To put it provocatively, this question is a request to handicap a race of the
lame. All renewables are cursed with fundamental problems that make their future
stand-alone (i.e. unsubsidized) viability as anything but a marginal energy
source highly questionable.
With respect to electricity generation, the major renewables (wind and solar) are both intermittent and diffuse. These are obstacles inherent in the source of the energy that will be difficult to surmount. One illustration. Here in Texas, when it gets hot—and the demand for electricity spikes—the wind stops blowing. Given the fact that we need generation most when it is hot, this is a serious deficiency. Solar has greater potential, given the prospects for innovations that improve the efficiency of solar panels and reduce the cost of producing them. But even for solar, the vicissitudes of the sun (which vary by season and location) and the diffusive nature of solar power limit its potential.
What's more, the revolution in natural gas undermines the economics of these technologies.
Countries that have been quite aggressive in their pursuit of wind and solar have realized that their aspirations greatly outpaced the technology. Both Germany and Spain have announced that they will substantially curtail their government support for wind and solar.
With respect to transportation fuels, the outlook is even more problematic. Battery technology has proved a major constraint on the ability to turn electricity (including electricity generated from renewable sources) into an efficient transportation fuel. Ethanol produced from food crops is an economic monstrosity that would require far more space than available here to spell out in proper detail. Ethanol produced from nonfood sources (e.g., non-celluosic ethanol) does not suffer from some of the worst aspects of ethanol derived from corn, say, but has proved stubbornly resistant to commercially economic production. The idea for producing ethanol from wood dates from 1898. It was commercially uneconomical then. It is commercially uneconomical now. It will remain commercially uneconomical for the foreseeable future. That said, it is a technology that has more attractions than the alternatives.
And again, the potential for natural gas as a transportation fuel, and the revolution in natural-gas production, undermine the economics of renewable motor fuels.
Insofar as renewables have desirable environmental attributes (and some—notably corn-based ethanol—may not), the preferable approach is to price these attributes and let the market choose the technologies that produce the best balance between environmental and non-environmental considerations.
Craig Pirrong (@streetwiseprof) is professor of finance and energy markets director for the Global Energy Management Institute at the Bauer College of Business at University of Houston. He was previously Watson family professor of commodity and financial risk management at Oklahoma State University and a faculty member at University of Michigan, University of Chicago and Washington University.
The second major source of renewable energy is traditional biomass, which accounts for two-thirds of the renewable energy in the world. In developing countries, the overwhelming majority of the energy consumed is provided by fuel wood (often unsustainably sourced), which is generally the cheapest fuel option available. Fuel wood is the main energy source for cooking for most of the developing world, and is the primary source of energy for over 2 billion people.
Solar and wind power have both experienced explosive growth over the past decade, but both still account for a very small portion of the world's energy. Global wind power capacity grew from under 5 gigawatts (GW) in 1996 to nearly 240 GW by 2011—a nearly 50-fold increase. But that translated into only 2.8% of the electricity produced in the U.S. and 1.6% of the electricity produced in China.
Likewise, since 2010 solar photovoltaic (PV) capacity has been added in more than 100 countries, and the estimated global capacity at the end of 2011 was 70 GW—a tenfold increase over the previous five years. But this resulted in only 0.5% of the global electricity demand in 2011.
Solar heating—consisting of solar water heating, space heating for homes and industrial process heat—is often overlooked in discussions of renewable energy. However, global capacity of solar heating applications is far larger than that of solar PV. According to the REN21 Renewables Global Status Report, at the end of 2011 total global capacity of solar hot water and space heating was 232 gigawatts of thermal energy (GWth) (including a solar water heater on my own roof in Hawaii).
So there are some very-fast-growing renewable energy options, and there are also some that are well-established. But if I had to put my money on one option that will likely command a much larger share of energy production in the future, it would be solar PV.
Robert Rapier (@RRapier) is chief technology officer and executive vice president at Merica International, a forestry and renewable energy company. He serves as managing editor for Energy Trends Insider and is chief energy strategist at Investing Daily.
Moreover, an increasing share of fluctuating solar and wind energy will drive higher demand for flexible and dispatchable "green energy" sources. If electricity storage becomes cheap, as expected, that could be a true game changer.
In general, adoption of a diversified mix of different renewable energy sources including storage will benefit power quality and overall security of supply.
Looking at the global picture, therefore, I do not believe there will be one winning renewable technology. Rather, there will be a healthy mix that depends on specific regional factors. We expect that by 2020 there will be at least one major competitive renewable energy source in most countries. The exact future mix will vary by region, depending on the availability both of renewable resources and grid infrastructure and on their contribution to the local economy. Germany for example, whose government has defined a vision for the country's energy future that strongly emphasizes renewable sources and energy efficiency, is currently pioneering a total transformation of its energy sector.
