Biofuels (link) appear to be among the best alternative energy sources under development. Production yields per acre for advanced biofuel sources such as algae, for example, significantly exceed those of both food and non-food crops, and it is possible that both gaseous and liquid fuels can be produced in quantities that could make a meaningful dent in the demand for fossil fuels within a decade or two. As for any energy source, though, while innovators tend to focus on power generation technologies, delivery and storage systems may be even more important in making them economically useful.
Cost of new infrastructure is a big concern. The cost of infrastructure for new energy sources will be a big factor in determining availability, cost to end user, and time-to-market. Hydrogen has been acknowledged for years as an energy source that could fuel vehicles as well as provide fuel for heating and electricity generation. The big problem has been that it will require an infrastructure that does not exist today. Setting up such an infrastructure will be quite expensive and take a lot of time to develop, and may inhibit development for some time to come in spite of efforts to the contrary by the U.S. Department of Energy. That leaves hydrogen out in the cold, especially in current economic conditions when money is tight and it is especially difficult to justify projects on the enormous scale of creating a new fuel infrastructure. This gives a big advantage to any alternative energy that can easily use existing infrastructure.
Minimizing infrastructure cost may be a key to implementing alternative energy sources. Solar power and biofuels, on the other hand, might be engineered to better use existing energy infrastructure where they can substitute for or mix with petroleum-based fuels. Ethanol is already available at many gas stations – mixed with gasoline in the US, but increasingly available in pure form in some parts of the world. Currently it is transported by truck from source-plant to retail fuel station, but when production volumes are sufficient it may be transported via pipeline, as petroleum products are today, using existing facilities. As for solar power, we already have a good infrastructure for distributing electricity but the plans for large solar installations in the Southwest are facing the added cost of transmission lines needed to reach them in the sparsely populated areas where they will be built.
Decisions to invest in alternative energy infrastructure will be strongly influenced by the cost of fossil fuels. As can be expected, decisions governing investments in infrastructure will take into account the time to cover the initial investments and the expected total long term net benefit of those investments compared with current energy sources. This means that the cost of existing fossil fuel energy sources and infrastructure will have a direct bearing on whether or not, and when, particular alternative energy source projects will be pursued. Volatility in current energy prices will create uncertainty and risk that discourage investment in alternatives, but that will be only one of many factors. From a consumer perspective, (especially a consumer concerned with the long-term future), the development of diverse and more ecologically-responsible alternative energy sources can’t occur fast enough, and a significant drop in the price of oil, for instance, would not necessarily be a good thing as it could stall or discourage alternative energy development including infrastructure investment and development.
As always, I welcome your comments.
Chapter V, Energy Infrastructure, 2006, UNESCAP
Heads Up, Arizona, Part 3: The Cost of Energy Infrastructure to 2032, June 18, 2008, Knowledge@W.P.Carey, W.P. Carey School of Business, Arizona State University
Hydrogen, Fuel Cells & Infrastructure Technologies Program, U.S. Department of Energy, Energy Efficiency & Renewable Energy
Hydrogen Infrastructure Costs, Analysis Repository, U.S. Department of Energy
Global Infrastructure, Alternative Energy and the Cost of Commodities, June 24, 2008, Marc Courtenay, seekingalpha.com
Infrastructure in Europe and Central Asia Region: Approaches to Sustainable Services, June 2006, Peter D. Thompson, The World Bank