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The Big Picture

Because traditional, nonrenewable energy sources such as oil and coal harm the environment in their extraction, processing, delivery, and use, customers say they are willing to pay more, if necessary, for cleaner energy. Green energy comes from the sun, wind, water, the burning of organic matter, and the heat of the Earth. These resources are cheap, abundant, and sustainable.

The Context

Using energy from fossil fuels causes air, water, and soil pollution and contributes to global warming because of the release of carbon dioxide and other harmful emissions. Moreover, these energy sources are not sustainable: The World Bank shows that global electricity use continues to increase as supplies of fossil fuels -- currently our primary source of electricity -- decrease.

Alternative energy appears the obvious savior. In Europe, renewables comprise the fastest growing segment of the energy market. Group Planning at Royal Dutch/Shell says it is “highly probable” that renewable energy will, in the next 50 years, fill at least half of the world’s energy needs.

To get there, alternative energy must be further developed and made available to consumers at a competitive cost. Businesses can begin to utilize renewable energy in areas such as heating and cooling, vehicles, lighting, and hot-water systems -- and in doing so, create market demand. In short, the private sector stands to play a vital role in the energy revolution.

Key Terms

  • Biomass is any organic matter available on a renewable basis, including: agricultural crops, wastes, and residues; wood and wood wastes and residues; animal wastes; municipal wastes; and aquatic plants. Biomass can be used to produce electricity, transportation fuels, or chemicals. This latter group, biochemicals, can replace petroleum and other nonrenewable materials in wood adhesives, molded plastic, and foam insulation.
  • Biofuels, mainly ethanol, are mixed with gasoline resulting in less carbon-monoxide emissions from vehicles.
  • Sunlight, or solar energy, can be used directly for heating and lighting homes and other buildings, heating water, generating electricity, and for a variety of commercial and industrial uses.
  • Wind, driven by the sun’s heat, produces energy that can be captured with turbines and converted into electricity. Wind turbines function alone or can be connected to a utility power grid or combined with a photovoltaic system. Stand-alone wind turbines are used for pumping water and for communications.
  • Geothermal energy taps the Earth’s internal heat to produce electricity and to heat and cool buildings.
  • The ocean’s tidal energy and wave energy, as well as the temperature difference between surface and ocean depths, can be used to produce electricity.

Key Players

  • Consumers, at least 70% of Americans, favor renewable energy. Fewer, however, may be inclined to put their money where their beliefs are until renewable energy is widely accessible and benefits other than market cost are valued.
  • Federal, state, and local governments can mandate the deregulation of the utilities industry and offer economic incentives to facilitate the development of renewable energy. Government can also establish environmental regulations such as requiring that a certain percentage of power be derived from renewable energy.
  • Green power marketers are stepping up to compete against traditional power conglomerates and offer customers renewable-energy packages.
  • Major companies are positioning themselves to take advantage of the move toward clean energy. Eleven major corporations -- including IBM, DuPont, General Motors, and Johnson and Johnson -- formed the Green Power Market Development Group in an effort to develop worldwide corporate markets for renewable energy.
  • Producers of biomass feedstock and developers of solar, geothermal, and wind-energy technologies continue to refine and market their products.
  • Utility companies control the generation, transmission, and distribution of power. Deregulation opens the field for renewable-energy suppliers to compete for consumer dollars. Deregulation will also lead to technology and resource development of alternative energy sources.