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By how much should we expect renewables to replace fossil fuels over the next 20 years?

August 7, 2010

The estimate the transition from a fossil fuel-based to a renewable energy-based economy is rather complex. This article discusses the future dependency of renewable energy in the U.S.  on market demands, fuel types, government legislation and initiatives as well as global, technological, socio-political and economic factors. The discussion includes a quantitative analysis of EIA data and a predicative methodology based on three empirical models.

To the extent that our government legislates and incentivizes renewable fuels, the rate of adoption may retard or accelerate from conventional wisdom. In the near term, the political news  for increasing demand of renewable fuels is less than favorable. In a recent announcement, the Senate decided to abandon all efforts to pass a comprehensive climate change bill. This leaves utilities, vehicle owners, businesses and homeowners with no direction and no reason to adopt more expensive renewable energy. As long as fossil fuel prices remain low largely due to tangible and intangible government subsidies, it is difficult to make a strong financial case in favor of renewable fuels.

As a counterpoint, whether one believes or disbelieves in climate change or global warming, the issue of reducing our reliance on foreign oil and fossil fuels is as much a domestic economic issue as it is an environmental one. The U.S. spends about $1.3 million per minute, $57 billion a month and more than $685 billion a year to feed its addiction of foreign oil. It seems the U.S. government is myopic to its economic and environmental impact.

In closing, it’s about us, humanity and our future. We must find the leadership, courage and conviction to get off petroleum in order to keep our dollars in the U.S. by using clean, abundant and domestically produced energy sources. Only by these actions can we ensure our children’s children will have any measure of hope for the future.

My predictions for how much renewables are expected to replace fossil fuel over the next 20 years are ………… (see http://tinyurl.com/barry-stevens3).

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8 Comments leave one →
  1. August 12, 2010 7:40 PM

    Comment posted in LinkedIn on this discussion.

    From Subject (Thread Messages) Date Size
    LinkedIn Network Update

    Kevin Watford has just left a comment on your network update:

    “Within the next 30-50 years I’m not sure we’ll have much of a choice. Hopefully within the next 20 though we’ll have made huge strides towards that. If not… :(”

    Barry Stevens ‘s article “By How Much Should We Expect Renewables to Replace Fossil Fuels Over The Next 20 Years?” was published in “Comment Visions,” August 6, 2010, http://lnkd.in/4D9pFR Add a comment

  2. August 12, 2010 7:46 PM

    Comment posted in LinkedIn on this discussion.

    LinkedIn Network Update
    Barry Stevens,

    Joe Coffman has just left a comment on your network update:

    “Also, hydro is considered renewable however, I’ll my two cents in, especially in the PNW comes with a high environmental cost to our rivers and salmon and is flatlined or declining.”

    Barry Stevens ‘s article “By How Much Should We Expect Renewables to Replace Fossil Fuels Over The Next 20 Years?” was also published in “Renewable Energy Investment, Acquisitions and Business Development,” August 9, 2010, http://lnkd.in/2cGhdi 3 comments

    Where will the U.S. really be in 20 years in terms of renewable…
    Article contributed by DR. Barry Stevens Associate at Bauhaus Capital Partners (bstevens@bauhauscp.com) The transition from a fossil fuel-based to a renewable energy-based economy is rather complex. It must be understood in terms…

  3. August 12, 2010 7:51 PM

    Comment posted in LinkedIn on this discussion.

    : Barry Stevens

    From Subject (Thread Messages) Date Size
    LinkedIn Network Update
    Barry Stevens,

    Brennan Jorgensen has just left a comment on your network update:

    “Hi Barry, great report! I certainly agree with your energy mix projections for the next 20 yrs. under a business as usual scenario. I have also been doing my own research on this matter and concluded that an energy tariff or tax amounting to 3 dollars for every barrel of imported foreign oil (or 7 cents for every imported gallon of oil) from 2010 through 2025 (15 years) would actually be able to finance the development of approximately 100-GW of renewable energy capacity by the year 2025 (with a 25% renewables component to the U.S. domestic energy mix). Continued-”

    Barry Stevens ‘s article “By How Much Should We Expect Renewables to Replace Fossil Fuels Over The Next 20 Years?” was also published in “Renewable Energy Investment, Acquisitions and Business Development,” August 9, 2010, http://lnkd.in/2cGhdi Add a comment

    Where will the U.S. really be in 20 years in terms of renewable…
    Article contributed by DR. Barry Stevens Associate at Bauhaus Capital Partners (bstevens@bauhauscp.com) The transition from a fossil fuel-based to a renewable energy-based economy is rather complex. It must be understood in terms…

  4. August 12, 2010 7:53 PM

    Comment posted in linkedIn on this discussion,

    To: Barry Stevens

    From Subject (Thread Messages) Date Size
    LinkedIn Network Update
    Barry Stevens,

    Brennan Jorgensen has just left a comment on your network update:

    “In addition, under this scenario, the transportation and utility sector would shift to domestic natural gas over 15 years. Natural gas would constitute 45% of the energy mix by 2025 under this model: 2010 Current % Energy Mix:: Petroleum-37.1 Natural Gas-23.8 Coal-22.5 Nuclear-8.5 Renewables-7.3 Other-0.8 A $3 U.S.D/ Barrel of Oil Energy Tax (or 7 cents a gallon) on every barrel of foreign oil imported between 2010-2025 could feasibly produce the following economic and energy model: 2025 Projected % Energy Mix: Petroleum-15 Natural Gas-45 Coal-6 Nuclear-9 Renewables-25”

    Barry Stevens ‘s article “By How Much Should We Expect Renewables to Replace Fossil Fuels Over The Next 20 Years?” was also published in “Renewable Energy Investment, Acquisitions and Business Development,” August 9, 2010, http://lnkd.in/2cGhdi 1 comment

    Where will the U.S. really be in 20 years in terms of renewable…
    Article contributed by DR. Barry Stevens Associate at Bauhaus Capital Partners (bstevens@bauhauscp.com) The transition from a fossil fuel-based to a renewable energy-based economy is rather complex. It must be understood in terms…

  5. Chris Calhoun permalink
    August 15, 2010 6:55 AM

    Nice commentary on both green energy and effective economic stimulus.

