Renewable energy - SUM: Sustainability Management Wiki

Authors: Ayleen Beekmann, Rebekka Ernst, Emily Ravier
Last updated: October 1st 2023

1 Definition and relevance of the sector

The renewable energy (RE) sector is on an upward trend because of its economic and environmental importance ¹ p.3.The sector deals with the generation of electricity, heating, and cooling from RE sources.² RE defines energy derived from natural sources that are replenished at higher rates than they are consumed.³ ⁴In 2021, RE represented 12.6% of the total final energy consumption (TFEC).⁵The RE sources include solar energy, geothermal energy, hydropower, wind energy, and biomass energy.² ⁶

Solar energy is generated by solar radiation in the form of heat or light.³ ⁶Solar technologies, like photovoltaic (PV) panels or mirrors that concentrate solar radiation, convert sunlight into electrical power.³ The generated solar energy can then be used for solar home systems, solar dryers, solar cookers, thermal power generation, and water heaters or in agrivoltaic systems.⁷ ⁸

Geothermal energy is generated from the Earth’s interior, where energy is stored in rocks and captured in steam or liquid water.⁷ ⁶ This is either residual energy made available by the formation of the planet or energy continuously extracted from the decay of radionuclides. ⁶ The heat from the Earth’s interior can be mined, for example, through the usage of wells in geothermal reservoirs. Geothermal energy can then be used to heat cities, generate electricity, or for hydrothermal purposes.⁷ In addition, near-surface geothermal energy can also be used by private households for heating, cooling, and hot water.²

Hydropower is currently the largest source of RE in the electricity sector.³ Hydropower comes from the hydrological cycle.⁶ Hydropower projects include dam projects with reservoirs, run-of-river power plants, and projects in river courses.⁷ Hydropower can be used to generate energy, mainly to turn turbines and produce electricity.⁷ Moreover, hydropower reservoirs provide drinking water, water for irrigation, flood and drought control, navigation services, as well as energy supply.³ Ocean energy, on the other hand, comes from the kinetic energy of the wind, which creates waves; the gravity of the earth, moon, and sun, which creates the tides, the differences in salinity between water types and the differences in temperature between ocean-layers.⁶ ⁷This way, ocean energy can be used for barrage and tidal stream projects.⁷

Wind energy is generated by the kinetic energy caused by air currents.⁹^,⁶^,⁷This kinetic energy is then used by wind turbines located on land, so-called onshore wind turbines, or in sea- or freshwater, so-called offshore wind turbines.³ The created energy can be used to generate electricity by wind generators, windmills, and water pumps.⁷

Biomass is used to produce bioenergy and can be divided into traditional biomass and modern biomass.⁶ ⁷Traditional biomass used for cooking and heating includes wood, charcoal, animal dung, and agricultural residues.⁶ Modern biomass includes dedicated energy crops, residues from forestry, agriculture, livestock, and organic matter that can be used for heat and power generation, pyrolysis, gasification, and fermentation.⁶ ⁷Bioenergy is an important RE because it can be used in multiple consumption sectors, such as heat, electricity, and transport, and therefore is the most versatile RE.⁷ ¹⁰

In 2021, the 12.6% RE sources of the TFEC consisted of 4.9% renewable heat through biomass, geothermal, and solar energy, 3.6% hydropower, 3% further use of biomass, geothermal, ocean, solar, and wind power, and 1% biofuels for transport.⁵Overall, a significant increase is likely to develop in the deployment of RE technologies by 2030.⁶In particular, the expansion of wind and solar energy will triple RE generation, as wind and solar power accounted for 23.9% of total installed generation capacity in 2022, with 1,185 GW of solar power and 906 GW of wind power.¹¹ ⁵ Moreover, the direct use of RE for global heating demand is projected to increase from about 10% in 2020 to 40% in 2050, with about three-quarters of the increase coming from solar thermal and geothermal. The indirect use of RE through electricity should contribute 15 % to total energy consumption in 2050.¹¹The share of RE in global electricity generation has already increased by 8.1% to an overall 29.9% in 2022.⁵ All in all, the RE sector has grown rapidly over the last decade in terms of its turnover, the number of industry players, and the generated energy.² In 2022, the global investment in RE in the power, fuel, and infrastructure sectors was at 29.4% with 495.4 billion USD.⁵ An important market for RE technologies, that also create a large share of the turnover for the RE sector, are industrial companies active in food production, metal processing, automotive, and other manufacturing sectors.⁵ ²This is because of their high energy requirements and their commitments towards sustainability, as well as targets towards net-zero emissions that all require increased use of RE.⁵ ²Private households are important consumers of heating and cooling from RE sources. Over the last five years, the number of households purchasing green electricity has increased.Moreover, private households also act as producers of solar power or heat from RE sources.The third largest market for the RE sector with a high energy demand consists of the hospitality, retail, wholesale, and other commercial and service sectors. Other markets include the transport sector, agriculture, companies in the healthcare sector, and public institutions.²^{, p. 19} The market entry barriers in the RE sector vary depending on technology and energy source.They are low if it concerns RE installed in private households, but they are high for RE sources that only large energy suppliers, banks and funds invest in, due to the numerous requirements for the protection of the environment as well as development plans and the high investment costs.² Also, important for the growth of the RE sector is the availability of qualified and experienced staff.⁵ In 2021, the number of people employed in the RE sector worldwide increased by 5.8% to 12.7 million.⁵

