarksVestas and Spains Gamesa.

The development of renewable energy has an outstanding effect on regional economyand environment, and offer opportunities for local employment and export market. InGermany, the employment of renewable energy industry was about 250,000 people in2007, increasing from 160,000 jobs in 2004. The total turnover in renewable energy isover 21 billion (Lund, 2009). According to recent estimation, as many as 400,000

people could be employed in this industry in Germany by 2020. This sector boosts thecountrys economy and exports as a result of massive investment and effective policy(Burgermeister, 2008). In Clean Energy 2030, a proposal by energy research teamat Google, it is estimated that clean energy will create about 1.4 billion new jobs by2030, including energy efficiency, wind power, solar power and geothermal energy(Figure 24) (Google energy team, 2008). Not only large countries demonstrate successin renewable energy sector, Denmark with over 20,000 people working in wind powershow that smaller countries can gain success through innovative policies and optimalmanaging of the commercialisation process (Lund, 2009). The case of thedevelopment of solar and wind energy in region Asturias, Spain has demonstrated thesignificant effect of renewable energy on employment (Moreno & Lpez, 2008). Butlocal government also need to face the challenge and adapt its traditional energysector to the new framework to satisfy the requirement of new energy sector,including skill training to improve regional competitiveness.

Due to climate protection, improving air quality and sustainable local development,several major cities have made commitment to reduce greenhouse gas emission andpromote renewable energy. For example, London proposed a target to reduce carbondioxide emissions by 20% by 2010 and by 60% by 2050. Tokyo announced anambitious target of 20% of total energy consumption by 2020 from current 3%.Vancouver proposed that all new buildings in the city should be carbon neutral by2030.Oxford in the UK set a target of 10% homes with solar hot water by 2010. To

bring down costs of renewable energy, it is suggested that the municipal governmentbuilding and public services to use green power. California government purchases100% of their power needs as green power. Woking in the UK aims for 100% by2011. Stockholm requires biofuels in public transport and with vision to become fully

fossil-fuel free by 2050 (REN21, 2008).


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Figure 24. Job creation by renewable energy (Source: Clean Energy 2030 Proposal)

Planning permission used to be one of major barriers for renewable energydevelopment in the UK. It was reported that 27% of the biomass plants with a Non-Fossil Obligations (NFFO) contract could not obtain planning permission in the first

round, and only 1 project won planning permission on appeal (Upreti & van derHorst, 2004). The development of a biomass electricity plant in Cricklade, UK wasfailed to gain planning permission due to local resident opposition. In general,

biomass energy plants have few environment impacts than plants using fossil fuel.Ambient Energy Ltd., proposed to develop a 5 MWe wood gasification plant near thetown of Cricklade. However, local community is anxiety about the perceived adverseimpacts or risks of biomass projects and mistrust that industry puts profits over theirwelfare. Recently, the largest wind power farm in the UK was proposed to build in

North Wales through top-down strategy, but it is reported that local resident wouldappeal the proposal due to the concern that this large-scale offshore wind farm willdamage the local tourist business. There is conflict between national needs and local

interest for the renewable power plants. The UK government needs to create a greaterlevel of public awareness of the environmental benefits of renewable energy. Thesystematic expansion of renewable energy is not only good from the environmentaland climate policy point of view but also for economy growth and employment in theregion.

Instead, the barrier now is the difficulty of financing investment projects. Forexample, one of the largest projects, the 4 billion cubic meters Esmond Gordonoffshore facility has been called into doubt. According to estimation by Ernst &young, the industry will need to invest 165 billion in new wind farms, nuclear powerstations and grid connections during 20082020 in order to meet the target of 15%energy from renewable sources by 2020. In the meantime, the installation cost of wind

power and PV solar power station is rising up due to limited suppliers. In the midst of


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from one process serve as the input material for other process or are recycled forfurther production. Thus industrial symbiosis is formed among the enterprises withinEIP, where they connect with each other like a food chain. The waste from oneenterprise is the raw material for another enterprise. This relationship can efficientlydecrease the pollution and increase the material utilization. Partially, EIP projects

focus on the integration with local community, resulting in less transportation formaterial because the enterprises are in the proximity region. This benefits thecompanies clustering in EIPs.

