NEW ENERGY ON THE VERGE

Study: Alternative-energy firms' outlook bright
David R. Baker, November 11, 2010 (SF Chronicle)

"Cellulosic ethanol, wind farms and large-scale solar power plants are on the cusp of being able to compete with fossil fuels without the need for subsidies, according to a [new] study…

"…What's Next for Alternative Energy? [from the Boston Consulting Group, a business strategy consulting firm to oil companies and alternative-energy businesses] tries to forecast the prices and market penetration of alternative-energy technologies by the year 2020, picking possible winners and losers. Some technologies, according to the report, are poised to grow much faster than generally assumed, even if the government doesn't encourage them with new subsidies."

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"With oil prices rising again, cellulosic ethanol, made from woody plants rather than food crops, should be able to compete with gasoline by 2012 or 2014. The consulting group estimates that by 2014, the cost of producing cellulosic ethanol will fall to $1.59 per gallon. Ethanol packs less energy per gallon than does gas, so the cost of producing enough ethanol to equal the energy in a gallon of gasoline would be $2.49…The current cost of producing a gallon of gasoline in California is approximately $2.34…

"Concentrated solar power, the technology used by large-scale solar power plants in the Southern California desert, also has the potential for significant cost cuts in the years ahead, according to the report. By 2020, such plants could supply electricity for less than 10 cents per kilowatt hour, making the technology competitive with conventional power plants that burn natural gas. (The report assumes that the cost of electricity from natural gas plants will hover between 6 cents and 9 cents per kilowatt hour.)"

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"Electric cars may make significant inroads in areas with high gasoline prices and will probably account for 5 to 10 percent of new vehicle sales by 2020, according to the report. But only 6 percent of the country's vehicle fleet is replaced in any given year, meaning that electric vehicles will remain a small portion of the cars on the road.

"The report included a gloomy forecast for technology that captures and stores the carbon dioxide from coal-fired power plants…"Carbon capture and sequestration" technology remains mired in its early stages, despite its potential for fighting global warming. The technology has not been demonstrated at a large scale, and its high costs make it unattractive to businesses unless it receives significant government support. Even under the report's most optimistic scenario, carbon capture and sequestration won't see widespread use before 2025…"