Among the renewable energy technologies bioenergy tends to have a lower public profile than wind or solar energy. However, it is considered a more mature technology and has a much higher level of use than many of these higher profile technologies (Richardson, 2001). Unfortunately, it is relatively easy for advocates of one particular resource or resource/technology mix to forget or ignore the possibility that another renewable resources when matched with the right technology may be able to provide all the services advocated for the chosen resource. Not only that, but the attributes and economics of this other resource/technology combination may be every bit as, or even more, desirable as that of the option being advocated.
In the renewable energy area there are a very large number of resource and technology combinations that are possible. Jackson & Löfsedt (1998) provide an overview of some of the resources and the technologies that might be used to extract useful energy from them. Geothermal, hydro, ocean energy, solar, and wind resources can all be exploited either via a one or two-stage process to provide electricity and heat. As with forests, different areas of the world enjoy differing factor endowments of these resources. It would therefore be unrealistic to expect future growth in the exploitation of renewable resources that should be limited to only biomass. Even in terms of biomass energy, as this analysis has shown, the available resource is not simply confined to woody plant materials.
Of the ‘other’ resources wind may be the resource where research and technology has been most successful in achieving resource commercialization in the last decade. Internationally the cost of wind energy is still declining, and wind generated electricity is even now in some situations little more expensive than the most cost effective form of electricity generation (EECA, 2001). However, as well as improved economics for wind there have been considerable advances in other areas too, most notably photovoltaics (van Campen et al, 2000). Electricity produced from photovoltaic (PV) systems though will still typically at present cost of the order of US16c/kWh (EECA, 2001). As a result in most cases, particularly when reasonable amounts of electricity are required and access to other generation means is possible, electricity from PV systems is not yet competitive with other sources of electricity. Still if costs continue to fall the scope for wider application of PV systems will grow.
That research has and continues to change the relative cost of producing energy from different renewable resources leaves any projection of the future role of any particular resource or technology vulnerable to the unanticipated results of research. Jackson & Löfsedt (1998), while acknowledging the power of serendipity in research, outline one view of the resources and technologies seen as having potential for becoming commercially viable in a European context within the next ten years. In a different jurisdiction (New Zealand) and context authorities have suggested that efficiency improvements to existing hydro generation, gas, wind, new small hydro and geothermal generation offer the least cost sources of pure electricity generation over the next 10 or so years (ECCA, 2001).
Even in the area of transportation fuel, an area where options might appear to be limited, there is at least a possibility of considerable technologically induced change occurring in the next decade. Transportation is the area where concern about the possible exhaustion of existing resources has most frequently been expressed. It is also the area where the current cost competitiveness of unsubsidized renewable fuels would appear to be the most problematic. However, options may be opening up. A recent editorial in New Scientist (25 November 2000) raised questions concerning the timing of the replacement of internal combustion engines in cars, and in the same issue Pearce (pp. 36-42) addresses the possibility of moving from an oil-based to a hydrogen-based economy in terms of “when” rather than “if”. The capacity of science and technology to surprise must be acknowledged - there is always a possibility that today’s uneconomic resource may, with the right technological advance, become tomorrow’s essential commodity.
At present the generalized economics of exploitation of most renewable resources would appear to be questionable. As with biomass, though any analysis needs to be firmly rooted in the specifics that apply to a particular site. While with existing technologies it may be true that for most places and situations these energy resources might best be regarded as (economic) options, the specifics of a particular site and factor endowment can change this. At present for most though, the main value of these other renewable resources and the technologies that are applicable to them, is that they provide a guaranteed backstop to the price which can be charged for the resources currently being exploited. Should real oil prices rise fourfold then clearly wood based biofuels can, and no doubt will, replace oil in many applications. Similarly should taxes that are designed to fully reflect all the externalities associated with the use of fossil fuels result in a doubling of the cost of coal fired electricity in at least some jurisdictions, wind based electricity systems are likely to prove a much more economic proposition than new coal based plants. The challenge in a number of cases will be in recognizing when or if the option should be exercised. In some cases it may even be rational to let the option lapse.