Government Grants for Alternative Energy

In his State of the Union Address for 2007, President George W. Bush called for a 22% increase in federal grants for research and development of alternative energy. However, in a speech he gave soon after, he said to those assembled, I recognize that there has been some interesting mixed signals when it comes to funding.

Where the mixed signals were coming from concerned the fact that at the same time the President was calling on more government backing for alternative energy research and development, the NREL—the National Renewable Energy Laboratory of Golden, Colardo—was laying off workers and contractors left and right. Apparently, the Laboratory got the hint, because soon after the State of the Union Address, everyone was re-hired. The second speech of the President's was actually given at the NREL. There is almost unanimous public support for the federal backing through research grants, tax breaks, and other financial incentives of research and development of alternative energy sources.

The NREL is the nation's leading component of the National Bioenergy Center, a “virtual” center that has no central bricks and mortar office. The NREL's raison d'etre is the advancing of the US Department of Energy's and the United States' alternative energy objectives. The laboratory's field researchers and staff scientists, in the words of Laboratory Director Dan Arvizu, “support critical market objectives to accelerate research from scientific innovations to market-viable alternative energy solutions. At the core of this strategic direction are NREL's research and technology development areas. These areas span from understanding renewable resources for energy, to the conversion of these resources to renewable electricity and fuels, and ultimately to the use of renewable electricity and fuels in homes, commercial buildings, and vehicles.” The federally-backed Laboratory directly helps along the United States' objectives for discovering renewable alternative fuels for powering our economy and our lifestyles.

The NREL is set up to have several areas of expertise in alternative energy research and development. It spearheads research and development efforts into renewable sources of electricity; these would include such things as solar power, wind power, biomass power, and geothermal power. It also spearheads research and development of renewable fuels for powering our vehicles such as biomass and biodiesel fuels and hydrogen fuel cells. Then, it seeks to develop plans for integrated system enginnering; this includes bringing alternative energy into play within buildings, electrical grids and delivery systems, and transportation infrastructures. The Laboratory is also set up for strategic development and analysis of alternative energy objectives through the forces of economics, market analysis and planning, and alternative energy investment portfolios structurings.

The NREL is additionally equipped with a Technology Transfer Office. This Office supports laboratory scientists and engineers in the practical application of and ability to make a living from their expertise and the technologies they develop. NREL's research and development staff and its facilities are recognized for their remarkable prowess by private industry, which is reflected in the hundreds of collaborative projects and licensed technologies that the Laboratory now has with both public and private partners.

Biofuels as Alternative Sources of Energy

Biofuels are produced by converting organic matter into fuel for powering our society. These biofuels are an alternative energy source to the fossil fuels that we currently depend upon. The biofuels umbrella includes under its aegis ethanol and derivatives of plants such as sugar cane, as well aS vegetable and corn oils. However, not all ethanol products are designed to be used as a kind of gasoline. The International Energy Agency (IEA) tells us that ethanol could comprise up to 10 percent of the world's usable gasoline by 2025, and up to 30 percent by 2050. Today, the percentage figure is two percent.

However, we have a long way to go to refine and make economic and practical these biofuels that we are researching. A study by Oregon State University proves this. We have yet to develop biofuels that are as energy efficient as gasoline made from petroleum. Energy efficiency is the measure of how much usable energy for our needed purposes is derived from a certain amount of input energy. (Nothing that mankind has ever used has derived more energy from output than from what the needed input was. What has always been important is the conversion—the end-product energy is what is useful for our needs, while the input energy is just the effort it takes to produce the end-product.) The OSU study found corn-derived ethanol to be only 20% energy efficient (gasoline made from petroleum is 75% energy efficient). Biodiesel fuel was recorded at 69% energy efficiency. However, the study did turn up one positive: cellulose-derived ethanol was charted at 85% efficiency, which is even higher than that of the fantastically efficient nuclear energy.

Recently, oil futures have been down on the New York Stock Exchange, as analysts from several different countries are predicting a surge in biofuel availability which would offset the value of oil, dropping crude oil prices on the international market to $40 per barrel or thereabouts. The Chicago Stock Exchange has a grain futures market which is starting to “steal” investment activity away from the oil futures in NY, as investors are definitely expecting better profitability to start coming from biofuels. Indeed, it is predicted by a consensus of analysts that biofuels shall be supplying seven percent of the entire world's transportation fuels by the year 2030. One certain energy markets analyst has said, growth in demand for diesel and gasoline may slow down dramatically, if the government subsidizes firms distributing biofuels and further pushes to promote the use of eco-friendly fuel.

