Is it worth it? The cost of alternative energy

For years alternative energy has seen much criticism due to it’s high cost. It was too expensive compared with energy based on traditional fuels like coal and natural gas. However with modern research, technological advances, and the potential of rising oil prices, alternative energy is starting to look really good to a lot of people. While the US depends heavily on fossil fuels, renewable energy sources such as biomass, wind, geothermal and solar are likely to account for a larger share of the electricity supply in future years.

For a very long time, the cost of capturing the free energy and converting it into electricity has been too high to be truly worth the investment. Now the equation is showing significant signs of change. For many reasons, people are becoming more and more interested in alternative energy sources, which has caused an increase in research and technology. Costs are falling for some alternative-energy sources, driven by new technology and renewed development interest. Although alternative energy still is far from competing with fossil fuels in price, the margins are narrowing. If you consider the environmental costs of the two, the cost margin shrinks very quickly even more.

“According to the Energy Information Administration, renewable resources produced 2.3% of the U.S. electricity supply in 2005. Bio-mass was responsible for 1.5%, wind for 0.44%, geothermal for 0.36% and solar power for a scant 0.01%. In contrast, coal-fired generation produced 49.7% of U.S. electricity supplies in 2005, followed by nuclear power at 19.3%, natural gas at 19.1%, hydropower at 6.5% and oil-fired generation at 3%.”

As it can be easily seen, non-renewable resources still dominate the area of energy. Some day all of this will run out, and alternative sources of energy will be required. Hopefully, we have that technology fully developed by the time this happens. Luckily much effort (and money) is going into developing this technology.

Some things that are being done include the following:

The US government is requiring the blending of more plant-based biofuels like ethanol with gasoline.

One of the most well known (and most talked about) sources of alternative energy is wind energy. There have been many improvements and advancements in wind energy technology. In 1980, wind-power electricity cost 80 cents per kilowatt-hour; by 1991 it cost 10 cents; today the cost is about 6-9 cents per kilowatt hour. As opposed to fossil fuel energy (natural gas, coal, nuclear) costs of about 5 cents per kilowatt-hour, this cost is not far from being very competitive.

Advancement in the technology and production cost reduction are the reasons for this decrease in cost. Material and production costs have greatly decreased.

In general, solar energy costs around 35-45 cents per kilowatt hour to be produced.

Geothermal energy costs around 6-10 cents per kilowatt hour to be produced

Biofuels, such as ethanol cost up to $1.60 to be produced.

All in all, the monetary cost of alternative energy is much greater than the cost of using fossil fuels for energy. It seems to me that the use of alternative energy is nearing the day that it could be a very real possibility. As it can be clearly seen, the cost of producing wind energy is quickly nearing a point of being very competitive to the cost of using fossil fuels.

Links Used:
http://www.businessinsider.com/subsidies-for-alternative-energy-costs-less-than-subsidies-for-traditional-energy-2009-3
http://yaleglobal.yale.edu/display.article?id=8813
http://news.nationalgeographic.com/news/2004/10/1028_041028_alternative_energy.html