Aren’t we supposed to be living the solar dream by then? Won’t
we be driving to the beach in algae-powered vehicles? Won’t we all
revel in our views of majestic wind turbines? The utopian vision of our
energy future may not exist in our lifetimes, but it has to have a
better outlook than the one released this week.
The short of the report: By 2035, world consumption is going to rise
more than 50 percent. (So, yes, that’s five percent growth on 50
percent more power). We’re going to be just as reliant on fossil fuels
as we are now. And our carbon problem is going to get worse — much
worse. But the
International Energy Outlook
is quick to point out that it doesn’t take into account any policy
changes that may affect the energy mix across the world. The renewable
industry knows better than anyone that policy is king, and that the
success of a growing industry is tied directly to that government
support.
The world currently revolves around prices for fossil fuels,
especially oil. There are other factors at play, though, that could make
renewable energy a bigger player in the decades ahead.
Third World Emergence:
U.N. Secretary-General Ban Ki-moon has said that
renewable energy will lead developing nations
out of energy poverty. So it stands to reason that in places like
Sub-Saharan Africa and India, renewable energy will find a growing
market. But his statements are in stark contrast to the report, which
finds that developing nations will drive the energy consumption, but not
necessarily with renewable sources. There are, however, some hopeful
signs led by large corporations and small communities. In areas often
powered by fuels like kerosene, there is little existing infrastructure
with which to compete. Some large-scale projects, such as
what we are seeing in Kenya, may prove that massive wind farms or large geothermal plants are the best ways to power growing economies. One look at a
solar insolation map
shows how vast and untapped large-scale solar is as a global energy
source. Or will the solution include more small-scale and localized
approaches, such as
what is being done in Bangladesh?
Developing nations are fairly new as investment areas, so successful
projects early on could go a long way toward turning economies toward
renewables and away from fossil fuels.
Grid Parity and New Technology:
We won’t have to wait until 2035 to find grid
parity, considering it’s already here in some select areas. Pricing
will truly be the transformative force that redefines the world’s
energy mix. Once we’re at true grid parity, it will become a matter of
retiring existing fossil fuel plants. Consider two companies that are
making huge strides toward grid parity.
First Solar
announced it is developing a thin-film cell with a 15 percent
efficiency in mass production. GE, meanwhile, is working to create
a 10- to 15-MW turbine.
Advancements like these will combine with the inevitable manufacturing
gains that come with greater scale to make grid parity a reality
perhaps sooner than later.
EPA Rules and Retiring Coal Plants:
In the U.S., environmental concerns are likely to
force the closure of some of the most inefficient coal plants. Solar
and wind are likely to compete or partner with natural gas as the
replacement source once the older coal plants go offline. Across the
rest of the world, coal use is expected to remain relatively flat. But
in Asia, it is expected to continue its meteroic rise. Will the trend
last? Residents across Asia — and especially China — are becoming more
vocal about the effects of industry on the environment. In a consumer
poll released in June, 53 percent of respondents in China listed
climate change as the world’s single greatest challenge. And just this
week, 500 villagers in eastern China rioted outside a Jinko Solar
factory over environmental concerns. If the massive growth is coming,
and it’s fueled by the dirtiest of fossil fuels, it’s likely the
developing world's citizenry, with its growing voice, will have a say
in the matter.
Nuclear Concerns:
The Fukushima nuclear crisis may go down as the
single natural event that’s had the greatest impact on our energy
future. The political fallout from the tsunami-stricken plant has moved
two of the industry’s biggest supports — Germany and Japan — to
re-evaluate their energy policy without the use of nuclear power. As a
result, both nations have positioned themselves as leaders in renewable
integration into their current mix. Could a nuclear giant such as
France reconsider its strategy, especially if Euro giant Germany
emerges even stronger? The anti-nuclear shockwaves were felt in the
business world this week when Siemens cited Germany’s move as the
reason
the company is wholesale pulling out of the nuclear industry.