There are several nations which are seriously involved in the development of biofuels.

There is Brazil, which happens to be the world's biggest producer of ethanols derived from sugars. It produces approximately three and a half billion gallons of ethanol per year.

The United States, while being the world's greatest oil-guzzler, is already the second largest producer of biofuels behind Brazil.

The European Union's biodiesel production capacity is now in excess of four million (British) tonnes. 80 percent of the EU's biodiesel fuels are derived from rapeseed oil; soybean oil and a marginal quantity of palm oil comprise the other 20 percent.

Renewable Fuels for Alternative Energy

The Germans have really taken off when it comes to renewable fuel sources, and have become one of the major players in the alternative energy game. Under the aegis of the nation's electricity feed laws, the German people set a world record in 2006 by investing over $10 billion (US) in research, development, and implementation of wind turbines, biogas power plants, and solar collection cells. Germany's “feed laws” permit the German homeowners to connect to an electrical grid through some source of renewable energy and then sell back to the power company any excess energy produced at retail prices. This economic incentive has catapulted Germany into the number-one position among all nations with regards to the number of operational solar arrays, biogas plants, and wind turbines. The 50-terawatt hours of electricity produced by these renewable energy sources account for 10% of all of Germany's energy production per year. In 2006 alone, Germany installed 100,000 solar energy collection systems.

Over in the US, the BP corporation has established an Energy Biosciences Institute (EBI) to spearhead extensive new research and development efforts into clean burning renewable energy sources, most prominently biofuels for ground vehicles. BP's investment comes to $50 million (US) per year over the course of the next decade. This EBI will be physically located at the University of Illinois Urbana-Champaign. The University is in partnership with BP, and it will be responsible for research and development of new biofuel crops, biofuel-delivering agricultural systems, and machines to produce renewable fuels in liquid form for automobile consumption. The University will especially spearhead efforts in the field of genetic engineering with regard to creating the more advanced biofuel crops. The EBI will additionally have as a major focal point technological innovations for converting heavy hydrocarbons into pollution-free and highly efficient fuels.

Also in the US, the battle rages on between Congress and the Geothermal Energy Association (GEA). The GEA's Executive Director Karl Gawell has recently written to the Congress and the Department of Energy, the only way to ensure that DOE and OMB do not simply revert to their irrational insistence on terminating the geothermal research program is to schedule a congressional hearing specifically on geothermal energy, its potential, and the role of federal research. Furthermore, Gawell goes on to say that recent studies by the National Research Council, the Western Governors' Association Clean Energy Task Force and the Massachusetts Institute of Technology all support expanding geothermal research funding to develop the technology necessary to utilize this vast, untapped domestic renewable energy resource. Supporters of geothermal energy, such as this writer, are amazed at the minuscule amount of awareness that the public has about the huge benefits that research and development of the renewable alternative energy source would provide the US, both practically and economically. Geothermal energy is already less expensive to produce in terms of kilowatt-hours than the coal that the US keeps mining. Geothermal energy is readily available, sitting just a few miles below our feet and easily accessible through drilling. One company, Ormat, which is the third largest geothermal energy producer in the US and has plants in several different nations, is already a billion-dollar-per-year business—geothermal energy is certainly economically viable.

Geothermal Power as Alternative Energy

We should be doing everything possible to develop geothermal energy technologies. This is a largely untapped area of tremendous alternative energy potential, as it simply taps the energy being naturally produced by the Earth herself. Vast amounts of power are present below the surface crust on which we move and have our being. All we need do is tap into it and harness it.

At the Earths' core, the temperature is 60 times greater than that of water being boiled. The tremendous heat creates pressures that exert themselves only a couple of miles below us, and these pressures contain huge amounts of energy. Superheated fluids in the form of magma, which we see the power and energy of whenever there is a volcanic eruption, await our tapping. These fluids also trickle to the surface as steam and emerge from vents. We can create our own vents, and we can create out own containment chambers for the magma and convert all of this energy into electricity to light and heat our homes. In the creation of a geothermal power plant, a well would be dug where there is a good source of magma or heated fluid. Piping would be fitted down into the source, and the fluids forced to the surface to produce the needed steam. The steam would turn a turbine engine, which would generate the electricity.

