With hopefully the worst of the economic crisis behind it, the clean energy sector is hoping that the combination of government support and growing demand will lead to a surge in renewable energy.
A study issued Tuesday anticipates it will, estimating that global renewable energy revenues will double by 2022, growing to $426 billion by 2022.
It also is facing a serious opponent in low natural gas prices, which renewable energy critics say reduces the need to invest in more expensive energy sources and to tap limited resources, such as water and land required for ethanol production.
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“As solar and other renewables continue their march down the cost curve, it seems that the goal posts are continually on the move, at least in the U.S., where fracking and horizontal drilling technology to inexpensively tap vast supplies of shale gas has fundamentally shifted the economics of energy,” stated Clean Edge, a clean tech research and advisory firm, in its report.
The study maintains that clean energy will be a growing part of the mix, as government and industry continues to seek a balance between economic and environmentally sustainable energy solutions.
“Some argue that America’s cheap natural gas will crowd out clean energy technologies, but we strongly believe this is not the case, as solar and wind have seen repeated record deployment in recent years,” the Clean Edge report stated. “Instead, it appears that the future of energy in the U.S. belongs to a mix of clean energy, improved efficiency, and responsible natural gas resource development.”
Renewable energy, by all accounts, had a tumultuous year in 2012, recovering from high-profile bankruptcies and sluggish funding from venture capital.
Combined global revenue for solar photovoltaic power, wind power, and biofuels expanded just one percent, from $246.1 billion in 2011 to $248.7 billion in 2012, the report said.
But the story behind the numbers is more compelling: The drop in growth can be partially attributed to the declining cost of solar photovoltaic panels, which decreased from a record $91.6 billion in 2011 to $79.7 billion in 2012 even as capacity grew by a record amount. Global installations expanded to 30,9 gigawatts in 2012, up from 29.6 gigawatts in 2011, with Germany, China, Italy and the U.S. leading the demand.
Biofuels production and revenues had, by all accounts, a good year. Global biofuels revenue, which includes ethanol and biodiesel reached $95 billion in 2012, up from $83 billion the previous year. From 2011 to 2012, global biofuels production grew from 27.9 billion gallons to 31.4 billion gallons of ethanol and biodiesel.
Wind production, led by China and the U.S. also had a record year, with 44.7 gigawatts of additional capacity added in 2012 and new installation capital costs up to $73.8 billion in 2012 from $71.5 billion in 2012. And it looks like favorable winds will continue to blow its way, with spending on new capacity expected to increase to $124.7 by 2022.