Abstract
The paper analyzes the facts and data regarding competitiveness of renewable energy use based on economics and environmental factors, showing how the cost relationships could change in the future, which would result in more competitive overall cost of producing and distributing energy.
Environmental cost concerns support a major reduction of fossil fuels and substitution of favored "nonpolluting" energies. The energy industry nearly spends as much on environmental protection as it spends searching for new supplies; roughly $10 billion a year (U.S. DOE). So far, the penetration of renewable energies into market has been slow, providing about 10% of total U.S. electricity use, principally by their higher cost relative to fossil energy.
Wind and solar power are the two energy sources most favored to displace fossil fuels to help protect environment, thus reducing compliance cost. The costs of solar and wind power systems have dropped substantially in the past 3 decades and continue to decline. Wind costs have declined from around US$0.20 per kWh to US$0.05 per kWh in favorable locations. Solar thermal facilities are operating effectively in virtually any climate, from facilities in "resource deficient regions" to water heating in the US (saving upto 300,000 GWh yearly). An added benefit of renewable energy projects is significant local economic activity, especially to "resource deficient regions" of world. For example, ethanol production not only offsets million of oil barrels, the associated crop production helps to create over $10 billion annually for investment into agricultural sector, thus revitalizing rural areas. While looking at unconventional energy, the paper also compares sustainability of some low-cost advanced technologies, estimated to increase "tertiary oil recovery" by millions of barrels by 2015 and beyond using various enhanced oil recovery techniques.
It is estimated that by 2030, the renewable energy capital cost per KW would be reduced by 5 to 10 times of the recent costs. The emphasis is to demonstrate the competitiveness of unconventional energy based on cost equivalence data in terms of millions of barrels of oil saved and hence its sustainability comparing to "conventional" sources.
