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Alternative energy is any energy source that is an alternative to the most popular energy source of the time. Today, it is generally used in the context of an alternative fuel source to fossil fuels. New alternative energies emerge in conjunction with new financiers- the lightbulb was financed by JP Morgan while alternatives today like solar are being financed by people via Mosaic Inc..
The nature of what constitutes an alternative energy source has changed considerably over time, as have controversies regarding energy use. Today, because of the variety of energy choices and differing goals of their advocates, defining some energy types as "alternative" is highly controversial.
In a general sense, alternative energy as it is currently conceived, is that which is produced or recovered without the undesirable consequences inherent in fossil fuel use, particularly high carbon dioxide emissions, an important factor in global warming.
|Oxford Dictionary||Energy fueled in ways that do not use up natural resources or harm the environment.|
|Princeton WordNet||Energy derived from sources that do not use up natural resources or harm the environment.|
|Responding to Climate Change 2007||Energy derived from nontraditional sources (e.g., compressed natural gas, solar, hydroelectric, wind).|
|Natural Resources Defense Council||Energy that is not popularly used and is usually environmentally sound, such as solar or wind energy (as opposed to fossil fuels).|
|Materials Management Services||Fuel sources that are other than those derived from fossil fuels. Typically used interchangeably for renewable energy. Examples include: wind, solar, biomass, wave and tidal energy.|
|Torridge District Council||Energy generated from alternatives to fossil fuel. Need not be renewable.|
Historians of economies have examined the key transitions to alternative energies and regard the transitions as pivotal in bringing about significant economic change. Prior to the shift to an alternative energy, supplies of the dominant energy type became erratic, accompanied by rapid increases in energy prices.
Historian Norman F. Cantor describes how in the late medieval period, coal was the new alternative fuel to save the society from overuse of the dominant fuel, wood:
Whale oil was the dominant form of lubrication and fuel for lamps in the early 19th century, but the depletion of the whale stocks by mid century caused whale oil prices to skyrocket setting the stage for the adoption of petroleum which was first commercialized in Pennsylvania in 1859.
In 1917, Alexander Graham Bell advocated ethanol from corn, wheat and other foods as an alternative to coal and oil, stating that the world was in measurable distance of depleting these fuels. For Bell, the problem requiring an alternative was lack of renewability of orthodox energy sources. Since the 1970s, Brazil has had an ethanol fuel program which has allowed the country to become the world's second largest producer of ethanol (after the United States) and the world's largest exporter. Brazil’s ethanol fuel program uses modern equipment and cheap sugar cane as feedstock, and the residual cane-waste (bagasse) is used to process heat and power. There are no longer light vehicles in Brazil running on pure gasoline. By the end of 2008 there were 35,000 filling stations throughout Brazil with at least one ethanol pump.
Cellulosic ethanol can be produced from a diverse array of feedstocks, and involves the use of the whole crop. This new approach should increase yields and reduce the carbon footprint because the amount of energy-intensive fertilizers and fungicides will remain the same, for a higher output of usable material. As of 2008, there are nine commercial cellulosic ethanol plants which are either operating, or under construction, in the United States.
Second-generation biofuels technologies are able to manufacture biofuels from inedible biomass and could hence prevent conversion of food into fuel."  As of July 2010, there is one commercial second-generation (2G) ethanol plant Inbicon Biomass Refinery, which is operating in Denmark.
In the 1970s, President Jimmy Carter's administration advocated coal gasification as an alternative to expensive imported oil. The program, including the Synthetic Fuels Corporation was scrapped when petroleum prices plummeted in the 1980s. The carbon footprint and environmental impact of coal gasification are both very high.
Heat pumps and Thermal energy storage are technologies which use energy sources that normally can't be obtained. Also, heat pumps have the advantage of leveraging electrical power (or in some cases mechanical or thermal power) by using it to extract additional energy from a low quality source (such as sea or lake water, the ground or the air).
