Most of us realize that alternative energy will play an increasingly important role, for all sorts of reasons. However, one of the weak points is that the supply of solar and wind energy is not reliable enough. 

There can be little doubt that alternative energy sources will play an increasingly important role:

• Whether you believe in peak-oil or not, getting more oil out of the ground is increasingly expensive
• And the geopolitical aspects of oil are getting more nasty, most of the world reserves are in countries with unpleasant regimes, and on top of that, these are mostly nationalized and the money flow is consumed to keep regimes in place while sufficient investment to increase (or even maintain, as in the case of Venezuela) production capacity is not happening
• Renewables are a relatively clean source, with the politics of climate change being intractable, we need technological breakthroughs.

One problem with alternatives is that their supply is not reliable enough. Wind power is not useful if there is no wind, solar cells generate much less energy on a cloudy day. There are a couple of solutions for that:

1) The distributed model, producing energy small scale, at the point of use (solar cells on one’s roof, a wind turbine in the garden, that kind of stuff). It is the view of Rifkin’s “Hydrogen economy”, that book of a couple of years ago, according to which everybody would be an energy producer (but the energy would come through fuel cells, these would be in cars, and at night they would be plugged into the red).

This model is very attractive, as it doesn’t need the waste of a big centralized distribution network (and the risks associated with that, like failure and brownout). The electricity network becomes like the internet, with a multitude of supply points, much more robust than the current centralized energy production.

However, peak demands might still coincide with a local lull in energy production, some sort of back-up system needs to be in place. That back-up system is still likely to be the network, but it would be very nice if there were other possibilities, some sort of energy storage, perhaps.

2) One vision of the future is one containing renewables producing the hydrogen necessary for fuel cells to deliver the electricity and function, at least partly, as storage. Such a future would drastically reduce our need for fossil fuel (depending on the scale it would happen, of course), and also drastically cut pollution and greenhouse gases.

Unfortunately, this vision is still way off. It’s something that could happen in a couple of decades. Fuel cells are not efficient enough, and the infrastructure and critical mass of renewables is nowhere near sufficient, even if we would embark on some sort of Marshall plan for alternative energy.

That means that the near future will require everything we can throw at reducing our dependence on fossil fuel, and this provides opportunities for companies with technological solutions.

3) One could actually take advantage off the fact that renewables do not necessarily produce energy when it’s most needed, as that inevitably means that they produce surplus energy when demand is low. This surplus energy can be stored temporarily in innovative ways.

For instance, an ingeneous scheme to store energy generated by renewables (wind energy, in this case) was provided by an engineer at Sandia National Laboratories. The surplus energy compresses air.

During off-peak hours compressors pressurize underground caverns to as high as 1,200 pounds per square inch (compared to 15 psi at sea level). During peak demand hours the compressed air is used to make electricity generators more efficient.

Basically, the scheme works as a giant battery, air is compressed with the surplus energy produced by wind parks at night, and that energy is released during peak hours, leading to very significant savings.

Although we do not have an engineering background, but the principle at work here must have wider applicability. Why not let wind turbines move water into a drainage basin, and release the water during the daytime, driving turbines producing classical hydro-electrical power.

4) We are waiting for some form of storage capacity that would enable households to become completely grid independent. Batteries are not yet good enough and they’re way too expensive still (and progress is slow), but devices called ultracapacitors could do the trick.

These are way cheaper than batteries, can be charged much faster, and have many more charging cycles. The problem is that they do not yet have the energy density of batteries, which is one reason why initial plans by Honda to use them instead of batteries in a hybrid car version did not materialize.

But, things could move fast in this space. There is more technological innovation in this area going on so they could very well catch up with rechargeable batteries at some point. One company to watch in this space is Maxwell technologies (MXWL), generally seen as the leader in this field.