Renewables -- Can We Really Afford to be Left Behind?
A lot of people think it is too early to start investing into alternative sources of energy like solar, geothermal and biofuels. That a technology, that can give us clean and renewable energy for cars, homes and business is not economically viable. That is a mistake. Research by the McKinsey Global Institute finds, for example, that even though world energy demand will grow with 2.2 percent annually to 2020 there are enough opportunities available to boost energy productivity with almost 150 percent of the entire US consumption today – or the equivalent of 64 million barrels of oil per day – and this without compromising economic growth.
So why wait? World oil production peaked in 2006, and the remaining oil reserve is estimated to be somewhere in between 854 to 1,255 Giga barrels. European car manufacturers Volkswagen and Daimler seem to prepare themselves. About a month ago they bought a part of German Choren Industries, producers of BTL – biomass to liquid – biogas that are not made from foodstuff like corn, but from other organic matter. In Sweden, Mercedes-Benz is running 18-wheelers with an Econic motor – a biogas engine. And in the Swiss region of Basel, you can take a biogas Taxi. The European Union is also in on the secret, by year 2020, 10 percent of the region’s transportation needs will be met with biofuels.
In Texas and the United States, however, we should stick to domestic oil and gas reserves for the safety of our economy, some says. That is all good, but what about renewables? Can we really afford to be left behind? “ By capturing the potential availability from existing technologies with an internal rate of return (IRR) of 10 percent or more, we could cut global energy demand growth by half or more over the next 15 years”, the McKinsey report, “Curbing Global Energy Demand”, states.
But if an IRR of 10 percent is not enough, why not subsidize renewable like the Swede’s do with wind power, through green certificates, with which the small extra cost is passed on to the consumer? I would rather pay for clean renewable sources of energy, than putting money into the pockets of Hugo Chavez and Mahmoud Ahmadinejad.
