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Introduction, Business and Industry Trends Analysis

Renewable electricity has been generated with great success for many decades in the form of hydroelectricity—that is, water flowing over a turbine installed at a dam site, with that turbine powering an electric generator.  Today, renewable energy comes from many other sources.  The non-hydroelectric resources are growing at a stunning rate worldwide.
Despite the rapid growth in the renewables field, the traditional sources of coal and natural gas (and to a lesser extent, nuclear energy) remain the primary sources of electric generation in most of the world.  This is changing, but it will take years of development and vast investment before renewable generation of electricity dominates over fossil fuels and nuclear.  In late 2021, the International Energy Agency (IEA) stated that, through 2026, renewables would account for nearly 95% of the increase in global electricity production capacity—mostly in the form of solar.  The IEA further stated that, by 2026, global renewable electricity capacity will rise more than 60% from 2020 levels, to over 4,800 gigawatts (GW)—equivalent to 2021’s total worldwide capacity of nuclear and fossil fuel-powered electric plants combined.  (However, it is important to note that the IEA is talking about capacity, not output.  Nuclear and fossil fuel electric plants are generally available to generate electricity 24/7, while renewable capacity is not always producing.  For example, solar plants cannot gather sunlight 24 hours per day.)
Meanwhile, some of the world’s leading oil and gas companies, including Royal Dutch Shell, are increasing their investments in renewable energy sources and technologies.  U.S. electric production from all renewable sources was 18.0% of total electric power in 2019, up from only about 7.6% in 1970.  In this case, “renewable” includes conventional hydroelectric and geothermal, along with solar, wind and biomass.  (In 1970, such production was almost entirely from hydroelectric sources.)
Wind Power has seen rapid growth worldwide.  Major technological advances in wind turbines (including much larger blades creating very high output per turbine, as well as blades that suffer very little downtime and are thus more efficient) have made wind power more economically feasible.  At the same time, massive government incentives are encouraging investment in wind generation.  Analysts at BP estimated total wind generation capacity worldwide at 733,300 megawatts in 2020. The Global Wind Energy Council forecasts it to climb to 908,000 megawatts in 2023.  In 2020, U.S. wind capacity was only 109,795 megawatts.  Wind projects, like other renewable power initiatives, benefit from tax credits and subsidies from government.
Solar Power is enjoying significant technological innovation.  The important factors in solar are the percent of captured solar energy that is converted into electricity, and the cost per installed watt of potential output (which has been steadily declining). 
Analysts at BP report that installed global solar photovoltaic (PV) capacity was only 4,245 megawatts at the end of 2005.  By 2011, that number had soared to 71,251 megawatts, and in 2020 it surged ahead to 855,700 megawatts. 
The Solar Energy Industries Association (SEIA) estimates that the American solar industry grew by 10,000% from 2006 through 2019, with much of that growth spurred by tax credits.  (The fact that solar panel costs plummeted also fueled extreme growth.)
Biomass energy (including the generation of energy using waste, such as wood chips and landfills, and the production of bioethanol) has also grown rapidly over the long term, both in the U.S. and elsewhere.
Nuclear Power, both expensive to build and controversial as to its safety, is in a state of great change.  The construction of new nuclear generating plants is continuing in China, where demand for electricity is booming and many new nuclear plants are planned.  New plants were also recently contemplated or underway in the UAE, India and South Korea.  In the UK, a controversial new plant has been under development at Hinkley Point, and in France, a new plant has been under development at Flamanville.  However, a history of construction cost overruns and a vast regulatory burden make it virtually impossible to construct a nuclear plant today in the U.S. and many other nations.  Nonetheless, nuclear provides an emission-free alternative to solar and wind, and it is generally reliable 24 hours-a-day.  Today’s advanced nuclear plant technologies are vastly improved and are thought by many to be virtually fail-safe.
Hydroelectric Power: World hydroelectric consumption increased by 1.39% during 2020.  North American hydroelectric consumption decreased by 4.0%.
It should be noted that the use of renewable sources does not always mean clean power generation.  For example, burning wood or trash for energy under the wrong conditions can create significant pollution.  Also, the clearing of land, such as forests, for planting of biomass to be used in ethanol or biodiesel refining can be highly destructive to the environment while creating huge quantities of carbon emissions.  In addition, many types of renewable energy production require vast quantities of water.  These trade-offs continue to create significant debate and controversy.
