credit: Mark Hooper
Something will have to keep the US economy running when the era of cheap oil is over. Petroleum hit $80 a barrel last year amid murmurs that worldwide production had peaked. Meanwhile, the grave cost of securing supplies became clear as the Iraq war dragged into its fourth year. Al Gore completed the trifecta with his Oscar-winning celluloid screed, An Inconvenient Truth, highlighting the environmental toll of burning fossil fuels. So the rush is on to bring alternatives to a voracious energy market.
The biggest surprise: After decades as an alt-energy backwater, solar power is suddenly a growth industry. Historically, solar has been prohibitively expensive. But in the past year, economies of scale have finally started to kick in. Google, Microsoft, and Sharp outfitted facilities with panels, and Wal-Mart solicited bids to solarize as many as 340 of its big-box rooftops.
In January, SunPower, which makes photovoltaic silicon panels that yield 50 percent more electricity than competing products, beefed up its ability to serve corporate and residential customers alike by acquiring PowerLight, a specialist in installation. Investors have bid the share price up to 120 times earnings.
But solar panels require lots of space and work only while the sun shines. Wind energy, which is also on the rise (GE sold a record number of turbines in 2006) has similar limitations. The alt-energy dark horse: nuclear power. Struggling since the sobering portents at Three Mile Island in 1979 and Chernobyl in 1986, nuke plants have emerged as a consistent, compact, carbon-free option. The Nuclear Regulatory Commission hasn't approved a new facility since 1978. But Exelon, the country's largest supplier of nuclear power, recently announced plans to apply for a permit. The NRC will rule on the request in 2012.
Leading the way
__SunPower__High-efficiency solar cells
Exelon Refurbished nuclear power plants
Monsanto bCorn bioengineered for ethanol
__Toyota__Hybrid vehicles
In the meantime, the federal government is throwing its weight behind ethanol, a fuel made of corn or other plants. In his 2007 State of the Union address, President Bush pledged to quintuple output in the coming decade. That's good news for Monsanto, which sells corn seeds genetically engineered for easy conversion into auto fuel. And for BP. Bedeviled by explosions, oil spills, and price- fixing charges, the oil behemoth that fancies itself Beyond Petroleum recently redoubled its commitment to repairing the environment (and its public image) by putting up $500 million to fund biofuels research.
The dream, of course, is to do away with hydro carbon fuels altogether. Trojan horsepower is already on the road in the form of Toyota's hybrid engine. Publicly, Toyota has distanced itself from the notion of all-electric vehicles since scuttling the RAV4-EV in 2003. Nonetheless, it's one of several companies working to harness lithium-ion batteries charged with potentially clean energy from the grid.
And big public companies aren't the only ones in the race. VC investment in alt energy exploded from $195 million in 2005 to more than $700 million in 2006. Ultimately, it may not be our better nature that drives the search for an affordable, sustainable, domestically produced energy option but rather the only truly inexhaustible natural resource: human greed.
Contributing editor Josh Mchugh (www.joshmchugh.net) wrote about prosthetic legs in issue 15.03.
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