The Use of Renewable Energy Devices for Household in Australia - Case Study Example

THE USE OF RENEWABLE ENERGY DEVICES FOR HOUSEHOLD THE USE OF RENEWABLE ENERGY DEVICES FOR HOUSEHOLD Insert name: Insert course code: Instructor’s name: 9 August, 2010. 10. EXECUTIVE SUMMARY Renewable energy technology is aimed at reducing the cost that households normally face when using fossil fuels to cater for their needs. Solar hot water unit is one of the renewable energy technologies that use sunlight to heat water. Solar hot water are very economical since once fixed they do not require other expenses. There is a Solar Heat for Industrial Process in Australia that is aimed at improving conditions for the market introduction of solar heating systems for industrial applications so as to promote a reduction of fossil energy consumption and thereby to develop an environmentally friendly way of industrial production. There also Thermal Solar Systems that catalyzes the development as well as promote beginning of high superiority in addition to profitable viable “PV/Thermal Solar Systems” and to raise broad understanding on presentation, trying as well as monitoring of “PV/Thermal Solar Systems” in the construction division. This report looks into the industry analysis of the renewable energy devices market in Australia as well as the positioning strategy for solar hot water unit in the Australian market. Table of Contents THE USE OF RENEWABLE ENERGY DEVICES FOR HOUSEHOLD 1 THE USE OF RENEWABLE ENERGY DEVICES FOR HOUSEHOLD 1 10. EXECUTIVE SUMMARY 2 Table of Contents 3 2.0 INTRODUCTION 4 3.0 FROM WASTING ENERGY TO SAVING ENERGY AND REDUCING CARBON DIOXIDE 4 3.1 Renewable sources of energy 6 4.0 ENERGY USE BY HOUSEHOLDS 7 4.1 Solar 7 4.2 Active collection of solar energy 8 5.0 RENEWABLES-INTENSIVE ENERGY SCENARIO 9 5.1 Energy demand 9 6.0 ENERGY RESOURCES 11 6.1 Renewable energy 11 6.2 Renewable thermal energy 11 7.0 INVESTMENT DECISION MAKING 12 8.0 CONCLUSION 14 References: 16 2.0 INTRODUCTION In modern industrial societies, energy is still available at relatively moderate prices as well as with no restrictions. In most countries, people consume energy as much as they want. This has resulted in increased consumption of electricity and as a result, energy prices have gone up in recent years. With the effect of energy prices going up, this have created a new awareness of the value of energy. High energy consumption is contributing to more and more impact on the finances. Furthermore, as the consumption of energy in households and industries has greatly resulted in climatic changes with adverse effects to the lives of people. The use of renewable energy will be able to address this issue and thus the need to have strategies to achieve a sustainable source of renewable energy. The governments of most countries are now taking approach to addressing the issue of climate protection. In this report paper we are going to address the use of renewable energy and particularly the solar hot water in households. We are going to look into the strategies that are being laid, the market and the positioning of renewable energy in Australia. 3.0 FROM WASTING ENERGY TO SAVING ENERGY AND REDUCING CARBON DIOXIDE Until the 1970s it was agreed that real economic growth and increasing prosperity would as well require the utilization of additional energy. The concept of energy saving came up when the oil crisis in the 1970s led to an explosion in oil prices and brought into a halt the development. There were several tips, stickers as well as appeals in the 1980s which aimed at encouraging citizens to save energy. As a result, the wasteful consumption of energy decreased at a considerable rate resulting to a reduced price of energy. As prices went down in the 1990s, people started ignoring the concept of energy saving and it was thoughtlessly wasted. High energy consumption is not necessarily the best way of maintaining the prosperity and living standards of citizens. As a matter of fact, energy consumption is coupled with huge losses. About 35% of primary energy consumed is already lost in the energy sector via power plant waste heat as well as during transportation even before it reaches to the consumer. The use of renewable energy thus becomes a competent means to save power in addition to reducing carbon dioxide. It has been noted that private households consume more energy than even industries. Most people use electricity to heat their homes as well as fixing hot water systems. The diagram below demonstrates the fraction of different sectors in secondary energy consumption. By 1990, industry was still the biggest consumer of secondary energy. As industry reduced its secodary enrgy use by uver 17% between 1990 and 2005, private households as well as the traffic sector increased their consumption by at least 10% during the same period. The major reason behind this increased domestic energy consumption was the increased sale of electrical appliances as well as devices. This increase is particularly noticeable in the areas of communication as well as entertainment electronics (Quaschning, 2010 p. 50). 