New Energy Era
- Submitted by: marcelo78
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- Date Submitted: 11/07/2011 09:29 PM
- Pages: 8
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New Energy Era
It is easy to predict that our current usage on fossil fuel and coal will lead us to an energy crisis. In order to survive in the energy crisis, governments and companies in the energy industry are looking for alternative ways of extracting energy—mostly from renewable sources, which we call “green energy”.
Even though the mainstream awareness and government pressure are continuously growing, the rate of renewable energy development in United States is still slow. This paper will discuss the current factors that have contributed to the low growth rate of alternative energy and the possible energy mixture usage in the coming twenty to thirty years.
It is perplexed that why United States is not in the lead of new energy development while being the country with highest energy demand. We are going to discuss three main factors that have prevented renewable energy development growing fast as we would like:
1. Cost:
This is explained by the “supply and demand” theory in economics. Demand goes up when price is low; supply increases the same direction with demand.
Below chart shows the prices on renewable resources are still significantly higher than conventional resources.
Here, we take a closer look at building a plant for nuclear, natural gas and coal as examples: For a nuclear plant investment, on a present value basis, at least two-thirds of its costs are incurred at the initial investment stage—before it is in service, and that is without factoring the interest rate or cash discount rate during the instruction period. By contrast, only a quarter of the total cost for a typical gas-generated electricity plant is required up front for the initial investment.
Coal plants are not expensive to build at all and are relatively economical to operate once it’s built. Coal price has dropped steadily over the past twenty years.
2. Technology
When technology moves to a certain level, it not only brings down the fixed cost/ initial...
It is easy to predict that our current usage on fossil fuel and coal will lead us to an energy crisis. In order to survive in the energy crisis, governments and companies in the energy industry are looking for alternative ways of extracting energy—mostly from renewable sources, which we call “green energy”.
Even though the mainstream awareness and government pressure are continuously growing, the rate of renewable energy development in United States is still slow. This paper will discuss the current factors that have contributed to the low growth rate of alternative energy and the possible energy mixture usage in the coming twenty to thirty years.
It is perplexed that why United States is not in the lead of new energy development while being the country with highest energy demand. We are going to discuss three main factors that have prevented renewable energy development growing fast as we would like:
1. Cost:
This is explained by the “supply and demand” theory in economics. Demand goes up when price is low; supply increases the same direction with demand.
Below chart shows the prices on renewable resources are still significantly higher than conventional resources.
Here, we take a closer look at building a plant for nuclear, natural gas and coal as examples: For a nuclear plant investment, on a present value basis, at least two-thirds of its costs are incurred at the initial investment stage—before it is in service, and that is without factoring the interest rate or cash discount rate during the instruction period. By contrast, only a quarter of the total cost for a typical gas-generated electricity plant is required up front for the initial investment.
Coal plants are not expensive to build at all and are relatively economical to operate once it’s built. Coal price has dropped steadily over the past twenty years.
2. Technology
When technology moves to a certain level, it not only brings down the fixed cost/ initial...