Fuel as usual

World Energy Outlook: Assessing Today’s Supplies to Fuel Tomorrow’s Growth

When electricity shortages blacked out much of California last year, those countries and industries investing in wind and solar-powered energy must have felt a glow of excitement. After the lights came back on, energy experts were boldly predicting that the solar power industry would double its profits by 2005.

Nevertheless, according to the latest World Energy Outlook, while its potential is huge, the share of alternative energy sources in the global energy mix is expected to remain small over the next 20 years.

Part of the challenge for developing renewable energy sources is that oil, gas, coal and uranium are more than adequate to meet demand for decades to come, even if it means massive investments in both production and transportation infrastructure. Besides, renewables are still expensive compared with fossil-fuel alternatives. Bioenergy is close to the same cost as coal and gas, but wind is double, and solar is roughly 20 times more expensive.

Hydropower is by far the largest source of renewable electricity in OECD countries. It made up 14% of OECD total electricity generation and 87% of its renewable electricity in 1999. In the future, developing countries will account for 80% of projected increases in hydroelectricity, three-quarters of it in China and Latin America.

Surprisingly, world energy intensity – primary energy demand in relation to GDP – is expected to decline by 1.1% a year between now and 2020; oil is expected to remain the dominant fuel in the primary energy mix with a share of 40% in 2020, almost identical to its share today. This, despite the forecast by the Outlook that energy-related CO2 emissions in 2010 will still be too high to meet commitments under the Kyoto Protocol.

A number of technologies under consideration or active development could radically alter the long-term supply picture. The main focus of current research on new technologies is on hydrogen production and use, in which renewable solar and wind generators might be used to produce pure hydrogen fuel out of water. according to the San Francisco Chronicle, “if a practical hydrogen storage system can be perfected, and if fuel cells can ever be mass-produced cheaply enough, today’s utility customers would have electricity in a stable, portable form capable of being used whenever needed”. But for the moment, that’s only California dreamin’.

World Energy Outlook: Assessing Today's Supplies to Fuel Tomorrow's Growth, OECD, 2002. 

©OECD Observer No 230, January 2002 

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