How rapidly will renewable energy be adopted?
How large a role will wind and solar play in our emerging energy landscape? At the heart of that debate lies the question as to whether these renewable technologies (whose fuel is free unlike the extractive fuels costs of both fossils and nuclear power) will expand the way other extractive energy sources have, or the way that other new technologies have.
Consider these three factual statements side by side: 1) wind and solar today represent less than 5% of the energy the world consumes today; 2) wind and solar now represent roughly 50% of the new energy capacity being built each year; and 3) a growing number of consumers have purchased enough wind and solar to cover 100% of their annual energy consumption. Absent government intervention, which growth curve do you think renewables will follow?
Over the last hundred and fifty years, we have introduced a new form of primary energy (one that represents roughly 75% of our energy mix) roughly every 50 years. Coal fairly handily overtook the burning of wood and the combination of oil and gas cut heavily into coal’s share of the U.S. energy market. Other markets around the world have followed suit, but in a delayed fashion. Nuclear energy arrived about 50 years ago, but has been much slower at replacing the fossil incumbents. Wind and solar represent the newest kids on the block with an, as yet, very small market share. In fact, history would suggest that our future is likely to be characterized by a blend of several different energy forms each holding a sub 25% market share. Without a carbon problem, one might well assume a fairly gradual progression for nuclear and renewables, tied directly to their ability to be the lowest cost provider and gain market share (which could look much like the slower growth curve for renewables in the chart above) and lead to a diversified market.
On the other hand, in a free market economy where consumers can suddenly make their own energy choices, will there be as much diversity or will the lowest cost provider, particularly if also a clean source of energy, own a dominant market share?