A new report by Renewable Energy Systems (RES) suggests that many forecasts have considerably overestimated global reserves of oil and gas, indicating that a “serious shortfall between demand and supply could become evident soon after 2010.”
The report goes on to say that up to 1,200 GW of extra wind capacity could potentially be installed by 2030 as the technology enters its ‘market era’ sooner than expected as a result of gas supply limitations.
While oil and gas will, according to the IEA, be called upon to provide 60% of the world’s energy in 2030. Supplies can be expected to fall short and the combined gaps are likely to represent 10% of the primary energy demand in 2020 and 18% by 2030, the report says.
The gas gap opens up as soon as 2015 and accounts for 20% of the demand in 2030. In the longer-term, it will be filled with a mix of energy efficiency, renewables, coal and nuclear. Wind power, says RES, presents a key element growing at an annual global rate of 28% for the last decade.
The Global Wind Energy Council (GWEC), which supported the research, forecasts that the global installed capacity for wind power will reach 135 GW by 2010. Furthermore, GWEC estimates that more than 1,000GW of wind capacity could be installed by 2020, if significant policy changes are implemented.
However, this GWEC analysis does not take into account potential supply gaps with gas only capable of supporting 400 GW of the 1,600 GW of new gas-fired power plant capacity additions planned to 2030, leaving a gap of 1,200 GW for other power sources.
The study adds that market dynamics will end up raising gas prices in a way that will make wind energy cost-competitive as fuel costs account for around 70% of the generation cost of combined cycle gas turbines.
Dr Ian Mays, managing director of RES, commented: “Fossil fuels cannot sustain our expected growth in energy demand and low energy prices are gone forever.”
Meanwhile, REN21, the Renewable Energy Policy Network, has released the 2006 update to its Global Status Report showing trends in renewable investment and policies worldwide.
The update indicates record investment in the sector with wind capacity growing by 24% in 2005 to reach 59 GW, and ten countries adding over 300 MW of wind power, up from five countries in 2004. Power from biomass increased by 50-100% in several countries while grid-connected solar power grew by 55%, led by Germany with more than 200,000 solar rooftops.
The report also estimates that at least 85 renewable energy companies or divisions have market valuations greater than $40 million with a total market valuation of $50 billion, double the 2004 valuation from 60 companies worth more than $40 million.
Meanwhile, investments in renewable energy sources have gone up by a third in the year from $30 billion in 2004 to $38 billion in 2005.
“Renewables are capturing increased attention of businesses and policy-makers around the world,” said Mohamed El-Ashry, chairman of the REN21 Steering Committee.
More details are available at: www.ren21.net while the the full RES report is available at: www.gwec.net/uploads/media/RESGWEC-_Plugging_the_Gap_report_01.09.06.pdf