New_Energy_Era

New Energy Era It is easy to predict that our current usage on fossil fuel and coal will lead us to an energy crisis. In order to survive in the energy crisis, governments and companies in the energy industry are looking for alternative ways of extracting energy—mostly from renewable sources, which we call “green energy”. Even though the mainstream awareness and government pressure are continuously growing, the rate of renewable energy development in United States is still slow. This paper will discuss the current factors that have contributed to the low growth rate of alternative energy and the possible energy mixture usage in the coming twenty to thirty years. It is perplexed that why United States is not in the lead of new energy development while being the country with highest energy demand. We are going to discuss three main factors that have prevented renewable energy development growing fast as we would like: 1. Cost: This is explained by the “supply and demand” theory in economics. Demand goes up when price is low; supply increases the same direction with demand. Below chart shows the prices on renewable resources are still significantly higher than conventional resources. Here, we take a closer look at building a plant for nuclear, natural gas and coal as examples: For a nuclear plant investment, on a present value basis, at least two-thirds of its costs are incurred at the initial investment stage—before it is in service, and that is without factoring the interest rate or cash discount rate during the instruction period. By contrast, only a quarter of the total cost for a typical gas-generated electricity plant is required up front for the initial investment. Coal plants are not expensive to build at all and are relatively economical to operate once it’s built. Coal price has dropped steadily over the past twenty years. 2. Technology When technology moves to a certain level, it not only brings down the fixed cost/ initial investments for renewable energy plants, but also makes it possible for storage and transportation, by doing that, the overall cost/ unit cost will be reduced and able to make it accessible to residential and industrial use. Wind, sunlight and water are free if available, and it turns out, in the US, there are many areas where renewable sources are available in abundance. But current technological level has many limitations and challenges regarding cost, geographical (Only limited areas with sufficient resources), and time (solar heating demand can be highest in winter while supply is the lowest). Energy storage and super-conducting transmission will make it possible for California residents to use energy in the winter that is from the past summer’s solar generation if such storage and transmission exist in a massive and cost-effective way. Looking from a bigger, global picture, there is no prospect that we can use less energy in the future. In fact, it is projected that the world energy demand will increase by 10% in 2030. On the other hand, advanced technology also helps business produce more efficient products for our daily use to reduce the energy demand rate while the total demand is going up. 3. Politics Governmental policies play a major role in renewable and alternative energy development. Chinese leaders are investing 12.6 million on renewable energy. In China’s $586 billion stimulus plan in 2009, $221 billion over two years is going toward public investment in renewable energy, low-carbon vehicles, high-speed rail, etc. This massive stimulus plan spends over 3% of China’s 2008 GDP in the following 2 years on green investments—more than 6 times green stimulus spending of the U.S. This same pattern has been repeated across the world renewable energy industry. The European Union has committed to 20% of final energy coming from renewable sources by 2020, China has committed to 16%, 66 other countries worldwide have committed to their national standards, but the Federal government in the United States has not set national standards. Below charts show the United States lags far behind other developed nations in renewable energy development such as wind and solar capacity. There is no reason that the United States could not be leading the renewable energy industry. Currently, United States is working on its renewable energy efficiency and infrastructure. In North America, between 2003 and 2008, the average wind turbine installed is with the capacity of 1.6 MW and was over twice the capacity of the average wind turbine installed in 2000. But it still has a long way to go. Cost reduction, technology advancement and government support is required to further enhance a wide implementation of renewable energy. Although development and research on renewable energy is limited by multiple factors as discussed above, it is required by circumstances. In the recent years, global warming, conventional energy drying up along with alternative energy development has drawn the most attention from industry and governments. In the next twenty to thirty years, the structure for energy consumption will definitely change. In fact, the changes have already been taking place in some areas. We will be focusing on Nuclear, Wind and solar development history and forecasting. Below is a chart that shows the current world energy consumption (June, 2010), from which, we can see that 45.9% of the power in the U.S. is currently generated by coal; 21.8% generated by natural gas; 19.9% is from nuclear plants. 0.9% is contributed by petroleum-fired plants, petroleum liquids represented 6.8%, and other renewable resources such as biomass, geothermal, solar, wind and other miscellaneous energy sources generated the remaining portion (4.4%). Figure: Net Generation Shares by Energy Source: Total (All Sectors), Year-to-Date through June, 2010 • Nuclear Comparing to electrical power consumption in 2006, when Oil and Coal hold the share of 62%, overall situation has been improved significantly. The biggest contribution was made by the continuous growth of nuclear energy. 