The demand for energy to meet human needs is increasing.⁷ Therefore, a reliable energy supply is essential in all economies.⁷ The strongest competition for the RE sector are fossil fuels and nuclear energy because until a few years ago, the generation of energy with coal or nuclear power was significantly cheaper than using RE sources.² Nowadays, RE is the cheapest power option in most parts of the world and has a lower sales volatility than fossil fuels.¹² ² ⁵ Moreover, efficient, reliable RE technologies can create a system less prone to market shocks and improve resilience and energy security.¹² For instance, while 2022 was volatile and unpredictable for energy markets, RE has overall shown resilience.⁵ ⁵

Additionally, RE combines economic growth and environmental benefits, also called green growth, which is explained by the UN environment programme as a “win-win strategy because it relates to other social objectives such as well-being, job creation, and tax revenues”⁶. Thus, it is essential to recognize the relevance of using these energy-efficient RE sources to help meeting the demand for energy and reduce environmental impact.⁸ The RE sector has also grown steadily in recent years thanks to the growing public environmental awareness since 2017.² Indeed, the use of RE helps to combat environmental problems and it is a global area of interest for achieving sustainable development.¹ ⁸ Therefore, many countries have set targets, support measures, and policies for RE that intend to promote the deployment of RE.⁵ Furthermore, at the global level, RE technologies are an essential tool for reducing emissions, as RE sources create lower emissions than fossil fuels.³ ¹¹ ⁷ Thus, transitioning from fossil fuels, which currently account for the biggest share of emissions, to RE is key to mitigating climate change.⁷ ³

2 Sustainability impact and measurement

RE and sustainability are two inseparable and widely discussed topics.⁹ In this chapter, the sustainability impact of the RE sector is divided following the triple bottom line approach into its environmental, social, and economic impact, which are summarized again in Figure 1.

Figure 1. Summary of the sustainability impact of the RE sector

Own illustration.

Sustainability is achieved through the provision of an adequate and continued supply of energy and other material needs without damaging the environment.⁹ Therefore, RE must be limitless and it must provide non-harmful delivery of environmental goods and services, a large reserve of energy without causing waste to be overall sustainable.⁷ ⁹ ¹³ The United Nations’ Sustainable Development Goal (SDG) 7 seeks to ensure that energy is clean, affordable, available and accessible to everyone through the deployment of RE.⁷ ¹³

2.1 Environmental impact

By taking action in achieving SDG 7, the SDG 13 climate action will also be addressed because mitigating climate change can be achieved through the use of RE sources, that are often considered to be clean energy sources, given that energy is the main contributor to climate change and causing about 60% of total global greenhouse gas (GHG) emissions.¹ ⁷ In this regard, RE technologies are typically presented as a carbon dioxide (CO₂) mitigation option because generally they do not produce emissions in the operation stage, resulting in overall decreased GHG emissions.⁶ ¹⁴ However, RE technologies emit GHG emissions during manufacturing and installation, but still these emissions are less compared to fossil fuels.¹⁴ For instance, PV modules have an energy payback time (EPBT) of 0.9 to 2.1 years and cause 20 grams of CO₂ per one kilowatt hour (kWh), because of their energy-intensive production.¹⁵ ¹⁶ ¹⁷ ¹⁸ ¹⁵ The combustion of biomass in 2020 produced 19 megatons of CO₂ due to the co-firing and co-gasification of biomass in power plants.¹⁹ The generation of hydropower is considered a green source of energy with a median value of 24g CO₂-equivalent (CO₂-eq) per kWh.²⁰ ²¹ ²² In a few cases, hydropower reservoirs produce significantly higher emissions or, on the contrary, have close to zero emissions and can even act as carbon sinks.²¹ A newly built onshore wind turbine produces around 9 grams of CO₂ per kWh and a new offshore plant in the sea 7 grams of CO₂ per kWh and the EPBT for wind turbines is 2.5 to 11 months. ²³ ¹⁸ In comparison to the RE technologies, fossil fuels produce way more CO₂, with median values of 490 and 820g CO₂-eq/kWh for gas and coal.²³ ²² ²¹ Thus, transitioning from fossil energies to RE is seen as an essential solution for fighting climate change.²⁴ ¹ ²⁰ ¹⁴ ²⁵

A negative environmental impact of the RE sector is the usage of critical raw materials especially for PV technology since they contain valuable resources that cannot be easily recovered.²⁶ ⁹ For instance, the European Commission released a report in 2020 which counts the elements gallium and indium, that are widely used in PV technology, to the critical raw materials.²⁷ Other highly toxic materials used in PV cells manufacturing are cadmium, lead, nickel, which have been restricted.²⁷ Furthermore, the silver used in the manufacturing of PV modules is considered a dangerous waste and its usage might lead to the depletion of silver resources.²⁸ ²⁹ Moreover, between 300 and 500 kilograms of rare metals are included in a wind turbine depending on the size.³⁰

Another environmental issue is the difficulty of recycling some of the RE technologies.³⁰ ¹⁸ For RE technologies to be durable, PV modules for example are firmly bonded together, which makes them difficult to recycle.²⁶The blades of wind turbines are also not easily recycled which will cause globally 100,000 tons of blade waste annually in 2025.³¹ Thin-film PV modules with toxic cadmium telluride and a lifespan of 20-30 years or wind turbines with an average 20-year lifetime, will have to be increasingly decommissioned. It is uncertain if after these years the company that produced the technology will still exist to deal with disposal of these in an environmentally friendly manner. ²⁷ ²⁸ ¹⁶ ³² ³³

