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About This Technology

Modern renewable energy technologies are becoming mainstream in many energy markets because they offer increasingly viable and sustainable alternatives to today's dominant fossil-fuel (coal, oil, and natural gas) and nuclear technologies. Scientists are making advances in a broad range of renewable technologies for power production, transport fuels, and heating and cooling. Renewable technologies draw on continuously replenished energy resources—including heat and light from the sun, wind, biomass, falling water, heat from inside the earth, and ocean energy. These resources are typically large and dispersed, and their energy is often convertible with little environmental impact, including low- and no-carbon emissions.

Although renewable energy technologies are still relatively small contributors to energy markets today, the sector is growing rapidly in response to a confluence of critical drivers. Drivers include strong growth in world energy demand—particularly in developing countries, environmental concerns about pollution and global warming, the desire to increase energy security and diversity, high fossilfuel prices, and technology advances that are improving the performance and lowering the costs of renewable energy systems. A large-scale move to renewable energy is not a certainty, even in a high-oil-price environment, but government policies worldwide are playing a vital role in helping to advance renewable technologies and lower market barriers. Nearly 70 countries now provide some type of renewable energy–promotion policy, and the policies in the most aggressive countries such as Germany have proved extremely successful. Some technologies, such as large-scale wind, biomass, geothermal, and small hydropower are increasingly competitive even without subsidies. In recognition of these developments, a growing number of large industrial companies, financial institutions, and venture-capital–funded start-ups are rushing to develop market opportunities for renewable energy technologies.

Global annual investment into renewable energy technologies reached a record $148 billion in 2007. The current global economic slowdown, struggling financial markets, and steep drop in crude-oil prices may slow the move to renewables to some extent, but the growth trend is sure to continue. Growth opportunities for renewable energy producers and distributors in both industrialized and developing countries depend on specific local conditions—the renewable energy resource base, government support and energy economics, market factors, and institutional constraints. Gridconnected solar photovoltaic technology remains the fastest-growing energy technology worldwide, creating opportunities for materials, component, and system suppliers for both silicon and nonsilicon thin-film technologies. The concentrating solar-power industry is now also expanding aggressively, after more than 15 years of commercial inactivity. Prospects are also bright for wind-turbine manufacturers and suppliers, as wind-energy projects received the most investment—$50 billion—in 2007. Utility companies are investing in huge wind parks to meet renewable energy requirements in the United States, Europe, India, and China. Biofuels producers and their suppliers have considerable opportunities to expand in the United States, Brazil, Europe, China, and other countries that are encouraging the use of biofuels in transportation fuels—but future growth depends on the development of advanced, more sustainable biofuels. Geothermal heating and power markets are poised for major growth in many countries, and small hydropower applications have significant potential to meet future energy needs, especially in developing countries. Ocean-tidal and wave-energy technologies are just beginning to reach commercialization but have even greater long-term potential than hydropower and offshore wind power. All these technologies have the potential to offer clean new sources of energy, provide economic-development opportunities, and improve the standard of living for people in rural areas. As more countries embrace the idea of large-scale renewable energy technology use, however, stakeholders must recognize and assess the trade-offs—economic, environmental, and social—associated with each technology, such as land-management issues.