Iván Martén is a senior partner at Boston Consulting Group. He has been the global leader of BCG's energy practice since 2008 and previously was the European leader of the practice.
Proponents argue—correctly—that production costs in the electricity sector have declined markedly over time. But, alas, so have the costs of gas-fired electricity, renewables' main competitor for new plant orders. The revolution in hydraulic fracturing suggests that renewables are unlikely to win the race against gas in the foreseeable future. Wind energy would seem to be the most commercially viable renewable energy source at present, but even so, it's not competitive with gas. Solar energy is even less competitive either on a utility-scale or at the point of use.
In the transportation sector, we see something similar; corn ethanol—the main renewable in play—has become less expensive to produce over time but, alas, it is still substantially more expensive than conventional gasoline in wholesale markets. Last week, for instance, gasoline was selling for an average of $2.76 per gallon in U.S. wholesale markets. To get the same energy content that a gallon of gasoline will get you, one would have to pay $4.06 for ethanol in those same markets.
But past is not necessarily prologue. Technological innovations are possible and scientists and engineers tell plausible stories about how any number of R&D projects currently under way could radically change the economics of renewable power. Of course, we've heard these stories for years, but past failures to achieve breakthroughs don't necessarily guarantee future failures.
Which renewable has the best chance of breaking through? No one really knows because no one can reliably predict which of the many ambitious R&D projects—if any—has the best chance of success. And no one can confidently predict what will happen to conventional energy prices…the other important factor in this equation. Confident predictions have been offered in the past but, as Vaclav Smil demonstrates in his excellent book "Energy at the Crossroads" (MIT Press, 2005), those predictions have been, without exception, not worth the paper they've been printed on.
All we can say for certain is that the government has no better crystal ball than the private sector so the former should not be second-guessing investments made by the latter.
Jerry Taylor is a senior fellow at the Cato Institute in Washington, D.C. He has written studies on energy taxes, the oil market, electricity regulation, energy efficiency, renewable energy, sustainable development and trade and the environment.
Solar can take advantage of improvements in materials, computing and nanotechnology in ways other technologies can't do nearly as effectively. Energy innovation is at its most powerful when it can leverage gains in other sectors. Solar also has a host of initial niches it can grow in, from rooftop generation in places like California, to off-grid and micro-grid energy in often-sunny developing countries that lack good infrastructure. Having moderate-sized markets to grow in is critical to scaling technology and bringing costs down. Solar is also a much better match for our energy demand than wind is. Solar power peaks when it's hot—exactly when people want to crank up their air conditioners. Wind power peaks in the middle of the night when people are using a lot less power.
The biggest barrier for solar is probably the cost of installing it—even if solar panels were free, the technology still would often be uneconomical. That will need to change for solar to fully take off. As I argue in a new book out in a couple of weeks, it would be unwise to bet on any renewable energy technology as our energy savior, but it would also be unwise to write renewables off.
Michael Levi (@levi_m) is the David M. Rubenstein senior fellow for energy and the environment and director of the program on energy security and climate change at the Council on Foreign Relations. His book, "The Power Surge: Energy, Opportunity, and the Battle for America's Future," will be published in April.
Energy from intermittent renewable resources like wind and solar will continue to be disadvantaged by the fact that they can't be turned on whenever they are needed, at least until:
1) Electricity storage technologies become much cheaper, and/or
2) Regulators permit dynamic pricing of electricity that sends price signals to consumers to conserve when intermittent resources are unavailable.
Making progress in these two areas could help wind and solar become more important contributors to our energy supply, as could finding ways to expand transmission infrastructure from where renewable energy resources are best (e.g., for wind, in the middle of the U.S.) to where most people live.
The most intriguing renewable energy technologies are those that have the most room to improve. Continued incremental improvement in wind and solar PV technologies should keep adding up over time, but the fact remains that these technologies have been around for a long time and are comparatively mature. More surprises may come from wild cards with which there is less experience. Perhaps concentrating solar power can make significant strides as we learn from the first large installations. Maybe the same subsurface expertise that has made unconventional oil and gas economic can lead to breakthroughs in enhanced geothermal systems, in which a hydraulic-fracturing-like process is used to create channels in rock through which fluid is pumped to absorb the heat at greater depths.
Mark Thurber is associate director at the program on energy and sustainable development at Stanford University. His research focuses on the role of state-owned enterprises in fossil-fuel production as well as how to deliver energy to low-income populations.
