THE BLOG
07/09/2012 05:21 pm ET Updated Sep 08, 2012

Is Alternative Energy Worth It?

On May 27th and May 28th of this year, something amazing and very important happened in Germany: Half of all of Germany's energy needs were met by solar.

This happened for only a few hours on each day, but let's look at the bigger picture by asking; How much power was actually produced by solar in order to meet half of the country's energy needs? The answer is an amazing 22 gigawatts.  How much is 22 gigawatts of power? It's equivalent to the output of 20 nuclear power plants!

You might think, "So what? It was only for a couple of hours on two days." The point is that solar energy is getting more efficient and effective, and it can and will have an increasingly dramatic impact on society. 

Of course, there's more research and innovation that needs to be done to make solar energy even more efficient and effective. And there's more to do in terms of learning how to store solar power. But the point is that you can create a lot of power from solar.

Interestingly, Germany isn't the only place having some amazing results with alternative energy. In Denmark, which is one of the world's leaders in wind energy, they often produce more energy from their wind turbines than the entire country can use, so they export the excess energy. This doesn't happen every day, but it is happening.

Likewise, according to PJM Interconnection, a U.S. regional electronic transmission operator, in localized parts of the United States there are times of the day when the energy demand is low and the wind blows strongly enough that we're producing more than 100 percent of the energy we need in those geographic areas.

And during the last winter, Spain produced 21.7 percent of its energy from wind during a two-week period in February, one of the coldest months.

When we hear these types of milestones they often seem like isolated incidents. This then causes many people to believe that alternative energy isn't giving us the payoff we thought we could get. So is alternative energy worth it?

If you use the rearview mirror as a way to look at the future of alternative energy and renewable sources, then alternative energy doesn't look that great. But if you stop using the rearview mirror and start using the windshield to look at the future, then you can see that there are many more technological advances on the horizon that will make it better. That's when you see how great the future of alternative energy can be.

Granted, we still need many breakthroughs, such as how to store excess power. The fundamental technology for such advances exist, so it won't be too long before we see some amazing things in terms of storage too.

Of course, whenever we talk about alternative energy, we always hear the question, "What about petroleum and coal?" To answer this you need to remember one of the principles I have shared over the years, when looking at old and new technology the future is not about 'either/or'; it's about 'both/and'. The reality is we're going to need petroleum and clean coal and alternative energy. In various parts of the world we have over a billion people entering the lower-middle class during this decade, and they are going to have different energy needs than they had when they were at the lowest levels of the economic ladder.

The world is hungry for energy, and it's going to take more than just the traditional power sources such as petroleum, coal, and nuclear to make it all work. It's a multi-fuel future, with alternative energy playing an ever-increasing role as a strategic part of the mix.