The paradox of alternative energy

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Alternative energy is any energy that does not depend on oil of middle east. That seems to be the apt description. It could be Solar, Wind, Nuclear, Bio-Fuel and everything else in your imagination except oil

In his book “Hot, Flat and Crowded” Thomas Friedman describes the alternative energy should be renewable. Which means it should be abundantly available and clean. There are only few energy sources which fulfill that criteria. Solar and Wind are the obvious choices. And these are expensive to generate.

Though solar energy is abundant it is not very easy to generate. A land of 10,000 acres is needed for generating 1,000 MW of power. Huge chunks of land is required to generate power. Where do we have that kind of land? Well, we can ask Ramalinga Raju but he is in jail now. Same is the case with Wind Energy – huge area, huge investments.

Wind Farm Energy

When oil per barrel was at $147, the talk for alternative energy has heated up. Since then the oil saw its inevitable downfall and so did the enthusiasm of the alternative energy advocates. Oil per barrel is at $40, and the alternative and biotech stocks has lost a lot since their peaks.

OPEC wants the oil to be somewhere at $90 per barrel. That is because they don’t have any other source of income other than oil. They need that price to remain profitable. Alternative energy industry also wants oil at $90 per barrel. They don’t say it but they know it in their hearts.

While there are efforts to go green in bits and pieces sprinkled across like Jay Leno’s wind turbine or Intel’s data center which is powered by solar energy. The real push for alternative energy can come only when the oil barrel value is at $100. Only then the world would innovate to move away from oil into the alternative energy segment.

The biggest push has to come from America which incidentally is the biggest consumer of world’s oil. The latest stimulus bill has $150 bn investment going into the renewable energy market. This to me is the big chunk of investment which can alter the course. Unless the spending comes from governments across, it would be impossible to get away from the oil addiction and secure our future.

Coming to India’s situation the alternative energy boom is still to catch up. Reliance Industries has seen its profits dropping which is a good indication that it should look at other alternatives like alternative energy. There are investments in photovoltaic’s from companies like Moser Baer, Reliance Industries  and Tata BP Solar. There are also smaller companies like Daily Dump which generate energy out of kitchen waste. Suzlon Energy is provides equipment to generate wind energy.

These investments and initiatives will take a back seat when the oil rate falls. To compound these worries is our perennial subsidies of petrol, diesel, LPG and Kerosene. We all know how those works. With the impending general elections there is one more price cut coming. That to me is a start of yet another vicious cycle.

Why do we need alternative energy? Because we are running out of oil and burning fossil fuels generates a lot of CO2 which can eventually kill the planet.

Why aren’t we acting fast? Because the cheap oil is still available and there is no economic incentive to go and pursue other fuels.

What should we do?

*Image credit : lant_70 via flickr

5 Comments
  1. Satheesh says

    The initiative has to come from US but India can try going back and see how we can follow our ancient system of worshiping trees, water and earth to promoter afforestation, 0 energy homes, efficient public transport, reduced use of personal autos and vedic life style. We only need to find a link between modern living, science and proven Vedic living.

  2. Ankit says

    @Sriram Glad my views are in sync with urs.Yes,The way we are consuming resources is becomin us’ish day by day without even thinkin that whteva happens,US still controls Oil barrels by hook or crook.Sadly it aint the case with India

    But,i would second the opinion that the leadership has to come from the US.It is our country and our leaders who will have to create this awareness.With L&T and Infosys both coming out of their Corporate Sustainability reports and the “Go green” motto, the signs are atleast good.Hope more companies follow suit and it shall start percolating to the masses

  3. Sriram Vadlamani says

    @Ankit : You have put it succinctly. Reactive vs proactive is what we are after. By US’ish if you mean the consumption then Yes we are on that path.
    But the world does not have enough resources if even a quarter of India follows a US lifestyle. The leadership cannot come from India for whatever reasons. It has to come from the US.

  4. Ankit says

    Interesting Article.I wonder whether it has something to do with how our generations have been grommed or we have become too US’ish:-)

    The article clearly highlights the issue of we being “Reactive and not pro-active”
    Until and unless we actually find ourselves in deep shit,nothin makes us think of contigency plans,backup and likes.
    With oil,the same strategy might lead to our future generations not knwoing the meaning of the word’OIL’
    I wish it neva comes to that

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