Jonathan Fahey, Contributor
Sometimes it seems like there’s nothing renewable energy can’t do. It can create jobs! It can jump-start the economy! It can protect us from terrorists! It can revive the heartland! And, of course, it can save us from climate calamity.
But so far it’s not doing much of any of this. Wind, solar, geothermal and biomass satisfied just 4% of our overall energy consumption in 2007, according to the U.S. Department of Energy’s Energy Information Administration. By far the biggest chunk of that sliver is thanks to ethanol from corn, which is of dubious environmental and economic benefit.
So what’s the problem? When are we going to live in this bright, clean future where our lives are powered by the wind, the sun and the Earth?
The problem, in a word, is money. Even though the fuel is free, the technology and infrastructure needed to gather the energy, or harness it, or transform it, or transport it adds up to something more expensive than burning coal, natural gas, uranium or gasoline.
Federal and local governments both in the U.S. and around the world are helping bridge the money gap with tax breaks, grants, mandates and, ever more, making dirty electrons more expensive than clean ones by putting a price on carbon.
But each of the major technologies has its own set of problems that is holding it back from truly widespread adoption. Forbes asked experts in the four major renewable energy technologies to explain.
Wind is an elder statesman of renewable energies. Though still small in the grand scheme of power production, its technology is mature and proven, and its costs are competitive.
It produced 32 million megawatt-hours of electricity in 2007 compared with 15 million for geothermal and just 600,000 for solar.
But growth has slowed considerably. In 2008, 8,300 megawatts of capacity were installed in the United States, but this year just 4,000 to 6,000 megawatts are expected to be installed. The problem is financing.
Wind projects in the United States have been financed in the past with tax credits. Developers teamed with financiers who doled out money in exchange for tax relief. There were 16 so-called tax-equity players last year, but that has dwindled to four. When there are no profits, there’s no need for tax relief. (See “Glory Days May Be Gone For Green Investing”)
Congress passed a new incentive scheme in February that will allow developers to take what was the tax credit in the form of an upfront grant instead (a whopping 30% of the cost of the project). But the Treasury Department, which is charged with administering the program, only started accepting applications for the grant in late July.
“Not one dime has flowed,” complains Ed Lowe, general manager for renewables market development at
Now that the incentives are in place, though, wind still has a few issues. Wind blows at night, when people don’t need much electricity, and storing that power for daytime use is expensive and difficult. Already nighttime power prices are dipping to zero in some markets.
Also, the country’s best wind resources, like those in the Dakotas and West Texas, aren’t connected to population centers where power is needed. More transmission is needed, which costs more money. This is the issue that caused T. Boone Pickens to scale back his ambitious wind plans recently.
GE’s Lowe says it’s a fallacy that the lack of transmission is holding back wind now, but he admits it will need to be in place to really push wind to a significant percentage of the nation’s electricity supply.
There’s plenty of useful heat hidden under the surface of the Earth that can be used to generate consistent, clean, power. The problem is that it is hidden under the surface of the Earth. (See “Journey to the Center of the Earth”)
Unlike with wind or solar, geothermal power developers have to raise money just to see if there’s a power source to be exploited. According to Mark Taylor, a geothermal analyst at New Energy Finance, it can cost $10 million to $15 million to drill two or three holes to prove there’s enough heat there to spin a turbine. “You need resources just to prove your resources,” he says.
Another big problem: Upside. If a biofuels company invents a bug that can turn straw into gasoline, or if a solar panel maker builds a cheap, efficient panel, they can then build factories that turn out billions of bugs and panels and, potentially, billions of dollars.
That kind of hope attracts lots of money from venture capitalists. Developing geothermal power is more like hand-to-hand combat. Companies have to gather land rights, drill holes, and, if successful, then build power plants on top of the holes. These plants can provide stable profits, but nothing like the kind of growth possible with biofuels or solar.
The industry got a lift from the federal stimulus bill, which included $350 million for geothermal research and development. Private companies are percolating up, too. AltaRock Energy is building a pilot well testing a new geothermal procedure in Northern California (though it was put on hold recently to study whether the procedure might trigger an earthquake). Companies like Potter Drilling, which received financing from Google.org, are developing ways to make drilling cheaper and easier. A Canadian geothermal company, Magma Energy, raised $100 million with a public offering on the Toronto Stock Exchange in July.