Generating RE increases the usage of metals and thereby creating mining threats for biodiversity.²⁵ Mining potentially influences 50 million km of Earth’s land surface and 82% of these mining areas target materials that are needed for RE production with a high density of mines in Protected Areas and Remaining Wilderness.²⁵ Moreover, RE causes issues regarding biodiversity because wind energy projects may harm birds and bats that are important for the ecosystem and these projects may also harm the marine ecosystem.¹⁴ Furthermore, alterations of the river flow because of hydropower can impact aquatic ecosystems ¹⁴ Hydropower reservoirs are often artificially created by flooding the former natural environment and hydroelectric structures disturb the ecological continuity of sediment transport and fish migration through the building of dams, dikes and wires. ²⁰ ³⁴ Furthermore, geothermal power may affect the stability of land and potentially trigger earthquakes.³⁴

Even though there are negative impacts by RE, in addition to the aforementioned decrease of GHG emissions, RE technologies have further advantages compared to fossil fuels. They minimize the use of natural resources, reduce deforestation, decrease of air pollution, and mitigate water scarcity.²⁸ ³⁴ ³⁵

2.2 Social impact

The combustion of fossil fuel produces air pollution and causes negative health effects.²⁴ Through the transition to RE technologies air pollution and the related health concerns can be reduced.²⁴ ¹⁴In addition, the human health can be improved when indoor air pollution is reduced by replacing coal- and wood-based stoves with solar stoves.³⁴

The use of land for RE is another critical point because some RE technologies occupy more land than conventional energy sources.²⁸ Especially the land-use requirements for bioenergy from dedicated feedstocks are two orders of magnitude higher than for other RE technologies and therefore reduce the availability of land for growing food.²⁴ Solar energy needs land as well, especially for the PV panels, but this may not be possible in every region due to its intermittent, requiring storage for nighttime or cloudy day use.⁹ Energy storage is important for intermittent RE, however it is often combined with technical difficulties and costs as well as regulatory problems.³⁶ Wind farms also require land far from urban centres in remote areas because the noise caused through wind turbines makes it unsuitable for a placement near population and therefore it is crucial to move the generated energy to urban load centres through an electric grid.²⁸ ³⁴ ¹²

RE might facilitate energy security goals because of their local or regional availability and therefore reduce vulnerability to supply disruption and market volatility by increasing the diversification of energy sources.²⁴ Especially in rural areas that lack centralized energy access, decentralized RE technologies are well suited to increase energy access, because a diverse portfolio of energy sources combined with good management and system design enhances energy security.²⁴ ²⁰ Moreover, the European Union (EU) promotes an energy transition by encouraging the deployment of RE and enforcing a more decentralized energy system with consumers becoming producers of the energy they consume, so called prosumers.³⁷ This way, RE enhances a more energy-efficient behaviour in private households and citizens get increasingly more interested in becoming at least partly self-suppliers and participating actively in the energy transition.³⁸ However, while the richer part of the population benefits from prosumption, over 50 million people in the EU cannot afford an adequate level of energy consumption and live in energy poverty.³⁷

RE systems are typically more labour-intensive than conventional energy systems and are therefore favourable in terms of generating employment.²⁴ However, the global solar panel manufacturing industry has a problem regarding the exploitation of workers.³⁹ For example, the Uyghur, a Muslim minority group based in Xinjiang in China, have been forced to produce polysilicon for solar panels under state-sponsored labour transfer programs for two years.³⁹ They had to work under dangerous conditions with low pay and were threatened with arrest and imprisonment if they refused to work.³⁹

2.3 Economic impact

In recent years, the RE sector faced multiple challenges like volatile commodity prices, higher interest rates, supply chain constraints, trade measures, and rising equipment costs that lead to higher technology prices. However, the RE sector has shown financial resilience in this regard. ⁵ ⁴⁰ Currently, RE is the cheapest power option in most parts of the world and the prices for RE technologies show a rapid decrease, which leads to an increasing attractiveness of RE.¹² Simultaneously, the fossil fuels got more expensive because of emissions trading and CO₂ pricing.² The rising fossil fuel prices and increased international funding for the energy transition enhances the usage of RE in all sectors.⁵ Moreover, the risk of supply disruptions and the high fossil fuel price volatility resulted in energy consumers to adopt more on-site RE systems and to switch to electrified technologies.⁵ In addition, adopting RE in all demand sectors reduces the dependence on fossil fuels, protecting RE from price volatility and supply shocks.⁵ As the share of RE increases, the share of fossil fuels in the TFEC fell from 81.2% in 2011 to 78.9% in 2021.⁵ In 2021 and 2022, solar and wind power projects have experienced delays due to the increased demand and disruptions in the supply of materials.⁵

Achieving the energy transition requires a significant increase in the production and in international trade of critical raw materials.⁵ Expansion of RE increases the demand for mineral resources including gold, copper, aluminium, lithium, and other metals used for manufacturing RE technologies.¹⁴ ³⁰ However, this increasing demand goes hand in hand with dependence on critical countries of which these materials originate from. For instance, there is a major import dependency on China for rare earths. This dependency and the absence of substitutions for these materials may lead to trade conflicts.³⁰

