Davos-Klosters, Switzerland — (METERING.COM) — February 1, 2010 – The smart grid and electric transportation have been identified as key enablers for emerging, large-scale clean energy sectors that will form part of the low carbon energy system of the future in a new report from the World Economic Forum.
According to the report, “Green Investing 2010,” which was released at the WEF’s meeting last week, clean energy investment has proven remarkably resilient, dropping just 6 percent to $145 billion in 2009 over the previous year due to the financial crisis. Further, it is expected to rise to $200 billion this year and continue growing beyond that.
However, this still falls far short of the investment volumes required to transform the world’s energy infrastructure. If the world is to see energy related CO2 emissions peak by 2020, and an increase in global average temperatures restricted to 2°C, then global investment in clean energy must reach US$500 billion per annum by 2020. However, without a major new initiative to drive the shift to clean energy, the figure is likely only to reach US$350 billion per annum by 2020.
The report, which sets out various policy mechanisms to promote clean energy investment, adopts the view that the smart grid is an essential part of any future energy scenario, as the world’s existing electricity grids simply cannot cope with the increasing diversity of energy sources, many from variable and decentralized renewable resources, and do not allow energy supply and demand to be managed efficiently. With global energy consumption set to triple between now and 2050, intelligent power management will be vital.
The report adds that it looks likely that only regulation will drive this investment, but at the moment, most regulators remain in wait-and-see mode.
On advanced transportation the report points to the scale of the problem, pointing out that transport accounts for more than 27% of all final energy consumed. If only 10 percent of the global fleet were to consist of electric vehicles, this market would be worth US$300 billion in 2020 for the cars alone, with batteries an additional US$100 billion and the lifetime mileage worth an additional US$250 billion according to the US Department of Transportation’s Research and Innovative Technology Administration.
However, widespread electric vehicle adoption faces three roadblocks that need to be addressed: infrastructure; psychological barriers and range extension; and availability and cost competitiveness of vehicles. From a total cost of ownership perspective, EVs are cheaper as the lower cost per mile more than offsets the upfront costs of the battery.
Other key enablers are power storage and carbon capture and sequestration, and the ten clean energy technologies are onshore and offshore wind, solar photovoltaic and solar thermal generation, biomass, municipal solid waste-to-energy, geothermal power, small-scale hydro, sugar-based first-generation biofuel and cellulosic, algal and other second-generation biofuels.