Renewable & Alternative Resources
Renewable energy is energy derived from regenerative sources; it includes hydro, geothermal, biomass, solar, wind, hydrogen and tidal power. For more than three decades, the world's renewable energy production has increased and currently makes up approximately 9% percent of the world's marketed energy demand (excluding non-marketed sources such as firewood and dung). Given concerns over climate change, reliability of supply, and energy costs, energy companies, governments and investors are working to develop renewable energy sources. While there are challenges with increasing the share of renewable energy to serve the transportation sector, renewable energy supplies will continue to grow, especially for use in the electricity sector.
Renewable Energy Demand in 2006-2030 EIA Reference Case
| (quadrillion Btu) |
|
2006 |
2030 |
| * Other includes wind, solar, geothermal, tidal, and wave energy |
| Ethanol & Biodiesel |
0.53 |
2.8 |
| Hydro |
2.89 |
3 |
| Biomass |
2.5 |
5.51 |
| Other* |
0.88 |
2.45 |
| total renewables |
6.8 |
13.8 |
| total energy demand |
99.3 |
117.8 |
| % renewables to total demand |
6.8% |
11.7% |
The EIA also predicts that supply of electricity from renewables will increase, with the renewable share of world electricity climbing to approximately 13% by 2030. The use of renewable energy sources will likely vary significantly across countries; for instance, wind power is an important source of electricity generation in Northern Europe today – in Denmark it accounts for upwards of 20% of total electricity consumed. In order for renewable energy to increase its share of total global energy consumed, it will need to continue to improve its competitiveness vis-à-vis conventional fossil fuels and overcome a number of technological challenges. For more information and discussion on renewable energy, refer to the Renewables discussion topic on willyoujoinus.
What are the Challenges?
Renewable energy has potential to meet a greater portion of our energy demand, but to date its development has been constrained by a combination of technological difficulties, inherent variability in production, a lack of infrastructure for delivery systems, and cost competitiveness with conventional energy sources.
Science and Technology
Renewables science has seen significant advancement and progress in recent years with some technologies emerging as more viable in the short term, such as wind power, and others, such as hydrogen, more likely to serve much longer term objectives. Large scale adoption of renewable technologies presents a number of scientific and commercial challenges that will only be resolved through the work of a broad array of business, government and other stakeholders.
Infrastructure
Once the science of producing renewable energy is mastered, producers must deliver it to consumers safely, reliably, and cost-effectively. This will require a large and potentially expensive infrastructure. Some energy sources may be able to use the transportation and delivery systems of existing energy sources, while others may require entirely new means of production and delivery.
Cost Considerations
While energy from renewable sources has been generally more expensive than energy produced from conventional sources, the gap continues to narrow for specific alternatives.For some technologies, scientific investment and infrastructure costs remain substantial, while for others reliability continues to be the primary commercial and technical challenge. When comparing different forms of energy, it is important to examine the assumptions behind costs. At today’s market prices pulverized coal is one of the lowest cost options for producing electricity; however, when the cost of adding carbon dioxide capture and storage to the coal plant is factored in, electricity from pulverized coal costs roughly the same as other fuel choices, including some renewables.
What are the Solutions?
Hydropower
Among renewable energy sources, hydropower is one of the most prevalent worldwide and is often one of the cheapest sources of power. It is by far the largest source of renewable electricity, and in 2004 it accounted for roughly 16% of total global electricity production and supplied over 2% of total global energy demand. Hydropower has the advantage of being a very stable source of power because of its storage capacity, and thus can be a built-in safety valve to meet sudden fluctuations in demand.
The common perception of hydropower facilities is that they are enormous. However there are both large and small dams and power plants, and it is in the area of "small hydropower" that arguably the greatest opportunity exists for expanding hydropower production. The IEA estimates that just 5% of the world’s small hydropower capacity has been tapped, and a considerable proportion of this exists in developing countries. With respect to developed countries, the opportunities for hydropower development are fairly well exploited, but even in countries such as the United States, where a considerable number of dams have been built, it is estimated that the potential additional capacity for power production from conventional hydropower nearly equals that which is currently being generated.