In truth, sunshine already powers everything. It is the energy that created the raw material for fossil fuels, it generates wind, it supplies the energy for crops to grow. Still, we’d like it to do more. For all its glories, sunshine is, unfortunately, too diffuse to cheaply gather into powerful electric current. Solar power is the most expensive of the alternative energies.
Solar energy is turned into electricity either directly, using photovoltaic cells to turn photons of light into electrons for electricity, or indirectly, by collecting the sun’s heat with mirrors and using that heat to create steam to spin a turbine.
It has some nice advantages over its green competition. It produces power when people use it, during the day. This allows it to compete against more expensive, on-peak power instead of very cheap base-load power. Also, it’s easy to make panels small enough to fit on the roofs of homes and businesses, boosting its potential market size.
Its problem, however, is efficiency. Most panels are made of crystalline silicon, and the best of those convert close to 20% of the solar energy that hits them into electricity. So-called thin film panels, which are much cheaper to produce, convert, at best, 10% of the solar energy that hits them.
While these efficiencies are creeping up, and hundreds of companies are working to produce thin films with better efficiency, these low efficiencies require lots and lots of panels to be built to produce enough electricity, and lots of infrastructure around these panels to hold them in place and move electricity around. So even as panel prices fall, the cost of the infrastructure around it will keep the overall price of solar frustratingly high.
Michael Wasielewski, a chemistry professor at Northwestern University and director of the Argonne-Northwestern Solar Energy Research Center, says either infrastructure costs have to fall or efficiency has to rise, or both. “We have an existing technology that will carry us forward, but it will go only so far,” he says. His center is working on developing solar cells made with extraordinarily cheap organic materials that he hopes could be rolled out like cellophane. “Our pie in the sky aim is to perhaps develop a system so you can go to Home Depot, buy a roll and maybe use it for a season, or for portable power and recycle it after a year.”
In the meantime, the economic downturn has done a lot to make solar cheaper. Silicon prices and high demand kept prices very high in 2007 and early 2008, even as makers were learning to cut manufacturing costs. Now silicon is cheap and there is a glut in the market. Painful for makers, but perhaps good for solar. (See “Storm Clouds”)
The simplest way to get energy out of plants is to burn it and use the heat to run a turbine. It’s relatively efficient and relatively widespread. But because plant matter is not a dense fuel, biomass power plants tend to be small, limited by the amount of fuel available nearby.
Also, competing with electricity prices is a lot harder to do than competing with gasoline prices. So most of the money and attention goes toward the more complicated way of getting energy out of plants–to have bugs or chemicals transform the plant matter into fuels.
Complication, of course, leads to cost. Biofuels are easy to produce from sugars, starches and fats, so all of the world’s biofuels come from foodstuffs–sugar and corn for ethanol, soybeans, rapeseed oil and palm oil for biodiesel. And even these relatively easy methods produce a fuel far more expensive than gasoline or diesel.
But there isn’t enough land or fertilizer in the world to grow enough corn or soybeans to make enough biofuels to make a real dent in oil use. There are hundreds of companies searching for every manner of trick to make so-called advanced biofuels out of waste products, like wheat straw or wood chips, or to engineer algae to excrete fuels directly. (See “Biofuels Battle”)
The successes in the laboratory have been impressive. Scale has been impossible, so far at least. Advanced biofuels generally require three steps: busting up the plant walls with acid or heat or both; breaking down the molecules in the plant walls with enzymes, bugs or chemicals; and transforming those molecules into fuel with bugs or chemistry. Each step has to be done cheaply, efficiently and produce a pure product consistently.
And even if this puzzle is solved for one type of feedstock, like, say, corn cobs, it won’t necessarily work so well on grass or wood chips because the plant material is different.
Then there’s the matter of growing and gathering feedstock. Farmers will have to be convinced to grow new plants perhaps, or at least gather current crops differently. Feedstock can’t come from far away or transportation costs rise too high. And the fuel most commonly produced, ethanol, can’t be run through pipelines and must be shipped at high cost.
“What people did not take into account was how complicated it is to integrate all the pieces,” says Helena Chum, a research fellow in the National Bioenergy Center at the National Renewable Energy Laboratory. “You have to develop the science, the engineering, the transportation, the feedstock contracts. It’s a system problem.”