Here’s some irony for you. There’s a new report out of the National Renewable Energy Laboratory (NREL) that suggests demand for renewable energy will outpace supply by the year 2010. (The report carries the scintillating title of “A Preliminary Examination of the Supply and Demand Balance for Renewable Energy.”)
Yes, that’s right. The paper, which was funded by the U.S. Environmental Protection Agency’s Green Power Partnership, postulates that the combination of state- and federal-level programs requiring a shift to some level of renewable energy usage as well as other incentives encouraging both consumers and companies to add renewable energy to their electricity mix are creating a boom in demand. Altogether 25 states and the District of Columbia have enacted legislation mandating that renewable energy account for between 2 percent and 30 percent of their power supply over the next five to 15 years.
NREL estimates that U.S. green power sales were 12 million megawatt-hours (MWh) in 2006, up from 8.5 million in 2005. This compares with a mere 800,000 MWh in 2001.
Using figures from the U.S. Energy Information Administration and eGrid, the scientists who pulled together the report have projected out possible demand and supply scenarios for the 2010 timeframe. It considered all manner of fuel sources as defined by the government, from agricultural crop byproducts to landfill gas to solar energy to wind power.
Based on their calculations of energy being created by various research and development projects as well as existing supply, the report projects the supply of renewable energy in 2010 will range from a base of about 83.4 million MWh to around 103 million MWh. The voluntary demand for that period is estimated around 38.5 million MWh. However, when voluntary demand is combined with the sales associated with government-mandated usage, the shortfall could be at least 8 million MWh and as much as 28 million MWh.
So, what’s a person to do if they want to use renewable energy as their power source?
First off, the report focuses on “what might be” and suggests several scenarios that might change their thesis. First off, if supply tightens and renewable energy prices go up, fewer people are likely to use it on a voluntary basis. The market around energy efficient certificates and carbon offset purchases will also have some impact, according to the report.
It’s also reasonable to assume that some states might fall short of complying with their renewable energy usage goals, which would ease demand.
The report also suggests that renewable development energy development projects have been negatively impacted by the pending expiration of federal tax credits at the end of 2008. If those credits are renewed, it might kickstart some new development.
Speaking of research and development, the NREL actually announced a couple of projects today at its new “green” Research Support Facility in Golden, Colo. They include the new Renewable Fuel Heating Facility, which will use biomass, and the Mesa Top PV Project (a five-acre photovoltaic array).
Click here if you want to read U.S. Department of Energy Samuel Bodman’s remarks prepared for the event announcing the projects.