Fundamentals of Alternative Energy
OK...no introduction in this post. We know alternative energy is one of the biggest possibilities in the future. There are several technologies in the arena - Wind, Solar, Nuclear, Tidal. Each one has its own technical needs. Each one has been invested in from investors across the world.
The obvious reasons these are promising are because they are independent of burning fossil fuels. That means lower carbon emissions and hence reduction in warming. I know, there is still some debate on whether global warming is really happening. I am not an expert but I believe in the phenomenon. In my opinion, it is the manifestation of the effects of the uncontrolled experiment of letting smoke into the atmosphere.
Current Status and Hindrances
Wind power needs only incremental changes to turbine technology but it has huge land needs and site selection is critical. Solar technology is still behind in efficiency terms. Nuclear energy poses the challenge of toxic waste.
Add to the above, the above are not yet financially competitive. And each one is facing the uphill task of competing with traditional power. One of the problems is of economies of scale. For example, the demand for solar cells is not high enough to cause scale production. This means higher cost of equipment which translates into higher price per watt.
Also, the incumbents are not going to easily make space for new technology. While they continue to invest in this area, they are still ok since green power is still not the automatic choice of consumers.
Possible Tipping Point?
Across the world, the moment substantial incentives are announced such that they make solar / wind energy affordable, then the demand for green energy will shoot up. Green energy has an inherent appeal for most people. When challenged with questions like, "Would you not like your grand-children to breathe cleaner air?", people choose green energy over thermal energy. Then it is left to how much they can afford to pay?
When the incentives come and eventually costs match, consumers will start shifting. Then, the current conventional power companies will start heavily investing in generating green energy (Remember, they already have the required land needed to put up solar or wind plants.) This will further push up the supply and bring down the costs.
The Big Question
Incentives are already existing that encourage these alternative energy sources. It is said that these are not enough. So, either they will be raised or newer incentives (like bonus for saving emissions / coal / etc.) will be introduced.
The question is When? That, my dear reader, is anybody's guess. The real winners will be those investors who would have been already invested in this sector when the announcement(s) come.