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Breakthrough Analysis

Alternative Energy

by William E. Halal
Monday, October 15, 2007


Event | Data Points | Forecast Data Analysis | Trend Analysis | Articles  

There are preliminary signs that global oil production may be nearing its peak, at a significant time when developing nations are starting to use more oil and concern over environmental impacts is growing. Most agree this signals the end of a long era of carbon fuel dependency. Wind power is experiencing a surge of growth because it is now competitive to oil. Solar and biomass are gaining use with further development, and nuclear power is being reconsidered, while conservation remains a strong option. A hydrogen economy is possible in the long term, but hydrogen is merely a carrier rather than an energy source. All "alternative" sources now comprise about 17% of global energy use. With nuclear excluded, however, true "renewables" (wind, solar, hydro, and biomass) make up roughly 11%. Overall, alternative energy is growing 30% per year, backed by wide public suport and strong corporate investment. As oil prices continue to rise and the cost of alternatives continues to fall with further technical advances, it seems likely that carbon fuels will no longer be the main energy source in two to three decades. TechCast has completed different studies that converge on 2020 +/- 5 years as the serious beginning of this transition period, when 30% of all global energy is most likely to be derived from alternative sources.

Event Being Forecast

Alternatives to carbon-based fuel provide 30% of all energy used.


Selected Data Points to Consider

PRESENT STATUS Carbon fuels presently supply 83% of all energy use, with the rest obtained from hydro - 6%, biomass - 3%, nuclear - 6%, wind and solar - 2%. Therefore renewable energy (excluding nuclear) totals 11% and alternative energy is 17%. Hydro is unlikely to grow further because most rivers are harnessed, so growth must come from wind, solar, biomass, and nuclear. Total energy costs in the U.S. are about $600 billion/year.

FORECASTS Experts estimate solar and wind power will reach 10% of U.S. energy by '13, and the U.S. DoE says renewables will reach 28% by 2030 (BusinessWeek 10/9/00). The EU expects renewables to reach 22% by '10, and China is planning to use 16% renewables by '20. (Discover 12/06) The Solar Energy Industry Assoc. says "By 2016 solar will be the lowest cost option for electricity." The U.S. DoE plans to replace 30% of gasoline with biofuels by 2030.

MARKET SIZE A research group finds that the global market for renewable energy was $9.5 B in ’02, $12.9 B in ’03, and should reach $92 B in ’13. (BusinessWeek, 10/8/04) Another forecasts call for $167 B by '15. (CNN Money 10/30/06) Solar energy alone is expected to increase from $13 billion in 2006 to $40 B in 2010. (USA Today 9/4/07)

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Forecast Data Analysis

    Mean Std Dev N (# Experts)
Most Likely Year 2020 9 64
Market Size ($B) 550 286
Confidence (%) 63 16

In addition, 2 experts predicted that this event would never occur; mean confidence: 50%; std. dev.: 10.0.

Note: "Most Likely Year" is the year when this technology is expected to reach the adoption level stated under "Event Being Forecast" in industrial nations like the US, EU, and Japan. "Confidence" is the confidence our experts place in this forecst. "Market Size" estimates the potential market demand when this rechnology matures; global figures are not available, so this estimate is for the U.S. economy.

Forecast Chart

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Trend Analysis

PROS: Trends Driving this Event

  1. OIL MAY PEAK SOON The same method that correctly forecast U.S. oil production would peak in the ‘70s now indicates global supplies will peak this decade (Deffeyes, Hubbert’s Peak: The Impending World Oil Shortage, 2003). “There is a growing consensus that we are heading toward a peak in oil,” said one analyst (New Scientist, 8/2/03).

  2. PUBLIC SUPPORT IS STRONG Surveys show 80% of people around the world want to protect the environment, and 75% support renewable energy. California Edison increased its use of renewables from 1% in ‘85 to 13% in ‘99, and the State now requires 20% of its energy to be renewable by 2017. Hawaii, and other states aim to have 20% of energy from renewables by 2020. Maine now derives 30% from renewables.