Partnership With Gas:
Natural gas, at least in the United States, is
abundant and cheap. And the prices are expected to remain fairly
stable, though fossil fuels always come with some volatility. Solar and
wind have intermittency concerns that can be solved by natural gas, at
least until storage becomes a viable option. Natural gas has emissions
issues that are solved by solar and wind. Christopher Berendt of
Drinker Biddle told an audience during a recent ACORE presentation that
natural gas and renewable energy plants have a distinct advantage over
both nuclear and coal plants. First, they can be built more quickly
and they come with lower capital costs. Plus, having companies like GE
on board will lead to more investor confidence and, eventually, more
renewable generation.
Military Leading the Way:
The American military has always been an incubator
of technology. Now, the U.S. military is seeing solar, wind, ocean and
biofuel technology as
key components of the nation’s security.
This has the potential of lending vast amounts of credibility for
those on the outside of the debate and it has the ability to also force
a scale-up in production that the commercial market may not be ready
to support. Innovation on U.S. bases and the battlefield alike could
eventually be sold to other nations that also seek energy security, thus
spawning growth that would reverberate into the commercial market.
A New Wave of Marketing:
Despite the inroads made in recent years, a
surprising number of consumers have given little thought to how their
energy is generated. Maybe that will be one of the unintended
consequences of the Solyndra fiasco (they say all publicity is good
publicity, right?) The bottom line is the more consumers consider where
their power comes from, the more they may then tailor their buying
habits accordingly. That’s the hope for the wind industry, which
recently launched a
WindMade label
that will soon tell consumers what percentage of renewable energy was
used for certain products on store shelves. The thinking is that once
you go straight to consumers, they will drive the market through their
purchasing decisions. The same could happen at the pump, if drivers are
presented with real, competitively priced renewable fuel options. This
is the aim of the
new initiative, FuelChoiceNow.
Building Standards:
Often the debate is about the cost of adding solar
energy to existing systems. But what if the energy system was
integrated into the design from the beginning? What if you didn’t need
to calculate how much it would cost to add solar panels to your roof
because all roofs already incorporated solar and this was a mandate for
all new construction? Oftentimes, integration means that the costs of
the solar embedded into the roof or the walls is offset by savings in
construction materials. Renewable energy standards built into a policy
structure would make new construction more energy efficient and more
cost-effective long-term. Hawaii already mandates solar hot water on all
new homes built in the state.
Growth Through Crisis:
It’s an unfortunate reality that change happens
through crisis. The Chernobyl disaster is credited with sparking the
Green movement in Germany. Public backing of renewables has certainly
been bolstered by oil spills from Exxon Valdez to BP. We’re seeing
hotter weather, bigger storms and more extreme droughts in many areas,
and climate change is growing in acceptance across the globe, if not in
the United States. Whether it’s a man-made occurrence or a natural
disaster, these events often tick the needle closer to renewable
sources of energy and farther from fossil fuels and nuclear energy.
Carbon Markets:
Carbon trading in the U.S. is dead, right? Well,
the utility-focused Regional Greenhouse Gas Initiative in the
northeastern part of the country is gaining business support, though it
has become a political pariah in places like New Jersey and New
Hampshire. In California, the country’s first industry-focused carbon
trading program is expected to launch in 2013 after much legal
wrangling. In Europe, the EU trading program has faced a bumpy road,
including a recent report that says carbon permits under their
current cap-and-trade system
are “underpriced.” The region, though, is also considering a new
program based on airline emissions. It has received stiff opposition
from many nations outside Europe, so the path forward may be a difficult
one. If it were to succeed, however, it could open up a new market and
help to launch an aviation biofuels industry that is currently looking
to get off the ground.
Feel free to add your own thoughts below about which global factors may lead to greater growth for renewable energy industries.
IN April, Gov. Jerry Brown made headlines by signing into law an ambitious mandate that requires California to obtain one-third of its electricity from renewable energy sources like sunlight and wind by 2020. Twenty-nine states and the District of Columbia now have renewable electricity mandates. President Obama and several members of Congress have supported one at the federal level. Polls routinely show strong support among voters for renewable energy projects — as long as they don’t cost too much. 