Thermal storage technologies allow heat or cold to be stored for periods of time ranging from diurnal to interseasonal, and can involve storage of sensible energy (i.e. by changing the temperature of a medium) or latent energy (e.g. through phase changes of a medium (i.e. changes from solid to liquid or vice versa), such as between water and slush or ice). Energy sources can be natural (via solar-thermal collectors, or dry cooling towers used to collect winter's cold), waste energy (such as from HVAC equipment, industrial processes or power plants), or surplus energy (such as seasonally from hydropower projects or intermittently from wind farms). The Drake Landing Solar Community (Alberta, Canada) is illustrative. borehole thermal energy storage allows the community to get 97% of its year-round heat from solar collectors on the garage roofs, which most of the heat collected in summer. The storages can be insulated tanks, borehole clusters in substrates ranging from gravel to bedrock, deep aquifers, or shallow pits that are lined and insulated. Some applications require inclusion of a heat pump.
Renewable energy is generated from natural resources—such as sunlight, wind, rain, tides and geothermal heat—which are renewable (naturally replenished). When comparing the processes for producing energy, there remain several fundamental differences between renewable energy and fossil fuels. The process of producing oil, coal, or natural gas fuel is a difficult and demanding process that requires a great deal of complex equipment, physical and chemical processes. On the other hand, alternative energy can be widely produced with basic equipment and naturally basic processes. Wood, the most renewable and available alternative energy, burns the same amount of carbon it would emit if it degraded naturally.
Renewable energy sources such as biomass are sometimes regarded as an alternative to ecologically harmful fossil fuels. Renewables are not inherently alternative energies for this purpose. For example, the Netherlands, once leader in use of palm oil as a biofuel, has suspended all subsidies for palm oil due to the scientific evidence that their use "may sometimes create more environmental harm than fossil fuels". The Netherlands government and environmental groups are trying to trace the origins of imported palm oil, to certify which operations produce the oil in a responsible manner. Regarding biofuels from foodstuffs, the realization that converting the entire grain harvest of the US would only produce 16% of its auto fuel needs, and the decimation of Brazil's CO2 absorbing tropical rain forests to make way for biofuel production has made it clear that placing energy markets in competition with food markets results in higher food prices and insignificant or negative impact on energy issues such as global warming or dependence on foreign energy. Recently, alternatives to such undesirable sustainable fuels are being sought, such as commercially viable sources of cellulosic ethanol.
Carbon-neutral fuels are synthetic fuels (including methane, gasoline, diesel fuel, jet fuel or ammonia) produced by hydrogenating waste carbon dioxide recycled from power plant flue-gas emissions, recovered from automotive exhaust gas, or derived from carbonic acid in seawater. Commercial fuel synthesis companies suggest they can produce synthetic fuels for less than petroleum fuels when oil costs more than $55 per barrel. Renewable methanol (RM) is a fuel produced from hydrogen and carbon dioxide by catalytic hydrogenation where the hydrogen has been obtained from water electrolysis. It can be blended into transportation fuel or processed as a chemical feedstock.
The George Olah carbon dioxide recycling plant operated by Carbon Recycling International in Grindavík, Iceland has been producing 2 million liters of methanol transportation fuel per year from flue exhaust of the Svartsengi Power Station since 2011. It has the capacity to produce 5 million liters per year. A 250 kilowatt methane synthesis plant was constructed by the Center for Solar Energy and Hydrogen Research (ZSW) at Baden-Württemberg and the Fraunhofer Society in Germany and began operating in 2010. It is being upgraded to 10 megawatts, scheduled for completion in autumn, 2012. Audi has constructed a carbon-neutral liquefied natural gas (LNG) plant in Werlte, Germany. The plant is intended to produce transportation fuel to offset LNG used in their A3 Sportback g-tron automobiles, and can keep 2,800 metric tons of CO2 out of the environment per year at its initial capacity. Other commercial developments are taking place in Columbia, South Carolina, Camarillo, California, and Darlington, England.
