What is the annual market opportunity for renewable energy and efficiency measures, such as building controls, energy reconstruction and electric vehicles? Does $1 trillion sound like an enticing number?
One trillion dollars may sound gargantuan, but it is what the International Energy Agency suggested in a recommendation earlier this week. And it isn’t far from the scale of the global warming efforts called for in other top studies.
In its landmark 2007 report, for instance, the Intergovernmental Panel on Climate Change concluded that mitigating atmospheric heat rise would cost the world 0.2 percent to 3 percent of annual GDP. Mitigation isn’t the same as market opportunity.
To obtain an economy where 50 percent of electricity come from renewable sources, the world will need to build the generation listed above
But it defines the magnitude of the effort – and perhaps the willingness of business to respond with innovation.
To put the IPCC’s projection in annual dollars, consider that the world’s gross domestic product is $61 billion. Three percent of that comes to $1.8 trillion a year. The IPCC’s report says the effort would hold temperature increases to between 2 degrees and 4 degrees Celsius.
The Paris-based IEA looks at impact from a different angle. The agency projects that the world will need to spend $46 trillion between now and 2050 to be sure half of all electricity comes from renewable sources. This includes improving energy efficiency.
Divide the number out and it comes to about $1.2 trillion a year. Most of this spending is to come from consumers buying more efficient, low-carbon equipment and, particularly, cars. Of course some of the money will be paid back through lower fuel use.
But achieving an economy where 50 percent of electricity comes from renewable generation requires an industrial investment as well beyond what might be anticipated to meet growing energy demand. That approach includes the annual construction or deployment of:
*More than 30 nuclear reactors;
*Thirty-five coal-fired plants with carbon capture technology;
*Two hundred biomass plants;
*Nearly 16,000 wind turbines;
*Forty-five geothermal plants;
*Three hundred and twenty-five million solar panels; and
*Fifty-five solar thermal plants.
Energy-efficiency improvements in developed countries also must continue at today’s almost 2 percent a year pace, a pace that is almost double from the 1990s.
The IAE points out that in 2008, the world invested about $110 billion in wind, solar and other renewable generation. Investment levels remained relatively stable in 2009, despite the downturn.
Still, they are one-tenth of where they need to be. It sounds like a monster of an opportunity.
Posted by Mark Boslet 