3.1 Renewable sources of energy The water, wind and sun are the fully renewable sources of energy. They are always available. With the improvement of technology, people have come up with ways of harnessing these resources and utilizing them in home to supply energy to heat water, to produce light, as well as heat to warm house or cook food. A number of Australians use solar heat collectors to heat their hot waer. In 1994, approximately five percent of Australian households had solar hot water. The percentage is high in Western Australia, with about 25% having solar hot water and in the Northern Territory where 58% do. There are several ways by which wind is used as a source of energy. Wind-mills have been utilized to thrust water from boreholes, to move water through irrigation schemes, milling wheat as well as generating electricity. As people are eager to come up with ways of producing electricity without burning fossil fuels, the use of windmills might become a significant source of energy. For instance, in Western Australia, Western Power Corporation built a large energy farm in Esperance. This farm generates about 14% of the energy consumed in the town. Moving water turns water wheels to turn generators or move levers just like windmills are turned by moving air. Waves hitting shores around the world have about twice the amount of energy used by people around the world. An Australian oceanographer by the name Tom Denniss working with kthe University Water Research Laboratory of the Univesity of New South Wales, has come up with a novel style of power generator that is able to capture the energy of waves (Mau, 1998 p.74). 4.0 ENERGY USE BY HOUSEHOLDS The largest population of the Australian people(about 98%) are members of households living in dwellings like houses, flats as well as units. The remaining percentage live in institutions like hostels, prisons and nursing homes. The amount as well as the type of energy used in the home has considerable implications for the environment. Households are responsible for around 11 per cent of entire energy utilization in Australia. Natural gass along with electricity continue to be the main sources of enery for heating rooms, heating water as well as cooking. In 2005, 78% of all households mostly preferred the use of gas (33%) and electricity (32%) for heating room as compared to only 12% of wood used. During this time, electricity was found to be the fundamental source of energy for hot water systems installed in households (51%). Solar energy is mainly used in Australia for heating water. It was found that by 2005, 4% of all family units utilized solar energy, with the ‘Northern Territory’ having the largest percentage of households (42%). The use of solar energy was as well popular in Western Australian households (16%) for heating water (Australian Bureau of Statistics, 2008 p. 67). 4.1 Solar The major source of market for renewable energy devices to generate electricity in the short to medium term appears to be in remote areas, where there are a total of more than 10,000 households as well as 300 communities which generate their own electricity. There are two main applications of solar energy that have the potential to make a significant contribution to grid-based electricity supply. These are Photovoltaics and solar thermal energy. Passive solar design is a financiallly viable means of utilizing solar technology throughout Austalia. Passive solar design standards have revealed that solar energy can meet up to 90% of normal household space heating needs. Australia is found to have a well established domestic solar water heater company. According to research, it has been found that more than 300,000 or five per cent of Australian houses are installed with domestic solar water heaters. In Western Australia, one in four households has a solar water heater, while in the Northen Australia it is about 37%. Thus the main market for the renewable energy devices is found to be in the places where most people are living ,and especially in remote areas. In the 1993 – 94 fiscal year, the Commonwealth Government pronounced that it would givee $6 million for a program that would make it possible for solar water heaters to be proviede to consumers at low initial outlay. The objective of the program was to develop, trial as well as to demonstrate innovative means of financing solar water heaters. This in turn boosted the market for the renewable energy devices in Australia. The program fostered cooperation between the industry, energy utilities as well as financiers to providehouseholds with solar water heaters at a low initial cost, with the balance to be recompensated in payments collected via consumers energy bills (Australian Bureau of Statistics, 2005 p. 546). 