  3. CORPORATIONS ENTERING THE FIELD Business is embracing alternatives because they see growth opportunities. Clean energy companies attracted 1% of venture capital before '99 but are now getting 5-8% of all investment. The market value of all renewable energy companies doubled in '06. Investors say "Greentech could be the largest business opportunity of the 21st Century," "It's going mainstream," and “We’re seeing the same ramp up we saw with the web.” (BusinessWeek, 10/8/04; Washington Post, 4/128/06)

  4. ECONOMIC TRENDS FAVOR ALTERNATIVES Developing nations are starting to use large amounts of oil, which is why prices are rising. World demand is expected to quadruple by 2050. Meanwhile the cost of renewables is dropping. In 2002, the cost of wind and hydro matched carbon fuels. Overall, renewable energy is growing about 30%/year (Time, 8/18/02).

  5. WIND IS COMPETITIVE England is building offshore wind farms housing 6000 turbines and Germany is building 16,000 turbines. Germany and Denmark expect to derive half of their energy from wind soon. European wind power overall grew 50-fold from 1990 to 2002 (Fortune, 12/22/03). Wind power in North Dakota, Kansas, Texas, and other U.S. states alone could provide all of America’s energy needs. Experts estimate wind power could supply 12% of the world’s energy needs by 2020 (Time, 8/18/02).

  6. SOLAR COSTS FALLING Solar cells cost $3-4/watt compared with $.40/watt for oil and gas. But it is thought that nanotech can provide plastic versions at $.20/watt and increase efficiency. (Technology Review, 2/03) Swiss researchers developed a "dye-sensitized" cell that costs $.50/watt. (TechnologyReview 9/15/06) Scientists have developed a solar cell that operates at 3 different bands of light to increase efficiency from the normal 15% to 40%, and other designs use "nanotowers" to create more surface area, increasing efficiency 60-fold. (TechnologyReview 10/6/06; PhysOrg 6/7/07) Nanosolar is mass producing solar cells at far less cost by printing them; the Company plans to increase the global supply of solar cells 20-fold. (TechnologyReview, 6/23/06) The world's largest solar power plant, located in the Mojave desert, uses Stirling dish technology and is 30% efficient. The CEO says "11 square miles could produce as much energy as Hoover Dam." (BusinessWeek, 9/19/05; New Scientist, 4/10/04) The consensus is that costs will become competitive with other energy sources about 2012-2015. (USAToday 9/4/07)

  7. CONSERVATION Amory Lovins claims the U.S. operates at such low efficiency that conservation is the most cost-effective approach. The U.S. saved 40% in energy costs over the past 20 years using conservation, allowing gains in efficiency to provide almost 80% of all energy growth during this time. Lovins thinks conservation can reduce energy costs by 75% with a 100% annual return on investment (Harvard Business Review, 5-6/99).

  8. NUCLEAR POWER RECONSIDERED Nuclear produces no pollution, has a sound safety record, and compares with oil on cost. 70% of Americans now favor nuclear, and 88% of those living near nuclear plants are confident of their safety. (Nuclear Energy Institute, 10/12/05) New designs like the pebble bed reactor are immune to meltdown and store waste in glass safely for 200,000 years. (Foreign Affairs, Jan-Feb/02; Sunday Telegraph, 9/26/04). A "fast breeder" design recycles spent fuel to reduce radioactive waste from 95% to 1%, increasing efficiency and reducing the disposal problem. (Scientific American, 12/05) The Bush Administration's "Global Nuclear Energy Partnership" plans to reprocess spent fuel, eliminating almost all dangerous waste, extracting 100 times as much energy from uraniuum, and reducing greenhouse gases by 33%. (TechnologyReview, 7/20/06) Dozens of new plants are being built, and the total number is expected to grow from 440 worldwide today to 500-600 by 2010. (Fortune, 8/8/05)

  9. BIOMASS NOW COMPETITIVE Ethanol is taking off as it can now compete economically. "Everybody in the industry is repositioning," said an ethanol producer." Capacity has doubled in the past 3 years and will double again soon. GM is building 400,000 flex-fuel vehicles. (Washington Post, 5/21/06) Scientists are developing bacteria to convert cellulose from woody plants and biomass waste (sawdust, weeds, etc.) into ethanol at even lower cost. The EPA is investing $385 M in 6 cellulosic plants, and the first is being built in Georgia. The EPA estimates biomass could produce 35% of all fuel used in the US. (TechnologyReview, 3/2/06; 5/3/06) Researchers reported in Science that they converted glucose sugars found in cellulose into alternative energy at 70-90% effiencies; because this could provide a renewable source of fuel, plastic, and other materials, the researchers think "the opportunities are endless." (PhysOrg 6/26/07) Sweden is building the world's largest biogas plant and thinking about 5 more. (TechnologyReview, 3/20/06)

