Green Energy Production
More than just a modern luxury, electric power has become a necessity that sustains human civilization. Yet, a staggering 70% of the world’s power comes from fossil fuels thought to contribute significantly to the warming of our planet. To reduce emissions of the compound CO2, released into the air by fossil fuel combustion, the world increasingly looks to green energy to power the cities of the future. While power production has long been a Shosha specialty, the growing urgency for fossil fuel replacements will bring these systems to the forefront of Shosha’s service catalog in the future.
1. The State of Green Energy
The majority – about 70% - of the world’s power comes from combustion processes fueled primarily by coal and liquid natural gas (LNG). Another 10% comes from hydroelectric and nuclear sources, while Green Energy processes produce just 3% of global power output. The IEA, however, projects that with cooperation from the international community Green Energy will account for approximately 15% of all power output by 2035.
Source: IEA "World Energy Outlook 2011"
Why isn’t Green Energy more widespread?
1. High Costs
America’s Energy Information Administration (EIA) estimates that it costs approximately .21USD to produce one kWh of solar electric power. That’s nearly three times the cost of gas power. And although geothermal and wind power are considerably cheaper than solar energy, they too are relatively expensive compared to more popular current methods.
Green Energy Cost Analysis
Source: EIA “Annual Energy Outlook 2011”/
US avg Levelized Costs (2009 USD/MWh) for Plants Entering Service in 2016
2. Unpredictable Output
Human industry and infrastructure demand a stable power supply. However, Green Energy technologies such as solar and wind power rely on natural forces to produce electricity, making output heavily dependent on weather conditions, time of day, and other factors that are often unpredictable or impossible to manipulate. In addition, switching to Green Energy systems on a large scale would require expensive and disruptive infrastructure overhauls.
3. Restricted Locations
Also due to Green Energy’s reliance on natural forces, Green Energy power plants must be placed where these forces are most consistent and/or powerful. Many of the best areas to locate a Green Energy power plant, however, may already be occupied by National or State parks, human settlements, etc.
Analysis
Experts believe that by encouraging Green Energy growth, the above drawbacks will be negated over time. For example, it is projected that, like other technologies, as Green Energy becomes more widespread, its cost of use will decline. In fact, a 2010 EIA estimate revealed the cost of wind and geothermal power production to be more or less in line with gas power. In addition, experiments are currently being conducted with Green Energy storage battery cells that will allow continuous energy output even in unfavorable conditions. Finally, as society gradually recognizes the necessity of combustion energy alternatives, current restrictions on the placement of Green Energy power plants are likely to be lifted in the future.
The emergence of Green Energy as a viable power source will likely coincide with the rise of the so-called “Smart Grid” style of public infrastructure – a system that uses information technology to improve the efficiency and reliability of electric power output. Smart Grid systems are predicted to usher in a more even split between Green Energy and traditional coal and gas energy in the future.
2. The Green Energy Business
In 2010, records showed the world’s overall renewable energy resource investments to total approximately 210 billion USD – an increase of 15% over the previous year. The increase, which experts foresee to continue into the future, was most likely due to the 2008 global economic crisis, which saw countries around the world turning to renewable energy projects to stimulate economic growth. Both public and private investment in the industry is clearly on the rise. In addition to the industry’s economy-stimulating job creation potential, interest has surged in Green Energy sources that do not produce greenhouse gases, in light of growing scientific evidence of man-made global warming.
Source: REN21
Source: British Petroleum (2011)
There are a variety of renewable energy options available, but the most widely utilized are wind and solar power generation. Other methods are being explored, including tidal and geothermal energy. Geothermal energy, which is produced by harnessing heat from liquefied rock (a substance called “magma”), may prove a particularly viable option for volcano-abundant Japan. The burning of biomass – organic waste, such as plant matter – can also produce energy. This method does release CO2 , but biomass crops themselves also sequester carbon, making the process essentially “carbon neutral”.
1. Wind Energy
Wind energy is the most widely utilized of all Green Energy options. Over the last five years, wind power output has been increasing at a blistering 20% per year, totaling approximately 200 million kW/yr by the latest measures. The United States and Europe especially have made great strides in introducing wind power farms, but China is also rapidly expanding its wind power infrastructure. In fact, the Asian nation produced about 45 million kW of wind power in 2010 – outpacing every other country in the world. Recently, the wind power industry has innovated new ways to capture wind energy, including by offshore farms which are removed from human settlements, cutting down on noise pollution. England in particular plans to take advantage of offshore wind farms, with the British government planning to supply 30% of all of the country’s energy by offshore wind farm by 2020. Japan is also planning to join China as a major Asian producer of wind energy in the future.
2. Solar Power
The use of solar power is also accelerating at an astonishing pace. Currently, over 100 countries utilize some type of solar energy plant to bolster power output. Germany far outpaces others in its use of solar energy, with the government offering so-called “Feed-In Tariffs” (FIT) to solar energy producers in order to encourage growth. Japan has also offered FITs for solar energy producers since 2009, and is likely to expand the FIT program to all renewable energy production in 2012. Solar energy enjoyed a 70% worldwide output increase in 2010 over the previous year, coming in at approximately 40 million kW/yr. Many countries are recently enacting plans to construct very large-scale solar power farms to take advantage of wholesale value. Additionally, India and Thailand are currently attempting to attract business dollars by setting aside spaces for these large-scale farms.
The biggest drawback that solar energy faces is its high cost. Historically, the solar power industry has had to rely on cash injections from governments worldwide, but future costs are expected to decrease as production volume rises.
3. Geothermal Energy
Geothermal energy production utilizes magma from the earth itself to generate power through vaporization. The advantage of this procedure is that, unlike wind and solar power, output does not depend on weather conditions. The US, Indonesia and the Philippines produced a combined total of 10 million kW of geothermal energy in 2009. On the other hand, Japan, rich in volcanic hotspots, has the potential to produce as much as 20 million kW/yr alone, according to experts.
That still pales in comparison to the production potential of the US, which is planning to expand production to 30 million kW/yr by 2025. Indonesia is also planning a 9X increase in that same time period.
While geothermal power production has historically relied on volcanic activity, technicians are currently perfecting methods that utilize superheated water.
Japan is poised to make an especially strong showing in this field. In fact, three of Japan’s largest industrial companies already take an approximately 80% share of worldwide geothermal plants.
3. Shosha Green Energy Activities
Because the Green Energy industry is still in its infancy, there are still no clear leaders among the many competing businesses. For instance, the top solar panel manufacturer is China’s Suntech Power, which takes an overall 10% of the market share. Yet, even the top five solar panel manufacturers combined control only 30% of the market. The wind energy market looks much the same, and manufacturers are expected to consolidate going forward.
Emerging countries have an especially advantageous presence on the market. China’s Suntech, for example, is joined by numerous other Chinese companies competing on the solar panel market. Some of the power hitters in the industry are not even energy companies by trade. Google, for instance, is currently exploring a number of clean energy options to power its data centers. In other words, it is critical for Shosha to partner up with companies who can survive in this still-unpredictable industry.
