Factclipper - Renewable Energy

Two reports point to an emerging trend: Venture capital is moving away from renewable energy to other markets, such as biotechnology and software:

• In their quarterly MoneyTree Report, PricewaterhouseCoopers and the National Venture Capital Association show that investments in clean technology in the second quarter of 2011 totalled $942 million, a 23 percent drop compared with 1Q 2011. The number of investments, however, rose by 11 percent to 81
• Cleantech Group's second-quarter 2011 data also points to a continuing dip in cleantech investments globally: Venture capital decreased 33 percent compared with the first quarter, and the number of deals slid, to 161. In contrast to 2010, the solar energy sector fell to second place in terms of dollars invested, behind energy efficiency. Analysts say that after years of investing billions in expensive photovoltaic plants, VCs are preferring less capital-intensive projects, such as LED-light plants, that pay for themselves in a few years

A two-part series in Energy Policy expands on an earlier proposal published in Scientific American that a large-scale wind, water, and solar energy (WWS) system can produce all new energy by 2030, and reliably and economically replace all of the world’s energy needs by 2050. Further studies by Mark Jacobson (Stanford University, Calif.) and M.A. Delucci (University of California at Davis) estimate:

• The equivalent footprint area on the ground for the sum of WWS devices needed to power the world is about 0.74% of global land area, with an overall spacing area is 1.16% of global land area. The land can be used for multiple purposes, including agriculture, ranching, and open space.
• If one-half of the wind devices are placed over water, and if 70% of the hydroelectric and rooftop solar areas are already considered as developed, the additional footprint of the new devices on land are only 0.41% and 0.59% of the world land area, respectively.
• The new WWS power systems are not likely to be constrained by the availability of bulk materials, such as steel and concrete.
• The rarer materials, such as neodymium (in electric motors and generators), platinum (in fuel cells), and lithium (in batteries), will have to be recycled or eventually replaced with less-scarce materials. The cost of recycling or replacing neodymium or platinum is not going to affect the economics of WWS systems noticeably, but the cost of large-scale recycling of lithium batteries is still uncertain.
• The transmission infrastructure needed to accommodate the new WWS power systems will have to be "greatly expanded" to address the variability of WWS energy. The methods needed to ensure that power supply reliably matches demand include using supergrids to interconnect geographically dispersed resources, using hydroelectricity and demand-response management, storing electric power on site, over-sizing peak generation capacity and producing hydrogen with the excess, storing electric power in vehicle batteries, and forecasting weather to project energy supplies.
• Some of the techniques, such as using complementary and non-variable sources, "smart" demand-response management, and weather forecasting require little or no additional costs.
• The cost of distributing wind power using supergrids and vehicle-to-grid storage will not exceed $0.02/kWh-generated, but even this additional cost, wind power will be less expensive than fossil fuels.
• The cost of using vehicles powered by batteries or fuel cells will match that of $3/gal of petroleum in the US, while the "social" cost will be less than that for conventional fuels.
• The study concludes that the barriers to a 100% conversion to WWS power worldwide are primarily social and political, not technological or economic.

Heady prediction: “Oil and gas will continue to be pillars for global energy supply for decades to come,” says James Burkhard, a managing director of IHS CERA (Cambridge, Massachusetts), an energy consulting firm. “The competitiveness of oil and gas and the scale at which they are produced mean that there are no readily available substitutes in either one year or 20 years.”

Indeed, the outlook for energy has once again been turned upside down:

• Giant deep-water oil fields have been discovered off the coasts of Brazil, Africa, the Gulf of Mexico and the Arctic: IHS CERA predicts that productive capacity for liquid fuels could rise to 112 million barrels a day in 2030, up from 92.6 million barrels this year
• Canadian oil sands now provide North America with more oil than Saudi Arabia
• The US has increased domestic oil production for the first time since 1991
• New shale-rock drilling technologies have spurred a wave of new natural-gas fields in the US, Europe and Asia
• Natural gas that was once flared in fields is being collected and piped to LNG export terminals around the world; gas prices have plummeted, making it a cost-effective, clean and efficient fuel

Ironically, the reason for the turnaround in supplies is due to high oil and gas prices, which attracted new investments and drilling. Meanwhile technical innovation unlocked new deep-ocean resources: Companies like Shell Oil and BP are exploring and drilling at depths of 10,000 feet (three kilometers) of water, and through several kilometers more of hard rock, thick salt and tightly packed sands using supercomputers, three-dimensional imaging, and drilling rigs that withstand the extreme temperatures and pressures at such depths. New horizontal drilling and advanced fracturing techniques have opened up shale-rock fields, enabling companies to tap gas fields, even those below large cities, such as Fort Worth, Texas.

Cautions: Future supplies depend on government policies in the coming decades. The International Energy Agency (Paris) in its annual global energy report1, released this month, forecasts that energy demand would increase by 36 percent between 2008 and 2035, based on policy commitments announced by various governments. Oil demand could grow to 99 million barrels a day in 2035, up from 84 million barrels in 2009.

1. 1. International Energy Agency: Global Energy Report 2010