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Such fuels are considered carbon-neutral because they do not result in a net increase in atmospheric greenhouse gases. To the extent that synthetic fuels displace fossil fuels, or if they are produced from waste carbon or seawater carbonic acid, and their combustion is subject to carbon capture at the flue or exhaust pipe, they result in negative carbon dioxide emission and net carbon dioxide removal from the atmosphere, and thus constitute a form of greenhouse gas remediation.
Such renewable fuels alleviate the costs and dependency issues of imported fossil fuels without requiring either electrification of the vehicle fleet or conversion to hydrogen or other fuels, enabling continued compatible and affordable vehicles. Carbon-neutral fuels offer relatively low cost energy storage, alleviating the problems of wind and solar intermittency, and they enable distribution of wind, water, and solar power through existing natural gas pipelines.
Nighttime wind power is considered the most economical form of electrical power with which to synthesize fuel, because the load curve for electricity peaks sharply during the warmest hours of the day, but wind tends to blow slightly more at night than during the day, so, the price of nighttime wind power is often much less expensive than any alternative. Germany has built a 250 kilowatt synthetic methane plant which they are scaling up to 10 megawatts.
Algae fuel is a biofuel which is derived from algae. During photosynthesis, algae and other photosynthetic organisms capture carbon dioxide and sunlight and convert it into oxygen and biomass. The benefits of algal biofuel are that it can be produced industrially, thereby obviating the use of arable land and food crops (such as soy, palm, and canola), and that it has a very high oil yield as compared to all other sources of biofuel.
Biomass briquettes are being developed in the developing world as an alternative to charcoal. The technique involves the conversion of almost any plant matter into compressed briquettes that typically have about 70% the calorific value of charcoal. There are relatively few examples of large scale briquette production. One exception is in North Kivu, in eastern Democratic Republic of Congo, where forest clearance for charcoal production is considered to be the biggest threat to Mountain Gorilla habitat. The staff of Virunga National Park have successfully trained and equipped over 3500 people to produce biomass briquettes, thereby replacing charcoal produced illegally inside the national park, and creating significant employment for people living in extreme poverty in conflict affected areas. 
Biogas digestion deals with harnessing the methane gas that is released when waste breaks down. This gas can be retrieved from garbage or sewage systems. Biogas digesters are used to process methane gas by having bacteria break down biomass in an anaerobic environment.  The methane gas that is collected and refined can be used as an energy source for various products.
2H2 + O2 → 2H2O + High Energy
High Energy + 2H2O → 2H2 + O2
This requires a high-energy input, making commercial hydrogen very inefficient. Use of a biological vector as a means to split water, and therefore produce hydrogen gas, would allow for the only energy input to be solar radiation. Biological vectors can include bacteria or more commonly algae. This process is known as biological hydrogen production. It requires the use of single celled organisms to create hydrogen gas through fermentation. Without the presence of oxygen, also known as an anaerobic environment, regular cellular respiration cannot take place and a process known as fermentation takes over. A major by-product of this process is hydrogen gas. If we could implement this on a large scale, then we could take sunlight, nutrients and water and create hydrogen gas to be used as a dense source of energy. Large-scale production has proven difficult. It was not until 1999 that we were able to even induce these anaerobic conditions by sulfur deprivation. Since the fermentation process is an evolutionary back up, turned on during stress, the cells would die after a few days. In 2000, a two-stage process was developed to take the cells in and out of anaerobic conditions and therefore keep them alive. For the last ten years, finding a way to do this on a large-scale has been the main goal of research. Careful work is being done to ensure an efficient process before large-scale production, however once a mechanism is developed, this type of production could solve our energy needs.
Floating wind farms are similar to a regular wind farm, but the difference is that they float in the middle of the ocean. Offshore wind farms can be placed in water up to 40 metres (130 ft) deep, whereas floating wind turbines can float in water up to 700 metres (2,300 ft) deep. The advantage of having a floating wind farm is to be able to harness the winds from the open ocean. Without any obstructions such as hills, trees and buildings, winds from the open ocean can reach up to speeds twice as fast as coastal areas.
