1. Introduction

Globally, sources for worldwide generation of electricity in 2007 included about 16% hydroelectric; 16% nuclear; and 2% “renewables” including waste, wind, geothermal and solar.

Wind power has seen rapid growth worldwide, including growth in the U.S. Major technological advances in wind turbines (including much larger blades creating very high output per turbine, and blades that suffer very little downtime and are thus more efficient) and government incentives encouraging investment in wind generation in many nations have fueled very rapid growth in wind turbine installation. In the U.S., wind power generation grew dramatically from 29,007 billion BTUs in 1990 to 258,385 billion BTUs in 2006 and 317,000 billion BTUs in 2007. Another sharp spike upward was posted in 2008. However, growth may falter in 2009 as financing becomes harder to obtain. BP plc reports that global wind generation capacity was 74,306 megawatts at the end of 2006, and climbed to 94,005 megawatts at the end of 2007. The Global Wind Energy Council expects that number to climb to 240,300 megawatts by the end of 2012. However, it remains to be seen whether financing can be found for that much expansion.

Meanwhile, solar power is enjoying significant technological innovation. The most important factor in solar is the percent of solar energy that is converted into electricity, and that ratio is climbing. The use of polymers is leading to exciting, flexible solar panels; and nanotechnology is creating breakthroughs in solar technology as well. BP reports that installed global solar photovoltaic capacity was 3,704,758 kilowatts at the end of 2005 within the IEA Photovoltaic Power System Program Member Countries. This was an increase of more than 100% over 2003. By 2006 (the latest year available) , that number had grown to 5,699,505 kilowatts.

Biomass energy (including the use of energy from waste and the production of bioethanol and biodiesel) has been growing rapidly as well, both in the U.S. and elsewhere. Biomass power consumption in America grew from 1,562,307 billion BTUs in 1950 to 3,226,918 billion BTUs in 2006 and 3,584,000 billion BTUs in 2007.

As for nuclear power, we are entering an era in which the construction of new nuclear generating plants will accelerate, particularly in China and India. Eventually, new nuclear construction will likely start in the U.S. and other fully-developed economies as well.

It should be noted that the use of renewable sources does not always mean clean power generation. For example, burning wood or trash for energy under the wrong conditions can create significant pollution. Also, the clearing of land, such as rain forests, for planting for biomass to be used in ethanol or biodiesel refining can be highly destructive to the environment while creating huge quantities of carbon emissions.

In the U.S., emphasis on alternative energy and conservation has a varied history. More than 30 years ago, the 1973 oil trade embargo staged by Persian Gulf producers vastly limited the supply of petroleum to the U.S. and created an instant interest in energy conservation. Thermostats were turned to more efficient levels, solar water heating systems sprouted on the rooftops of American homes (including a system that was used for a few years at the White House) and tax credits were launched by various government agencies to encourage investment in more efficient systems that would utilize less oil, gasoline and/or electricity. Meanwhile, American motorists crawled through lengthy lines at filling stations trying to top off their tanks during the horrid days of gasoline rationing.

While some consumers maintained a keen interest in alternative and conservative energy methods from an environmentally friendly point of view, most Americans quickly forgot about energy conservation when the prices of gasoline and electricity plummeted during the 1980s and 1990s. Gasoline prices as low as 99 cents per gallon were common for many years. As advancing technology made oil production and electricity generation much more efficient, a low commodity price trend kept market prices under control. As a result, Americans returned to ice-cold air-conditioned rooms and purchased giant, gas-guzzling SUVs, motor homes and motorboats. The median newly constructed American single-family home built in 1972 contained 1,520 square feet; in 2005 it contained 2,434 square feet. More square footage means more lights, air conditioning and heating to power. Meanwhile, federal and state regulators made efforts to force automobile engines and industrial plants to operate in clean-air mode, largely through the use of advanced technologies, while requiring gasoline refiners to adopt an ever-widening web of additives and standards that would create cleaner-burning fuels.

, the first energy crisis in the early 1970s did lead to the use of technology to create significant efficiencies in some areas. For example, prior to that time, as much as 40% of a typical household’s natural gas consumption was for pilot lights burning idly in case a stove or furnace was needed. Today, electric pilots create spark ignition on demand. Likewise, today’s refrigerators use about one-third the electricity of models built in 1970. Many other appliances and electrical devices have become much more efficient. While the number of electricity-burning personal computers proliferated, computer equipment makers rapidly adopted energy-saving PC technologies.

Today, fluctuating (and at times extremely high) oil and gas prices have created a renewed interest in all things energy-efficient. Smaller cars, high-efficiency homes and even solar power are once again part of popular culture. Sales of gas-guzzling SUVs have slowed to a crawl while the demand for light, high-efficiency cars is rising steadily. At the same time, renewable energy sources and cleaner-burning fuels are of great appeal to the large number of American consumers who have developed a true interest in protecting the environment. For example, surveys have shown that some consumers would be willing to pay somewhat more for electricity if they knew it was coming from non-polluting, renewable sources.

gasoline-electric automobiles made by Toyota and Honda are selling well in the U.S. “Clean diesel” cars that deliver very high mileage are extremely popular in Europe. Meanwhile, some municipalities, such as the city of Seattle, Washington, are investing in buses and other vehicles that are hybrids or run on alternative fuels. Plug-in hybrid electric vehicles will soon soar in production and popularity.

Alternative energy is also attracting rapidly growing interest from investors. Globally, venture capital has helped to support innovation at firms that focus on alternative energy or energy conservation technologies. Likewise, national governments are helping to fund many energy efficiency projects, ranging from fuel cell research to the design and development of high-efficiency buildings.

Legislation at state and national levels will continue to boost renewable energy development and conservation technologies on a global basis. In the U.S., state governments have passed stringent legislation requiring that an ever-growing percentage of electric generation come from renewable means. In Washington, D.C., newly-elected President Obama is likely to follow through on his campaign pledge to boost investment in renewable energy and conservation measures.

However, when analyzing plans, announcements and developments in renewable energy projects, it is best to keep an eye on a big challenge: where will the money come from? The global financial crisis of 2008 has made money extremely difficult to raise for organizations, corporations, utility firms and local governments. At the same time, national governments are faced with their own, massive fiscal problems. Many alternative and renewable energy projects had already been delayed or abandoned by the end of 2008. Tar sands projects in Canada had been shelved, and some of the biggest wind and solar projects ever announced were cancelled or delayed due to funding constraints.

industry is struggling to justify and attract the investments required to develop renewable and alternative projects when oil and gas prices fall. Nonetheless, renewable energy remains a viable business for the long term, particularly technologies with reliable payback, such as hydroelectric. Conservation through advanced technologies such as smart electric meters remains a real possibility, as long as a reasonable return on investment can be shown. Alternative energy sources, such as tar sands and oil shale, harbor vast potential reserves, but means must be found to produce them at reasonable prices per barrel of oil equivalent. Bioethanol and biodiesel are questionable at the least, and perhaps extremely misdirected at the worst. Some production of bioethanol appears very efficient, particularly in Brazil where sugar cane is the feedstock. However, the diversion of corn and soy from the food chain to the energy chain for ethanol or biodiesel may be a very bad idea. Long term, the development of new geothermal energy projects, along with tidal energy, look very promising, but it will take many years to develop them to large-scale commercial energy production at reasonable cost.