Next year, the costs and efficiencies of renewable technologies will dramatically improve, making their long-term outlook much stronger.  For example, the economics of wind-generated electricity promise to be more favorable thanks to larger rotors and better-engineered blades. Wind turbines now generate electricity at about 5 to 7 cents per kilowatt-hour (kWh)--as opposed to 25 to 30 cents per kWh in the late '70s. That's very competitive with fossil fuel power-generation costs, which are about 4 to 6 cents per kWh, according to the International Energy Agency, a Paris-based organization comprised of 26 member countries (whose governments are committed to taking joint measures to meet oil-supply emergencies). Not far behind are generation costs of photovoltaic (solar) devices, which over the past 20 years have fallen tenfold and now hover at 18 to 20 cents per kWh. Though this is more than three times the usual cost of electricity generation, photovoltaic energy is very competitive during peak consumption times when traditional electricity supplies are limited and prices soar. This summer in California, for example, spot prices for electricity were as high as 51 cents per kWh.

Despite this promise, renewable energy sources account for only about 1 percent of the global energy market. That's expected to change over the next five years as wind- and solar-energy use grows to 25 percent per year in some regions of the world. The increased use of renewable energy sources is also expected to help developed countries meet the goals for the 1997 Kyoto Protocol, which set limits on worldwide emissions of greenhouse gases.

Globally, $10 trillion to $15 trillion will be invested in a variety of renewable energy projects over the next 20 years, according to an April report from the United Nations Environment Programme. Importantly, these technologies could energize local development and help developing nations avoid the steep costs of building a traditional power grid. Demand for alternative energy technologies is especially strong in places like rural China, where large wind farms are being built and the use of solar panels is growing. Africa and Inner Mongolia have also made significant investments in wind and solar technologies to bring electricity to homes and to power sewing machines and electric well pumps in villages. Two years ago, South Africa announced plans to extend solar-based electricity to rural schools and health clinics, and it has targeted the installation of solar-powered systems to 350,000 homes. And in India, an estimated 1.2 gigawatts of wind turbine capacity was installed in 2000. The reason for these investments: electricity needs to be in place before economic growth can occur.

The renewable appetite is also strong in Europe. The European Commission plans to double the proportion of renewable energy used from 6 percent to 12 percent of Europe's consumption by 2010. The European Wind Energy Association plans to grow its capacity 40 percent per year with a 2010 target of 60 gigawatts of capacity, enough to power 10 to 20 percent of all of Europe's energy needs.

Meanwhile in the United States, the current enthusiasm for renewable energy technologies carries with it a sense of d�j� vu. In the aftermath of the energy crisis of 1973, the U.S. government and private companies took a hard look at America's dependence on foreign oil and its impact on the environment. The country became the world's leader in the development of renewable energy from the '70s to the '90s--even spending as much as $1.5 billion a year in the early '80s. But interest waned as foreign oil prices fell.

Now, new fears of disruptions in oil supplies from the Middle East and the falling costs of renewables are powerful catalysts. In 2002, the United States will likely increase its budget for renewable energy development from this year's $200 million. A future where fuel cells, wind power, and solar energy supplant oil and coal in developed and developing nations is at hand.