As an emerging economic sector, there are limited investment opportunities in alternative energy available to the general public. The public can buy shares of alternative energy companies from various stock markets, with wildly volatile returns. The recent IPO of SolarCity demonstrates the nascent nature of this sector- within a few weeks, it already had achieved the second highest market cap within the alternative energy sector.
Investors can also choose to invest in ETFs (exchange-traded funds) that track an alternative energy index, such as the WilderHill New Energy Index. Additionally, there are a number of mutual funds, such as Calvert's Global Alternative Energy Mutual Fund  that are a bit more proactive in choosing the selected investments.
Recently, Mosaic Inc. launched an online platform allowing residents of California and New York to invest directly in solar. Investing in solar projects had previously been limited to accredited investors, such as Warren Buffett, or a small number of willing banks.
Over the last three years publicly traded alternative energy companies have been very volatile, with some 2007 returns in excess of 100%, some 2008 returns down 90% or more, and peak-to-trough returns in 2009 again over 100%. In general there are three subsegments of “alternative” energy investment: solar energy, wind energy and hybrid electric vehicles. Alternative energy sources which are renewable, free and have lower carbon emissions than what we have now are wind energy, solar energy, geothermal energy, and bio fuels. Each of these four segments involve very different technologies and investment concerns.
For example, photovoltaic solar energy is based on semiconductor processing and accordingly, benefits from steep cost reductions similar to those realized in the microprocessor industry (i.e., driven by larger scale, higher module efficiency, and improving processing technologies). PV solar energy is perhaps the only energy technology whose electricity generation cost could be reduced by half or more over the next 5 years. Better and more efficient manufacturing process and new technology such as advanced thin film solar cell is a good example of that helps to reduce industry cost.
The economics of solar PV electricity are highly dependent on silicon pricing and even companies whose technologies are based on other materials (e.g., First Solar) are impacted by the balance of supply and demand in the silicon market. In addition, because some companies sell completed solar cells on the open market (e.g., Q-Cells), this creates a low barrier to entry for companies that want to manufacture solar modules, which in turn can create an irrational pricing environment.
In contrast, because wind power has been harnessed for over 100 years, its underlying technology is relatively stable. Its economics are largely determined by siting (e.g., how hard the wind blows and the grid investment requirements) and the prices of steel (the largest component of a wind turbine) and select composites (used for the blades). Because current wind turbines are often in excess of 100 meters high, logistics and a global manufacturing platform are major sources of competitive advantage. These issues and others were explored in a research report by Sanford Bernstein. Some of its key conclusions are shown here.
Due to steadily rising gas prices in 2008 with the US national average price per gallon of regular unleaded gas rising above $4.00 at one point, there has been a steady movement towards developing higher fuel efficiency and more alternative fuel vehicles for consumers. In response, many smaller companies have rapidly increased research and development into radically different ways of powering consumer vehicles. Hybrid and battery electric vehicles are commercially available and are gaining wider industry and consumer acceptance worldwide.
For example, Nissan USA introduced the world's first mass-production Electric Vehicle "Nissan Leaf". A plug-in hybrid car, the "Chevrolet Volt" also has been produced, using an electric motor to drive the wheels, and a small four-cylinder engine to generate additional electricity.
Before alternative energy becomes main-stream there are a few crucial obstacles that it must overcome: First there must be increased understanding of how alternative energies work and why they are beneficial; secondly the availability components for these systems must increase; and lastly the pay-off time must be decreased.
For example, electric vehicles (EV) and Plug-in Hybrid Electric Vehicles (PHEV) are on the rise. These vehicles depend heavily on an effective charging infrastructure such as a smart grid infrastructure to be able to implement electricity as mainstream alternative energy for future transportations.[unreliable source?]