  6. August 15, 2010 7:26 AM

    Comment posted in LinkedIn on this discussion.

    LinkedIn Groups
    * Group: Solar Investors
    * Subject: New comment (1) on “Where will the U.S.. be in 20 years in terms of renewable energy? What does this mean to business and investors in the mid and long term?”

    This is a very hard subject for many reasons. First almost all electric power plants are either coal or natual gas. On the private investors this could make or break again into a huge growing industry. Since there is no history to follow in terms of renewable energy other than hydro electric systems. The days of building dams for electric power may be over. There are many issues that must be solved in the next 20 plus years. 1. The grid is not designed to take us into the new century. 2. Our demand or peak load demands are far greater than the wires we use today. 3. The price of electric power in 20 years should be around $2.00 a KW plus the fuel charges. Here is why I say this. Almost all PPA’s are based on selling electric power to power companies. The power companies in turn charge their customers more for electric power. Someday soon we will all have to pay for feed in tariffs. This again will increase the cost of electric power. This could happen in a very short time. Now lets look who really makes the profits. Since power suppliers are not governed the same as a power company. The power companies can point the finger to its suppliers for all kinds of energy failures. Some power companies are also only interested in the REC’s or Carbon Credits. This adds to their green portfolio. So to sum us this post. The customers of electric power companies in the next 20 years will pay dearly for electric power. The solar farmers and wind farmers may see small increase in some PPA. But the prices allowed by PPAs will keep the utility companies happy with huge profits, and the inflation will cause many more of the power companies customers to want to go off grid completely. This is what I feel is the future. The cost will keep on comming down on solar PV and grid parity will take place in the next few years. Now there is a even playing field. PPA’s will be a income that will end in the next 5 years. If we just think like our electric power companies for just a little while this answer should be clear. Living off grid is growing all over the world. Yet the grid is not growing. I really think that going off grid will be as popular as the off grid communication systems of today. The cell phone is a perfect example of off grid communications. The same thing took place with notebook computers. Even the intranet has more off grid users. So it is safe to say the grid for electric power may be a memory from our past. On the investor side of the renewable energy companies. It never hurts to invest in winners. Last year even in these hard investors times always invest in advances in technology. Technology will drive our future in the many years to come. Renewable Energy Products and systems are not a trendy situation that has no goals. Look how Renewable Energy Systems is changing the way we produce electric power. This is what businesses and investors need to understand. At least Renewable Energy Systems has a ROI. Electric power bills don’t; they are just a tax deduction to a point. Electric power is not like the fossil fuel based industry. The fossil fuel industry’s prices go up and down. The electric power generating cost is not going up at all. The only thing you can count on in the United States is a bigger tax burden for the people in the United States and also the cost of electric power will only increase over the next 20 years. In my last 64 years I have never experienced a decrease in the cost of electric power. I have seen decreases with the cost of fuels.
    Posted by Jim Mckirdy

  7. August 15, 2010 7:29 AM

    Comment posted in linkedIn on this discussion:

    LinkedIn Groups
    • Group: Transatlantic Forum
    • Subject: New comment (1) on “Where will the U.S.. be in 20 years in terms of renewable energy? What does this mean to business and investors in the mid and long term?”
    I’m very impressed by this down to earth, back of the envelope type of calculation, based on solid work (fact-based vs. perception based). It makes for dire reading though. We’re pretty much doomed here, unless we get the kind of leadership and vision that we’ve seen in places like Germany and China (yes, China !). I’m saddened to see the massive opportunity we have here (in the US) pass us by – and a tough issue to explain my young children who very much care. I continue to have hope, but as they say, it’s not an option. Can we start with a massive European style tax on gas please ?
    Posted by Yvan De Munck

  8. August 15, 2010 7:31 AM

    Comment postedd in LinkedIn on this discussion.

    LinkedIn Groups
    • Group: Solar Investors
    • Subject: New comment (2) on “Where will the U.S.. be in 20 years in terms of renewable energy? What does this mean to business and investors in the mid and long term?”
    In 20 years from today we should see the cost of electric power with and without the use of renewable energy a increase of over 140% for the cost of electric utility power. This will affect everyone in the United States. The only solution is to invest in any thing that makes sense to make more and more grid location into off grid systems. There are two things that drive prices. Supply and demand. In 20 years from now the demand will increase at 8% a year. This means the demand will increase at least 160%. Currently the grid or how we produce electric power today can not supply this demand in 20 years from now. The answer is simple. O-F-F G-R-I-D systems! Why waste our time and money on old technology. How many here still own a model T ford? Yet we still use a system that was designed many years ago to meet our needs today. Does this make sense to anyone?
    Posted by Jim Mckirdy

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