The rush is on to exploit high-carbon fossil fuels. To mitigate the clash between supply and demand for fossil fuels, solar and wind energy must rise rapidly to meet the challenge of oil depletion.
Since the beginning of the oil era around 1860, world population has increased dramatically. The world’s population has expanded six times since then.
Energy inequity will continue to grow between the haves and the have-nots, and the struggle over the remaining energy reserves will intensify. Oil is an essential foundation of productive modern agriculture, and starvation is already intense in certain regions. In the developed world, food can now travel more than 500 kilometers on average.
The Clean-Energy Response Clean energy is the response to the inevitable need to find other energy sources, substituting new energy for oil and what oil does. As fossil fuel costs increase, the economics of renewable energy will transform the market.
Today, solar, hydroelectric and wind power have net energy yields higher than conventional fuels such as oil, gas and coal. With their inherently high net-energy yields, renewables can be ramped up rapidly.
The world’s primary energy production, including all fossil fuels, nuclear power, hydroelectric and renewables, is 14 terawatts, which is equivalent to 14,000 large power plants. This is less than 1/100 of 1 percent of the 170,000 terawatts continuously delivered to the earth as sunlight. With 600 terawatts of terrestrial potential, solar energy far exceeds all other possible forms of energy substitution.
Transportation is powered almost exclusively by liquid fuel and it has been natural to propose biomass as a substitute for liquid fuels. We will not see electric airplanes or cargo ships, but biomass will play a role in the energy future. However, liquid fuels exclusively from plant material will be possible for transport at only about one-tenth the present level worldwide.
The world is tied to its investment in its automobile/truck fleet and due to the current limitations of biofuels, it is difficult to conceive the transformation of transportation to renewable energy sources. Nevertheless, electric vehicles are currently at least twice as efficient as gasoline vehicles and are ideal for urban transportation.
Preparing For Change The transition to the decline in oil threatens to bring great international tension. The major consuming countries will compete with each other for access to supply, most of which lies in just five countries bordering the Persian Gulf.
How will the change occur? Ramping Up Renewable Energy. The rapid development of renewable energies fromtide, wave, solar, wind and other sources, including the growing of energy crops must be encouraged and incentivized.
Nuclear Energy Potential. The nuclear option can be used, but it has to be made safer with thorium reactors or pebble bed technology, and the waste-disposal issue must be resolved.
Evaluation of Real Resource Supplies. International organizations will stop providing erroneous forecasts on the status of the world’s energy supplies.
Efficiency Taxes. Utilities will be taxed or incentivized to deliver alternative or green power. An efficiency factor could be incorporated into fuel charges to penalize the wasteful. The transport system is where this applies most. Everyone must become more energy conscious and find ways to be less wasteful.
Utopia 2050 Our century holds enormous promise for world economies. The goal of clean energy is to bring a future to the Earth that will have many positive attributes. Clean Energy is the single greatest investment theme of the next 20 years. That future spells out how the world’s wealth will be deployed to the new Clean Energy infrastructure required to bring power to society.
Future Scenarios for Clean-Energy Impact are noted below: Cities will reorganize around their urban centres,with dense communities surrounded by greenbelts used for agricultural production. Suburbs will lose their influence.
- Economies will be built around locally produced products that have drastically reduced reliance on transportation - Public transportation and shipping fleets could be powered by liquid fuels derived frombiomass or algae feedstocks and by hydrogen derived from renewable electricity.
- The world will strive to contain nuclear weapons proliferation and develop new nuclear technologies with which proliferation can be contained - Countries will focus on research, innovation and manufacturing to support the new energy paradigm.
- Virtually ubiquitous solar energy, dispersed with consistency across the earth’s surface.
- Universal availability and affordability of renewable energy resources will bring greater economic parity within and among societies.
- Photovoltaic manufacturing facilities will occur locally and design specifications for wind turbines can be optimized for local wind conditions.
- The energy economy will be tied to locally available renewable resources.
- The agricultural sector will have been transformed, with farming communities using more wind power.
- Most electricity generation can become emissions-free.
- New electricity generation, based on biofuels, could use advanced catalytic controls to eliminate virtually all pollutants and will require reforestation or replanting to ensure carbon-neutrality.
- Homes will use virtually no external energy, since on-site solar energy supplies could supply all necessary daylighting, hot water, space heating and electricity.
- The transportation sector can shift to biofuels and hydrogen. The retirement of most hydrocarbon technologies can stabilize the level of carbon dioxide, one of the principal greenhouse gases, by mid-century.
Global wealth will have roots in entrepreneurship and innovation, rather than in the ownership and control of natural resources.
Nanotechnology will transform labor-dependent manufacturing. Nanotechnology will affect how energy is stored and distributed. These transformations will have further enormous impact on the Clean-Energy planet that will affect the renewable future of many projects today. These transformations will be overwhelmingly favourable for world energy supplies and lead to equitable access.
How Will We Fill the Fossil Fuel Gap Now? The world consumes nearly 14 terawatts (TW) of continuous energy consumption in 2008. Demand is projected to increase to 30 TW in 2050. There is a projected shortfall of 16 TW*
The Resources We Have Hydropower 4.6 TW global theoretical potential 0.7 TW technically feasible 0.5 TW installed capacity
Tides/Ocean Currents 2 TW cumulative energy globally
Biomass 7 to 10 TW global theoretical potential
Geothermal 12 TW globally, of which only a small fraction might be practically extracted
Wind 50 TW global theoretical potential 2 to 4 TW economically feasible land usage + additional offshore potential
Nuclear 10 TW, based on construction of a new 1- gigawatt nuclear fission plant per day for the next 50 years
Solar 120,000 TW global theoretical potential 600 TW available incident solar power 60 TW technically feasible generated power based on 10 per cent conversion efficiency 20 TW based on usage of just 0.16 percent of global land area and 10 percent conversion efficiency
Conclusions for the Investor Clean-energy stocks have outperformed traditional equity indices and energy subindices.
The S&P Clean-energy index beat the MSCI World Index by 2X since April 2004. We believe this outperformance and excess return will continue on a similar path and that the trend is at an early stage. BBGI Clean-Energy Fund was launched in June 2008 and is an excellent diversified product that gives investors participation in this profitable growth industry.
*1 TW equals 1 million megawatts (MW). For context, if a large electric power plant generates 1,000 MW of power, it would require 1,000 such power plants to produce 1 TW. (Sources: U.S. Department of Energy Office of Basic Energy Sciences 2005)