But unlike traditional energy sources like oil, gas and coal, renewable energy can be "extracted" in every single state in the nation. In a paper I co-wrote last year for Next Generation and the Center for American Progress, we identified six distinct advanced energy regions in the U.S., each with its own unique strength in a particular form of clean energy. These regions have found competitive advantage in their ability to build on these strengths to innovate, manufacture, and deploy clean energy for their own residents, and for export to other regions.
As for the time frame: Renewable energy is already a major energy source. Even here in the U.S., where we have yet to make a national policy commitment to renewable energy (and where fossil fuels are still heavily subsidized), we're still deploying enough to make these technologies cost-competitive. Wind energy, for example, is already the cheapest new source of electricity in many parts of the country, and in fact more megawatts of wind energy were installed in 2012 than any other kind of generation, including natural gas. Solar, too, is booming: Citigroup C -0.13%recently reported that rooftop solar has already reached residential "grid parity" in California. And just imagine how cheap these renewable technologies would become if we decided to charge the real social cost of burning fossil fuels, which would add between 14 and 35 cents per kilowatt-hour.
We're beyond talking about the promise of renewable energy. It's a reality. It's time now to talk about how to make it a far bigger part of our nation's energy future.
Kate Gordon (@katenrg) is vice president and director of the energy and climate program at Next Generation. She previously served as vice president for energy and environment at the Center for American Progress.
Solar today is a negligible part of the global energy mix. It provides a fraction of 1% of world-wide electricity, the International Energy Agency says. Moreover, solar companies now are suffering, and many more are likely soon to fail. The industry is being walloped by declining government subsidies for its subsidy-dependent products and by massive overcapacity, which is turning its profits into losses.
But those are short-term problems. Longer term, solar's future seems bright. The cost of producing polysilicon-based solar panels—today's dominant solar technology—has plummeted over the past two years. In a few spots around the globe—places with lots of sun and quite high electricity prices—solar today is starting to compete on price with conventional power (albeit when taking into account the tax breaks these energy sources get).
One sign of solar's emergence is that it's scaring many of today's dominant producers of conventional power. E.ON, EOAN.XE -0.76%the big German utility, reported a loss in last year's third-quarter that it blamed partly on solar. Enough E.ON customers were putting solar panels on their house roofs, minimizing their demand for peak-time electricity from E.ON's fossil-fueled plants, that E.ON's profits were materially eroding. And last month, David Crane, chief executive of NRG Energy, a big U.S. power producer, called distributed solar power a "mortal threat" to companies such as his.
Fossil fuels aren't going away soon. But huge innovation is under way to come up with new solar technologies that could prove game-changers. It's crucial not to get blinded by the light. But it's also worth recognizing what may be over the horizon.
Jeffrey Ball (@jeff_ball), formerly The Wall Street Journal's environment editor and a longtime energy reporter at the paper, is scholar-in-residence at Stanford University's Steyer-Taylor Center for Energy Policy and Finance, a joint initiative of Stanford's law and business schools. He writes about energy and heads a project exploring the relationship among countries in the globalizing clean-energy industry.
Different U.S. states and different regions of the world will have different energy mixes, including among the renewables. However, it is important to remember that for now these technologies are not competitive, BTU to BTU, with fossil fuels, if the government phases out the current tax credits. Energy is not a matter of religious faith, and technologies should not receive open-ended subsidies just because someone "wants to believe."
A separate issue is renewable transportation fuels. These may come from algae or a number of agricultural sources, but again, so far, these are not competitive. The fiasco of corn ethanol is widely known. The closest one gets to competition is sugar-cane ethanol, but only when oil-based gasoline is relatively expensive.
The 2012 U.S. Department of Energy renewable fuels study postulates that 80% of electricity generation in the U.S. by 2050 will be from renewable sources based on known technologies and excluding possible breakthroughs and novel technologies such as enhanced geothermal; ocean energy, including wave, tidal, current or ocean thermal; and floating offshore wind technology.
Dispatchability, the ability of suppliers to exercise control over an alternative energy plant's increase and decrease of supply, will remain one of the key challenges in wind and photovoltaic solar.
However, with the abundance of shale gas obtained through fracking and horizontal drilling and development of the global LNG markets, these renewable technologies are likely to face serious barriers to entry, or remain noncompetitive, unless governments introduce carbon taxes or cap and trade which would distort markets drastically. Such a high economic price for renewables appears unwise, especially as the debate over the human causes of climate change continues, and as major emerging markets polluters, including China and India, are unenthusiastic about joining an equitable and global carbon tax or capture regime.
Ariel Cohen (@Dr_Ariel_Cohen) serves as a senior research fellow in Russian and Eurasian studies and international energy policy at the Heritage Foundation. He has published six books and monographs, 30 book chapters and over 500 articles.
