Solar Energy Perspectives - IEA

Chapter 1: Rationale for harnessing the solar resource
Solid fuels like coal, and gaseous fuels like natural gas, are less convenient. Still, they have
greater energy content – per mass unit – than wood, the main source of heat before their
emergence. Like oil, they are remnants of ancient living organisms 1 initially powered,
directly or indirectly, by solar energy through photosynthesis. Collected and concentrated
along food chains, then accumulated and cooked under great pressure by geological
processes for aeons, fossil fuels obtain considerable energy density.
The challenge for collecting renewable energy is to do so in a manner so efficient and cheap
that its obvious advantages – it is inexhaustible, most often not import-dependent and does
not pollute much – fully compensate for the initial disadvantage of lesser convenience. The
relatively low density of most renewable energy flows compounds this challenge. However,
prospects for reaching competitive levels have improved dramatically in the last few years.
And the highest energy density of all renewables by land surface area is offered by direct solar
conversion into heat or electricity, and possibly fuels.
Drivers and incentives
There are many reasons for developing and deploying solar energy while fossil fuels still
dominate the global economy’s energy balance. Its ubiquity and sustainability mean that it is
among the most secure sources of energy available to any country, even in comparison to
other renewable sources of energy. It is also one of the least polluting. Along with other
renewables, it can drastically reduce energy-related GHG emissions in the next few decades
to help limit climate change. Other important drivers are the desires of people, cities and
regions to be less dependent on remote providers of energy and to hedge against fossil-fuel
price volatility.
Fossil resources are finite. However, it is difficult to predict when their scarcity will by itself
raise their prices so high that most alternatives would become less costly in the current state
of technologies. Except for the original continental-US “peak oil” prediction by King Hubbert
in 1956, all global forecasts have been proven wrong – so far. Oil shocks have been followed
by gluts, high prices by low prices. The ratio between proven oil reserves and current
production has constantly improved, from 20 years in 1948 to 46 years in 2010.
However, to maintain this record in the decades to come, oil will need to be produced in
ever more extreme environments, such as ultra-deep water and the arctic, using more
sophisticated and expensive unconventional technologies, very likely keeping costs above
USD 60 per barrel, which is twice the average level fewer than ten years ago. While shortterm
fluctuations in supply and demand and low price elasticity mean that spot prices will
continue to gyrate, rising average prices are inevitable. The era of cheap oil seems over.
Furthermore, price volatility raises valid concerns, as does a hefty dependence on too few
producing countries.
The availability of natural gas has recently been augmented by shale gas exploitation, and
there are huge and wide-spread coal reserves available to generate electricity. At less than
USD 100/bbl, gas and coal can also be transformed into liquid fuels. But there are wellknown
environmental concerns with the extraction and processing of both these fuels and
1. Except, maybe, for some methane that may be produced by abiotic phenomena.
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© OECD/IEA, 2011