4.2 Active collection of solar energy In most homes, the hot water heater is among the very costry appliances, in terms of electricity or fuel (natural gas) required to keep it operational. The energy (and thus cost) savings that can be attained with solar heater can vary considerably, depending on the local climate as well as how careful or wasteful the household is in its energt use. The households that are careful on their use of energy can achieve up to 40% of reduction in their energy cost needed for heating water by harnessing solar energy. Active solar energy is a technology that is widely being used in the world. Australia has made a serious commitment to solar energy. In a number of areas in Australia, solar hot water heaters are a requirement by the law, as are solar-heated distillation units for producing clean water for dinking from salty water. In several parts of Australia, the market penetration for solar equipment now exceeds 30%. Nevertheless, there are a number of restrictions to the solar energy technology. Solar energy varies in several ways: daily variation, or even variation in the course of the day, due to weather change; a seasonal variation in the position of the sun in the sky; as well as the inevitable difficulty that soalr energy is only available during daylight hours. Thus there is need for a backup energy source, in addition to provision for storing extra solar enegry (Schobert, 2002 p. 589). 5.0 RENEWABLES-INTENSIVE ENERGY SCENARIO The aim of developing this renewables-intensive energy scenario is to identify the potential marrkets for renewable technologies in the years 2020 and 2050, presuming that market barriers to these technologies are removed by comprehensive national policies. While constructing the scenario, there was an assumption that renewable power technology would confine markets each time a reasonable case can be prepared that renewable power is not further pricey on a life-cycle price foundation than predictable substitutes as well as the use of renewable technology at the levels shown would not result to substantial ecologiacl, land utilization and additional troubles. 5.1 Energy demand The market for renewable energy is partly dependent on the future demand for energy services: heating and cooling, lighting, as well as transportation among many other uses. This demand is in turn influenced by the growth of economy and population along with the efficiency of energy use. Potential power supply necessities can be anticipated by taking such contemplations into account. “In order to create a renewables-intensive energy scenario, future levels of demand for electricity as well as for solid, liquid and gaseous fuels should be assumed to be the same as those projected in a scenario by the Response Strategies Working Group of the Intergovernmental Panel on Climate Change” (Johansson and Burnham, 1993 p. 12). The “Working Group” developed a number of projections of power requirements. The projection that has been adopted for the renewables-intesnsive scenario is characterized by lofty fiscal growth in addition to ‘accelerated policies’. The accelerated policies case was fashioned to show the consequence of strategies that would motivate the implementation of energy-efficient technologies, without hampering financial development. Renewable technologies can succeed only if they are a segment of a plan aimed at minimizing the entire cost of providing energy services. Thus the energy-efficiency assumptions underlying the accelerated policies scenario ought to be consistent with the goals of the renewables-intensive scenario. The high financial development, accelerated-policies situation schemes a replication of globe populace as well as an eight-fold add to in gross globe financial invention between 1985 and 2050. Economic development rates are presumed to be superior for developing nations than for those already developed. Energy demand raises more unhurriedly than economic production due to the accelerated implementation of energy-efficient technologies, but demand intensification outspaces effectiveness improvements – particularly in swiftly growing developing nations. 