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Renewable Energy Predictions

Is This Energy Prediction Complete Bullcrap?

Written by Jeff Siegel
Posted January 24, 2011

We can achieve 100 percent renewable energy by 2030!

Well, at least that's what a new study from the journal Energy Policy suggests. But I wouldn't hold your breath for that one...

While you'll find no greater advocate of renewable energy than me, the truth is you and I will never see 100 percent renewable energy in our lifetimes. That's just the reality.

Sure, 100 percent renewable energy is possible in theory. This isn't news.

We already know that:

  • Enough electric power for the entire country could be generated by covering about 9 percent of Nevada with solar power systems. This is a plot of land that's about 92 miles by 92 miles.

  • Wind could provide 5,800 quads of energy each year — or about 15 times the current global energy demand.

  • There are over 100 million quads of accessible geothermal energy worldwide; the world consumes about 400 quads.

  • Wave energy along the U.S. coastline could provide enough power to cover half the total electricity consumption in the U.S.

But just because something could theoretically happen, doesn't mean it will.

Even the authors of the Energy Policy study suggest that interconnection challenges, a bottleneck of rare earth supplies, and political obstructions may be tough to overcome.

That being said, there's absolutely no doubt that renewable energy is still going to grow faster than any other energy sector over the next 20 to 30 years.

Just last week, BP released a new industry forecast indicating renewable sources will grow dramatically as global energy demand surges nearly 40% by 2030.

Most of this will come from China, India, Russia, and Brazil — with renewable energy sources increasing their contribution from 5% to almost 20%. At the same time, coal and oil are likely to lose market share.

Money, jobs, security

Now I'm not saying you can't make a ton of dough in oil and coal.

In fact, now that oil production has officially peaked, and coal production is within ten years of peaking — or may have already peaked in terms of energy content — both will continue to present huge opportunities going forward. There's no doubt about that.

But the realities of oil and coal shortfalls will also continue to result in a flood of capital being funneled into the clean energy space.

VC funding for clean energy companies rose by more than 76 percent in 2010, moving from $2.1 billion in 2009 to $3.7 billion.

And of the ten biggest VC investments in 2010, five were clean energy companies:

  • Better Place (electric vehicles) – $350 million

  • BrightSource Energy (solar) – $150 million

  • Abound Solar (solar) – $111 million

  • Elevance Renewable Sciences (renewable fuels and chemicals) – $100 million

  • Fisker Automotive (electric vehicles) – $78 million

Assuming the economy doesn't fall off a cliff (which isn't necessarily a safe assumption to make), this trend is not going to slow.

Certainly the big boys don't think so...

GE (NYSE: GE), Cisco (NASDAQ: CSCO), ABB (NYSE: ABB), and dozens of other heavy hitters are not only making a fortune in the clean energy space; they're investing heavily.

But what else do you expect?

This is one area where growth is pretty much guaranteed.

Look at Siemens (NYSE: SI), for instance. Just last week, Siemens announced it will add a minimum of 2,000 jobs at its renewable energy division this year. Adding jobs — not cutting jobs!

In 2004, Siemens' renewable energy division employed 800 people. Today, more than 7,000.

This is the fastest growing division at Siemens, and currently, its order backlog comes in at about $13.5 billion. That's billion with a b.

My point is this: If you're not already, get acclimated to the clean energy space now.

There's just too much money to be made to ignore this juggernaut any longer.

To a new way of life, and a new generation of wealth...

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Jeff
Editor, Energy and Capital

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