Alternative Energy and Biofuel Investments
What Are Biofuels?
Biofuels are produced from living organisms or from metabolic by-products (organic or food waste products). In order to be considered a biofuel the fuel must contain over 80 percent renewable materials. It is originally derived from the photosynthesis process and can therefore often be referred to as a solar energy source.
In 2008 biofuels provided 1.8%* of the world’s transport fuel and with the EU target of ensuring 10% of petrol and diesel comes from renewable sources by 2020 this figure is set to rise dramatically. United Nations Environmental Programme 'Assessing Biofuels' 2009. ....read more.
The Mainstreaming of Alternative Fuels
What was once considered alternative is now mainstream. The advancements in technology and science are fostering a new attitude about alternates to natural gas – oil and coal – which still fuel the vast majority of our nation's energy needs. The war in Iraq and Afghanistan, the never-ending threat of terrorism, and increased competition from China and India for oil has given the renewable energy sector a shot in the arm.
And the number of investment opportunities in these renewable energy sources could be greater than the energy industry has ever seen. That's simply because the industry is spawning new companies that are producing the technology to bring about the fundamental change.
To be sure, capital investments in the renewable energy sector are projected to increase 35% in just one year, from $130 billion in 2009 to $200 billion this year, according to the research firm New Energy Finance. Some of the biggest corporations are financing new products and methods to harness energy. In addition to GE and Archer Daniels, they include:
- Siemens
- Dupont
- Mitsubishi
- Dutch Royal Shell
- Exxon Mobil, and
- Investment banker Goldman Sachs
The biofuels industry has doubled in size in the last year alone. Energy generated by the wind has increased by one-third in the past year. And the solar industry is well on its way to producing more economical photovoltaic panels that require processed silicon. In fact, solar energy appears poised for a technological breakout in the near future.
Biofuels filling up at your local gas station
and in your alternative energy investment portfolio
Biofuels are grabbing all the headlines these days. Willie Nelson began his own biofuels company when he did a little research from his home computer and found that farmers were wasting valuable resources. Bill Gates jumped into the act, plowing $84 million into Pacific Ethanol. Sun Microsystems' founder Vinod Kholsa gave it the thumbs up, as did former Fed Chairman Alan Greenspan.
So why are biofuels such a big deal? First of all, biofuel is energy that comes from biomass. That includes living organisms or their byproducts. Ethanol gets the most headlines because it can be burned in internal combustion engines.
At the moment, most ethanol comes from corn, which is processed so that part of its byproduct can be blended with petroleum diesel to create a biodiesel blend. The United States produces and consumes more ethanol fuel than any other country in the world.