6.0 ENERGY RESOURCES 6.1 Renewable energy The quantities of wind, solar-thermal as well as photovoltaic power that can be efficiently incorporated into electric generating systems are very susceptible to patterns of electricity demand along with weather conditions. The insignificant value of these commonly referred to as intermittent electricity sources generally decreases as their share of the entire electric market increases. Analysis of these interactions suggests that intermittent electric generators can provide 25 to 35 per cent of the total electricity supply in Australia andmost parts of the world. Some regions of Australia like Esperance, emphasize wind, while others would find photovoltaic or solar-thermal-electric systems more appealing. “Even though the utilizable hydroelectric potential is huge, principally in developing nations, and hydropower is an outstanding complement to intermittent electric sources, the development of hydropower will be constrained by environmental and social concerns – especially for projects that would flood large areas” (Johansson and Burnham, 1993 p. 14). Due to these constraints, it is presumed that only a fraction of potential sites would be exploited, with most growth occuring in developing countries. Globally, only a quarter of the technological potential as anticipated by the World, Energy Conference, would be exploited in the scenario by 2050 (Johansson and Burnham, 1993 p. 14). 6.2 Renewable thermal energy The market infiltration of conventional solar thermal flat-plate collectors has been restricted by high costs and low reliability. Conventional technologies for producing thermal energy are too intensive in their use of material as well as labour to achieve the low capital costs and rapid payback periods that are necessary for the market acceptance. Under new technology, a solar energy collector panel using polymer film as well as laminate technology demonstrates low cost and high thermal efficiency. 7.0 INVESTMENT DECISION MAKING Any technique for analysing investments in solar hot water projects ought to distinguish between what is finanacially rational from the national perspective as well as what is economically attractive to private investors. Measures that a private decision maker will take in his or her own firm’s interest often differ considerably from those thhat are best from a public point of view. This is particularly right in the event of investments in renewable energy technology. The differences in the economic interest of the private and public sectors result partly from the fact that market prices do not reflect social costs and partly from the decision making criteria used by private and public entities. When an investment is analysed from the national viewpoint, social benefits and costs ought to be assessed. Ideally, government planners ought to consider indirect benefits and costs, like the impact of investments in solar hot waater projects on avaerage consumption, employment, balance of payments, economic growth, the purest sections of the population and equity. The method used to evaluate social benefits is the shadow price of the quantity of oil that would be replaced by renewable energy. The shadow price equals the market price plus a premium othat represents the amount of foreign exchange available for other imports now that it is no longer needed to buy oil. At any rate, the only additional cost to the government, which is going to spend its funds on one form of energy or another, will probably be that of whatever policy incentives it institutes to encourage investments in renewable energy. The priority attached by the government to any incentive scheme ought to rely on the outcomes of the social cost-benefit analysis. Assuming that social benefits exceed social costs, the government should consider the criteria used by private firms for specific investment decisions and design incentive schemes that incorporate these criteria while at the same time providing net social benefits (Desai, Jhirad, and Munasinghe, 1990 p. 19). Of all the household use of energy, water heating is the task that consumes the largest section on energy consumption. However this depends greatly on the climatic zones. Thus it is important to incorporate the renewable energy technology in Australia and especially the solar hot water so that much expenss on heating water can be reduced. The trend in energy use patterns indicates that the majority of Australia’s energy requirements are used for space heating/cooling or water heating. The chart below shows the Queensland household energy use. 8.0 CONCLUSION Despite the introduction of energy-efficient requirements into building regulations into building regulations, the actual amount of energy utilized by houses has increased over the last decade. Between 1983 – 84 and 2003 -04, emnergy use in the residential sector increased by 52% or an average of 2.2% per year. Much of this growth