There remain several major barriers to hydropower assuming a larger role in the provision of global energy supplies. The general public, financial institutions and governments share concerns and are working to address the negative social and environmental costs of some hydropower projects. Among these are resettlement of people, impacts on wildlife habitats and wetlands, and the reduction of biodiversity. For more information on Hydropower, play Chevron's Energyville.
Wind Power
The supply of energy derived from wind has advanced rapidly over the past decade as the cost of generating electricity from wind has decreased dramatically, with the majority of growth occurring in Western Europe and the United States. Wind energy is the fastest growing large-scale power generation technology in the world; since the early 1970s, wind power production has grown at an annual rate of nearly 50%, but it nonetheless accounts for less than 1% of global energy demand. The contribution of wind energy to the energy portfolio varies considerably, across countries: in the United States, wind energy is approaching 1% of electricity generation and it appears set to rapidly increase production; and, in Denmark, Germany, and Spain wind energy accounts for a significant share of electricity production.
The technology underlying wind power production is quite advanced with respect to both onshore and offshore sites, and the typical wind turbine today is far more durable (designed to last for 20 years or more) than the previous generation of technology. The economics of production have also improved to the point where wind power generated onshore is in some cases cost competitive with conventional power sources; this is generally not the case for offshore production (even though the wind supply is more reliable) since it is more costly to construct and operate such operations.
Wind power is likely to grow in importance in coming years as part of the overall energy portfolio, but there are natural and manmade conditions that place limits on its growth potential. Production is, of course, limited to those areas that are both accessible and where wind speeds are sufficient to efficiently drive turbines. Additional challenges arise from the intermittent nature of wind, which has an impact on an electricity grid’s reliability, and the fact that such resources are not infrequently located in remote locations that pose problems in terms of linking into transmission lines. Utility companies, policymakers and developers are discussing the construction of "infrastructure pipelines" to connect urban areas with rural areas that are better suited to producing wind power. For more information on wind power, play Chevron’s Energyville.
Bioenergy
No other sector of the energy industry has received more attention in recent years than bioenergy. Bioenergy is defined as energy produced from organic matter or biomass, and its byproducts are used for heating, generating electricity, and powering transport vehicles. To create useable fuel, biomass may be either burned directly as solid biomass (e.g., wood) or processed and converted into liquids or gaseous fuels using technology – which is its most common application in more advanced industrial economies. (See more on Biofuels and Climate Change)
Given the ubiquitous nature of biomass and its ease of use, solid biomass is the world’s largest source of renewable energy. Almost all of the investment that has gone into the bioenergy sector over the past decade has gone into research and production related to liquid biofuels, and in particular ethanol and biodiesel. This focus has been driven in part by the high price of oil, concerns over the impact on climate change of burning fossil fuels, and the supporting legislative framework for biofuels that many countries have adopted. Since biofuels contain virtually no sulphur, trace metals or aromatics, they offer environmental benefits such as lower carbon emissions and lower air quality impacts compared with conventional petroleum-based fuels.
Ethanol and biodiesel are the main transportation biofuels that are currently used and are generally produced using "first-generation" feedstocks such as corn and soybean. Ethanol accounts for nearly 90 percent of total biofuel production worldwide, with biodiesel making up the rest. Production of biofuels has soared since 2000, with ethanol production increasing from approximately 5 billion gallons a year to well over 10 billion today and biodiesel rising from approximately 200 million gallons to over 1 billion. Brazil, China, and the United States are the largest producers of biofuels. Biofuels are making up an increasing percentage of vehicle fuels in some countries: this is particularly significant in Brazil where today around 40% of its transport fuel is ethanol. Based on its forecast of oil and corn prices, the EIA predicted in 2008 that ethanol would constitute 16% of total gasoline consumption by volume, by 2030. Oil and corn prices in early 2009 would lead to a much different conclusion. For more information and discuss on food prices and biofuels energy, please visit the Biofuels discussion on willyoujoinus.com.
