Oil Analyst Says Renewables Get Competitive

[OKIsItJustMe]

http://www.usnews.com/blogs/beyond-the-barrel/2008/3/6/oil-analyst-says-renewables-get-competitive.html

Oil Analyst Says Renewables Get Competitive

March 06, 2008 12:39 PM ET | Marianne Lavelle

Those who believe that oil is running out have a special scorn for prominent oil industry consultant and analyst Daniel Yergin, chairman of Cambridge Energy Research Associates. Yergin, who wrote The Prize, the Pulitzer Prize-winning book that stands as the definitive history of the oil industry, has often dismissed concerns that the world is at or near "peak oil," or the point at which petroleum production will begin an inexorable decline.

Peak Oilers even recently issued a $100,000 wager—not accepted yet—challenging CERA's June 2007 forecast that global oil capacity would rise from its current 91 million barrels per day to 112 million barrels per day by 2017.

The run-up in the cost of oil over the past five years has indeed made CERA's price forecasts seem optimistic, although the consultants haven't been totally sanguine about the oil scene—particularly about the geopolitical factors that limit access to petroleum.

In any case, Yergin this week offered his take on the role of oil's (and coal's) clean competitors in the energy market. "Renewable energy is crossing the divide towards a competitive role in energy markets," he said at the government-sponsored Washington International Renewable Energy Conference. "But there is still more terrain to cover among the different renewable energy sources in terms of economics, technology, and scale."

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[GliderGuider]

1. I think Yergin is absolutely right

I think he's right when he says "clean power could supply as little as 7 percent or as much as 16 percent of the world's electric needs by 2030". However, he may not be right for the reason he wants us to think.

About 25% of the world's electricity is generated by natural gas. That's going to decline rapidly following Peak Gas. Nuclear generation is going to slip as well, while hydro will remain static and coal will probably grow to a peak and decline. That means that the part of the electricity pie composed of traditional sources is going to shrink, perhaps by as much as 25% by 2030. Into this shrinking pond comes the growing frog of renewables. The wind/solar/etc. output that would comprise only 5% of today's electrical capacity could represent perhaps 7% or more of the smaller electricity pool of 2030.

You have to be careful with percentages - you always have to ask, "percentage of what?"