By Tom Vulcan
There has been much discussion recently both of the "green" items on the agenda at the G20 summit in London, and the place of clean energy projects in the current U.S. administration's economic stimulus package.

In addition to a budget that calls for some $15 billion each year for renewable energy programs, this package includes tax breaks and grants of $56 billion over the next 10 years for clean energy projects.

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When the government has gotten around to organizing how these funds are actually going to be disbursed (the funds distributed to date have been minimal), the financial benefits available for those companies operating in the "space" could be quite significant.

What Is Clean Energy?

Clean energy is most often considered to be synonymous with "renewable energy," "green power" and "alternative energy." More often than not, it refers to electricity generated using the wind, sun, water, etc.

It is, however, also frequently used in the context of CO2-mitigated traditional electricity generation using nonrenewable resources (e.g., coal or oil), the use of such technology as advanced batteries for transportation purposes (e.g., in electrically powered cars) and even conventional nuclear power generation.

Further "down the line," as it were, the expression "clean energy" is often used when talking about increasing the efficiency of existing, everyday items; for example, electric light bulbs – of which more later.

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Renewable energy today comes from a variety of sources. These include:

Biomass: The organic matter in plants and trees. It can be used to make such products as ethanol and biodiesel.
Geothermal: Energy derived from the Earth's resources of internal heat, in the form of either hot water or steam, or, indeed, hot rocks. These can be used both to generate electricity and to heat and cool buildings.
Hydrogen: Most commonly associated with fuel cells. And the only by-product is water vapor!
Hydropower: Uses the kinetic energy of flowing water to generate electricity.
Ocean: While the tides and waves are those sources of power most frequently associated with the oceans, among other angles, research continues to try to exploit the temperature gradient that often exists as you descend through to an ocean's depths.
Solar: Power derived from harnessing the sun's radiant energy in any of a number of ways. These include photovoltaic systems, passive heating and lighting, and systems to focus the sun's rays to create steam.
Wind: Turbines, essentially windmills, convert the wind's kinetic energy to electricity.

The Technologies

A number of different technologies have been, and continue to be developed to exploit energy derived from these seven different sources. And there's no telling what further sources may possibly be added in the future (e.g., the holy grail: fusion energy).
Further technologies continue to be developed, too, not only to help "clean up" conventional fossil-fuel-burning power generation, but also to improve the efficiency of battery-powered propulsion in road vehicles.

Trying to determine just which of these technologies will eventually be winners is extraordinarily difficult, if not impossible. Any investor should be aware of two fundamental considerations when looking at clean energy technology.

First: While some technologies may be not just viable, but even very successful, in an economic environment replete with subsidies and other government (or state) incentives, should these be removed, the narrative can be very different. Second: Legislation is continually being introduced, at all levels, that will determine not only what funding is available for clean energy initiatives, but also, just as importantly, which clean energy technologies are, as it were, "flavor of the month."

A somewhat extreme example of this last is the fact that, in Europe, under an EU directive, standard incandescent electric lamps will be phased out by 2012. Discussions of a ban on incandescent light bulbs have also taken place, amongst other places in Canada and Australia, and Ireland has banned the bulbs since the start of this year. In the U.S., according to the New York Times, the Energy Act, signed into law in 2007, will "render most incandescent bulbs unmarketable by 2014."

Of all the actual clean energy resources available, probably the most widely available are the sun and the wind. It is safe to say that, unless you are skulking in a tropical rainforest or dug in under the ice at the South Pole, you'll experience (at some time) sunshine and wind pretty much anywhere around the world. Other clean energy resources, however, are, by their very nature, location specific, e.g., biomass, ocean and hydropower. Whether, at any location, the available renewable resources can be harnessed efficiently and viably (economically) is another matter altogether.
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