In addition, RE increases the number of jobs in the energy sector.⁴¹ These employment effects due to the energy transition are considered favourable over the long term because even though about 5 million jobs in fossil fuel production could be lost by 2030, around 14 million new jobs could be created through RE, resulting in a net gain of 9 million jobs.²⁴ ¹²

RE investments are a major challenge for many countries with limited resources, and many will need financial and technical support for the energy transition.¹² ⁵ About 2.8 trillion USD are set to be invested globally in energy in 2023, of which over 1.7 trillion USD are going to clean technologies, including RE.⁴² However about 4 trillion USD a year invested in RE is needed until 2030 to achieve net-zero emissions by 2050.¹² Even though the investments are high they will pay off because the reduction of pollution and climate impacts could save up to 4.2 trillion USD per year by 2030.¹²

2.4 Measurements of sustainability in the sector

Energy indicators are useful for monitoring progress towards sustainability and communicating the results.¹² Indicators and methods to measure the sustainability of RE are the life cycle assessment (LCA), the Aggregated Energy Security Performance Indicator (AESPI), the standardized sustainability energy index (SSEI), the Environmental Performance Index (EPI), the Renewable Energy Country Attractiveness Index (RECAI), Global Sustainability Index (GSI) and the Renewable Energy Responsible Investment Index (RERII).¹ ⁴³The following figure 2 gives an overview of the different indicators to measure the sustainability of RE by classifying them according to the three dimensions of sustainability.

Figure 2. Overview of sustainability indicators for RE

Own illustration.

The LCA and the EPI focus on the measurement of environmental sustainability. The LCA is used for the assessment of the sustainability of energy systems and is important for evaluation and comparison of different energy systems.⁴⁴ ⁴³It is especially used to assess the sustainability of RE.⁴³ The LCA can be described as “the systematic analysis of the potential environmental impacts of products and services during their entire life cycle”⁴⁵. The EPI provides a way to spot problems, set targets, track trends, understand outcomes, and identify best policy practices and is a powerful tool in encouraging the achievement of the SDGs.⁴⁶ The EPI estimates the environmental health and the ecosystem vitality. The resulting rankings through the EPI indicate which countries have the best actions concerning the global environmental problems.⁴⁶ ⁴⁷

The SSEI and the RECAI concern the economic sustainability measurement of energy systems. The SSEI estimates whether the energy sector is developing in a sustainable way under the constraints of the sustainability goals.⁴⁸ The RECAI ranks the world’s top 40 markets on the attractiveness of their RE investment and deployment opportunities and thus highlights the most attractive global RE markets with larger capital flows and capacity.⁴⁹ ⁵⁰ This way, the RECAI brings more attention towards smaller markets with a strong commitment to RE.⁴⁹

The AESPI, the GSI and the RERRI deal with the measurement of all three sustainability dimensions. The AESPI shows the present, past, and future energy performance based on the energy policy of a country.⁵¹ ⁵² It includes 25 indicators that show the utilization of modern form of energy, the efficient supply and use of energy, the availability of conventional energy sources, the living quality, the demand and the affordability for people, the environmental impacts, and the market of import of power.⁵¹ The GSI is calculated by grouping the three sub-indexes, namely the internal approach index, the external approach index and the operational approach index.⁵³ ⁵⁴The RERII is also a composite index and contains 50 countries and 17 different indicators which are classified to economic, environmental, social and country governance pillars.⁵⁵

3 Sustainability strategies and measures

The chapter above has shown that although the RE sector is often regarded as sustainable, the sustainability could be improved regarding certain aspects. Therefore, strategies, processes, and measures to enhance sustainability are introduced below.

3.1 Components and plant architecture

Sustainability of RE plants begins in their design stage where the first sustainability related decisions are made.¹⁰ LCA tools are helpful to ensure a sustainable design.⁵⁶ It needs to balance different aspects, especially durability, repairability and recyclability.The latter is important to consider as waste and recycling of the plants are problematic at their end of life (EoL).²⁶ Certain architectures increase the recyclability since they are easier to dismantle than others.¹⁸ ⁵⁷ ⁵⁸To choose the right ones as well as the right materials, recycling experts should be included in the design process.²⁶

Efficient RE plants can improve the sustainability of the sector as they either reduce the material input or increase the energy output.²⁷ To achieve higher efficiencies, the components of plants are developed further.¹⁰ There are various approaches in research, for example technologies such as conductive bonding and matrix shingle bonding done by the German Fraunhofer Institute for Solar Energy Systems.⁵⁸ ²⁷

The input materials directly affect the sustainability of a plant even beyond recyclability. This is illustrated by a recent study that came to the result that “raw materials are responsible for 71% of the CO2eq emission on a representative 8MW offshore wind turbine lifetime”⁵⁶. But GHG emissions are not the only important aspect to consider when choosing the materials, as resource scarcity can lead to problems in the future.⁹ ²⁷For some materials, less rare substitutions are available.²⁷ For instance, in PV systems, aluminium could be used instead of gallium, and copper could replace silver in large parts.²⁷ ⁵⁹ In addition, chrome can replace osmium and ruthenium in PV system catalysts, which is beneficial as the chrome deposit is 20,000 times larger.⁶⁰ An example of switching to completely different materials is building wind turbines out of wood, as some start-ups like Voodin Blades or Modvion do.¹⁸ Furthermore, artificial materials could be integrated.²⁷The company LM Wind Power recently produced a prototype of a recyclable wind turbine blade made of thermoplastic.¹⁸Another aspect in this regard is choosing non-toxic materials like substitutes for the sometimes-used lead.²⁷ ²⁶This applies not only to direct material input, but also to the manufacturing process. For example, there are refining processes for the glass panes of PV systems that do not require the addition of the harmful antimony.¹⁶

