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By Root 958 0

grid, car owners can elect to charge up when electricity demand is low, and discharge back into the grid when demand is high. Google Inc. is actively developing such a “V2G” (vehicle-to-grid) technology through their RechargeIt initiative.164 In effect, a city’s entire motor pool becomes a giant collective battery bank, helping to buffer fluctuations in electricity supply and help protect against brownouts. In return, cars earn a profit by buying electricity when it is cheap and selling when it is expensive. Thus, the notion of a “cash-back hybrid.” Jeff Wellinghoff, commissioner of the U.S. Federal Energy Regulatory Committee, estimates that if millions of cars were made available to the grid, cash-back hybrids could earn their owners up to two thousand to four thousand dollars per vehicle.

Solar power is an exciting, fast-evolving field, and is positioned for technological breakthroughs on multiple fronts.165 With transmission line investments CSP technology has good potential to bloom in well-placed deserts, for example tapping the northern Sahara to supply electricity to Europe. Globally, the solar power industry is over USD $10 billion per year and growing 30%-40% annually, even faster than wind power. 166,167 Depending on the choices we make,168 world electricity production from solar sources is expected to grow anywhere from fiftyfold to nearly two thousandfold by 2050, cornering some 0%-13% of the world’s electricity market.

That zero was not a typo. This is all very exciting and will surely inspire many investor fortunes in the stock market. But if you’ve been adding up the numbers as we went along, you’ve already figured something out: Fast-growing as they are, the blunt truth is that the clean, renewable energy sources we’d all love to have—wind, solar, hydro, geothermal, tidal, and (sustainably grown) biomass—are in no position to replace nonrenewable sources by 2050.169

Despite blistering growth, by 2050 solar energy will just be starting to substantially dent our energy needs. It takes time to grow from a base of near-zero. Our present capacity is so minuscule that a fiftyfold increase of solar power in the next four decades will still supply about 0% of the world’s electricity. Even the most aggressively modeled expansion of solar sources suggests they can meet just 13% of the world’s electricity demand by 2050. So buy the stocks if you wish, but in forty years where will the bulk of the world’s energy be coming from? Very likely from the same sources they come from today. There is simply no realistic way to eliminate oil, coal, and natural gas from the world’s energy portfolio in just forty years’ time.

Natural Gas versus the Dirty Temptation

As oil supply tightens we will harden our gaze more than ever upon coal and natural gas, until that distant day when renewable sources can catch up. Both have their handicaps and benefits relative to oil and to each other. Neither approaches the value of oil for making liquid fuels and chemical products. However, these two fossil fuels already dominate the world’s electricity generation, with about 40% coming from coal and 20% from natural gas (in contrast, only 7% of all electricity is generated using oil). A transition to electric cars, therefore, would seem a natural one even without renewable and nuclear sources of electricity.

Should current trends continue unabated, coal demand will nearly triple by 2050, at which point it would capture 52% of the electricity market. Natural gas demand will more than double, at which point it would capture about 21%. However, nothing is fixed about these “business as usual” projections. Through aggressive conservation measures, and development of natural gas, nuclear, and renewable sources, for example, global electricity production from coal could be as little as a few percent by then.170 There are compelling reasons for the world to work toward this goal, as we shall see shortly.

Demand for natural gas is projected to more than double between now and 2050, and it is difficult to imagine any scenario in which we will