What is the issue?

Alternatives to fossil fuels will need to provide a lot more energy than they do today, if the world is going to meet growing needs, keep energy supplies secure, and reduce greenhouse gas emissions.  But for this to happen these sources need to get much cheaper.

Today, alternatives to fossils fuels supply approximately a fifth of global energy demand, most of this coming from nuclear and large-scale hydroelectric facilities. Biofuels, wind and solar power currently meet less than 1% of demand.

The main reason is cost. Even with today’s higher oil and gas prices, biofuels, wind and solar power still cost more to produce. Government support, operational improvements and, in some cases, further technology development is needed to make these sources competitive. Only then can they be rolled out on the massive scale needed.

We are working hard to make this happen and are optimistic. With global energy use expected to double by 2050, fossil fuels are expected to continue to provide most of our energy for many years to come.  However, Shell and the IEA both expect alternatives to expand rapidly and provide a larger share of energy demand. We expect there to be six to ten times more energy from biofuels, wind and solar in 2050 than today. 

More on Our Approach to Alternative Energy

What are the options?

The term ‘alternative energy’ embraces energy from a wide variety of sources: from wind and waves to harnessing the power of the sun:

Transport Biofuels

The term ‘biofuels’ describes transport fuels produced from crops such as sugar and oil seed or from plant residues such as straw. Biofuels can be used either 'pure' form or blended with conventional automotive fuels and used in today’s vehicles. Because the plants absorb CO2 as they grow, they can result in lower overall carbon dioxide emissions, despite the extra energy needed to harvest and process them. We are one of the largest distributors of today’s first generation biofuels and are investing in advanced biofuels that avoid competing with food production, reduce C02 much more, and have the potential to be lower cost. Dicover more on our biofuels page. 

Biomass for power

The world produces enormous amounts of organic material each year. This can be agricultural and forestry material, but also industrial and household waste. These forms of biomass can be burned in energy-for-waste facilities to generate electricity. Shell is not active in biomass energy, but we provide more information on our  biomass website.

Hydro-electricity

This is the biggest source of renewable energy, currently providing 14% of the world’s electricity. The force of moving water flowing through a turbine generates hydroelectricity. In most cases, water is stored behind a dam in a reservoir. Water pressure forces the water through an intake onto the blades of a turbine. The "run of a river" and ocean or tidal waves can also be used to generate electricity. Shell is not active in hydro-electricity, but we provide more information on our hydro-electricity page. 

Geothermal Energy

Geothermal energy is generated in many places, where heat from the earth’s core rises to the surface, for example where volcanoes and hot springs are present. This heat can also be exploited in some parts of the world by drilling down 3-5 km to reach ‘hot rocks’ with temperature at or above 200°.  Shell is no longer active in developing ‘hot rocks’ technology because we do not believe the needed cost reductions can be achieved. Read more on geothermal energy page.

Solar energy

The earth receives as much energy from sunlight in twenty days as the planet’s entire reserves of fossil fuels contain. Read more about how sunlight is converted into energy and how we are developing lower cost next generation solar technologies on our Shell Solar website.

Wind energy

Annual wind kinetic energy available is about 25 times the global annual energy production. Read more about how wind turbines work and more about Shell WindEnergy, a major wind farm developer and operator, on our Shell WindEnergy website.

→ Shell Sustainability Report 2006

Visit the online Shell Sustainability Report 2006 and discover what we say about alternative energy - opens in a new window.