By 2040, wind-powered generation is projected to account for about 7% of global power supply. Wind power is already among the most competitive renewable technologies. The levelized cost of electricity (LCOE) for new onshore wind farms ranges between $0.05 to $0.15/kWh (based on a cost of capital of 10%). In locations with good wind resources, onshore wind is becoming competitive with fossil fuel-based generation.
Solar-powered generation is projected to account for about 2% of global power supply by 2040. The costs of concentrated solar and solar PV are declining due to steep learning curves and large deployments in recent years. In the case of solar PV, for instance, it is estimated that every doubling of installed capacity will yield a reduction in module costs of about 22%.
Even as a relatively mature technology, hydro will continue to attract attention due to the advantages it offers: Lowest LCOE, grid stability, and potential for energy storage and complementarity with other renewables. Further, hydropower (including small hydro) provides options for building additional capacity at existing facilities or installing generation capacity at dam locations with no current generation at attractive marginal investment costs in the range of $500 to $800/kW.
The long-term projections for expansion in the use of renewable energy are sensitive to natural gas prices, innovation in storage technologies (including batteries), policy programs and the relative costs of alternative generation sources. It is important to take a portfolio approach to renewable energy sources and their share of total energy supply whether at the level of a specific geographic market or globally.
Mazen Skaf (@Skaf777) is managing director of the Europe and Middle East practice of the U.S.-based management consulting firm Strategic Decisions Group. He advises clients in energy and related industries on strategy, financial-risk management, negotiation analysis and deal structuring.
Given a choice between algae-based biofuel or expanding high-speed Internet access to encourage telecommuting and reduced fuel use, which should we choose? Does it matter that one is a "renewable" energy source and the other isn't? This is the beauty of the free market. As long as there are costs to energy use and the impacts of energy use, the free market treats all approaches equally, without politics, as long as they effectively save resources. Given a choice between solving our energy and environmental demands by narrowing our focus to a few choices or expanding our vision to include any approach that conserves energy, we will be more successful by embracing all potential options.
This is the danger of politically chosen technologies. The perspective of policy makers is limited and it can never match the combined creativity of the many investors and inventors looking for the next opportunity to profit from their risk-taking in the marketplace. For decades, we've been promised that solar energy would be price competitive. Just a few years ago, Congress expected cellulosic ethanol to blossom as an energy source. Neither occurred. Numerous other technologies have been touted and then have floundered. That is the nature of innovation. We are wiser to reduce the costs of taking risks in the process of discovering new technologies than to guess what technologies will emerge.
Todd Myers (@WAPolicyGreen) is environmental director at the Washington Policy Center in Seattle and author of "Eco-Fads: How the Rise of Trendy Environmentalism is Harming the Environment." He also serves on the Washington state Salmon Recovery Council.
With respect to electricity generation, the major renewables (wind and solar) are both intermittent and diffuse. These are obstacles inherent in the source of the energy that will be difficult to surmount. One illustration. Here in Texas, when it gets hot—and the demand for electricity spikes—the wind stops blowing. Given the fact that we need generation most when it is hot, this is a serious deficiency. Solar has greater potential, given the prospects for innovations that improve the efficiency of solar panels and reduce the cost of producing them. But even for solar, the vicissitudes of the sun (which vary by season and location) and the diffusive nature of solar power limit its potential.
What's more, the revolution in natural gas undermines the economics of these technologies.
Countries that have been quite aggressive in their pursuit of wind and solar have realized that their aspirations greatly outpaced the technology. Both Germany and Spain have announced that they will substantially curtail their government support for wind and solar.
With respect to transportation fuels, the outlook is even more problematic. Battery technology has proved a major constraint on the ability to turn electricity (including electricity generated from renewable sources) into an efficient transportation fuel. Ethanol produced from food crops is an economic monstrosity that would require far more space than available here to spell out in proper detail. Ethanol produced from nonfood sources (e.g., non-celluosic ethanol) does not suffer from some of the worst aspects of ethanol derived from corn, say, but has proved stubbornly resistant to commercially economic production. The idea for producing ethanol from wood dates from 1898. It was commercially uneconomical then. It is commercially uneconomical now. It will remain commercially uneconomical for the foreseeable future. That said, it is a technology that has more attractions than the alternatives.
And again, the potential for natural gas as a transportation fuel, and the revolution in natural-gas production, undermine the economics of renewable motor fuels.
Insofar as renewables have desirable environmental attributes (and some—notably corn-based ethanol—may not), the preferable approach is to price these attributes and let the market choose the technologies that produce the best balance between environmental and non-environmental considerations.
Craig Pirrong (@streetwiseprof) is professor of finance and energy markets director for the Global Energy Management Institute at the Bauer College of Business at University of Houston. He was previously Watson family professor of commodity and financial risk management at Oklahoma State University and a faculty member at University of Michigan, University of Chicago and Washington University.
