The Case For an Alternative Energy Driven Boom

Most booms happen on the back of technological change.   Think about it:

• The boom in the 1980’s which was caused by computers.
• The internet boom in the 1990’s.
• The mini-booms in the early 2000’s in bio-technology and nano-technology.

And, come to think of it, some of the biggest booms in history have been caused by energy driven technological change.  Consider steam power fed by coal, internal combustion engines fed by oil as well as the rise of electricity, to name a few.

So why might the next boom be driven by alternative energy?

The last few decades have not seen much in terms of innovation from the energy sector.  Coal, natural gas, and even oil (not counting the 1970’s) have all been relatively inexpensive.  And as a result, there hasn’t been much pressure on the energy industry to innovate.

But this is changing; Oil is more expensive than it has ever been, and there is now growing concern that the available supply of oil is reaching its peak.

This is causing some pretty incredible innovation and once lofty ideas, such as vehicles powered by batteries, are slowly creeping into the mainstream.  Consider, for example, the Tesla Roadster.  Presently, these vehicles are too pricey for the average consumer.  But that will begin to change in the next 3-5 years, as GM and Toyota (and others) begin producing affordable electrics, and as both companies unleash their marketing machines on the American public.

But natural gas is becoming more expensive too, which is causing electricity to cost more.  This has an interesting effect, and is surely making wind and solar power look more attractive.  Consider Boone Pickens, the billionaire oil man who is making a big bet on wind power.

And while coal still remains fairly inexpensive, the number of coal-fired power plants in America’s future remains uncertain.  With a new president taking the reigns in a few short months, there will almost certainly be some marked change in environmental policy.  Americans are becoming increasing concerned about the pollution caused by coal plants, and if America ever joins the Kyoto Protocol, which is quite probable, then businesses will need to take into account the costs of carbon dioxide abatement.  These two forces will likely put a strain on coal-fired power.

When you take all of these factors into consideration, the case for an alternative energy driven boom becomes clear - be it wind, solar, geothermal, hydro or a combination of them all.

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Tagged as: Energy, Future, Technology