While incumbent energy producers are starting to look beyond oil and petroleum, farmers need to look beyond ethanol and start to build comprehensive energy supply businesses.
22nd February 2006. Cambridge, UK: Large-scale capture of wind and solar energy requires the management of significant areas of land, and - if the market for renewable energy continues to grow at the current rate - farmers will occupy a strategic position within the energy market within two decades. According to CarbonFree, a Cambridge UK based research company that has recently completed a study of the farmed renewable energy market, while incumbent energy producers are starting to look beyond oil and petroleum, farmers need to look beyond ethanol and start to build comprehensive energy supply businesses.
According to Peter Kruger, Analyst with CarbonFree, farmed renewable energy conforms to an energy generation model that NextGen energy producers find attractive. "For several decades the energy market has been dominated by a handful of companies and closed to new entrants. Advocates of a distributed energy generation model, the so called 'Internet of Energy', are particularly interested in farmed renewable energy - in the main because this source of power is readily available and is a good fit with their plans for a reformed energy market."
Much, however, will depend on the agricultural sector's ability to organise itself and provide a comprehensive range of energy products and services. While farmed energy will grow in importance, CarbonFree suggests that the fragmented nature of agricultural production will prevent farmers dominating the global economy in the same way as oil producers do today. Nevertheless farmers should be able to make a significant impact on the energy market during the rest of this century.
Incumbent energy companies and producing countries will find the market for oil and gas squeezed by farmers and consumers who are both producing energy using wind and solar power technology. As this technology becomes ever more sophisticated, a situation could occur where alternative energy is competitive at a relatively low oil price, perhaps even as low as $30 per barrel. If this situation occurs, and no new major fossil fuel reserves are discovered, investment in and the development of renewable energy technology will continue at its current pace, or even accelerate.
Although uneconomic today, solar energy farming will eventually benefit from advances in solar cell technology - in particular the ability to deposit photovoltaic materials on low cost polymer based substrates. In theory, installation of polymer based photovoltaic material could be as straightforward as the deployment of the large amounts of polythene farmers use to speed up the growth of fruit and vegetables.
A third generation of photovoltaic devices produced using nanotechnology, which split water into hydrogen and oxygen, would greatly reduce the cost of turning the sun's energy into a fuel. Such materials will start to reach the market at a time when many oil-producing countries find that the cost of activating a barrel of oil per day (bpd) has become prohibitively high. "Then," Kruger explains, "countries such as Iran, which already has the infrastructure in place to supply liquefied gas, could play a key role within the Hydrogen Economy and exploit the growing use of the gas for transport and electricity generation." However, he goes on to point out, "Farmed energy will come at a cost, both political and geopolitical, as the agricultural sector is empowered economically and countries within the solar belt attempt to leverage the advantage they have over the US and Europe."
The report "Farming Renewable Energy" is available from the CarbonFree website. http://www.carbonfree.co.uk
CarbonFree carries out research and analysis in a wide range of alternative energy related fields and disseminates results in its highly focussed CarbonFree reports. It also helps companies and organisations reposition themselves to take advantage of a rapidly evolving energy market.
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