A few months ago, I had the opportunity to attend a lecture hosted at the US Dept of Energy given by Dr. Eric Martinot who is Senior Research Director for the Institute for Sustainable Energy Policies in Tokyo, Japan. He presented an overview of a recent report that he authored titled “Renewables: Global Futures Report” produced by the Renewable Energy Policy Network for the 21st Century (REN21).
Background from 2012 Status report:
– Currently Renewable energy represents about 17% of the global energy share. This includes 3.3% nuclear.
– The report focuses on a few major questions.
- How much renewables are possible?
- What are the trends for finance and investment?
- What are the roles of different types of companies? (Electric utilities, oil companies, automakers, IT companies, technology integration companies such as Siemens, building materials manufacturers)
- How do the cost of renewables compare to other energy sources?
Following are a few things that I found surprising or interesting:
- Energy storage is actually not necessary for balancing the variability of renewables. Storage is only one of twelve options for balancing variability. (Pages 23-24)
- Renewable is attractive among energy investments because it caries lower operational and political risk than alternatives such as oil.
- Utility companies may take on more of a role of managing variable energy as micro utilities spring up to provide energy for a building or neighborhood. (Side note: More recently, NWP’s CEO, Mike Radice discussed the related potential opportunities for multifamily firms of Private Electricity Distribution at NWP’s annual Energy Summit.)
- Offshore wind is more expensive than onshore wind. The cost of the turbine is only about 30% of the cost. The rest is made up of platform construction and maintenance. Oil service companies could help bring down these costs based on their expertise with offshore rigs.
- Upfront cost of solar PV (I.e., generating electricity via solar panels) has dropped to $1 per watt. The main cost now is in the installation, inverter, and wiring as opposed to the technology itself.
You can learn more at REN21’s website.
Overall, I was encouraged by the prospects for renewable/sustainable energy in the coming decade. There may be interesting opportunities for Multifamily particularly in the areas of electricity generation and distribution, and solar PV.