is linked to population growth, but it is also related to the growing size of the average home as well as decreasing number of people per dweling. Between 1984 – 85 and 2002 – 03, average house size increased from 162m2 to 228m2 while household size has been steadily decreasing and is currently just below 2.6 people per dwelling. The long-term projections for energy use in the residential sector is that it will continue to increase at around 1.7% per year and that by 2030 the sector will be consuming 650 petajoules of energy or around 26.3GJ/person. Currently, the majority of this energy comes from fossil fuel sources – both local (through electricity generation) and natural gas. Jointly, electricity and natural gas account for 80% of a households energy consumption, with the remaining percentage coming form wood, LPG as well as a very small fraction from solar energy (0.6%). This lofty relianse on fossil fuels, along with the trend of increasing dwelling size, poses enormous challenges for housing design into the future. Traditionally, water heating has been provided by electric or natural-gas-powered hot water units. Despite the fact that the trend has moved towards the more fficient natural-gas-fired units, these still use a fossil fuel and as a result produce greenhouse gas emissions. The obvious alternative is solar hot water units, which use sunlight to provide the majority of the heating power and usually use an electric or gas booster sysytem for the cooler periods of the year. Depending on the climate zone, solar hot-water units can provide in excess of 90% of a households hot water needs without the use of their booster systems (Newton, 2008 p. 429). References: Australian Bureau of Statistics. 2005. Year book, Australia, Issue 87. Canberra, Aust. Bureau of Statistics. From http://books.google.com/books?id=PaF5zRuBCEYC&pg=PA546&dq=the+use+of+solar+hot+water+for+household+in+australia&hl=en&ei=eaZfTNLoNNmgOO2ZlL0J&sa=X&oi=book_result&ct=result&resnum=1&ved=0CDAQ6AEwAA#v=onepage&q=the%20use%20of%20solar%20hot%20water%20for%20household%20in%20australia&f=false (accessed August 9, 2010) Australian Bureau of Statistics. 2008 Year Book Australia No. 90. Canberra, Aust. Bureau of Statistics. From http://books.google.com/books?id=1K7CzUsYhjkC&pg=PA67&dq=the+use+of+solar+hot+water+for+household+in+australia&hl=en&ei=eaZfTNLoNNmgOO2ZlL0J&sa=X&oi=book_result&ct=result&resnum=2&ved=0CDYQ6AEwAQ#v=onepage&q=the%20use%20of%20solar%20hot%20water%20for%20household%20in%20australia&f=false (accessed August 9, 2010) Desai, A. V., Jhirad, D. and Munasinghe, M. 1990. Nonconventional energy. New Delhi, New Age International. From http://books.google.com/books?id=Mq8FPYpG2csC&pg=PA19&dq=An+industry+analysis+of+the+renewable+energy+devices+%28solar+hot+water%29+market+in+Australia&hl=en&ei=qARgTNSbGZOIOITI9bwJ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CDUQ6AEwAA#v=onepage&q&f=true (accessed August 9, 2010) Johansson, T B. and Burnham, L. 1993. Renewable energy: sources for fuels and electricity. NW, Island Press. From http://books.google.com/books?id=40XtqVMRxOUC&pg=PA10&dq=An+industry+analysis+of+the+renewable+energy+devices+market+in+Australia&hl=en&ei=IgRgTLj0CsruOaPKmKUP&sa=X&oi=book_result&ct=result&resnum=7&ved=0CFcQ6AEwBg#v=onepage&q&f=false (accessed August 9, 2010) Mau, J. et al. 1998. Science Australia 1. Carlton, Curriculum Corporation. From http://books.google.com/books?id=lmSsWWM5nJIC&pg=PA73&dq=the+use+of+solar+hot+water+for+household+in+australia&hl=en&ei=eaZfTNLoNNmgOO2ZlL0J&sa=X&oi=book_result&ct=result&resnum=4&ved=0CEIQ6AEwAw#v=onepage&q&f=false (accessed August 9, 2010) Newton, P. W. 2008. Transitions: Pathways Towards Sustainable Urban Development in Australia. New Zealand, Springer. From http://books.google.com/books?id=c47nD1k_efgC&pg=PA429&dq=the+use+of+solar+hot+water+for+household+in+australia&hl=en&ei=eaZfTNLoNNmgOO2ZlL0J&sa=X&oi=book_result&ct=result&resnum=3&ved=0CDwQ6AEwAg#v=onepage&q=the%20use%20of%20solar%20hot%20water%20for%20household%20in%20australia&f=false (accessed August 9, 2010) Quaschning, V. 2010. Renewable Energy and Climate Change. West Sussex, Wiley-IEEE. From http://books.google.com/books?id=JL1BCL7GyBUC&pg=PA51&dq=the+use+of+renewable+energy+devices+for+household&as_brr=3&client=firefox-a&cd=4#v=onepage&q&f=false (accessed August 9, 2010) Schobert, H.H. 2002. Energy and society: an introduction. NY, Taylor & Francis. From http://books.google.com/books?id=9aDcfXLuBmEC&pg=PA589&dq=the+use+of+solar+hot+water+for+household+in+australia&hl=en&ei=eaZfTNLoNNmgOO2ZlL0J&sa=X&oi=book_result&ct=result&resnum=7&ved=0CFUQ6AEwBg#v=onepage&q=the%20use%20of%20solar%20hot%20water%20for%20household%20in%20australia&f=false (accessed August 9, 2010) Read More