BNEF: Clean Energy Reserves On Par With Fossil Fuels

A new report by Bloomberg New Energy Finance (BNEF) funded by BP, found that US and Brazilian wind and bioenergy projects have considerable reserves, on par with fossil fuel reserves.

The report, “Renewable Reserves: Testing the Concept for the US and Brazil,” found that in Brazil, the energy resource equivalent of existing renewable projects amount to over two fifths of the country’s oil and gas reserves, in terms of expected lifetime energy output. The US has even greater oil and gas riches – equivalent to one seventh of the size of US fossil fuel project reserves.

The BNEF report is the first time a consistent approach for measuring the energy output and lifespan of renewable energy projects has been developed that is comparable to fossil fuel analysis. As a result, investors will have a more consistent way to assess the long-term value of the sector.

Before the BNEF analysis, renewable projects were typically expressed in terms of annual production capacity, and not lifetime energy contribution.

The study used a simple approach for quantifying and categorizing renewable energy as “commercial projects” and “potentially commercial projects” based on their stage of development. The concept was then applied to the wind and bioenergy sectors in the US and Brazil by analyzing project level data.  The results were converted from megawatt-hours to the equivalent of millions of barrels of oil in order to compare them to estimates for fossil fuel reserves. In the coal, oil and gas industries, resources and reserves are measured in terms of volume.

Development of a full reserve accounting methodology involves more work, according to the report. Renewable Reserves Initiative, of which BP is a member, is currently developing such a system.

To read the Bloomberg New Energy Finance report executive summary, click here

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