Robert Rapier: My Money Is on Solar PV
Two renewable energy sources are already major energy sources. Hydropower currently provides about 16% of the world's electricity, which is greater than the percentage produced by nuclear power, and a far greater share than all other renewables combined. In fact, the largest power plant by capacity in the world, as well as four of the five largest power plants in the world are hydroelectric plants. However, most of the world's best sites for hydropower have already been developed, so global growth in new hydropower capacity is forecast to be slow.The second major source of renewable energy is traditional biomass, which accounts for two-thirds of the renewable energy in the world. In developing countries, the overwhelming majority of the energy consumed is provided by fuel wood (often unsustainably sourced), which is generally the cheapest fuel option available. Fuel wood is the main energy source for cooking for most of the developing world, and is the primary source of energy for over 2 billion people.
Solar and wind power have both experienced explosive growth over the past decade, but both still account for a very small portion of the world's energy. Global wind power capacity grew from under 5 gigawatts (GW) in 1996 to nearly 240 GW by 2011—a nearly 50-fold increase. But that translated into only 2.8% of the electricity produced in the U.S. and 1.6% of the electricity produced in China.
Likewise, since 2010 solar photovoltaic (PV) capacity has been added in more than 100 countries, and the estimated global capacity at the end of 2011 was 70 GW—a tenfold increase over the previous five years. But this resulted in only 0.5% of the global electricity demand in 2011.
Solar heating—consisting of solar water heating, space heating for homes and industrial process heat—is often overlooked in discussions of renewable energy. However, global capacity of solar heating applications is far larger than that of solar PV. According to the REN21 Renewables Global Status Report, at the end of 2011 total global capacity of solar hot water and space heating was 232 gigawatts of thermal energy (GWth) (including a solar water heater on my own roof in Hawaii).
So there are some very-fast-growing renewable energy options, and there are also some that are well-established. But if I had to put my money on one option that will likely command a much larger share of energy production in the future, it would be solar PV.
Robert Rapier (@RRapier) is chief technology officer and executive vice president at Merica International, a forestry and renewable energy company. He serves as managing editor for Energy Trends Insider and is chief energy strategist at Investing Daily.
Iván Martén: Expect a Healthy Mix of Renewables
Several renewable-energy sources are technologically mature. Several already are making a significant contribution to energy generation, such as hydropower in Brazil, biomass in Finland, onshore wind in Denmark, solar photovoltaic in Germany or geothermal energy in Indonesia. Apart from hydropower, this strong footprint so far has largely been accomplished through strong regulatory support. Future growth of renewable energy will increasingly be driven by cost competitiveness with fossil-fuel based generation: The cost of renewables will continue to decline while the cost of fossil fuels is expected to increase further. Today, solar and wind have already reached this point in several countries that have abundant resources and high cost of electricity.Moreover, an increasing share of fluctuating solar and wind energy will drive higher demand for flexible and dispatchable "green energy" sources. If electricity storage becomes cheap, as expected, that could be a true game changer.
In general, adoption of a diversified mix of different renewable energy sources including storage will benefit power quality and overall security of supply.
Looking at the global picture, therefore, I do not believe there will be one winning renewable technology. Rather, there will be a healthy mix that depends on specific regional factors. We expect that by 2020 there will be at least one major competitive renewable energy source in most countries. The exact future mix will vary by region, depending on the availability both of renewable resources and grid infrastructure and on their contribution to the local economy. Germany for example, whose government has defined a vision for the country's energy future that strongly emphasizes renewable sources and energy efficiency, is currently pioneering a total transformation of its energy sector.
Iván Martén is a senior partner at Boston Consulting Group. He has been the global leader of BCG's energy practice since 2008 and previously was the European leader of the practice.
Jerry Taylor: The Best Prediction: Who Knows?
The prospect of economically competitive renewable energy is like the horizon; it continues to recede even as we march double-time toward it.Proponents argue—correctly—that production costs in the electricity sector have declined markedly over time. But, alas, so have the costs of gas-fired electricity, renewables' main competitor for new plant orders. The revolution in hydraulic fracturing suggests that renewables are unlikely to win the race against gas in the foreseeable future. Wind energy would seem to be the most commercially viable renewable energy source at present, but even so, it's not competitive with gas. Solar energy is even less competitive either on a utility-scale or at the point of use.
In the transportation sector, we see something similar; corn ethanol—the main renewable in play—has become less expensive to produce over time but, alas, it is still substantially more expensive than conventional gasoline in wholesale markets. Last week, for instance, gasoline was selling for an average of $2.76 per gallon in U.S. wholesale markets. To get the same energy content that a gallon of gasoline will get you, one would have to pay $4.06 for ethanol in those same markets.
