Project Development in the Solar Industry

Chapter 1

Why renewable energy?

At present, a growing population of over 7 billion people inhabits the planet. The

growth rate is expected to slow each year, however, a population of somewhere

between 7.5 and 10.5 billion people by 2050 is anticipated, according to the Popula-

tion Division of the Department of Economic and Social Affairs of the United Nations

Secretariat (2009). Natural gas, coal, and petroleum power plants are responsible for

over 65% of all electricity today. Many accept these conventional sources of energy,

also known as fossil fuels, as reliable long-term energy sources.

As the world’s population increases so does the world’s energy usage. If fossil

fuels remain the dominant form of energy generation, the world as we know it will

likely continue on its present course of increased consumption. The question is “In

what form is that course, and is it a sustainable one?” Al Gore’s now famous presen-

tation, An Inconvenient Truth, highlights historical data showing not only a global

warming trend, but also its link to the greenhouse gas carbon dioxide, CO

2

, a known

byproduct of fossil fuel use. While determining the causes of CO

2

creation is an issue

that is being evaluated, this will not be the only environmental problem the world will

face if fossil fuels remain our dominant source of energy generation.

Tenth of a degree annual average temperature changes due to global warming

have been both relatively subtle up to today and challenged by both sides of the glo-

bal warming debate. Hence, building an argument for renewable energy based solely

on “solving” climatic change or global warming is hard to quantify and highly con-

troversial. But what if there were highly observable and almost indisputable figures

available that are directly related to use of conventional energy? With fluctuations not

just in the tenths of a percent but in the ten or even twenty percent rate of change,

these figures exist and we have to look no further than the volatile historical prices

of our conventional energy commodities. Take the retail price of gasoline or the mar-

ket price or natural gas used in electricity generating power plants. Increases of over

10–20% in one month have been seen in gasoline prices and natural gas has been no

less dynamic with both up and down swings of 100% in 1–2 year periods (Arndt,

1989). While gasoline and diesel prices are nearing record highs today in 2012, the

price of natural gas is the lowest it has been in 10 years. Some may not see an issue

with historically dynamic or volatile prices, especially when they are low. However,

price volatility is seen an important factor in economics. According to a report by

the Center for American Progress, energy price volatility has a very negative effect on

the economy. Data presented in their May 2011 report titled Not Again The Summer

Vacation Gas Price Roller Coaster on the Move Again states that “… energy price

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2 Project development in the solar industry

Annual electricity net generation in the world

20000

18000

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TWh

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Renewable

Nuclear

Fossil (coal/natural gas/petroleum)

0

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Figure 1.1 Worldwide energy generation (EIA, 2011).

0

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Kg of Oil Equavalent (BIllions)

Year

Energy Usage in kg of Oil Equivalent

World

China

USA

Figure 1.2 Energy usage in oil equivalent (World Bank Database, May 2012).

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