There are criticisms of geothermal energy tapping which prevent its being implemented on the large scale which it should be. Critics say that study and research to find a resourceful area is too costly and takes up too much time. Then there is more great expense needed to build a geothermal power plant, and there is no promise of the plant turning a profit. Some geothermal sites, once tapped, might be found to not produce a large enough amount of steam for the power plant to be viable or reliable. And we hear from the environmentalists who worry that bringing up magma can bring up potentially harmful materials along with it.

However, the great benefits of geothermal energy would subsume these criticisms if only we would explore it more. The fact that geothermal energy is merely the energy of the Earth herself means it does not produce any pollutants. Geothermal energy is extremely efficient—the efforts needed to channel it are minimal after a site is found and a plant is set up. Geothermal plants, furthermore, do not need to be as large as electrical plants, giant dams, or atomic energy facilities—the environment would thus be less disrupted. And, needless to say, it is an alternative form of energy—using it would mean we become that much less dependent on oil and coal. Perhaps most importantly of all—we are never, ever going to run out of geothermal energy, and it is not a commodity that would continuously become more expensive in terms of real dollars as time passes, since it is ubiquitous. Geothermal energy would be, in the end, very cheap, after investigation and power plant building costs are recouped.

Investing in Alternative Energy Stocks

Alternative energy stock portfolios are a great part of a modern investor's financial plan, due to the fac that there is so much upward potential. These make excellent long term growth investment vehicles, and the money put into them by you, the investor, serves to further the cause of implementing the alternative energy power sources that we need as we sail into the 21st century and beyond.

Analysts predict that by 2013, the alternative energy industry will be a $13 billion dollar industry in today's dollars. This figure bespeaks an enormous return on investment. Indeed, if you were to invest in a start-up alternative energy company, you might find yourself having invested in the next Microsoft in terms of return on investment. People are fed up with the rising costs of gasoline—while this alone is not sufficient understanding of the need for developing alternative energy sources, it is a factor which can act as a market maker—meaning for you that investments in alternative energy companies makes a lot of financial sense.

However, this does not mean that you don't first want to do some careful research into alternative energy stocks, perhaps with the help of a financial planner. “A few alternative-energy companies are going after the right markets but that doesn't mean you should go buy every name in the sector. Investors need to be cautious about chasing the stocks,” says Sanjay Shrestha, who is an analyst at First Albany Capital. And if you are an investor, then you know that the problem in this sector is that nearly every single one of the major players in the alternative energy for profit game are start-ups or in the very early stages of growth. This means for you that they have relatively minuscule (even if rapidly growing) sales, and no expected profitability in the near term or history of earnings for you to be able to research. This can lead to some bubbling, as with what happened to the dot-com industry at the turn of the 21st century. Bubbling in the stock market is not a good thing for investors.

Ananlysts and financial planners can play a crucial role in helping you get it right with alternative energy investing. “We don't play around in the tiny cap stocks that have technology and not much revenue—the 'hope' stocks. We invest in companies with clear cash-generation plans in place,” are the words of Ben walker, who is a senior portfolio manager at the Gartmore Global Utilities fund out of London.

Still, the outlook is very positive overall—and healthy. “It is good to see that the number of renewable energy funds and the amount of money flowing into these funds is increasing,” according to chief executive of UK alternative elecricity supplier Good Energy Juliet Davenport. “The renewable generation market is at an important stage in its development; it needs the continued support of the consumer, investor and government to ensure that it reaches its potential and really starts to make a difference to climate change.”

Developing Nuclear Power as Alternative Energy

Many researchers believe that harnessing the power of the atom in fission reactions is the most significant alternative energy resource that we have, for the fact of the immense power that it can generate.

Nuclear power plants are very “clean-burning” and their efficiency is rather staggering. Nuclear power is generated at 80% efficiency, meaning that the energy produced by the fission reactions is almost equal to the energy put into producing the fission reactions in the first place. There is not a lot of waste material generated by nuclear fission—although, due to the fact that there is no such thing as creating energy without also creating some measure of waste, there is some. The concerns of people such as environmentalists with regards to using nuclear power as an alternative energy source center around this waste, which is radioactive gases which have to be contained.