But past is not necessarily prologue. Technological innovations are possible and scientists and engineers tell plausible stories about how any number of R&D projects currently under way could radically change the economics of renewable power. Of course, we've heard these stories for years, but past failures to achieve breakthroughs don't necessarily guarantee future failures.
Which renewable has the best chance of breaking through? No one really knows because no one can reliably predict which of the many ambitious R&D projects—if any—has the best chance of success. And no one can confidently predict what will happen to conventional energy prices…the other important factor in this equation. Confident predictions have been offered in the past but, as Vaclav Smil demonstrates in his excellent book "Energy at the Crossroads" (MIT Press, 2005), those predictions have been, without exception, not worth the paper they've been printed on.
All we can say for certain is that the government has no better crystal ball than the private sector so the former should not be second-guessing investments made by the latter.
Jerry Taylor is a senior fellow at the Cato Institute in Washington, D.C. He has written studies on energy taxes, the oil market, electricity regulation, energy efficiency, renewable energy, sustainable development and trade and the environment.
Michael Levi: Three Reasons Solar Will Succeed
If I had to bet on one renewable source ultimately making a very large impact it would be solar. There are three big reasons to look to solar over other renewable energy supplies.Solar can take advantage of improvements in materials, computing and nanotechnology in ways other technologies can't do nearly as effectively. Energy innovation is at its most powerful when it can leverage gains in other sectors. Solar also has a host of initial niches it can grow in, from rooftop generation in places like California, to off-grid and micro-grid energy in often-sunny developing countries that lack good infrastructure. Having moderate-sized markets to grow in is critical to scaling technology and bringing costs down. Solar is also a much better match for our energy demand than wind is. Solar power peaks when it's hot—exactly when people want to crank up their air conditioners. Wind power peaks in the middle of the night when people are using a lot less power.
The biggest barrier for solar is probably the cost of installing it—even if solar panels were free, the technology still would often be uneconomical. That will need to change for solar to fully take off. As I argue in a new book out in a couple of weeks, it would be unwise to bet on any renewable energy technology as our energy savior, but it would also be unwise to write renewables off.
Michael Levi (@levi_m) is the David M. Rubenstein senior fellow for energy and the environment and director of the program on energy security and climate change at the Council on Foreign Relations. His book, "The Power Surge: Energy, Opportunity, and the Battle for America's Future," will be published in April.
Mark Thurber: Look Out for Wild Cards
Wind and solar technology are already on a scale where they can be considered "major" in some jurisdictions (e.g. wind turbines in Denmark, solar PVs in Germany). However, almost all large installations of these technologies have occurred only because of strong (and costly) government incentives. Unsubsidized wind is borderline cost-competitive where wind resources are good, but solar remains far out of the money just about everywhere. (One mistake people sometimes make in declaring solar to be at "grid parity" is to compare the levelized cost of solar generation with the retail price of electricity, rather than to the levelized costs of other energy technologies.) Parts of developing countries that lack grid access and cheap fuel supplies may be an exception where small solar can already find a viable economic niche even without big subsidies.Energy from intermittent renewable resources like wind and solar will continue to be disadvantaged by the fact that they can't be turned on whenever they are needed, at least until:
1) Electricity storage technologies become much cheaper, and/or
2) Regulators permit dynamic pricing of electricity that sends price signals to consumers to conserve when intermittent resources are unavailable.
Making progress in these two areas could help wind and solar become more important contributors to our energy supply, as could finding ways to expand transmission infrastructure from where renewable energy resources are best (e.g., for wind, in the middle of the U.S.) to where most people live.
The most intriguing renewable energy technologies are those that have the most room to improve. Continued incremental improvement in wind and solar PV technologies should keep adding up over time, but the fact remains that these technologies have been around for a long time and are comparatively mature. More surprises may come from wild cards with which there is less experience. Perhaps concentrating solar power can make significant strides as we learn from the first large installations. Maybe the same subsurface expertise that has made unconventional oil and gas economic can lead to breakthroughs in enhanced geothermal systems, in which a hydraulic-fracturing-like process is used to create channels in rock through which fluid is pumped to absorb the heat at greater depths.
Mark Thurber is associate director at the program on energy and sustainable development at Stanford University. His research focuses on the role of state-owned enterprises in fossil-fuel production as well as how to deliver energy to low-income populations.