4.2.1 Kalundborg Eco-Industrial Park in Denmark

The eco-industrial park of Kalundborg in Denmark is the most successful example.This provides an evidence of what could be achieved through implementing industrialsymbiosis concept. At Kalundborg, the connection of waste and energy exchangeswas developed within the system, including the local city administration, a power

plant (Energy E2 Asnaes Power Station), a refinery, fish farms, a pharmaceuticals

plant and a wallboard manufacturer (Figure 26) (Gibbs, 2008). The power plant is theheart of the park, providing process steam to Statoil Refinery and pharmaceutical

plant, Novo Nordisk and also providing residual heat to the municipality and fishfarms. Residual steam is also sent to the refinery by the power company, in exchangeto receive refinery gas previously flared as waste. Farms use sludge from the fish farmand the pharmaceutical processes as fertilisers. Sulfur, which is removed after thetreatment of excess gas from Statoil refinery, is sold as a raw material for themanufacture of sulphuric acid. The treated clean gas is then used as raw material inthe manufacture of plasterboard at Gyproc. The basis of the industrial symbiosiscooperation in Kalundborg is openness, communication and mutual trust between the

partners. It is estimated that there are about 2.9 million tons of material be re-used orrecycled at Kalundborg through waste exchange. 3 million m3 of water are savedamong the companies, for example, the power station has reduced water use by 60%through recycling (Gibbs, 2008).

4.2.2 Styrian recycling network, Austria

Schwarz & Steininge (1997) reported a much larger industrial recycling network inthe province of Styria, Austria. The exchanged materials in this network include

paper, power plant gypsum, iron scrap, used oil and tires. The firms were motivatedpurely by the revenues from by-products they could exchange and the saving in

landfill disposal costs. The former waste from a company was re-used by anotherinter-company in the region recycling network through matching of productionprocesses. It helps to reduce material and energy throughput in the economic systemto sustainable levels.The exchange of by products has both economical andenvironmental benefits. The company managers in Styris were not aware of industrialsymbiosis concept and the exchange was purely driven by cost saving. The pattern ofindustrial symbiosis of Styria regional trading network was self-organisation model,without initial planning. The industrial recycling network is shown to play asignificant role to foster the regional economy


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Figure 26. Eco-Industrial Park at Kalundborg, Demark.(Resource: Industrial Symbiosis Institute, website:http://www.symbiosis.dk)

4.2.3 Rantasalmi Eco-Industrial Park, Finland

Sustainable development has also been paid a vast attention in Finnish forest industrybusiness. The first eco-industrial park are planned and organised in the commune ofRantasalmi, where there is a concentration of mechanical word processing companies(Figure 27). The main core companies are Rantasalmi Oy, the forth biggest log-housecompany in Finland, and Sil-Kas Oy, a wood-processing company whichmanufactures blanks for window and door from pine. Rantasalmi Oy has a strongnetwork with carpentry companies in material supplying. The wood materials areexchange among the companies, for example, Korpihonka uses solely by-products ofSil-Kas Oy. Wood wastes are combusted in the heating plant of Suur-Savon ShkOy, which supplies heat for the companies in the parks and neighbouring residence.The companies in the park co-operate with each other, sharing the energy, material,logistics, storage etc. Rantasalmi Eco-industrial Park serves as an example of creating

business opportunities for small and medium-sized enterprises through cooperation,and of developing an ecological, socially and sustainable economy in rural area likeRantasalmi (Saikku & Lehtonen, 2006).
http://www.symbiosis.dk/http://www.symbiosis.dk/http://www.symbiosis.dk/http://www.symbiosis.dk/


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Figure 27. Eco-Industrial Park at Rantasalmi, Finland.(Source: Saikku & Lehtonen, 2006)

4.2.4 Dyfi Eco-Industrial Park, UK

Dyfi Eco-Industrial Park is located in Dyfi Valley, near Machynlleth, Mid Wales, UK.

The local valley is a community of some 12,500 people with 74,000 ha of family hillfarms. The economy used to be dominated by tourist and other services during 1990s,but has been a serious decline in farm incomes. In 1998, the community renewableenergy project was created with the initial funding support from the EuropeanRegional Development Fund (http://www.wda.co.uk/). Several organisations wereinvolved in this project, including local county council, Dulas Ltd (a leading specialistrenewable energy company based in local valley), the Centre for AlternativeTechnology, the Welsh Development Agency and Snowdonia National Park. This

project was successful to enable local people to carry out small-scale schemes usingvarious renewable energy technologies. The total installed capacity of renewableenergy included over 200kW electrical capacity (hydro, wind and solar) and 150 kW

heat capacity (solar, wood, heat pump). The renewable energy installation wassupplied by local SMEs. The reduction of the expenditure on energy supplied from
http://www.wda.co.uk/http://www.wda.co.uk/http://www.wda.co.uk/http://www.wda.co.uk/


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outside the community keeps more money circulated within local economycommunity. This project improved local community to understand green localeconomy and support for renewable energy.

