Questions and Answers
Why does WWF target the Power Sector?
The power sector is the industrial sector dealing with the production, transmission and distribution of electricity. Electricity production is the largest cause of CO2 emissions—37% of all CO2 emitted into the atmosphere comes from generating electric power.
Figure 1
what are WWF's four challenges to the power sector?
WWF is challenging the major utilities to be part of the solution. To do so, they must implement a number of key activities to concretely make the switch from coal to clean power. These include:
- Improve the energy efficiency of both power plants and of how consumers can use electricity by shifting to co-generation of heat and power, retrofitting existing plants and investing in consumer’s use of highly efficient residential and office appliances and industrial production equipment
- Increase their share of 'new' renewables, such as wind, biomass, geothermal and solar, to at least 20 percent by 2020
- Support strong policies in their countries to cut CO2 emissions and increase the share of renewable energy
- Stop investing in new coal plants and coal mining
what is POWER SWITCH! about?
Power Switch! is a new initiative by WWF. It maps out the way for the electricity sector—the POWER producers—to become CO2–free by the middle of this century in industrialised countries and to make a big switch from coal to clean in developing countries. It initiates concrete action to start reducing the CO2 emissions from now on—the country and regional plans identify benchmarks for 2010 and 2020.
the kyoto protocol is not yet in force—why is wwf focusing on something new?
Russia is the last country missing to bring the Kyoto Protocol into force. However, the existence of that Protocol is already shaping the reality—look at the upcoming Emissions Trading Directive in the European Union, the McCain/Lieberman bill in the United States, or the policy discussions in Japan around taxes and trading as examples.
While WWF is working hard on persuading the Russian administration and the Duma to pass the Kyoto ratification, many implementation plans are already taking place. Decisions to build coal fired power plants are happening now and WWF wants to influence that. Also of course, climate change will not wait, and neither will new investment opportunities.
who are we working with?
WWF's initiative focuses on persuading the major actors in the power sector, whoever they might be in each country, to make the switch from coal to clean power. In Europe and the US this is initially focused on major power companies—challenging them to move their investments out of coal fired power stations, and instead to invest in efficiency and renewable energy technologies. The major companies that WWF is challenging include German RWE and E.ON, Swedish Vattenfall and Italian ENEL.
and who is supporting the POWER SWITCH! initiative?
WWF has already engaged with a number of PIONEER companies—power generators that have signed up to WWF's challenges. These companies include:
- MVV Energie AG
- Stadtwerke Hannover
- N-Energie AG
- Heag NaturPur
- EWS Schönau
- LichtBlick
- NaturEnergie AG
- Naturstrom AG
- Unit[e]
For more information on what makes these companies pioneers go to
why should we move from coal to clean?
Coal is the worst offender, the most carbon intensive fossil fuel, producing 70 percent more CO2 emissions for the same energy output as natural gas. Brown coal or lignite is even more carbon-intensive. The investments made today will last decades. For example, in the next few years Germany will be making decisions to replace half of their power plants. What will those new power plants be—Coal or clean?
what about oil?
Oil does not play a major role in the power sector around the world, but surely where it is playing a role a switch to clean is also possible, reducing greenhouse gases and increasing energy security by switching to domestic renewable energy.
why is nuclear energy not an option?
Due to the numerous high risks and prohibitive costs, nuclear power is neither an alternative to fossil fuels nor a solution to climate change.
what are the alternatives?
To replace the current dependency on fossil fuels, power companies would use a double approach: investment in energy efficiency and a strong focus on so-called "new renewables"—electric energy mainly from wind, biomass, and solar energy.
The two main alternatives in renewables are large scale wind and sustainable biomass. Solar only a plays a role later as right now the cost is prohibitive. So investments must be made for the future. WWF has a series of criteria and principles for offshore wind and sustainable biomass to ensure that we can balance both energy needs, nature conservation and food supply in the future. These renewables, however, will not do it alone. Energy efficiency is absolutely essential so the message is to combine the two to get the switch.
Natural gas is seen as a transition fuel for the next decades because of its relatively high efficiency—its CO2 emissions per energy unit produced are up to 70% lower than the ones from coal.
how could it be done?
In Europe
A study for WWF on the potential for moving to a CO2–free power sector in Europe by 2020 shows that electricity demand reductions of 27 percent could be achieved. In addition, full exploration of the technological potential to cut CO2 emissions by renewable energy technologies such as wind, solar electricity, geothermal, smaller hydro-electric and co-firing of sustainable biomass in existing power plants could increase the share of renewable energies to approximately 40–60 percent of all power produced depending on the success of energy efficiency measures. Simultaneously, this would reduce CO2 emissions in the European power sector to about 50 percent of the present level by 2020.
In the United States
In the USA, a recent study for WWF has shown that in a PowerSwitch! scenario achieving 59 percent CO2 emission reductions, consumers’ net costs could fall $86 billion a year by 2020. This would take place due to less electricity being used through investing in more efficient appliances, buildings and power plants, and accelerating the uptake of non-hydro renewable energy sources by a factor of twelve.
how much will it cost?
While this is not the main message of WWF, it is clear from many studies that this switch can be done cost-effectively. For example:
In the United States
- The PowerSwitch! policies initially result in higher electricity prices to all sectors; the average price is 2.4 cents/kWh higher in 2010 and 1.2 cents/kWh higher in 2020 (2000$).
- However when combined with lower electricity demand, lower fossil fuel demand and lower natural gas prices the buildings and industrial sectors have a net energy bill decrease in 2020 of $121 billion. The energy bill decreases from 2004 to 2020 result in average savings of $11 billion per year.
- Overall the policies in this study lead to net benefits to the U.S. economy that average $20 billion per year for the period from 2004 to 2020. The benefits and costs of the policy measures are at similar levels up to 2010 but benefits significantly outpace costs in later years, reflecting in part the longer term benefits of reduced costs as new technologies are commercialized and as the system adjusts to the new policies. By 2020, the average savings exceed the additional costs of new equipment by more than $80 billion per year.
In the European Union
Some initial conclusions on the costs have been made in the WWF report. These show that:
- The lifetime economic benefits to consumers of the demand reduction options are likely to be negligible or positive
- Specific costs for the supply side options may be in the range of 10–60 Euros per tonne of CO2 avoided (at social discount rates). This will tend to be at the higher end in 2010 and the lower end in 2020 as technology improves and costs fall. This may lead to additional costs of the order of 10 Euros per capita per year in 2010 and 30 Euros per year in 2020
- An important synergistic effect is that strong efforts to improve energy efficiency on the demand side will have a downward pressure on the electricity prices in the European Union. Hence—despite higher average production costs in a low-carbon future—it might well be that the total costs of the electricity production/consumption system remain the same or even decrease
In Developing Countries
For a range of developing countries in Asia, studies are currently underway to show how to make the switch from coal to clean power. These will be released in July 2003.
Figure 2
Development of CO2 emissions in Business-As-Usual and PowerSwitch!scenario in the EU
PowerSwitch! Questions & Answers1