Kate Gordon: It Depends Where You Are
This is one situation where the right answer really is "All of the above." Energy issues are inherently regional: Different parts of the country have different natural resources and energy needs. We see that in the oil-and-gas sector, with big new discoveries in North Dakota and California, but no major resources in the upper Midwest and Pacific Northwest, for example. Same goes for renewables: Some parts of the U.S. are windier than others, some are sunnier, some have better access to hydroelectricity or geothermal resources…. You get the point.But unlike traditional energy sources like oil, gas and coal, renewable energy can be "extracted" in every single state in the nation. In a paper I co-wrote last year for Next Generation and the Center for American Progress, we identified six distinct advanced energy regions in the U.S., each with its own unique strength in a particular form of clean energy. These regions have found competitive advantage in their ability to build on these strengths to innovate, manufacture, and deploy clean energy for their own residents, and for export to other regions.
As for the time frame: Renewable energy is already a major energy source. Even here in the U.S., where we have yet to make a national policy commitment to renewable energy (and where fossil fuels are still heavily subsidized), we're still deploying enough to make these technologies cost-competitive. Wind energy, for example, is already the cheapest new source of electricity in many parts of the country, and in fact more megawatts of wind energy were installed in 2012 than any other kind of generation, including natural gas. Solar, too, is booming: Citigroup C -0.13%recently reported that rooftop solar has already reached residential "grid parity" in California. And just imagine how cheap these renewable technologies would become if we decided to charge the real social cost of burning fossil fuels, which would add between 14 and 35 cents per kilowatt-hour.
We're beyond talking about the promise of renewable energy. It's a reality. It's time now to talk about how to make it a far bigger part of our nation's energy future.
Kate Gordon (@katenrg) is vice president and director of the energy and climate program at Next Generation. She previously served as vice president for energy and environment at the Center for American Progress.
Jeffrey Ball: Solar's Future Seems Bright
Most predictions about the future of energy turn out to be wrong. Oh, well. Here's one: Solar power could prove a big, though probably not dominant, energy source over the next couple of decades.Solar today is a negligible part of the global energy mix. It provides a fraction of 1% of world-wide electricity, the International Energy Agency says. Moreover, solar companies now are suffering, and many more are likely soon to fail. The industry is being walloped by declining government subsidies for its subsidy-dependent products and by massive overcapacity, which is turning its profits into losses.
But those are short-term problems. Longer term, solar's future seems bright. The cost of producing polysilicon-based solar panels—today's dominant solar technology—has plummeted over the past two years. In a few spots around the globe—places with lots of sun and quite high electricity prices—solar today is starting to compete on price with conventional power (albeit when taking into account the tax breaks these energy sources get).
One sign of solar's emergence is that it's scaring many of today's dominant producers of conventional power. E.ON, EOAN.XE -0.76%the big German utility, reported a loss in last year's third-quarter that it blamed partly on solar. Enough E.ON customers were putting solar panels on their house roofs, minimizing their demand for peak-time electricity from E.ON's fossil-fueled plants, that E.ON's profits were materially eroding. And last month, David Crane, chief executive of NRG Energy, a big U.S. power producer, called distributed solar power a "mortal threat" to companies such as his.
Fossil fuels aren't going away soon. But huge innovation is under way to come up with new solar technologies that could prove game-changers. It's crucial not to get blinded by the light. But it's also worth recognizing what may be over the horizon.
Jeffrey Ball (@jeff_ball), formerly The Wall Street Journal's environment editor and a longtime energy reporter at the paper, is scholar-in-residence at Stanford University's Steyer-Taylor Center for Energy Policy and Finance, a joint initiative of Stanford's law and business schools. He writes about energy and heads a project exploring the relationship among countries in the globalizing clean-energy industry.
Ariel Cohen: Energy Is Not a Matter of Religious Faith
Renewable energy is not going to come from one source, but from a number of technologies, including solar and wind, which for now appear to be the leaders in renewable electricity generation.Different U.S. states and different regions of the world will have different energy mixes, including among the renewables. However, it is important to remember that for now these technologies are not competitive, BTU to BTU, with fossil fuels, if the government phases out the current tax credits. Energy is not a matter of religious faith, and technologies should not receive open-ended subsidies just because someone "wants to believe."
A separate issue is renewable transportation fuels. These may come from algae or a number of agricultural sources, but again, so far, these are not competitive. The fiasco of corn ethanol is widely known. The closest one gets to competition is sugar-cane ethanol, but only when oil-based gasoline is relatively expensive.
The 2012 U.S. Department of Energy renewable fuels study postulates that 80% of electricity generation in the U.S. by 2050 will be from renewable sources based on known technologies and excluding possible breakthroughs and novel technologies such as enhanced geothermal; ocean energy, including wave, tidal, current or ocean thermal; and floating offshore wind technology.
Dispatchability, the ability of suppliers to exercise control over an alternative energy plant's increase and decrease of supply, will remain one of the key challenges in wind and photovoltaic solar.
