| Renewable electric power is beginning to | | | | Solar PV is hot, too. It works by converting |
| soar. The current surge of activity, which | | | | sunlight directly into electricity using |
| has been accelerating over the last few | | | | semiconducting materials such as polysilicon. |
| years, is driven by several factors: high | | | | Global solar PV installations have grown by |
| fuel prices; ongoing improvements in | | | | an average annual rate of 35 percent over the |
| renewable power technologies; and increasing | | | | last five years. Germany, Japan and the U.S. |
| political support, which grows out of concern | | | | are the leaders in solar PV use, combining to |
| about energy security and climate change. | | | | account for 85 percent of the global |
| | | | installed base of more than 6 GW. PV |
| Although renewable power is still generally | | | | installations in the U.S. grew by over 20 |
| more expensive than electricity generated | | | | percent last year due to the expansion of |
| from fossil fuels, the cost of renewables has | | | | federal and state support. |
| declined significantly. Moreover, energy | | | | |
| investment decisions are increasingly made | | | | Solar PV is also on the rise in Asia, |
| not solely on an economic basis, but with | | | | particularly in China, which is positioned to |
| environmental and sociopolitical | | | | emerge as one of the world's largest solar PV |
| considerations factored in as well. | | | | manufacturers and consumers over the next |
| | | | several years. |
| It's taken a long time to get here. Three | | | | |
| decades and $30 billion of research funded by | | | | The surge in wind and solar PV over the last |
| the United States and other industrial | | | | several years is creating its own obstacles. |
| countries have gone into renewables, along | | | | The wind industry is currently struggling |
| with billions more from the private sector. | | | | with turbine component shortages. These |
| The effort has been marked by | | | | shortages have driven up the installed cost |
| booms-and-busts, ups-and-downs in research | | | | of wind turbines from as low as $1,100 per |
| funding, disappointment and long dry periods. | | | | kilowatt a few years ago to $1,500 or higher |
| But after languishing for many years on the | | | | today-if you can find them. |
| fringe, renewable power is now headed into | | | | |
| the mainstream. | | | | Polysilicon demand from PV manufacturers is |
| | | | now greater than demand from the |
| Renewable power technologies generate | | | | semiconductor business, and there is simply |
| electricity using natural regenerating | | | | not enough silicon production capacity today |
| resources such as sunlight, wind and waves. | | | | to meet these twin sources of demand. |
| Traditional renewable power technologies | | | | |
| include hydro, geothermal and biomass. | | | | This has created a shortage and driven up |
| Familiar to most people, hydro power involves | | | | prices. Polysilicon prices exceeded $100 per |
| the use of dams and running water to drive | | | | kilogram in 2006, up from $35 per kilogram a |
| electric turbines. | | | | few years ago. These shortages are expected |
| | | | to persist until 2008, when new wind turbine |
| Geothermal systems capture steam and hot | | | | component and silicon manufacturing capacity |
| water in geologic reservoirs to generate | | | | comes on line. In the meantime, technologists |
| electricity. Biomass plants burn forest | | | | are seeking to find ingenious ways to |
| products and agricultural residues to produce | | | | innovate around these shortages. |
| steam to accomplish the same. These | | | | |
| traditional renewable power technologies | | | | The rapid growth in renewable power has been |
| account for more than 90 percent of global | | | | accompanied by an associated increase in |
| renewable power capacity and are growing at a | | | | investment. According to New Energy Finance, |
| modest pace. | | | | investment in clean energy reached $70 |
| | | | billion in 2006, up from $50 billion in 2005. |
| The menu is being widened with more exotic | | | | Venture capitalists are now focusing on this |
| technologies. Concentrated solar power plants | | | | sector as well. According to the Cleantech |
| use mirrors to focus sunlight and boil a | | | | Venture Network, the North American venture |
| fluid to produce steam to drive a turbine. | | | | capital community invested $758 million in |
| Enhanced geothermal systems produce | | | | wind and solar startups in 2006, a threefold |