In many areas of the United States, low-level ethanol/gasoline blends are already helping to meet pollution reduction mandates. These blends may be 10 percent ethanol (E10) or less and can be readily burned in standard automobile engines. Higher concentrations, such as E85, are officially classified as alternative fuels and can be used only in specially designed engines. Despite the significant growth in the production and use of ethanol, fossil fuels still account for more than 95 percent of the transportation fuel market. However, according to one study conducted by the U.S. government, cellulosic ethanol could displace 30 percent of US transportation needs.
But the estimate of bioenergy’s impact on conventional fossil fuel consumption in the transport sector is dependent upon the industry overcoming a number of major challenges. These include questions about: the available supply and the sustainability of production of the agricultural crops that currently are the primary feedstocks for biofuels (sugar and grains), the cost differential (at least in the United States and Europe) for ethanol and biodiesel compared to conventional fuels when subsidies are taken out, the need for transportation and distribution infrastructure, the lack of technology to convert cellulosic material economically at scale to liquid fuels, and the growing concerns about how biofuels production may impact food security and prices and land use in the developing and developed world.
Second-generation ethanol — made from nonfood sources such as crop residues, switchgrass, jatropha, miscanthus, Giant Reed grass, bamboo, and some types of trees — holds significant promise as a low-carbon, renewable transportation fuel that can complement traditional petroleum-based fuels in meeting the world's future energy needs. This approach would reduce potential pressures on food production but could nevertheless have land use impacts. Research into this experimental process is focused on developing technologies that can convert cellulosic biomass, often regarded as a waste material, into transportation fuels. For more information on Biofuels, play Chevron’s Energyville.
Solar Power
Solar energy could potentially supply 5,000 times as much energy as the world currently consumes. Capturing the energy contained in sunlight and doing so in a way that is economically viable would have profound social, political, and economic ramifications. But even though much progress has been made in improving the technological and financial profile of solar energy production, it still accounts for only a minor portion of energy supply. The biggest challenge is that photovoltaics, which are the solar cells that convert sunlight into electricity, are relatively expensive to manufacture. This makes the electricity produced by solar cells cost 4-5 times more per kilowatt-hour, compared with coal-fired electricity. In 2004, solar energy accounted for less than one-tenth of 1% of the global energy supply, even after a three decade span (1971-2004) during which solar energy production rose at nearly a 30% annual growth rate.
Standing in the way of solar energy achieving its potential as a virtually limitless source of relatively clean power are its financial and technological challenges. Another challenge is the fact that solar power is by its nature variable; it turns off from dawn to dusk and under heavy cloud cover. Thus, when connected to an electricity grid or when simply supplying a home, solar power requires a backup system. For more information on solar power, play Chevron’s Energyville.
Geothermal
Based on exploiting underground heat that rises to, or near to, the earth’s surface (typically in the form of hot water or steam), geothermal energy is a potentially large source of power in those areas where it is readily available. Although many countries have been identified as having geothermal resources, its accessibility in commercially viable quantities is far more limited, and to date has been concentrated in Central America, East Africa, Indonesia, the Philippines, and the United States. Geothermal energy accounts for roughly four-tenths of 1% of global total primary energy supply, which is more than solar and wind combined. However, its annual growth rate over the past three decades has been lower (7.5%) than the other major renewable energy resources.
Geothermal resources can be used either to produce electricity directly or as a heat source. Since a wave of construction of geothermal plants in the 1970s, the cost per kilowatt hour has dropped sharply, and the electricity produced by new plants is very competitive with that of other renewable sources as well as conventional fossil fuels. In addition, geothermal energy has another important advantage: its supply is not variable in nature.
These positive attributes would seem to argue that geothermal energy production may increase rapidly in a carbon constrained world, but there are limiting factors as well. Among these are the high risks and costs involved in exploration, and the fact that large-scale development is limited to a relatively small number of countries.
Diversifying the sources of energy supply that we use makes environmental and perhaps economic sense if fossil fuel burning externalities are factored in. In order to continue to diversify our portfolio, scientific, economic and political resources will need to be mobilized in concert; new and improved technologies will be needed; and delivery systems will need to be built