March 20, 2023
Renewable energy sources are becoming increasingly important as the world strives to reduce its dependence on fossil fuels and mitigate the effects of climate change with an overall aim of reaching carbon neutrality by 2050.
There are several different types of renewable energy sources, each with their own unique advantages and limitations.
Renewable energy sources — such as solar, wind, hydroelectric, geothermal, and biomass — are becoming increasingly competitive with fossil fuels in the United States.
The cost of renewable energy has been decreasing, while the cost of fossil fuels obviously fluctuates wildly… as we’ve all borne witness to these last few years.
In some cases, renewable energy sources have actually become cheaper than fossil fuels, especially in states with high renewable energy potential such as California and Texas.
Renewable energy sources currently account for only about 12.7% of total energy consumption in the United States with the largest sources being wind and hydroelectric power.
Yet, the percentage of energy consumption in the US from renewables has been rising steadily in recent years — and that trend is expected to continue well into the future.
Let’s take a quick look at the different types of renewable energy sources, how they are used, and where their limitations lie.
Solar energy is perhaps the most well-known and widely used form of renewable energy globally. It is harnessed by capturing the energy from the sun through solar panels or photovoltaic cells. These cells convert sunlight into electricity that can be used to power homes and businesses.
The advantages of solar energy include its abundance and accessibility as well as its ability to be used in remote areas. However, the limitation of solar energy is that it is dependent on sunlight (obviously) and cannot generate electricity at night or in cloudy weather.
Ivanpah Solar Power Facility, California: If you’ve ever flown to Las Vegas during the day, you’ve undoubtedly seen this!
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Solar is one of the cleanest forms of renewable energy as it does not produce any emissions or waste products. The only potential environmental impact is the manufacture and disposal of solar panels, which can be minimized with responsible manufacturing and recycling practices.
Wind energy is another popular form of renewable energy that is considered clean. It is generated by harnessing the power of wind turbines, which convert wind energy into electricity. Wind turbines are typically placed in areas with high wind speeds such as offshore or in open fields.
San Gorgonio Wind Park, California: I’ve driven by this wind farm countless times on my way from Temecula to Palm Springs. It’s truly a sight to behold!
The advantages of wind energy include its low cost and abundance as well as its ability to generate electricity even at night. And although it doesn’t produce any emissions or waste products, there are some concerns about the impact of wind turbines on birds and other wildlife along with noise concerns for those living close by.
Hydro energy, also known as hydropower, is generated by harnessing the power of water. This is typically done by using dams to control the flow of water and turn turbines to generate electricity.
Hydro energy is a clean, reliable, and predictable source of energy as it is not dependent on weather conditions. However, the construction of dams can have a negative impact on the environment, and the availability of suitable locations for hydro energy is obviously limited.
Geothermal energy is generated by harnessing the heat from the Earth's core. This is typically done by drilling wells into the Earth's surface and using the heat to generate electricity.
Geothermal is a clean, reliable, and consistent source of energy, and it can be used in a variety of applications, including heating and cooling. However, the cost of building geothermal plants can be extremely high, and suitable locations are limited as well.
Perhaps the best example of the successful use of geothermal, globally, is the country of Iceland. Iceland is located on the Mid-Atlantic Ridge, which is a tectonic plate boundary that runs through the center of the country.
As a result, the country has a large number of active volcanoes and hot springs, which provide an abundant source of geothermal energy.
Hellisheiði Geothermal Plant, Iceland: One of six major geothermal energy plants bringing clean power to the people of Iceland.
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Over 85% of the country's energy comes from renewable sources with geothermal energy being the largest contributor.
America — which has a number of geothermal plants in the west — certainly has the potential to emulate Iceland’s successful model when it comes to geothermal energy production.
Overall, the United States has more than 3.7 GW of installed geothermal capacity, making it the third-largest producer of geothermal energy in the world.
Yet, geothermal still ranks at the very bottom of renewable energy consumption in America in terms of percentage:
- Wind: 8.3%
- Hydropower: 6.5%
- Biomass: 5.5%
- Solar: 4.6%
- Geothermal: 0.1%
So, a lot of work still to be done… but the potential is clearly there. Especially considering the number of geothermally active areas in the United States in places like California, Nevada, Utah, Alaska, Hawaii, the Gulf Coast — and even in open areas not far from Yellowstone National Park.
Lastly, biomass energy is generated by burning organic materials such as wood, agricultural waste, and even garbage. This produces steam, which is used to generate electricity. Biomass energy is a renewable source of energy as the organic materials can be replenished.
However, the use of biomass energy can have negative environmental impacts due to the harvesting and processing of these materials as well as the emissions that can be produced during combustion. Plus, the availability of suitable biomass materials can be somewhat limited.
To summarize, there are several different types of renewable energy sources in use today. As we continue to develop and implement these technologies, we can reduce our reliance on fossil fuels and create a more sustainable future for our children and grandchildren.
With costs coming down, renewable energy sources are becoming increasingly competitive with fossil fuels in the United States and are poised to play an increased role in our nation’s energy mix over the coming decades.
In the coming weeks and months, we’ll be exploring these technologies in greater detail, including ways to invest in the current and future leaders of the renewable energy space.
Editor, Daily Profit Cycle