19.9% of total electricity power generation in United States has put the nation with the largest nuclear industry. The total electricity production from nuclear reactors almost equivalent to the combined total of France and Japan—the other two advanced nuclear nations. In some states, over half consumed electricity is supplied by nuclear generator. Nuclear doesn’t have greenhouse or acid rain affect, however, it requires large capital cost because of emergency, containment, radioactive waste and storage systems. Even though the cost of the electricity that are produced by nuclear plants in the United States today tends to be cost competitive with gas or coal generated power, since the initial investment on the plants has been paid off and the efficiency of some plants been upgraded, electricity supplies in United States has not been associated with private investment in the nuclear plants, which associated with high capital cost and long return period. That directs the other types of alternative energy with more competitive market of generating electrical power, such as wind and solar for private investors. • Wind "Wind power isn't the silver bullet that will solve all our energy challenges—there isn't one. But it is a key part of a comprehensive strategy to move us from an economy that runs on fossil fuels to one that relies on more homegrown fuels and clean energy." -- President Barack Obama, April 2010 In 2007, The US had a 45% incensement in wind installation investment, which made wind power one of the fastest growing new generation technologies and likely to continue at this pace of growth for several years. Using an average annual capacity factor, the US wind power accounts for 0.88% while the world has 1.31 of the total electricity generated by all sources. That has provided room for significant growth. A new report says that the U.S. could get 20% of its electricity from offshore wind energy by 2030 if wind farms are developed along the coast and in the Great Lakes. The same report also indicated that under conservative assumptions, the United States could generate 54GW of energy from offshore wind only. • Solar Same as Wind, it is free and nature recourse. California as the sun-belt place in the United States is making its way to the top of the solar energy industry. The state has approved four solar energy projects, including a project for the world’s largest solar farm at 7,000 acres, and it is able to meet the electricity power demand for 675,000 homes. State of California recently also passed regulations that requiring one-third of electricity be produced by renewable energy. The future development and research of renewable energy is a complexity of politics, technology and economics. Coal’s importance to the U.S. electricity generation may decline due to the concerns about its pollutions and the growth of alternative energy types in terms of cost deduction, technology advancement, and government support. In 2005, about 36% of the people would like to pay an additional $2000 to buy a hybrid version of their current vehicle that improves miles per gallon by 40%; about 17% of the people would like to pay an additional $4000 to by a plug-in version that could travel up to 20 miles per day on its battery only. In 2006, the same population has increased to 42% and 28%. The need for renewable energy has never been as strong and it’s still growing. However, alternative energy development is still experiencing its growing pains, by which it means the dominance of coal energy generation will still last for some years. Despite the decline of overall economics in recent years, the renewable energy industry has continued to grow around the world since 2009—32% more wind power capacity, solar used for hot water and heating has increased by 21%; geothermal also has a 4% increase and 3% growth in hydropower. A study done in 2007 by Wood Mackenzie, a global energy consulting firm, found with the growth of renewable energy, electricity prices would decrease by 7% to 11% by 2020. Conclusion We are optimistic about the energy usage mixture in the future 20-30 years, with the continuous growth of alternative energies, conventional energies such as coal and oil will gradually been replaced. In the next 20 years, we believe the dominance for coal and oil will continue to reduce. In 2007, coal and oil is taking up 62.7% of the total energy usage, and we expect the share to reduce by 7% to 55% in 2030. The rest energy generating groups will make up the difference by continuously growing. It is not difficult to believe that by 2040—in thirty years, the U.S. is going to have its biggest energy revolution—Coal and Oil use first time in history lose its dominance going under 50%, from where, the new energy era begins. References: http://en.wikipedia.org/wiki/Energy_crisis http://energy-alaska.wikidot.com/current-costs-future-projections http://climateprogress.org/2009/04/21/primer-solar-pv-wind-us-china-europe/ http://bravenewclimate.com/2009/10/11/tcase3/ D.L. HOFFMAN, T.S. MOLINSKI; Manitoba Hydro (CAN) “How New Technology Developments Will Lower Wind Energy Costs” PIETRO S. NIVOLA “The Political Economy of Nuclear Energy in the United States” LARRY BIVINS, Gannett Washington Bureau, October 13, 2010 “Is US a green energy leader'” http://www.thecalifornian.com/article/20101013/NEWS02/101013023 Megan Treacy, 13/10/10, “U.S. could get 20% of Energy from Offshore Wind by 2030” http://ecogeek.org/wind-power/3326-us-could-get-20-of-energy-from-offshore-wind-by-20