However, with the abundance of shale gas obtained through fracking and horizontal drilling and development of the global LNG markets, these renewable technologies are likely to face serious barriers to entry, or remain noncompetitive, unless governments introduce carbon taxes or cap and trade which would distort markets drastically. Such a high economic price for renewables appears unwise, especially as the debate over the human causes of climate change continues, and as major emerging markets polluters, including China and India, are unenthusiastic about joining an equitable and global carbon tax or capture regime.
Ariel Cohen (@Dr_Ariel_Cohen) serves as a senior research fellow in Russian and Eurasian studies and international energy policy at the Heritage Foundation. He has published six books and monographs, 30 book chapters and over 500 articles.
Mazen Skaf: Hydropower's Dominance Will Continue
A renewable energy source that is already a major source of energy today is hydropower (global installed capacity of hydro exceeds 980 GW). Excluding hydropower, several renewable energy sources are on track to deliver an increasing share of total energy supply over the next 10 to 20 years. Specifically, wind, concentrated solar, biomass, geothermal and solar PV carry the most promise (with variations across markets depending on resource availability, policy programs, and competing energy sources).By 2040, wind-powered generation is projected to account for about 7% of global power supply. Wind power is already among the most competitive renewable technologies. The levelized cost of electricity (LCOE) for new onshore wind farms ranges between $0.05 to $0.15/kWh (based on a cost of capital of 10%). In locations with good wind resources, onshore wind is becoming competitive with fossil fuel-based generation.
Solar-powered generation is projected to account for about 2% of global power supply by 2040. The costs of concentrated solar and solar PV are declining due to steep learning curves and large deployments in recent years. In the case of solar PV, for instance, it is estimated that every doubling of installed capacity will yield a reduction in module costs of about 22%.
Even as a relatively mature technology, hydro will continue to attract attention due to the advantages it offers: Lowest LCOE, grid stability, and potential for energy storage and complementarity with other renewables. Further, hydropower (including small hydro) provides options for building additional capacity at existing facilities or installing generation capacity at dam locations with no current generation at attractive marginal investment costs in the range of $500 to $800/kW.
The long-term projections for expansion in the use of renewable energy are sensitive to natural gas prices, innovation in storage technologies (including batteries), policy programs and the relative costs of alternative generation sources. It is important to take a portfolio approach to renewable energy sources and their share of total energy supply whether at the level of a specific geographic market or globally.
Mazen Skaf (@Skaf777) is managing director of the Europe and Middle East practice of the U.S.-based management consulting firm Strategic Decisions Group. He advises clients in energy and related industries on strategy, financial-risk management, negotiation analysis and deal structuring.
Todd Myers: Whatever the Market Decides
Let's imagine we are in the year 2025 and tidal power accounts for 10% of electric generation. That would be a dramatic increase. By that time, however, giving homeowners more control over their energy using the Smart Grid could reduce demand by a similar amount. If a penny saved is a penny earned, why would we focus more on "renewable" tidal power than technologies yielding the same carbon emissions reduction and energy savings?Given a choice between algae-based biofuel or expanding high-speed Internet access to encourage telecommuting and reduced fuel use, which should we choose? Does it matter that one is a "renewable" energy source and the other isn't? This is the beauty of the free market. As long as there are costs to energy use and the impacts of energy use, the free market treats all approaches equally, without politics, as long as they effectively save resources. Given a choice between solving our energy and environmental demands by narrowing our focus to a few choices or expanding our vision to include any approach that conserves energy, we will be more successful by embracing all potential options.
This is the danger of politically chosen technologies. The perspective of policy makers is limited and it can never match the combined creativity of the many investors and inventors looking for the next opportunity to profit from their risk-taking in the marketplace. For decades, we've been promised that solar energy would be price competitive. Just a few years ago, Congress expected cellulosic ethanol to blossom as an energy source. Neither occurred. Numerous other technologies have been touted and then have floundered. That is the nature of innovation. We are wiser to reduce the costs of taking risks in the process of discovering new technologies than to guess what technologies will emerge.
Todd Myers (@WAPolicyGreen) is environmental director at the Washington Policy Center in Seattle and author of "Eco-Fads: How the Rise of Trendy Environmentalism is Harming the Environment." He also serves on the Washington state Salmon Recovery Council.
David Ferris, ContributorGenerally I have been disappointed by the lack of breakthrough 
With computing and design savvy, Matt Rogers (left) and Tony Fadell may have done more than anyone else in Silicon Valley to reduce energy consumption.
Mitsubishi Electric and PointSix Wireless have both launched energy management system (EMS) products.
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An offshore wind farm in Portugal. Despite having a large resource, the U.S. does not have any offshore wind installed. Will a transmission network speed development? Credit: Principle Power.