There are numerous organizations within the academic, federal, and commercial sectors conducting large scale advanced research in the field of alternative energy. This research spans several areas of focus across the alternative energy spectrum. Most of the research is targeted at improving efficiency and increasing overall energy yields.
Multiple federally supported research organizations have focused on alternative energy in recent years. Two of the most prominent of these labs are Sandia National Laboratories and the National Renewable Energy Laboratory (NREL), both of which are funded by the United States Department of Energy and supported by various corporate partners. Sandia has a total budget of $2.4 billion  while NREL has a budget of $375 million.
Solar heat has long been employed in passively and actively heated buildings, as well as district heating systems. Examples of the latter are the Drake Landing Solar Community is Alberta, Canada and numerous district systems in Denmark and Germany. In Europe, there are two programmes for the application of solar heat: the Solar District Heating (SDH) and the International Energy Agency's Solar Heating and Cooling (SHC) programme.
The obstacles preventing the large scale implementation of solar powered energy generation is the inefficiency of current solar technology, and the cost. Currently, photovoltaic (PV) panels only have the ability to convert around 16% of the sunlight that hits them into electricity.
Both Sandia National Laboratories and the National Renewable Energy Laboratory (NREL), have heavily funded solar research programs. The NREL solar program has a budget of around $75 million  and develops research projects in the areas of photovoltaic (PV) technology, solar thermal energy, and solar radiation. The budget for Sandia’s solar division is unknown, however it accounts for a significant percentage of the laboratory’s $2.4 billion budget.
Several academic programs have focused on solar research in recent years. The Solar Energy Research Center (SERC) at University of North Carolina (UNC) has the sole purpose of developing cost effective solar technology. In 2008, researchers at Massachusetts Institute of Technology (MIT) developed a method to store solar energy by using it to produce hydrogen fuel from water. Such research is targeted at addressing the obstacle that solar development faces of storing energy for use during nighttime hours when the sun is not shining.
In February 2012, North Carolina-based Semprius Inc., a solar development company backed by German corporation Siemens, announced that they had developed the world’s most efficient solar panel. The company claims that the prototype converts 33.9% of the sunlight that hits it to electricity, more than double the previous high-end conversion rate.
Wind energy research dates back several decades to the 1970s when NASA developed an analytical model to predict wind turbine power generation during high winds. Today, both Sandia National Laboratories and National Renewable Energy Laboratory have programs dedicated to wind research. Sandia’s laboratory focuses on the advancement of materials, aerodynamics, and sensors. The NREL wind projects are centered on improving wind plant power production, reducing their capital costs, and making wind energy more cost effective overall.
The Field Laboratory for Optimized Wind Energy (FLOWE) at Caltech was established to research alternative approaches to wind energy farming technology practices that have the potential to reduce the cost, size, and environmental impact of wind energy production.
As the primary source of biofuels in North America, many organizations are conducting research in the area of ethanol production. On the Federal level, the USDA conducts a large amount of research regarding ethanol production in the United States. Much of this research is targeted toward the effect of ethanol production on domestic food markets.
The National Renewable Energy Laboratory has conducted various ethanol research projects, mainly in the area of cellulosic ethanol. Cellulosic ethanol has many benefits over traditional corn based-ethanol. It does not take away or directly conflict with the food supply because it is produced from wood, grasses, or non-edible parts of plants. Moreover, some studies have shown cellulosic ethanol to be more cost effective and economically sustainable than corn-based ethanol. Sandia National Laboratories conducts in-house cellulosic ethanol research  and is also a member of the Joint BioEnergy Institute (JBEI), a research institute founded by the United States Department of Energy with the goal of developing cellulosic biofuels.