The radiation from these gases lasts for an extraordinarily long time, so it can never be released once contained and stored. However, the volume of this waste gas produced by the nuclear power plants is small in comparison to how much NOx (nitrous oxide—that is, air pollution) is caused by one day's worth of rush-hour traffic in Los Angeles. While the radiation is certainly the more deadly by far of the two waste materials, the radiation is also by far the easier of the two to contain and store. In spite of the concerns of the environmentalists, nuclear power is actually environmentally friendly alternative energy, and the risk of the contained radiation getting out is actually quite low. With a relatively low volume of waste material produced, it should not be a difficult thing at all for storage and disposal solutions for the long term to be developed as technology advances.

The splitting of an atom releases energy in the forms of both heat and light. Atomic power plants control the fission reactions so that they don't result in the devastating explosions that are brought forth in atomic and hydrogen bombs. There is no chance of an atomic power plant exploding like a nuclear bomb, as the specialized conditions and the pure Plutonium used to unleash an atomic bomb's vicious force simply don't exist inside a nuclear power plant. The risk of a “meltdown” is very low. Although this latter event has happened a couple of times, when one considers that there are over 430 nuclear reactors spread out across 33 nations, and that nuclear reactors have been in use since the early 1950s, these are rare occurrences, and the events of that nature which have taken place were the fault of outdated materials which should have been properly kept up. Indeed, if nuclear energy could become a more widely accepted form of alternative energy, there would be little question of their upkeep being maintained. Currently, six states in America generate more than half of all their electrical energy needs through nuclear power, and the media are not filled with gruesome horror stories of the power plants constantly having problems.

Resources for Alternative Energy

There are many different forms in which alternative energy is available.

One of these is solar power. Solar power is driven by photovoltaic cells, and these are progressively getting less expensive and more advanced. Solar energy power can be used for electricity, heating, and making hot water. Solar energy produces no pollution, as its input comes completely from the sun's rays. However, much more work still needs to be done in order for us to economically harness the sun's energy. For the time being, the resource is a little too conditional—storage batteries are needed to be used as backups in the evenings and on inclement days.

Wind energy has become the most-invested-in (by private investors and governments together) alternative energy source for the time being. The great arrays of triple-bladed windmills are being placed all over as “wind farms”, to capture the motion of the wind and use its kinetic energy for conversion to mechanical or electrical energy. Of course, there is nothing new about the concept of a windmill for harnessing energy. Modern wind turbines are simply are more advanced variations on the old theme. Of course, the drawback to wind energy is...what do you do when there is a calm, still day? Needless to say, during these times the electric company kicks in for powering your home or office. Wind energy is not altogether independent.

Hydroelectric energy is available as a source of alternative energy, and it can generate a substantial amount of power. Simply put, hydroelectric energy uses the motion of water—its flow in response to gravity, which means downhill—to turn turbines which then generate electrical energy. Needless to say, water is ubiquitous; finding sources for driving hydroelectric turbines is, therefore, not much of a problem. However, hydroelectricity as a source of alternative energy can be complicated and expensive to produce. Dams are often built in order to be able to control the flow of the water sufficiently to generate the needed power. Building a dam to store and control water's potential and kinetic energy takes quite a lot of work, and operating one is complex as well,and conservationists grow concerned that it. Of course, a dam is not always needed if one is not trying to supply the electrical needs of a city or other very densely populated area. There are small run-of-river hydroelectric converters which are good for supplying neighborhoods or an individual office or home.

Probably the most underrated and under-appreciated form of alternative energy is geothermal energy, which is simply the naturally-occurring energy produced by the heating of artesian waters that are just below the earth's crust. This heat is transferred into the water from the earth's inner molten core. The water is drawn up by various different methods—there are “dry steam” power plants, “flash” power plants, and “binary” power plants for harnessing geothermal energy. The purpose of drawing up the hot water is for the gathering of the steam. The Geysers, approximately 100 miles north of San Francisco, is probably the best-known of all geothermal power fields; it's an example of a dry stream plant.