4.2.5 Eco-Industrial Parks in the USA

In the USA, the Clinton administrations Presidents Council on Sustainable

Development (PCSD) suggested to establish a few Eco-Industrial Parks on somedemonstration sites (Table 9). EIPs aim to increase business competitiveness, reducewaste and pollution, create jobs and improve working conditions, leading to the

benefits of the regional economy, environment and society (Gibbs & Deutz, 2005).The developments of EIPs in the USA are at early stage and the initiatives with stronggovernment interaction attempt to create a EIP from scratch, locate enterprises withspecific industry that have potential symbiotic relationship. The physical settings varyamong these demonstration sites. Some EIPs retrofit from old industrial or militarysites; others are new development from green-field. Most of EIPs are based on

manufacturing and developing new enterprise for by-product exchange or wasterecycling; while a few parks focus on agriculture products, for example, RiversideEIP. Raymond Green EIP involves sustainable harvesting in coastal forest area.Several EIPs have goals to become a zero-emissions or closed-loop industrial system.Recently, it has witnessed that more enterprises in EIPs produce sustainable productswith a sustainable manufacturing practice, eventually becoming energy independentof fossil fuels or outside electricity. The following are some examples of differenttypes of EIPs in the USA.

Brownsvil le, Texas/Matamoros, Mexico

The Brownsville site is located on the border of Texas and Mexico in the Rio GrandeValley. The cross-border region has some severe environmental problems due to rapidindustrialization. The virtual eco-industrial park was introduced through regionapproach to develop and diffuse innovative, cost-effective technologies and practicesthat could promote sustainable industrial development along the U.S.-Mexico border.City of Brownsville has worked with Matamoros, Mexico on the EnvironmentalDefence Fund's eco-industrial park project (PCSD, 1996). The first phase of the

project is a quantitative analysis of the economic and environmental benefits fromcross-border multi-firm resource-sharing strategy. The second phase involves testingthe model at the site. The affiliated companies in EIP participating in waste exchangewill pay lower prices for secondary raw materials and realize savings in hazardous

waste disposal charges. For example, Mobil sells styrene/ethylbenzene to localrecycler in EIP system at half price as it used to deposit it. By-product exchangesdepend on virtual linkage rather than co-location. Triangle region of North Carolina isanother success example of regional economy community to organise firms virtuallyacross a broader region.

Londonderr y Eco-Industri al Park, New Hampshir e, USA

Londonderry is a sub-urbanising community of 27,000 people in an area of activeeconomic development, 40 miles to Boston. The gas power station (AES) uses 4million gallons of treated waste water daily from the city (Deutz & Gibbs, 2004).Originally, a recycling company approached Stonyfield Farms Yoghurt to establish a

plastic recycling operation next to the dairy to use its grey water to rinse plastics(Lowitt, 2003). Town of Londonderry has the inspiration for the sustainable nature of


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development to set up this EIP, but it was developed by a commercial company. Themanagement company require all tenants to develop an environmental managementsystem, track their resource use, set environmental performance goal and performthird party ecological audits. The businesses in the EIP include power plant, recyclingcompany, medical supply distribution firm, software firms and rental car operators, all

extensive users of the nearby airport (Lowitt, 2003). These businesses co-located in adefined EIP can exchange energy, water, materials and share information,transportation, marketing service.

Table 9. List of Eco-Industrial Parks in the USA. (Source: PCSD, 1996)

Park Location CharacteristicsBerks Country EIP Berjs County, PA, State/private project converting landfill

into energy system for manufacturingBrownsville EIP Brownsville, Texas Cross-border multi-firm resource-

sharing strategyCabazon ResourceRecovery Park

Indio, California Biomass electricity generation plantsand a recycling-manufacturing

Civano Industrial Eco Park Tucson, Arizona Business centre for the development ofsustainable technology

East Shore EIP Oakland, California Alternative waste processing companiesFairfield EIP Baltimore, Maryland Boasts resource recovery enterprises in

city-created empowerment zone, withcollaboration with university and parkmanagement.

Franklin County EIP Youngsville, North

Carolina

Clean-tech companies in a Eco-design

solar-powered buildingLondonderry EIP Londonderry, NewHampshire

Firms co-locate in a defined EIP andexchange by-product and energy.

Plattsburgh EIP Plattsburgh, New York Research, recreational, industrial, andcommercial facilities on abandoned airforce base.