3.2 Park design

Besides plant design, the design of a power park can also improve the sustainability. An overarching aspect is the sustainable planning of the RE implementation. Integrated planning of power plants and parks can reduce their negative impact. This way, for instance water use for hydropower-generation or negative impacts of wind parks and ground-mounted PV can be reduced.⁶Integrated, cross-sectoral assessment tools are essential to ensure a system perspective.⁶¹ There are various tools available, for example the nexus analysis, which can be used for energy, food, and water, where the interdependencies between these dimensions are explored to “identify actual or possible trade-offs and synergies”⁶¹. With this method, different scenarios can be compared regarding their impact on the considered aspects and thus their sustainability. This approach can be extended to the future as well.⁶¹

Several sustainable planning approaches intend to harmonize RE plants and the protection of biodiversity. ⁶² ⁶³For ground-mounted PV in particular, the negative impact can be prevented by applying an extensive agrivoltaics approach, a further development of the classic agrivoltaics which combines energy production, agriculture, and biodiversity and hence is a solution for the competition for land.⁶⁴ ⁶⁵ ⁶³ ⁵⁸In Germany, the potential for agrivoltaics consists of tens of thousands of hectares.⁶⁶An important aspect of extensive agrivoltaics is increased row spacing. Other measures include slightly increased elevation of the modules and wild plant mixtures instead of just grass.⁶³In addition, fertilizers or pesticides are typically not used and mulching is not practiced. There are calculation tools that assist with the important technical decisions and are therefore helpful in the planning process, in which nature conservation concepts and goals are developed.⁶³ ⁶⁵ ⁶⁶Nesting aids can further support the occurrence of certain birds. In an extensive agrivoltaics park near Salzwedel in Germany, the population of various species of animals, including toads, insects, and birds are proven to be promoted. For instance, skylarks have a territory size of 1.17 hectares here, which is larger than the actual maximum territory size of 0.5 to 0.79 hectares. Skylarks and other bird species are also increasingly detected. In another extensive agrivoltaics park near Fürstenwalde in Germany, the impact of the row spacing on locust occurrence was analysed by comparing similar areas in two adjacent solar parks. In the plant with wide row spacing (5 to 6 meters) 21 species were proven and thus 40% more locust species than in the plant with narrow spacing (1.5 to 2.5 meters). Furthermore, in the plant with wide row spacing, some species were found that did not occur in the other solar park and species that lived in both parks had higher population densities in the extensive agrivoltaics park.⁶³

Not just for ground-mounted PV, but also for wind parks there are strategies to improve the biodiversity. As the killing of birds is one of the main threats regarding wind parks, some start-up companies like BirdVision and IdentiFlight developed systems to prevent this, for example cameras that detect birds via artificial intelligence and shut down the wind turbines temporally.⁶⁷ ⁶⁸ ⁶⁹ ⁷⁰Due to this technical innovation, the birds can fly through the parks without being harmed, and unnecessarily long shutdown times can be avoided at the same time. The effects of using IdentiFlight were analysed by independent experts, with the result that 87.2% of birds were detected and 97.8% of them were identified correctly. ⁶⁷

The negative sustainability impact of bioenergy, especially regarding soil damages and biodiversity, can be decreased, especially by proper operational management.⁷ By choosing the right inputs, the global warming effects and land use can be reduced, because “[c]ellulosic biofuels […] promise low land-use intensity and, hence, fewer relevant climate effects”⁶. Another strategy is using waste as input, which is done in a research project called Waste2Energy in Ghana.¹⁰ Moreover, there are projects that use algae and aquatic plants as input, which can be combined with waste treatment systems and therefore saves water. Some plants are more efficient in this regard as other, for instance the water hyacinth was proven to be particularly suitable.¹⁰ ⁷¹

3.3 End-of-life-treatment of plants and Circular Economy

As the treatment of plants at their final stage of life can have a significant impact on the environment, one aspect that should be considered regarding the sustainability of RE plants is the handling of these systems at their EoL stage.³² As more and more systems reach this point in the present or near futures, this matter is of growing importance.⁷² It is predicted that in 2050, the “amount of waste PV panel is estimated to reach 9.57 million tonnes”.⁷³ However, various methods are still in the laboratory stage and need to be implemented in practice. ³²This implementation is especially crucial as the availability of resources is limited, so they need to be recovered at the end of the plants’ life.⁹ An overarching concept in this context is Circular Economy. Circularity is not just a waste concerning topic but starts at the product design phase, for example by using LCA, and ranges over every step in the life cycle of a RE power plant.⁹ If resources are recycled at the end of their lifespan and fed back into the material cycles, they can be reused for manufacturing new plants. This way, the resource input and the energy demand during manufacturing are reduced.¹⁰ In particular, the overall emissions of wind turbine blades are decreased by 28% if recycled fibres, metals, and resin are used in manufacturing.⁷⁴

Various waste-approaches are rated differently regarding their sustainability. This is illustrated by the European Waste Hierarchy, which arranges waste practices by ascending sustainability: disposal, recovery, recycling, repurpose, reuse, and prevention. The hierarchy is shown in figure 3.³³