| electricity with steam made from water that | | | | increase from 2005. |
| is injected into the earth and heated by | | | | |
| contact with hot rocks. Biomass gasification | | | | Policy uncertainty and fossil fuel prices are |
| plants turn biomass into a gas that can be | | | | among the biggest threats to renewable power |
| used in a combined-cycle generator. These | | | | in the short and medium terms. Renewable |
| technologies have great potential, but are | | | | power options have yet to achieve cost parity |
| still developmental. | | | | with fossil fuel sources, although some wind |
| | | | projects are competitive today in favorable |
| Wind turbines and solar photovoltaic (PV) | | | | sites with abundant wind resources and tax |
| cells occupy the middle ground between the | | | | incentives. |
| traditional renewable power sources of today | | | | |
| and the promising technologies of tomorrow. | | | | Solar PV still has a way to go, with current |
| Although both wind and solar PV have been | | | | costs of PV-generated power approximately |
| commercially available for decades, these | | | | five times those of electricity from a |
| technologies have matured over the last | | | | natural gas plant. As a result, wind and |
| thirty years due to ongoing research and | | | | solar must rely upon robust and stable |
| accumulated know-how. They are now | | | | government supports to fuel industry growth. |
| experiencing rapid market growth. | | | | But renewable power policies can be just as |
| | | | intermittent as the wind and sun themselves. |
| The big winner so far is wind. Global wind | | | | |
| power capacity has tripled since 2000 and | | | | Although recent events have spurred strong |
| reached nearly 75 gigawatts (GW) by the end | | | | support for incentives and renewable power |
| of 2006. This is still small-less than two | | | | targets, declining fossil fuel prices could |
| percent of total world capacity-but it is | | | | make such policies less tenable. Especially |
| enough to meet the annual electric needs of | | | | important is what happens to natural gas |
| nearly 20 million U.S. households. | | | | prices and whether and when a price is put on |
| | | | carbon emissions from fossil fuel-fired power |
| Germany, the United States, Spain, India and | | | | plants. |
| Denmark have the largest installed wind base, | | | | |
| but in 2006, North America saw the fastest | | | | When considering the future prospects for |
| growth. In the U.S., nearly 3 GW of new wind | | | | renewables, perspective is important. Despite |
| turbines were installed last year, with | | | | their recent rapid growth, wind and solar |
| overall wind capacity breaking 10 GW along | | | | together account for just two percent of |
| the way. U.S. wind growth was fueled by a | | | | global power generation capacity. Even with a |
| federal tax credits and state renewable | | | | continuation of the strong growth seen in |
| portfolio standard programs, which require | | | | recent years, wind and solar are likely to |
| utilities to purchase a certain percentage of | | | | account for less than five percent of global |
| their power from renewable sources. | | | | capacity a decade from now. |
| | | | |
| At the same time, continuing technological | | | | Moreover, there are questions as to how |
| advances are being made in the design and | | | | renewables will interface with existing |
| operations of windmills. | | | | technologies and infrastructure. |
| | | | |
| Asia is emerging as a center of growth for | | | | But by the middle of the next decade, as wind |
| both wind energy use and wind turbine | | | | and solar PV continue to grow-and as |
| manufacturing capacity. Over 3 GW of new | | | | concentrated solar power, advanced biomass |
| capacity was installed in Asia in 2006, the | | | | and geothermal technologies become |
| bulk in China and India. This came as a | | | | increasingly competitive-renewables can begin |
| result of policies supporting renewables, | | | | to make a more significant impact in global |
| such as China's new Renewable Energy Law, | | | | power markets. Indeed, it is likely that |
| which requires 5 percent of China's electric | | | | renewable power will continue to grow at a |
| capacity to be renewables-based by 2010. | | | | rapid rate, given the prospect for continued |
| India is the world's fourth-largest wind | | | | technology improvements and the likelihood |
| power market, thanks to sustained government | | | | that climate change and energy security will |
| support for the sector. | | | | remain important concerns. |
| | | | |