A Brief History: In the U.S., emphasis on alternative energy and conservation has a varied history.  The 1973 oil trade embargo staged by Persian Gulf oil producers greatly limited the supply of petroleum in America and created an instant interest in energy conservation.  Thermostats were turned to more efficient levels, solar water heating systems sprouted on the rooftops of American homes (including a system that was used for a few years at the White House) and tax credits were launched by various government agencies to encourage investment in more efficient systems in buildings and factories that would utilize less oil, gasoline and electricity.  Meanwhile, American motorists crawled through lengthy lines at filling stations, trying to top off their tanks during the horrid days of gasoline rationing.
While some consumers maintained a keen, long term interest in alternative energy from an environmentally friendly point of view, most Americans quickly forgot about energy conservation when the price of gasoline plummeted during the 1980s and 1990s, and again in 2014.  Low gasoline prices were common for many years.  As advancing technology made oil production and electricity generation much more efficient, a long-term, oil price trend kept market prices under control.  (Although price spikes do occur from time-to-time.)  As a result, Americans returned to ice-cold air-conditioned rooms and purchased giant, gas-guzzling SUVs, motor homes and motorboats.  The median newly constructed American single-family home built in 1972 contained 1,520 square feet; by 2018 it contained 2,386 square feet.  More square footage means more lights, air conditioning and heating systems to power.  Meanwhile, federal and state regulators made efforts to force automobile engines and industrial plants to operate in clean-air mode, largely through the use of advanced technologies, while requiring gasoline refiners to adopt an ever-widening web of additives and standards that would create cleaner-burning fuels.
Fortunately, the first energy crisis in the early 1970s did lead to the widespread use of technology to create significant efficiencies in many areas.  For example, prior to that time, as much as 40% of a typical household’s natural gas consumption was for pilot lights burning idly in case a stove or furnace was needed.  Today, electric pilots create spark ignition for gas burners on demand.  Likewise, today’s refrigerators use about 70% less electricity than models built in 1970.  Many other appliances and electrical devices have become much more efficient, through better design and engineering, better insulation, more efficient motors, efficient lightning and smarter building controls.  While the number of electricity-burning personal computers proliferated, computer equipment makers rapidly adopted energy-saving PC technologies.
Likewise, in transportation, today’s jetliners burn up to 70% less fuel per passenger seat-mile than they did in 1970.  Meanwhile, trucks, ships, buses and trains all have increased efficiency dramatically.
Renewable energy sources, cleaner-burning fuels, fuel-efficient automobiles, as well as homes and buildings that utilize energy-efficient materials and controls are of great appeal to the large number of consumers worldwide who have developed a true interest in sustainability or in protecting the environment.  For example, surveys have shown that many consumers are willing to pay somewhat more for electricity if they know it is coming from non-polluting, renewable sources.  Nonetheless, the vast, recent drops in the market prices of oil and natural gas pose a significant challenge to alternative and renewable energy sources on a purely economic basis.
Other Developments: Bioethanol and biodiesel, from an economic and environmental point of view, are questionable at the least, and extremely misdirected at the worst.  Some production of bioethanol appears very efficient, particularly in Brazil where easily grown sugar cane is the feedstock.  However, in the U.S., the diversion of corn and soy from the food chain to the energy chain for ethanol or biodiesel may be a very bad idea from a wide variety of measures. 
Advanced technologies that capture carbon dioxide and utilize it to grow oil-producing algae appear to be a somewhat promising alternative source for oil, but much research and development remains to be done in this area, and costs remain high.
At least two geothermal energy projects, where deep holes are drilled to tap the high temperatures of the inner Earth, have recently been cancelled due to concerns that these activities cause earthquakes.
Tidal energy looks promising, but both installation costs and maintenance remain huge obstacles.  Nonetheless, technologies are advancing in this field, and many prototype projects, as well as a few permanent installations, have been completed.
Smaller-scale, rooftop solar power installations have become extremely popular in sunny climates.  The cost of solar cells has plummeted to the point that solar power produced at homes and commercial buildings is becoming economically viable after government incentives are factored in.  While the solar cells themselves are now relatively cheap, installation remains costly.  Meanwhile, solar cells require regular maintenance, and their efficiency degrades steadily as they age in place. 
Massive, utility-scale solar has been a different story.  Such plants required multi-billion-dollar investments in relatively unproven technologies.  Many of the largest projects have been total disappointments.
The renewable energy sector will continue to evolve rapidly, as new technologies offer breakthroughs and greater efficiencies are reached.  The biggest gains will occur when powerful new batteries are finally developed that make it cost-effective to store solar and wind power where they are produced, for release as needed even when wind or sunlight are not available.

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