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Oil, natural gas, uranium, water - as power sources, all have the potential to run out during the course of human development, possibly in the next couple of hundred years. Renewable sources can sidestep step this problem by using energy sources that either will last longer than the human race or can be regenerated through agriculture. Most renewable energy sources are also environmentally friendly, fight global warming by reducing carbon emissions, and allow economies to reduce their dependences on politically turbulent nations. Wind energy is best established of the renewables, constituting 1% of global energy production[1]. It can also be the most cost-efficient, especially when large installations using large turbines can take advantage of economies of scale. On the other side of the fence, solar power is the most expensive, least efficient form of renewable energy - for now. Increased spending in the sector has caused tremendous improvements both in cost and efficiency, and this has caused companies from China, Europe, and the U.S. to flood the sector, increasing competitiveness and driving even greater improvements. Geothermal energy gets relatively little attention, but with states along the fault lines and geysers of the Western United States increasingly passing renewable energy mandates, its potential is growing. Biofuels, however, have been all the rage, and with Congress's 2007 passage of an energy bill mandating increased production of ethanol and cellulosic ethanol, the stage is set for their use to greatly increase - in spite of protests from social activists who are worried about rising food prices. Since the middle of 2007, oil prices have been trending upwards, to record highs; on the 21st of May, 2008, for example, oil traded at $134.10 per barrel[2], after averaging around $20 during the 1990s.[3] Still, most renewable technologies are still less cost-efficient than fossil fuels - though government support has led to heavy spending in search of ways to close this gap. Renewables are quickly catching on in progressive regions like Europe, and with over 750,000 deaths in China caused by air pollution and other environmental damages each year[4], the market for clean energy is expected to grow in there as well.
[edit] Renewable Energy Breakdown  
[edit] GeothermalGeothermal energy uses hot water deep within the earth's crust to spin turbines and produce power 24 hours a day, seven days a week. It produces few carbon emissions and can re-inject used water back into the earth to be used again, making it fully sustainable. Not every part of the planet has geothermal resources; usually, they can be found in regions where there is volcanic activity, or where two tectonic plates meet. This is why places like Indonesia and the Philippines, which are situated on the Pacific "Ring of Fire", or California, with its myriad fault lines and hot springs, are such strong markets for geothermal technology.
[edit] SolarThe appeal of solar power is obvious. It is a virtually limitless resource. It's free of greenhouse gas emissions, widely thought to contribute to global climate change. In developed countries using lots of air conditioners, it generates more electricity exactly when you need it-- at times of peak electricity usage (e.g, you run your air conditioners more during the hottest, sunniest days of the summer time). Once installed, solar systems can function for 25 or more years with little maintenance or oversight.[7] Solar comes with limitations, however, with poor cost-efficieny being the most notable. Solar is weather dependent and intermittent, requiring storage or back-up systems to supplement during times of weak generation. More importantly, thanks to fast-rising silicon prices, solar systems average $8,000 per kilowatt installed[8] - extremely expensive even in comparison to other renewables. Still, the solar market has exploded over the past year, with electricity generated from solar systems increasing from 2.5 GW in 2006 to 3.8 GW in 2007[9].
[edit] WindWind is caused by different parts of the earth heating at different rates to different temperatures, creating pressure gradients and leading air molecules to move from areas of higher pressure (density) to areas of lower pressure (density). As long as the sun shines, the wind will blow. It would appear that wind is the ultimate source of energy, but, like all other renewables, it faces some issues. Not every region has winds that are the right speed year-round; furthermore, turbines are very dangerous for birds, particularly during migrations. Wind parks can also "overproduce" on windy days, creating more electricity than needed by the utilities grid, though there are massive batteries being developed to store some of this excess energy for periods when the wind is weaker than needed. Wind turbines have the lowest installation costs of any of the renewables, and with large wind installations taking advantage of economies of scale to reach lows of $800 per kilowatt installed[10], today it rivals natural gas as a form of cheap, base-load energy.