Port of Cape CharlesSustainable TechnologyIndustrial Park

Eastville, Virginia Development zones with specificincentives for photovoltaic producers,clean fuel vehicle manufacture, andrecycled material producers

Raymond Green EIP Raymond, Washington Located within a sustainable harvested

forest, works with local resources andprocess waste streams on site

Riverside Eco-Park Burlington, Vermont Agro-industrial park with biomass andreprocessing technology

Shady Side EIP Shady Side, Maryland Marine-based park with localcommunity participation

Trenton Eco-IndustrialComplex

Trenton, New Jersey Urban network, not geographicallycontiguous


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4.2.6 Guigang Eco-Industrial Park, China

China has experienced a rapid economic growth in the past thirty years, but the fasteconomy growth is now facing big challenges of resource and environment issues. To

promote the EIP concept, the State Environmental Protection Administration of Chinainitiated the pilot of eco-industrial parks in 1999. Guigang Eco-industrial Park is oneof the earliest demonstration sites in China. The park was managed by the GuitangGroup, a state-owned enterprise with a history of over 50 years. The economy of thetown of Guigang is mainly dependent upon sugar related industries. But the sugarindustry has declined rapidly during 1990s. This EIP initiative is to transfer thedeclining Guitang Group from a conventional sugar industrial system to an eco-industrial system. The Guitang Group set up the eco-industrial complex based onsugar industry and now it becomes the largest sugar refinery in China. The complexincludes sugarcane farms, sugar-making plant (it produces 120,000 tonnes of sugarannually), an alcohol (10,000 tonnes) plant, a pulp mill, a paper (85,000 tonnes) plant,

a calcium carbonate (8000 tonnes) plant, a cement (330,000 tonnes) plant, and afertilizer (30,000 tonnes) plant. The paper-making plant uses the sugar slag generatedfrom the sugar-making plants; while cement mill uses by-product, the sludge, as rawmaterial for the production of cement (Fang et al., 2007).

The whole Eco-industrial Park is managed under one big umbrella, Guitang Group.The material and by-product exchange occur primarily within the same complex,improving significantly the efficiency of its many processing plants (Fang & Lifset,2008). Recently, the group was privatised and extend its exchange network into acommunity-level to receive by-products from other sugar producers for increased

production. The Guitang Groups example has inspired the town of Guigang to adopta five year plan to become an Eco-industrial City. By 2007, there were 24 nationalEIPs established in China. Most of them are organised and managed by theadministrative commissions of the development zones and the governments at cityand county level, while others are under enterprise management. Now, the concept ofeco-industrial development expands from park, community-level, city-level, to

provincial level like Liaoning Province, as demonstration province for circulareconomy (Fang et al., 2007).

4.3 Eco-Industrial Clusters

In earlier stage of EIP development, most EIPs focus on waste recycling and by-product exchange on the level of the industrial park. However, recent emerging greeninnovation demonstrates that larger regional area may be more suitable for closingmaterial loops and developing sustainable industrial ecosystems (Anbumozhi, 2008).The concept of eco-industrial development is for companies to find the innovativesolution via working together. Rather than just co-location, these companies couldachieve economic, environmental and social success via networking, collaborationand sharing the resources. Renewable energy technologies are innovative instrumentsfor regional eco-industrial development. Cluster approach has been widely promotedto increase regional innovation and competitiveness (Porter, 2002). Eco-IndustrialClusters are defined here as A dynamic geographical concentration of competing

and collaborating companies, their customers and suppliers, supported byorganizations that facilitate knowledge, investment and other private or collective


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support services. This community of business co-operate with each other and withlocal/regional community to efficiently share resource (material, energy, information,infrastructure and finance etc., leading to economic gains, improved environmentalquality and social success (Anbumozhi, 2008). Gibbs & Deutz (2005) alsosuggested that the incremental adoption of industrial ecology principles and regional

cluster approach may be more viable than a purely park-based approach.

4.3.1Processum Technology Park, rnskjldvik, Sweden

rnskjldvik is often referred to as the cradle of the Swedish chemical industry.Processing industry has developed in rnskjldvik during the twentieth century.There are strong business and research and development in process chemistry, processengineering and process control. Recently, biorefinery has been developed to produce

biofuel from renewable raw material through specialized processing technology,extracting the maximum possible refinement values from the renewable raw material.Today, more than 2000 different products are refined from crude oil and intermediate

feed stocks can be routed to various units to produce different products, as shown inFigure 28. Sweden is rich in forestry resource, the worlds fourth largest exports ofpaper and pulp. Processum Company is set up to organise collaboration betweencompanies within the processing industry cluster. Its task is to develop new businessopportunities and product development, to carry research and development work, andto involve marketing activities within the process industry in rnskjldvik.Processum with its member companies (Table 10) are working together to develop a

biorefinery cluster, based on forest resource and traditional root of processingtechnology. Up to date, Processum refinery initiative has successfully generated threenew companies, created 85 new qualified jobs and two patent applications since it wasestablished in 2004 (http://www.processum.se).