    • Far more efficient LEDs and OLEDs could save 90% of the energy wasted by incandescent lights and last 50 times longer. Australia will phase out all incandencent bulbs by 2010. (TechnologyReview 10/6/06)
    • Geoplasma Co. is building a plant in Florida that uses 10,000 degree F plasma to convert 3,000 tons of waste daily into electricity for 36,000 homes with no pollutants. (Discover 6/07)
    • New fuel cell technologies are being developed that create H2 directly from biomass, plant photosynthesis, and solar cells spliting water. (See Fuel Cell Cars)
    • Photosynthesis is becoming understood, offering the prospect of converting sunlight into energy as plants do - at 100% efficiency. ( 4/13/07) Even bacteria can be redesigned to produce energy from sunlight. (TechnologyReview 3/26/07)
    • Stirling engines, which are 85% efficient, are being used in England.
    • Tidal energy is being harnessed using 6 turbines in the East River to deliver 35 KWatts of electric power to Manhattan. Other systems are providing 24 MWatts in Normandy, France, and 20 MWatts in Nova Scotia. (TechnologyReview 4/23/07)
    • Geothernal energy could easily supply US needs, says an 18 member panel at MIT. They estimate a $1 B project could provide 100 Gwatts over the next 40 years to supply 10% of all U.S. electricity. (Scientific American 4/07)
    • Cold fusion is being rediscovered because of new supporting evidence.
    • Slaughterhouse waste, sewage, old tires, scrap plastics, and almost anything else can be converted into oil at competitive prices, while also producing fertilizer as a by-product. (Discover, 3/06)
    • Craig Venter, the scientist who decoded most of the human genome, is developing microorganisms that produce ethanol and H2. "Genomics is now doing for energy what it did for medicine in the '90s," he said. (Washington Post, 2/27/06)
    • Researchers at U. California are converting the biggest problem in global warming - CO2 - into oxygen and carbon monoxide, the primary feedstock for plastics and other products. (TechnologyReview 5/25/07)
    • Sky WindPower is developing wind turbines that ride 10 Km up in the jet stream to capture 100 times as much energy, which is transmitted to Earth on supporting cables. (The Economist 4/3/07)
    • The US Military is studying the use of solar satellites for producing energy, and India is planning to build one. ( 4/11/07; The Statsman 7/13/07)


CONS: Obstacles Opposing this Event

  1. OIL SUPPLIES COULD BE VAST Oil may remain plentiful because new fields and methods are constantly being discovered. The U.S. Geological Survey and the DoE estimate world oil production will last until 2037 and Cambridge Energy Research thinks actual reserves are almost 3 times larger than commonly stated.( 11/16/06) The oil sands of Canada are enormous and could meet demand for decades. (Fortune, 10/3/05) Some think hyrocarbons are common at deeper levels of the Earth. In '06 Chevron discovered oil 5 miles beneath the Gulf of Mexico, setting off speculation that other deep sources may be found and increasing U.S. reserves by 50%. The costs of working at such depths, however, are 3-4 times conventional drilling. (BusinessWeek, 9/7/06)

  2. COAL IS ABUNDANT Experts claim 95% of U.S. reserves consist of coal, but present plants kill 20,000 to 30,000 Americans each year and dump 50 tons of mercury in the air. Some analysts claim the energy needed to mine and liquify coal would produce twice the global warming emissions of gasoline.(Singer Newsletter, 4/7/01; Scientific American 8/07). British Columbia now requires new coal power plants to emit no CO2, a move expected to set the new standard for clean coal technology. (TechnologyReview 2/28/07) The US EPA is spending $1 B on FutureGen, a pilot plant to demonstrate clean coal gasification and sequestration (IGCC).

  3. INFRASTRUCTURE Alternative energy requires difficult changes in production (power plants), distribution (gas stations), usage (vehicles, appliances, etc.) and other aspects of infrastructure, expected to cost $600 billion.

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  1. Issues in Science & Technology

  2. Energy Impact of Emerging Technologies

  3. EPA Study

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