Figure 3. European Waste Hierarchy

Own illustration based on Nagle, A. J., Delaney, E. L., Bank, L. C. & Leahy, P. G. 2020, p. 2

Disposal is the least sustainable way to handle EoL RE plants.³³ Common disposal practices PV modules or wind turbine blades are landfills and incineration without heat recovery.⁵⁶ As toxic substances can get into the ground water during this, these treatments are potentially harmful.³² If the energy which is released while burning is recovered during the incineration, the slightly more sustainable recovery stage is reached.³³ The more positive effect on the environment results from using the recovered heat as energy instead of using alternative energy sources. For example, “the extraction of 6 tonnes of coal used for heat or power production can be avoided by using 10 tonnes of blade waste”³¹. However, the energy can be saved only partly.⁵⁷

The next more sustainable waste dealing alternative is recycling, where the waste is turned into a new substance with lower value.⁵⁷ ³²Theoretically, approximately 90 % of wind turbines are recyclable. There are various procedures to recycle PV modules and wind blades, and some of them are already common practice.⁵⁶ ⁷⁶

An economically viable practice that combines energy recovery and recycling is co-processing, where wind blades are shredded. Then, the plastics are burned, while the glass fibres are put in a kiln with other feedstock and used for making cement. This way more than half of the blade waste can be recycled into cement.⁷⁶ ³³ ³¹The positive effect of the accompanying input substitution was analysed in an Irish assessment. Rising the substitution rate from a tenth to a half lead “to an average of 415% improvement to the environmental impact”³³, which was seen in positive effects on “Human Health (360%), Climate Change (393%), and Resources (492%)”³³.

While recycling the glass and the aluminium of old PV modules is already common practice, more valuable resources like silicon and silver are more difficult to recycle because the components are hard to disassemble. However, a project of the German Fraunhofer institute has shown that it is doable and that PV modules can be built completely with recycled silicon.⁷⁶ ¹⁶A way of recycling the valuable inputs of PV modules is heat-treatment of these, which releases the silicon parts for further use. By this, “80% of the PV modules (by mass) can be reused”³². By treating the silicon of damaged wafers with acid and melting it after that, 85% of it can be recovered. ³² If these practices will get common, the sustainability of the RE sector would be further improved.

Repurposing is the next more sustainable waste handling and describes using components of old RE plants for different applications at the EoL. For example, the strong and weather-resistant blades of wind turbines could be used as bridges, urban furniture, or for sound insulation. Furthermore, artificial roofs can be created with them.⁵⁶ ³³ ³¹ The Indian Institute of Science used old PV modules as a building material. At the same time, the PV systems still can be used to produce power, as the nominal power of EoL PV plants still is around 4 kWh per square meter per day.⁷⁷ ⁷⁸This approach of building integrated PV saves costs and extends the lifecycle of the PV systems.³²

PV modules and wind turbines are often still usable at the end of their economic lifespan or can be repaired easily.⁷⁶ Because of this, the reuse of these systems elsewhere is possible, which prevents waste at least temporally.³³ For instance, they can be sold for a lower price than usual. ⁵⁶ ²⁶ Furthermore, in the case of PV systems, instead of reusing the whole plant, one can also recover certain parts of it. When PV wafers are separated and reused in new panels, the global warming effect can be reduced by 52.2 kg CO₂-eq due to the avoidance of new cell production.⁷³ Prevention of waste means keeping the RE plants in use longer by extending their lifetime. For this, a good maintenance of the plants is essential. This can also be done by the re-equipment, which replaces only certain parts of the plants, as different parts have different lifetimes.¹⁰ ³²

3.4 Sustainability in the supply chain

Sustainable supply chains are a cross-sectoral topic and hence not only important in the RE sector. Nevertheless, some matters in this regard should by briefly covered here.

As the violation of human rights was discovered in PV factories, it is crucial for RE companies to make sure that human rights are assured in their supply chains, for example by independent audits, especially in regions where the violation of human rights was discovered. They should critically check their suppliers in this regard. If they cannot make sure if human rights are maintained, they should cut the supplier off.⁷⁹ ³⁹

In some cases, it could be helpful to switch to other supply places where more transparency is ensured. Instead of only sourcing in China, diversifying the supplier landscape could be helpful. Australia and Canada have relevant mineral deposits, for instance. This way, the dependence on certain countries could be decreased, too.⁸⁰

3.5 Energy justice

Considering social sustainability, energy systems should align with standards of justice, especially of energy justice.⁶⁴ Energy justice accounts “that all people need energy to meet necessities and thus should be able to access and afford energy”⁶⁴. In this context, the distribution of energy, the procedures during the development of RE plants and the inclusion of social groups, especially the energy poor and opposing citizens, are crucial.⁶⁴

The matter of energy justice is particularly relevant in less developed countries, where the social inequality is above average, and many people are not connected to energy grids. Hence, rural electrification initiatives are important here. Choosing the right technology increases the social sustainability of RE in these countries. Case studies in India as well as in sub-Saharan African countries have shown that “decentralized RE powered micro-grid systems”⁶⁴are better suited to improve the life of the people in rural areas than large-scale RE plants. Via these microgrids, education, health care and employment can be improved, which leads to a reduction in poverty.⁶⁴

