Biofuels delays no danger to alternative energy growth
Ernst & Young says U.S. still leads in planned renewable energy
By Tom Stundza -- Purchasing, 12/5/2007 5:52:00 PM
There was a slowdown in global biofuels facility growth in the third quarter, caused by rising feedstock prices and worries that rapid expansion in ethanol capacity might outstrip demand, according to an Ernst & Young UK report released last week.
“As a result of these difficulties, we expect that the established markets of the U.S. and Europe will see a period of consolidation,” Jonathan Johns, head of renewable energy, says in the report. “It is low cost and integrated producers, which have control over significant parts of the supply chain, as well as those with significant financial backing who will most likely weather the current downturn.”
The report points out that planned investments are just slowing, not ending. Renewable energy generation is developing at a rapid pace worldwide. Wind and solar energy have experienced double-digit annual growth for the past decade, the report adds, noting that global investment in renewable energy was an estimated $100 billion in 2006.
And, despite high feedstock prices, overcapacity and distribution chain bottlenecks for ethanol, the U.S., for example, still leads the business services firm’s 15-nation All Renewables Index for planned wind, solar and biomass-based energy investment.
The new U.S. energy bill that is being debated in congress now would require investor-owned utilities to source 15% of their energy from wind, solar, geothermal or other renewable projects by 2020. The bill also would repeal $23 billion in government subsidies to oil companies— and redirect most of that money to support solar, geothermal, biomass and marine renewable technology.
The Ernst & Young report also notes that Senator Harry Reid of Nevada has introduced new legislation that would provide additional financing of new grid lines and connections which would enable the transmission of renewable energy from less-populated areas to areas of high electricity demand.
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