February 26, 2007	Monday	Safar 8, 1428

THE world’s energy scenario looks poised for a change. Higher international oil prices, geopolitical uncertainty and growing focus on global warming seem to be paving the way for a new energy policy. In the coming decades, the world may redouble its efforts to develop a host of new technologies to diversify its fuel mix and control the greenhouse gas emissions.

Nuclear power provides about a sixth of the world’s electricity. Wind and solar energy are expanding rapidly and witnessing considerable cost reduction. Coal could also reportedly be turned into a carbon-free energy source, if bulk of the produced carbon dioxide was captured and stored geologically. These technologies presents an optimistic picture of the world’s capability to deal with its growing energy needs.

For so many years, one of the major objections against alternative energy had been its higher cost, as compared to the cost of energy based on traditional fuels such as coal and natural gas. However, costs are reported to be declining for some alternative energy sources, as a result of new technology and renewed interest in the development of these sources. Alternative energy may, no doubt, still be unable to compete with fossil fuels, but the cost margins between the two are narrowing, particularly because of the surge in the oil and gas prices.

Renewable energy sources such as biomass, hydro, solar, wind and geo-thermal constituted 13.1 per cent of the world’s primary energy supplies in 2004, according to statistics provided by the International Energy Agency. However, the percentage may go up considerably in the coming years.

Wind power stands out as one of the greatest success stories. Over the past 10 years, the cost of generating electricity from wind has witnessed a dramatic decline. In 1980, wind power electricity cost 80 cents per kilowatt hour, while the cost came down to 10 cents in 1991, according to the figures supplied by the International Energy Agency. At present, production costs at the best on-shore sites have dropped to 3- 4 cents per kilowatt hour, while the average cost is between 6-9 cents. Thus, the cost of wind power electricity is approaching a point where it could be able to prosper without subsidies.

A multitude of factors had helped in bringing down the cost of wind power. The materials used in wind turbine have improved and the turbines are now much larger and more efficient. Besides, the government policy gave wind power a boost. Germany – the largest wind power producer in the world – has given grants to builders of wind farms since the late 1980’s and, at the same time, it requires utilities to buy electricity generated from renewable sources.

By the end of 2005, there was about 59,000 megawatts of total installed capacity of wind power the world over, which was considered sufficient to meet the electricity demand of 20 million homes. Two-thirds of this capacity is in Europe. Germany, Spain, the US, India and Denmark are reportedly the top five producers of wind power.

As regards solar power, it still accounts for less than one per cent of the world’s total power generation. According to reports, there is 5,400 megawatts of capacity on line which is considered enough to meet the daytime electricity needs of 2 -3 million homes. Solar power obviously does not generate electricity at night, which means that backup energy sources would be needed for areas depending on solar power.

The cost of generating electricity with solar panels is as high as 35-45 cents per kilowatt hour, according to International Energy Agency. In the US, however, the costs are reported to be 26 -35 cents only, as the country has plenty of sunlight.

In one of the latest developments, a new generation of solar plants has shown the promise of acquiring the capability of producing electricity on an industrial scale at competitive rates. The new plants use a technology called concentrating solar power (CSP) which is much more powerful than the classic photovoltaic panels, which use semiconductor chips to convert sunlight into electricity.

The problem, however, remained to bring generating costs in line with those of conventional power plants. It cost 9-12 cents to generate one kilowatt hour of electricity by CSP compared to only 3-5 cents to generate the same amount of electricity by burning coal.

Only six per cent of solar energy is generated through the CSP technique. Energy analysts are of the view that as more CSP plants move into operation, costs will come down. However, with current costs remaining at a higher level, few companies are willing to take the risk of building a plant without adequate government incentives.

In addition to wind and solar power, there are so many other alternative energy sources such as biomass, geothermal and bio-fuels including ethanol. However, all these sources (except ethanol) are being used on a very limited scale.

It is hoped that the use of all the alternative energy sources will continue to grow, with the passage of time. Even if the international oil prices come down to a moderate level, the quest for energy security and the concern over the catastrophic consequences of global warming would compel the developing and the developed world to find viable alternatives to fossil fuel.