No longer a mere suggestion of what might be, renewable energy is hitting a tipping point, with far-reaching implications. For the first time, understanding the scale and patterns of renewable energy development has become essential to any full analysis of trends that will shape the global energy economy and the health of the planet.
Buoyed by hundreds of new government energy policies, accelerating private investment, and myriad technology advances over the past five years, renewable energy is breaking into the mainstream of energy markets. Over the past two years, the United States and Europe have both added more power capacity from renewables than from coal, gas, and nuclear combined, according to the report. Worldwide, renewables accounted for one-third of the new generating capacity added.
Renewable energy, including hydropower, now provides 18 percent of total net electricity generation worldwide. Meanwhile, biofuels such as ethanol and biodiesel are making inroads in the transportation fuels market and are now equal to about 5 percent of world gasoline production. And in China, more than 150 million people heat at least some of their water using solar hot water systems.
The economic weight of the renewable energy sector is now large enough to attract many of the world’s largest and most powerful companies, from GE and Siemens to unlikely players such as Samsung and Google. Renewable energy investment of $150 billion worldwide in 2009 was the equivalent of nearly 40 percent of annual investment in the upstream oil and gas industry, which topped $380 billion.
Changes in government policy are responsible for most of these advances. In 2009 alone, 10 national and state governments enacted policies giving renewable power generation access to the grid at prices set by policymakers, bringing the number of governments with such policies to 70. Altogether, the number of countries with policies to encourage renewable energy has increased from 55 in 2005 to 100 in 2010.
One of the forces motivating new renewable energy policies is the desire to create new industries and jobs. Employment in the renewables sector now numbers in the hundreds of thousands in several countries. In Germany, which has led renewable energy development for more than a decade, more than 300,000 people were employed in renewables industries in 2009. This figure almost equals the number of jobs in the country’s largest manufacturing sector: automobiles.
The changing geography of renewable energy is another indicator that we are entering a new era, with the growing geographic diversity boosting confidence that renewables are no longer vulnerable to political shifts in just a few countries. It is also clear that leadership is shifting decisively from Europe to Asia, with China, India, and South Korea among the countries that have stepped up their commitments to renewable energy.
This transition reflects a growing recognition within Asia itself that these oil-short countries have much to gain from the development of renewable energy in economic, environmental, and security terms. For the world as a whole, this is a momentous development, since Asian nations now lead the growth in carbon emissions. Given East Asia’s dominance of low-cost global manufacturing, the region’s commitment to renewable energy will almost certainly drive down the price of many renewable energy devices in the coming years.
Renewable energy is also beginning to make a dent in emissions of carbon dioxide and other greenhouse gases. In Germany, renewables displaced 109 million tons of greenhouse gases in 2009 – equivalent to 12 percent of the country’s total – helping to reduce domestic emissions 29 percent from the 1990 level.
At a time when the world’s energy headlines are dominated by an oil-stained Gulf of Mexico and failure of the U.S. Senate to act on climate change, renewable energy is a rare good news story. The momentum that renewables have gained in a relatively short time indicates that with modest policy changes, a very different energy system could begin to emerge over the next decade.
The problem with alternative energy has been simple; it hasn’t been profitable. But alternative energy especially wind and solar has become cheaper to produce and is looking increasingly attractive as oil prices rise.
Thanks in part to falling prices in solar panel production, solar power, for example in California, has fallen from 25-30 cents a kilowatt hour to about 10 cents. The reduced cost are led by the significantly less expensive cost of the panels them selves. What has not kept up as well is the cost of installation which includes all the other hardware as well as the labor.
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