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As oil prices continue to rise, power companies and consumers have started to look elsewhere for their energy needs. Voilà: Alternative energy producers are clambering out from the shadow of the oil industry giants, ready for their moment in the sun—or the wind or the ocean, as it were. Though the trend is worldwide, Europe is a particularly friendly setting for renewable energy these days, both as a center of homegrown innovation and as a theater for overseas investment and development.
The European Union's commitment to the Kyoto Protocol has created a gradual opening in the market as the continent works to phase out its greenhouse gas–emitting energy sources and as individual member states actively encourage the growth of eco-friendly energy.
LOCATION, LOCATION, LOCATION.
Germany, for instance, offers significant financial incentives to users and producers of renewable energy. And the Alternative Investment Market, or AIM, a subsidiary of the London Stock Exchange, has proven to be a safe haven for domestic and international alternative energy firms seeking financing (see BusinessWeek.com, 4/5/06, "Europe Opens the Tap for Clean Energy").
Although more traditional power sources still dominate, the Old World has become the global leader in renewable energy use and production. As eco-friendly energy becomes more cost-effective, convenient, and feasible, its growth rate is likely to increase.
Alternative energy facilities often look more like farms than factories, because they usually require a lot of open space and agreeable natural conditions to generate enough electricity to effectively service a community, whether via the sun, wind, or ocean.
FOLLOW THE SUN.
The most common form of renewable energy, representing roughly three-quarters of Europe's renewable energy production, is wind. The ideal setting for a wind farm is, of course, where it's windiest: off-shore, at higher altitudes, or along coastlines. But perhaps because they are the most common, these wind farms are also controversial. Local communities often protest the establishment of on-shore wind farms because the turbines, which can be as big as 180 meters tall, with blade spans of 114 meters, block views, make noise, and can endanger local bird life. Offshore locations are also problematic: The water and salt are powerful corrosives, and their remote location makes the turbines difficult to maintain.
Solar energy doesn't pose any such problems, and sun-power installations thus rarely inspire protest from local communities. One reason may be that in some places, solar power generates a tidy profit for those who produce it. In Germany, for instance, the government passed a law in 2004 that guarantees producers of solar electricity, whether individuals or businesses, minimum rates well above the standard market value. The only problem: Enthusiastic uptake by the German public has driven up prices for polysilicon, a primary component of most solar panels, and it will take some time for supply to catch up with demand.
In the meantime, another model of solar power collection is experiencing considerable growth. Arrays of reflective glass structures, designed either as dishes, troughs, or panels, tilt toward the sun as it makes its way across the sky and redirect the light onto receivers that convert the collected heat into electricity. Spanish firm AndaSol will begin building two solar trough power plants near Granada in 2007. Together, the plants should generate enough power for 50,000 households. There is a downside, though: Whereas wind is more or less constant 24 hours a day, sunlight clearly is not.
OIL FROM STONE.
The newest and perhaps most promising development in renewable energy is wave power, which dodges the pitfalls of both its sunny and windy counterparts. Set out in the ocean, wave farms are unobtrusive and can generate electricity indefinitely and without pause. Should they require maintenance, they can be easily towed back to shore.
The Portuguese government has contracted Scottish firm Ocean Power Delivery to set up just such a wave farm off the country's coastline (see BusinessWeek.com, 5/3/06, "Portugal Makes Waves in Alternative Energy"). The device, called the Pelamis, consists of four cylinders connected by hydraulic hinged joints. Resting semi-submerged on the ocean's surface, the cylinders bob up and down, translating the movement of waves into electricity. Initially, the farm will consist of three of these modules, supplying enough energy to satisfy the needs of 1,500 homes, with an option for another 27.
As a largely desert country, Israel is well suited to solar power, and local startup Solel, has seen significant success domestically and abroad (see BusinessWeek.com, 2/14/06, "Israeli Solar Startup Shines"). As it turns out, sunshine isn't the only natural energy resource that the desert has in abundance. Israel is also home to innovation in a more traditional kind of energy. Haifa-based engineering firm A.F.S.K. Hom Tov holds a patent on a highly efficient method for squeezing oil from shale and then burning the leftover shale for additional energy (see BusinessWeek.com, 7/5/06, "Israel Presses for Oil from Shale").
Skyrocketing oil prices are even breathing new life into the most controversial of all alternative energy sources, nuclear power. French firm Areva is now building a new nuclear reactor in Olkiluoto, Finland, the first new nuke in Europe in 15 years. Areva, which is 97% owned by the French government, is also in talks for a possible future contract in Britain.
Though disposal of spent radioactive fuel is still a major sticking point, nuclear energy is cleaner in the short term than either oil or coal. (Finland's current policy is to bury the waste deep underground in tough copper canisters.) And countries laboring under soaring oil prices can't help but note with envy that France gets 77% of its electricity from nuclear power.
No one alternative energy source is perfect, but in combination they are slowly helping reduce dependence on the declining supply of greenhouse gas–producing hydrocarbons. Instead, in Europe as elsewhere, new sources of energy are finally coming into their own, whether from land, sea, or sky.
Click here to see a slide show of alternative energy sources.