Figure 28. Integrated forest biorefinery products. (Source: http://www.processum.se)


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Table 10. List of member companies in Processium Technology Park, Sweden.(Source: http://www.processum.se)

Company Business field

Akzo Nobel Surface Chemistry Production of thickeners for water based

paints and the construction industry

Domsj Fabriker Production and global sales of dissolvingpulp and paper pulp

vik Energi Energy production and distribution

Sekab Production of ethanol, ethanol derivativesand ethanol as fuel

Etek Etanolteknik Technology company with ethanolproduction process based on lignocelluloses

Eurocon Technological independent processconsultant company

EcoDevelopment Consultancy for project management in thearea of sustainable development

Kvaerner Power Design and manufactures systems forchemical recycling and energy production

MoRe Research Independent cooperative R&D within pulptechnology and paper analysis

M-real Technology Center R&D organisation on process and productdevelopment

Holmen Skog Timber trading

rnskjldvik Municipality Public sector

The foundation for Technology Transfer inUme

Finances for research commercialisation

Ume University, Mid Sweden University Public education sector

NPI, Network for Process Intelligence ICT sector

4.3.2 Bavarian Energy Technology Cluster, German

Bavaria was as a rural state dependent on agriculture in the early twentieth century.By the twenty-first century, it had emerged as one of Germany's industrial

powerhouses, consistently setting national standards for productivity and innovation.Due to its targeted support and promotion of biotech, Bavaria is Germanys leading

biotech state and is among Europes top biotech clusters. There are some leading

R&D centers such as Max-Planck-Institute, the GSF National Research Centre forEnvironment and Health, and the Gene Center. Under recent Bavarian Cluster

Initiative, energy technology is the targeted field to develop in Bavaria. Conventionalpower generation technology, nuclear energy and photovoltaic technology are all


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important thematic fields to develop in order to develop Bavarian Energy TechnologyCluster. The Bavarian government has long-term innovation policy to support high-tech industry built on its strong science base, providing support funding to encouragetechnologydriven start-ups, facilitating technology transfer, supporting clusternetwork and collaboration. Bayern Innovative Company manages the cluster network

and promotes endogenous technology development in the region.There are about 450 companies in energy technology sector in Bavaria, with over100,000 employments in the region (seehttp://www.invest-in-bavaria.com). Thecompanies main activities are manufacturing of electricity generation and distributionfacilities. Some world-class power plants such as Siemens Power Generation andAlston Power Energy are based in Bavaria. A large number of local small andmedium-size enterprises provide sub-contract works and suppliers with these large

power companies. Renewable energy technologies have been used in the generationof electricity in Bavaria, including Hydrogen power, biomass, photovoltaic, wind andgeothermal ones. Bavaria now accounts for half of all the photovoltaic-generated

facilities in Germany. The entire manufacturing chain of photovoltaic energy facilityis based on the region, from the Crystal pulling, manufacturing of wafers, cells,modules, and to entire facilities. The manufacturers of solar-use silicon and

photovoltaic cells based in Bavaria, such as Applied Materials GmbH & Co. KG,Alzenau and AVANCIS GmbH & Co. KG, Munich, are among the worlds leaders in

the field.

4.3.3 Peterborough cluster of environment sector, UK

Greater Peterborough cluster of environment sector, located in the East of England,consists of over 380 companies working in the environmental goods and services

sector. It was estimated to employ 5,000 people and total collective annual turnover isover 340 million in the cluster. It has become as the largest cluster of environmental-focussed businesses and organisations in the UK(http://www.envirocluster.net/).EnviroCluster, set up in 2002, aims to identify and exploit business opportunities, toencourage start-ups and to attract inward investment in Greater Peterborough area. Ithas helped to attract over 1 million inward investment to this sector. GreaterPeterborough has built up strong base on environment business sector. Businesscluster increases the number and value of business opportunities through revealingsynergies between local players. Developing clusters of renewable energy technologyis considered as potential target for the region development (UK CEED, 2001).Potential wind energy cluster was proposed, base on strong environmental industry in

this region (Figure 29). Some components of the value chains are already present inGreater Peterborough, but not genera

cooke 09 fang renewables review

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