Regarding the political framework, incentives to encourage the building of RE plants are helpful to provide access to energy for everyone. Feed-in-tariffs are a common and effective way to do so, as the generation of power is subsidized by the government, which makes the operation of a RE plant less expensive for the population. Additionally, it is a reliable source of income for the operators.⁸¹ In general, it is important that the people living in poor areas have access to financial means and services to be able to escape from poverty. Otherwise, the operation and maintenance of RE plants is not possible. Payment models that are adjusted to the situation of the population are a solution, for example payments scheduled during harvest seasons, which reduces the risk of default.³⁴

In more developed countries, some people disapprove of RE projects, especially wind parks, as they fear negative impacts on their personal life, like the noise of wind parks. Involving citizens in RE projects improves the social sustainability in this situation. With participation of citizens, the concerns of people that oppose RE plants in their region are actively considered in the planning.⁶⁴ ⁶² Possible formats of community based RE projects are dialogue procedures or financial participation. ⁶² For example, the energy provider Octopus Energy has developed an electricity tariff in which residents near the wind park receive discounted electricity when the wind park is generating power. According to the company’s own information, this has increased the acceptance of local wind farms in the United Kingdom by 80 %.⁸² ⁸³

Due to the volatility of most RE sources, security of supply cannot always be guaranteed without further adjustment. Energy storage systems provide a solution and stabilize power supply and demand, as energy is taken from the grid or given back to it flexibly. This way, a continuous power supply and hence the access to energy are secured. Storage systems are available in various dimensions, reaching from small home batteries to utility-scale storage systems.⁵⁸ However, high costs for storage systems and safety concerns are barriers to their expansion. These problems are currently addressed in research, so that the sustainability of these system probably will increase in the future.¹⁰

4 Drivers and barriers of sustainability

As pointed out in chapter 3, there are multiple options to improve the sustainability in the sector. Therefore, the question appears, why some measures are not implemented in practice yet and what drives their implementation.

4.1 Drivers and barriers of innovation

Innovation is indispensable when talking about more efficient technologies. One major factor in this context is policy. It has a crucial influence on a country’s and also the global innovation environment. Opposing subsidies hinder the development of an innovative environment for firms. For example, if subsidies for fossil fuels are in place, there is overall less implementation of RE technologies due to the lack of financial support for operators. This decreased demand results in less interest in innovative RE technologies and therefore less investment and financial support.⁸⁴ ⁷Consequently, abandoning support for fossil fuels or at least the absence of a ‘mixed-signals-support policy’ scheme is a starting point for the creation of an innovative environment for the RE sector.⁷ However, innovation cannot only be hindered by a lack of subsidies for (innovative) RE technologies, but also by unstable subsidies and support programs. Even though they intend to support them, frequent changes in incentives and policy schemes or even abrupt stops of subsidies create an unstable financial environment for investors and innovators. This hampers the anticipation of future market developments and thereby the development as well as necessity of innovations.⁸⁵ Overall, “[a]n effective RE policy should [consider] the interconnection of factors affecting RE suppliers and sustainability”⁷.

Another crucial aspect is competitiveness and economic viability of innovations. Innovations are expensive in their development and production, and hence the implementation of prototypes is costly. Therefore, innovations are less implemented. With the aid of economic incentives and support programs the implementation can be brought forward to spread their deployment and thereby their commercialization.⁸⁶ However, the mandatory EoL requirements could hinder this diffusion and.⁷³ One example where a support program initiated the implementation of an innovative RE technology is the support program of Horizon 2020 (2014-2020), that is aimed at research and innovation projects.⁸⁷ It provided financial support for the Spanish company Nabrawind to promote the implementation of their higher and more efficient onshore wind turbines.⁸⁸

4.2 Drivers and barriers of Circular Economy, Recycling and Waste

4.2.1 Economic aspects

Regarding the circularity of RE plants several factors can be identified to drive and hinder sustainability. Current recycling technologies for RE-technologies are costly and currently not commercially viable.²⁸ If recycling is not economically viable it is not implemented, especially on a large industrial scale, since investing in certain recycling technologies is only worthwhile for companies if there is enough waste.³³ ¹⁷ ²⁸If companies take over responsibility for waste, they often suffer from economies of scale and transportation costs when collecting it, where collective programs can help.⁵⁷ A lack of economic incentives and an uncertain material flow of potential recyclable PV modules make it difficult to build a business around their recycling which additionally holds back investments. This again hinders the implementation of new technologies.²⁶ For example there is little financial incentive to recycle for example glass fibre components in wind turbine blades since they have a limited application and low value when recycled.⁵⁷

A well-established market for recycled materials, so-called recyclates, drives recycling in the sector.²⁸ This provides stability to manufacturers since they can account for that in their production process.⁵⁷ On the contrary, underdeveloped markets lead to selling waste abroad which increases the chances of waste ending up on landfills or incineration instead of (domestic) recycling. As explained in 3.3, landfills and incineration have the lowest ranking on the European waste hierarchy, so this is problematic. One example to prevent this can be found in the EU where the export of waste is prohibited which shall thereby initiate recycling.⁹⁰The present lack of the circular approach and interest in waste management in the industry is due to the fact that there has only been a small amount of waste from RE technologies until now. ¹⁷ ⁷³ ⁵⁶Since more and more RE plants will reach their expected EoL in the next years, the amount of waste will rise sharply in the 2030s.¹⁷ Due to the little waste generation up to this point, there is also a absence of knowledge on processes to cope with the upcoming waist.⁷³ Additionally, recycling requires either a kind of recycling service provider or an own waste management system in the company. The Czech Republic and the EU cooperated to provide such a service for PV systems making it easier for companies to calculate where and how to handle their panels at EoL.⁹⁰

