RENEWABLE ENERGY: Generation Next?

The pros and cons of renewable energy sources

By JAVIER ESPINOZA

The use and prominence of renewable energy, which uses natural resources with no finite supply, such as wind and sunlight, has been on the rise. In China, the planet's biggest polluter, renewable energy could form 26% of the country's energy mix by 2030, according to a report by the Renewable Energy and Energy Efficiency Partnership. In the U.K., renewable energy has been described as the 'first pillar' of the country's future energy plan.

WSJE has looked at the pros and cons of some of the key renewable energy types.According to the Rnewables 2010 Global Status Report, in 2008 about 19% of global final energy consumption came from renewables, with 13% coming from biomass, which is mainly used for heating, and 3.2% from hydroelectricity. Some believe that a massive take-up of renewable energy will move governments away from using traditional carbon emitting sources of energy such as coal, oil and gas. Despite the apparent benefits to the environment, however, skeptics argue that renewable energy is too costly, it can be a blight on the landscape in many cases and that, ultimately, it is not a realistic or truly efficient way to guarantee energy security. After all, the wind only blows 30% of the time and the sun is a rare visiter in many parts of Northern Europe. How viable renewable energy is as an alternative source of energy will depend on each country's natural resources, says Peter Rossbach, head of the private equity division at Impax Asset Management Group, a London-based fund manager with a particular focus on cleaner sources of energy like solar and wind. "Each country has a different resource mix. So there is no silver bullet," he says.

Wind

Using wind to generate power is not a new concept. The Babylonians were using wind to pump water to irrigate crops 4000 years ago. What is new, however, is the idea that wind can be harnessed in such a way that it can form a genuine alternative to fossil fuels. This dream is becoming closer to reality.

Wind power grew by 31% globally in 2009, according to the Global Wind Energy Council. This meant 37.5 additional gigawatts installed, or a total global wind power capacity of 157.9 gigawatts. Not only is this a boost to the environment but for jobs too. More than 500,000 new jobs were created as a result of the growth in wind power, according to one Brussels-based trade group. In Europe, the wind sector hopes to provide 20% of final European Union electricity consumption by 2020, according to the European Commission.

One of the main advantages of producing energy from wind is that, once installed, it is cheap. Wind is free and with the latest technology it can be stored in an efficient way. Wind turbines are also relatively easy to maintain compared to other power plants.

However, these turbines rely on the strength of the wind and this is not always reliable or constant. Storage technology is also still in its infancy. Skeptics of wind power also point out that large-scale 'farms' are a blight on the landscape, decrease local property values and do not produce enough energy to justify their negative visual impact.

Ultimately, however, the nay-sayers face an uphill battle if they are to reverse plans roll out more windmills. Governments across Europe have set their course: And it's wind powered.

Solar

Using the sun's rays to power homes and businesses would seem the ideal remedy to fossil fuels. The sun produces enough energy in just one hour to power the world economy for an entire year. The challenge lies in harnessing that abundant potential. The best mankind has come up with so far is the photovoltaic cell - or solar panel.

Unfortunately this technology is expensive to make and, some argue, causes as much pollution in its manufacture as it might potentially save when up and running. In terms of cost, according to the Energy Saving Trust, installing a solar electricity system can set you back up to £12,000. However, supporters point out that in the long term solar panels will pay for themselves.

The other obvious drawback is of course cloud cover. An all too common occurrence in Northern Europe, though this has not stopped Germany becoming a world leader in solar technology. Scientists are still working hard to improve the efficiency of solar cells during overcast days.

Not all countries are as enamored with solar energy as Germany. The U.K. government recently said it is planning to scrap subsidies for large-scale solar installations to divert the funds to smaller projects. There are concerns that the high cost of solar projects will consume most of the government's alternative energy investments.

However, Impax Asset Management's Mr. Rossbach, foresees a fall in equipment prices. "Equipment prices have already dropped 50% since mid-2008 and as a result prices for fixed panel systems have come down from €6 per Watt to €2.5 and we expect more price drops."

Hydro

Perhaps the most controversial of all sources of renewable energy, with perhaps the most potential too, is hydropower. Installed hydroelectric capacity grew to 1,230 gigawatts in 2009 globally, according to the Renewables 2010 Global Status Report. To put that into perspective: Hydro supplies about 15% of total global electricity production. However, critics of this particular form of clean energy rail against the damage it can do to sensitive river ecosystems, in particular the impact of dams on fish migration.

It can also have a terrible human price. The Five Dams project in China, and similar schemes in South America and Africa, have the potential to make many thousands of people homeless. A matter which is of great concern to human rights groups. Despite these concerns, hydropower is here to stay. In the U.S. alone, there are plans to add 60 gigawatts of hydropower capacity in the near future.

Harnessing the power of rivers is just one piece of the hydropower pie. The latest projects are looking at harnessing the power of the tides too. Huge coastal barrages built across the mouths of river estuaries can transform incoming and outgoing tides into energy through the use of giant turbines. The obvious drawbacks here include the sheer cost of building such dams, the potential damage to marine life and the inevitable protests from those living in the area that they will have their sea views blighted forever.

As with all renewable energy sources, however, governments across the globe are desperately trying to strike a balance that lessens their nation's dependence on fossil fuels while guaranteeing energy security for the future.

Biomass

Biomass energy, which is produced by burning or digesting some forms of animal and plant material, has been on the rise. A report by the International Institute for Environment and Development estimated biomass energy production will account for 30% of global energy production by 2050. Biomass energy never runs out and it has the capacity to generate heat and electricity, according to Ronan O'Regan, a director at PricewaterhouseCoopers' renewables and low carbon group. Biomass also utilizes large quantities of waste generated everyday so it is a relatively easy resource to obtain. The problem, however, is that there is a complex supply chain to manage.

Skeptics have also highlighted the environmental damage biomass projects can cause. In the U.S. a group of environmentalists is calling for the Scottish government to scrap a controversial biomass plan in Leith, Edinburgh, because it would involve bringing wood from the U.S. to fuel plants there.

The campaigners raised concerns that not all the wood would come from sustainable sources. Separately, there are concerns in England that a biomass power station set to be installed in the center of Southampton (a city on the south coast of England) may cause air pollution in the area.

However, according to estimates from the Department of Energy and Climate Change, the number of industrial biomass plants, anaerobic digesters and other energy-from-waste installations is set to rise in the U.K. DECC estimates that by 2020 some 13,000 installations across industry and around 110,000 in the commercial and public sectors will be built.

Geothermal

Energy produced through Geothermal means - naturally occurring steam and hot water beneath the planet's surface - has the potential to more than double by 2020, according to a report by Pike Research. In the next nine years, the study says, geothermal power could rise by 134%. Soaring oil prices and more strict carbon laws are said to be contributing factors for this growth.

One of the most familiar landmarks where the Earth's heat combines with water is the Yellowstone National Park in the U.S. Some of the applications of this type of renewable energy include the powering up of generators in buildings though there are some smaller scale residential uses too. In Europe, Iceland has become a leading producer of geothermal power because of the high concentration of volcanoes there.

Those who support the use of geothermal energy argue that although the initial investment may be high, once the necessary technology is installed, producing power is virtually free. Like most renewable energy, geothermal energy is an environmentally sound way to generate power.

Still, geothermal energy isn't yet widely used and building the requisite facilities to produce it is not only expensive, but vast areas of land are required.

And because the generation of energy depends entirely on what is produced in certain areas of the planet, this makes the generation of geothermal energy somewhat unstable because there is no guarantee that the desired quantities of power will be produced. Some have also linked the generation of geothermal power with minor after-shock earthquakes.