Our thirst for energy will continue to grow as global populations and global economies continue to grow. The economic expansion of developing countries such as India and China and the increased globalization of the world's markets will only accelerate our needs.
In June 2008, the US Energy Information Administration predicted energy consumption will rise by 50 percent from 2005 to 2030 with the vast majority of this being driven by developing countries. World electricity generation is will nearly double from about 17.3 trillion kilowatthours in 2005 to 24.4 trillion kilowatts in 2015 and 33.3 trillion kilowatthours in 2030.
Countries are trying to cope with this capacity issue by building new power plants. "China's power sector has been expanding at a rate roughly equivalent to three to four new coal-fired, 500 megawatt plants coming on line every week," said MIT associate professor Edward S. Steinfeld as reported by MIT News on 10/6/08. However due to a variety of constraints including the effects of greenhouse gas emissions, there will be an increasing demand to make this growth less reliant on fossil fuels.
The venture capital community is and will continue to invest in alternative energy (“Venture Capital Community Not Worried About Greentech Investment Bubble, See Significant Increase in 2009 Funding, KPMG Study Finds” PR News Sept 23 2008). Although there has been some concern recently about the loss of momentum in this field (“Momentum Slows for Alternative Energy” New York Times 10/20/08; “Slump May Limit Moves on Clean Energy” New York Times 11/25/08).
However, these investments could easily be dwarfed by the US Federal Government getting more involved. As reported in The New York Times article “Obama Vows Public Works on Vast Scale” (12/7/08) “(Obama) said he would invest record amounts of money in the vast infrastructure program, which (also) includes … electrical grids, damns and other public utilities. The green jobs would include various categories, including jobs dedicated to creating alternative fuels, windmills and solar panels.” On Barack Obama's campaign website he stated that his goal is to "help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future."
On the demand side, utilities have begun to rely more on cleanteach (“Utility execs anticipate few acquisitions, but more reliance on cleantech” Venture Beat 5/8/08). Here in California the goal is for electricity providers to have 20% of their portfolio coming from renewable sources by 2010 (California Public Utilities Commission). One would hope that the supporting regulation would follow government investment. A simple way to jump start this industry is to change the buying habits of the world's largest procurer, the US Federal Government.
While public regulation is necessary to grow this important industry, renewable energy companies must strive to cost the same as fossil fuel. Some green technologies such as solar are claiming that their price points are getting close to those of oil or gas (few cents per KWH). This is much less than previously considered possible, however that still means it is still 10X more expensive than coal. (Read "Understanding the Costs of Solar Energy.")
How much would it take to replace our oil habit (a cubic mile of oil per year)? Roughly 4.2 billion solar rooftops, 300 million wind turbines, 2500 nuclear power plants or 200 Three Gorges Dams, according to SRI International (as reported by Forbes on 7/9/08). So just beginning to supplement our oil dependencies will require a huge investment. I agree with John Doerr who at the November 2008 Web 2.0 conference stated that "Energy is the biggest market opportunity of our lifetime."
Here are some interesting GreenTech companies and resources:
AlwaysOn GreenTech 100 and Greentech Media's Top Ten Startups
Renewable Energy Stocks Website and Green Tech Investor
Top 100 Renewable Energy Sites
CNet "Green Companies to Watch: Renewable Energy"
Inc's Top 50 Private Energy Companies
A few magazines: Energy Biz, Photon International, and Solar Industry
From Peter O'Brien:
Jefferies Research Clean Technology Primer
Grentech Media's Concentrating Photovoltaic series
McKinsey Quarterly's Economics of Solar Power
From Tony Chen:
Reinventing Electric Utilities: Competition, Citizen Action, and Clean Power (a good book about the California utilities and how they began to use RFPs to purchase outside power instead of building their own generating assets recommended by Rob Lamkin)
Solar Revolution: The Economic Transformation of the Global Energy Industry (a primer on current photovoltaic technologies and some of the economics)
The Clean Tech Revolution: The Next Big Growth and Investment Opportunity (Tony says haven't read it yet, but it looks good.)
Hot, Flat, and Crowded (John says speaks to our climate and economic situation)
Energy at the Crossroads
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