Sun and Wind Will Be Sources
by Jim Carlton
The amount of electricity generated from solar, wind and other nontraditional sources is likely to double in the U.S. and Canada during the next decade amid the plunge in renewable-energy costs, a report backed by power companies shows.
World-wide, renewable energy sources of electricity are projected to grow 9.2% on an annually compounded basis compared with 2.4% for electricity from conventional fossil fuels and large dams, said the report expected to be released Thursday by Navigant Consulting Inc., a Chicago-based firm whose study was largely funded by energy and utility companies in the U.S. and Canada.
Although renewables account for only about 3% of the world's electricity supply, they are poised for explosive growth -- to a projected $35 billion-a-year global industry in 2013 from about $17 billion currently, not including large hydroelectric plants. "It is a small fraction of the market today, but it is the fastest-growing segment by far," said Lisa Frantzis, a Navigant Consulting principal who helped oversee the report, based partly on surveys of energy and related firms.
The growth in renewables comes as some officials in Washington are expressing concern over the recent run-up in natural-gas prices. In his testimony before the House energy and commerce committee last week, Federal Reserve Chairman Alan Greenspan raised the possibility that those prices could become an increasing drag on the U.S. economy. The prices have jumped over the past few months as natural-gas inventories have been depleted following a harsh winter in parts of the U.S. The Senate is working on an energy bill that provides subsidies for wind and solar energy, as well as coal and nuclear sources.
Market forces, though, are helping drive the growth of renewable energy. As a result of technological advances, along with government incentives, industry analysts say, the cost for many of the forms of energy has plummeted. Wind power, for instance, has dropped from a cost of about 38 cents a kilowatt hour in the early 1980s to 3 to 3.5 cents now. By comparison, electricity produced by natural gas costs about 5.5 cents a kilowatt hour, a jump of about 1.5 cents since last year, analysts say.
Indeed, wind power has become so affordable that the Navigant Consulting study says it will dominate the rise in renewable power in the U.S. and Canada, which it projects will jump to 60,000 megawatts over the next decade from about 27,000 now. Globally, the study projects renewable power will more than double to about 300,000 megawatts by 2013 from about 116,000 megawatts.
As a result, renewables are gaining more mainstream interest. Big companies such as General Electric PLC have made significant investments in renewable technologies. "There is literally no limit to its growth potential," said Blaine Townsend, vice president of San Francisco-based Trillium Asset Management, which invests in "socially responsible" companies.
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