[edit] Wave PowerWave power uses the kinetic energy from ocean waves to generate electricity. Most wave energy producers are private labs and emerging companies, but Ocean Power Technologies has emerged as the first publicly-traded wave power producer in the U.S. [edit] BiofuelsBiofuels are sources of energy that are renewable in the truest sense of the word. They are made from plant matter; since plants can be regrown, the energy source can be renewed. Major biofuels include biodiesel, ethanol, and cellulosic ethanol, though there are currently private companies working on refining biogasoline. In the U.S., major companies that dabble in the three main forms of biofuels include: [edit] EthanolEthanol is a biofuel that can be blended with gasoline; it is made by fermenting sugar, and corn is its primary input. Currently, American cars can run on a mix of 90% gasoline and 10% ethanol, though there isn't nearly enough corn-based ethanol being produced at the moment to meet this capacity.[11] There are also cars that can run on 85% ethanol and even pure ethanol[12] , though these vehicles are few and far between in the U.S. VeraSun Energy primarily produces corn-based ethanol. [edit] Cellulosic EthanolEnergy legislation passed in 2007 mandated an increase in the amount of ethanol used in the U.S. to far levels greater than the nation's corn-production capacity. Another form of ethanol, cellulosic ethanol, uses industrial or biological processes to refine ethanol from cellulosic matter, like paper, wheat husks, and dead plants. Companies like Bluefire Ethanol refine ethanol from trash, while others like Verenium Corporation use lab-developed enzymes to break down cellulose from plant matter like leaves and grass. [edit] Biomass and Energy-From-WasteCompanies like Covanta use trash instead of gas to generate the heat needed to spin steam turbines. These companies burn waste from farms and landfills, converting leavings that would otherwise not me monetized into valuable electricity. [edit] Not-Quite-RenewablesNotably excluded from this list is nuclear energy, neither a fossil fuel in the truest sense of the word, nor a form of renewable energy. Nuclear looks a lot like renewable energy -- its fuel sources, uranium and plutonium, should last for many centuries, and once constructed, it produces emission-free energy. However, it has had severe environmental repercussions, and is not strictly renewable, in the sense that plutonium and uranium are not inexhaustible resources. For this reason, nuclear remains the energy orphan. Large companies that are part of the nuclear industry include Exelon, Entergy, American Electric Power, and Duke Energy. Hydropower is a special case of renewables, because the technology has been in use since the 19th century and, more importantly for those looking to expand renewable sources of energy, the majority of good sites for hydropower, at least in the developed world, have already been developed as power sources. Combustible renewables and renewable waste would include biofuels, but the historical driver of this 10.6% of our energy supply involves the burning of wood, plants, and organic waste in developing countries.[13] Still employed around the world, this method of energy generation is, in the truest sense, renewable, though it is highly inefficient in terms of energy conversion and may take several hundred years to replenish itself (e.g., in the case of burned-down forests). [edit] Energy ConservationBuilding new generating capacity is expensive; many electric utilities would much rather deal with growing electricity demand by getting customers to use electricity more efficiently. Companies like EnerNOC (ENOC) contract with large industrial electricity users and electric grid operators; when energy use peaks, the company gets factories and other large consumers to cut down usage (by turning off unnecessary lighting, systems, etc.) so that grid operators can direct the extra electricity to where it is needed. That way, they don't have to install extra generators to meet peak demand. [edit] Renewable Energy FundsPowershares Wilderhill Clean Energy ETF - stock symbol "PBW", along with a slew of other renewable funds, offers broad exposure to the sector. Given the plethora of IPO's in renewable energy and clean technology that occurred in 2006, 2007, and 2008, a broad exposure to the clean energy market through an ETF is a good bet for beginning green investors -- like the Internet boom, some of these companies will burst and others will survive, but it will be hard to predict early in the development curve which is which. One item investors might want to consider with PBW the Powershares Wilderhill Clean Energy ETF, is that index is based on mostly US companies working on solar panels. An alternative one might consider is Market Vectors Global Alternative Energy ETF - stock symbol "GEX" which has a has invested more than half its assets outside the U.S. and includes a Danish company, Vestas Wind Systems which is the fund's top holding at nearly 11%. Rounding out the top three holdings are a Spanish company -- Gamesa, a specialist in wind turbine and wind farms -- at roughly 8% of holdings, and Norwegian solar energy company Renewable Energy, which accounts for roughly 7% of assets. [edit] Drivers of renewable energy[edit] Legislative SupportLegislative support for clean energy investment in the form of tax breaks, subsidies, and energy mandates has driven growth in the sector over the past few years. Because most renewables aren't as cost-efficient as traditional fossil fuels, such government support is necessary to make clean energy appealing. In April, 2008, the US Senate approved the passage of the Clean Energy Tax Stimulus Act of 2008, in response to high oil prices and climate change fears. This act continues the previous subsidies, increasing the amount of spending to $19 billion. In addition to national legislation, states have also passed their own mandates on clean energy adoption. California has notably stringent policies, including the California Global Warming Solutions Act of 2006, which requires utilities to provide 20% of energy from renewable sources by 2020. [edit] Cost of substitutesDemand for renewable energy is driven largely by the price of the alternatives, namely coal and natural gas (for electricity generation) and oil (for liquid fuel). All the factors that drive rising oil prices or fears of peak oil, therefore also drive demand for renewable energy. On the demand side of the equation, clearly rising worldwide energy demand also plays a large role. [edit] Fears of greenhouse gas emissionsAs the evidence in favor of climate change has mounted and governments and citizens have begun to crack down on greenhouse gas emissions, demand for biofuels has ramped up significantly. It's expected that this demand will only continue to grow, as the consensus behind reducing greenhouse gas emissions grows. Heavy investments in renewable energy by such petroleum firms as BP, Shell, Chevron, Total, as well as companies as diverse as HP, Intel, and Google, suggest that businesses are already acknowledging this future demand. On February 4th, JP Morgan Chase, Citigroup, and Morgan Stanley stated that they would put into effect a set of "Carbon Principles" by which they would give investment priority to clean energy groups, and force any company planning to build coal-powered plants to show how they would deal with the carbon dioxide pollution in order to get investment money. With investment priority at these major banks now going to renewables, clean energy start-ups should have less trouble getting financing. [edit] Cost of inputsThough its energy inputs are typically renewable, generating renewable energy is not costless, and like all booming industries, renewable energy faces bottlenecks and supply shortages for its key inputs. In the case of wind energy, the cost of turbines has climbed, as manufacturers typically put customers on 18-month waiting lists and even then struggle to source gearboxes and other key parts for the finished products. Solar cell manufacturers face shortages in polysilicon, while biofuels producers face rising prices for their feedstocks, especially corn and sugarcane. [edit] References
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