To improve the recyclability of PV modules, for instance, other construction methods may be possible, but they must not be costlier than the other methods, otherwise they are not likely to be realized.⁷⁶ Certain recycling techniques may not be viable because of the low cost for virgin materials, since recycled material will only be incorporated if it reduces the overall production costs. However, the inclusion of recycled materials can drive down the cost of production since less energy is needed to produce new materials.³³ ²⁸Due to increased production of RE plants the costs for virgin materials may rise and it therefore may be economically viable to include pre-used materials that has been recovered.⁵⁷

First Solar is a leader in the recycling of PV modules. Besides producing and selling their own modules, they established a business around the recycling of PV panels providing these services to module and power plant owners. With that, First Solar is the “only PV manufacturer capable of offering global PV recycling services”⁹². Starting the “industry’s first voluntary global prefunded module recycling program”⁹², they now run a business around recycling. With having over 10 years of experience until and in-house recycling infrastructure the costs are driven down for consumers further which promotes the recycling of PV modules.⁹²

It can be stated that if there is no law or regulation in place obliging manufacturers to care for the EoL of their products, there is no necessity for them to do so, since it implements higher costs and more effort.⁹⁰ ⁵⁶

4.2.2 Policies and laws

The EU is working on an eco-design directive which should address the following aspects of PV modules: durability, repairability, recyclability, harmful substances, and use of recycled materials.²⁶ Furthermore, the EU has the Waste from Electrical and Electronic Equipment directive which obliges producers to take back PV modules and putting them back into circularity. ⁸⁵ ¹⁶ In Germany, this directive is transmitted into national law by the Elektro- und Elektronikgerätegesetz which obliges manufacturers to have a recovery rate of at least 85% and a reuse and recycling rate of 80%. By this law, producers are forced to include circularity in their production process, from the design to the EoL stage. The law also regulates financing which reassures producers for their planning process.¹⁶

That laws and regulations cannot only be a driver of circularity in the sector but can actually hinder the sustainable development can be seen by the Restriction of Hazardous Substances in Electrical and Electronic Equipment directive from the EU in 2010, where the directive hindered the production of cadmium telluride panels due to banning components for its production. The solar panels were exempted from this law to meet the RE targets and facilitate production, which shows that economic sustainability partly is given a higher weighting than environmental and social sustainability in politics.⁸⁵ The loss of competitiveness and thereby the lack of economic sustainability need to be considered. Otherwise, manufacturers are forced to buy from suppliers from China, which would further strengthen the dependence. This topic will be discussed later.⁹⁰ ⁵⁶

As high costs of landfill encourage other methods of disposal, tax allowances and penalties should be used to reward the use of disposal methods that are higher in waste hierarchy and punish for example landfill and incineration.For instance, Ireland has the highest rate for disposal of blade waste in the EU. ³³Another option to clarify the financing of the EoL stage is a policy change that requires wind farm owners to post decommissioning bonds to cover costs of sustainable disposal.³³

Support programs that explicitly promote RE technologies geared towards circularity can provide remedy. One example is the National Growth fund of the Netherlands, where it was currently announced that nearly half a billion euros are provided for the promotion of circularly designed PV modules.⁹³

4.3 Drivers and barriers of sustainability in materials

The import dependency regarding mineral raw materials is also a barrier especially for more social sustainability in the sector. These elements are quite important for future technologies since they stand at the beginning of the production.⁸⁰ But with growing demand for these rare earths because of growing request of RE technologies it is nearly impossible to dispense them.²⁵ Therefore mining of rare earths will persist. Additionally, these elements have different compositions depending on their mining location and these different compositions are needed depending on their purpose. This makes it even more difficult to quit business relationships with certain problematic mining countries.⁸⁰ Another barrier preventing sustainability of the components of RE technologies and especially PV panels is the worldwide allocation of the different rare elements.¹⁵ This complicates the traceability of supply chains. The aforementioned dependency on China and especially on the region Xinjiang is further amplified through the low costs of labour. Manufacturers may close down their own production plants if they cannot compete with Chinese prices.³⁹ The closure of manufacturers outside of Xinjiang leads to less alternatives. Choosing manufacturers outside of Xinjiang would drive up the costs for PV panels which hinders the implementation of this.⁹⁴ To improve the social sustainability, laws could be established. For example, the United States passed a law which bans imports of some solar companies from the named region.³⁹ ⁹⁵ By implementing such laws that explicitly ban problematic regions, the demand for solar materials could be actively shifted to other regions with better reputation. It is important to create transparency in the supply chain. One example for this is the German Supply Chain law (Lieferkettengesetz). It obliges companies to investigate when allegations arise, to follow them up with pressure and, if necessary, to end the relationship with the supplier if nothing changes. The law makes it even possible to take legal steps against the company buying from these firms which leads to a more sustainable selection of suppliers.⁷⁹ Nevertheless, quitting supplier relationships with China, especially Xinjiang, will pose a big challenge on RE and on the solar industry since the demand for these technologies will rise steadily and for some components like polysilicon that are tight on the market it will be nearly impossible to find other suppliers.⁹⁴

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