energy

Over the last 100 years, oil has fueled industrial development, mobility and prosperity for much of the world. Future progress will be made possible by new sources of energy.

Although we have consumed only 30% of the Earth’s proven reserves, much of the remaining supply is locked away in unconventional sources like tar sands and deep water, making it far more expensive to extract. As we spend more on production and approach what has been termed “peak oil”, further pressure is expected from new demand from industrializing countries such as China and India.

Rise of renewable energy

Renewable energy is the most attractive alternative moving forward. However, even though the Earth’s endowment of sun, wind, wave, river and geothermal resources are more than enough to meet our energy needs, only 2% of global electricity (and an even lower percentage of transportation energy) is currently generated by non-hydro renewable sources.

The recent growth in investment in renewable energy is encouraging. A study sponsored by the United Nations found that the 2007 global investment in renewable energy totaled $148.4 billion USD, up 60% from 2006. Much of this increase has come from solar energy and wind power, whose prices have declined steeply over the past few years.  Yet, without technological breakthroughs, further cost reductions are dependent on volume scaling and the ability to capture off-peak generation.

Renewable energy and transportation

The economics of renewables create an extraordinary opportunity for transportation.  But the economics of transportation also create an extraordinary opportunity for renewables.  A transition from our current system – in which 98% of transportation is powered by oil products – to an electric transportation system based on renewables, would benefit both renewable energy and transportation.

First, an electric vehicle system can take advantage of underutilized electricity, reducing oil consumption and providing resources for renewable development. U.S. government research shows that 73% of its domestic light vehicles could be replaced by EVs without requiring any additional capacity when the EV system is complemented with a “smart grid” that optimally manages the flow of available electricity. Second, EVs can alleviate the problems of intermittency, unpredictability and off-peak generation that have hindered the progress of renewable energy in the past. Third, because EVs offer energy efficiency up to three times greater than that of gasoline-powered vehicles, EVs reduce the overall burden on energy resources.

Denmark, for example, presents a strong case for the economics of the transition.  Denmark’s wind farms generate electricity at variable rates caused by unpredictable changes in wind patterns. Further, the wind farms generate much of their electricity at night, when winds are high but demand for electricity is low. If a critical mass of EVs is plugged in at night, they collectively serve as a distributed energy storage device that absorbs renewable energy as it become available, which then powers transportation the following day. Denmark’s DONG Energy estimates that the country’s entire fleet of 2 million passenger vehicles – if replaced with EVs – could run on fewer than 750 windmills (or about 60% of the installed wind capacity Denmark has right now).

more about the opportunity

• energy
• environment
• economics