From 1978 to 1996, the National Renewable Energy Laboratory experimented with using algae as a biofuels source in the "Aquatic Species Program.” A self-published article by Michael Briggs, at the University of New Hampshire Biofuels Group, offers estimates for the realistic replacement of all motor vehicle fuel with biofuels by utilizing algae that have a natural oil content greater than 50%, which Briggs suggests can be grown on algae ponds at wastewater treatment plants. This oil-rich algae can then be extracted from the system and processed into biofuels, with the dried remainder further reprocessed to create ethanol.
The production of algae to harvest oil for biofuels has not yet been undertaken on a commercial scale, but feasibility studies have been conducted to arrive at the above yield estimate. In addition to its projected high yield, algaculture— unlike food crop-based biofuels — does not entail a decrease in food production, since it requires neither farmland nor fresh water. Many companies are pursuing algae bio-reactors for various purposes, including scaling up biofuels production to commercial levels.
Several groups in various sectors are conducting research on Jatropha curcas, a poisonous shrub-like tree that produces seeds considered by many to be a viable source of biofuels feedstock oil. Much of this research focuses on improving the overall per acre oil yield of Jatropha through advancements in genetics, soil science, and horticultural practices. SG Biofuels, a San Diego-based Jatropha developer, has used molecular breeding and biotechnology to produce elite hybrid seeds of Jatropha that show significant yield improvements over first generation varieties. The Center for Sustainable Energy Farming (CfSEF) is a Los Angeles-based non-profit research organization dedicated to Jatropha research in the areas of plant science, agronomy, and horticulture. Successful exploration of these disciplines is projected to increase Jatropha farm production yields by 200-300% in the next ten years.
Geothermal energy is produced by tapping into the thermal energy created and stored within the earth. It is considered sustainable because that thermal energy is constantly replenished. However, the science of geothermal energy generation is still young and developing economic viability. Several entities, such as the National Renewable Energy Laboratory  and Sandia National Laboratories  are conducting research toward the goal of establishing a proven science around geothermal energy. The International Centre for Geothermal Research (IGC), a German geosciences research organization, is largely focused on geothermal energy development research.
Over $1 billion of federal money has been spent on the research and development of hydrogen fuel in the United States. Both the National Renewable Energy Laboratory  and Sandia National Laboratories  have departments dedicated to hydrogen research.
Since the late 1980s, there have been several attempts to investigate the possibility of harvesting energy from lightning. It has been proposed that the energy contained in lightning be used to generate hydrogen from water, or to harness the energy from rapid heating of water due to lightning, or to use inductors spaced far enough away so that a safe fraction of the energy might be captured. In the summer of 2007, an alternative energy company called Alternate Energy Holdings, Inc. (AEHI) unsuccessfully tested a method for capturing the energy in lightning bolts.
The generation of alternative energy on the scale needed to replace fossil energy, in an effort to reverse global climate change, is likely to have significant negative environmental impacts. For example, biomass energy generation would have to increase 7-fold to supply current primary energy demand, and up to 40-fold by 2100 given economic and energy growth projections. Humans already appropriate 30 to 40% of all photosynthetically fixed carbon worldwide, indicating that expansion of additional biomass harvesting is likely to stress ecosystems, in some cases precipitating collapse and extinction of animal species that have been deprived of vital food sources. The total amount of energy capture by vegetation in the United States each year is around 58 quads (61.5 EJ), about half of which is already harvested as agricultural crops and forest products. The remaining biomass is needed to maintain ecosystem functions and diversity. Since annual energy use in the United States is ca. 100 quads, biomass energy could supply only a very small fraction. To supply the current worldwide energy demand solely with biomass would require more than 10% of the Earth’s land surface, which is comparable to the area use for all of world agriculture (i.e., ca. 1500 million hectares), indicating that further expansion of biomass energy generation will be difficult without precipitating an ethical conflict, given current world hunger statistics, over growing plants for biofuel versus food.
Given environmental concerns (e.g., fish migration, destruction of sensitive aquatic ecosystems, etc.) about building new dams to capture hydroelectric energy, further expansion of hydropower in the United States is unlikely. Windpower, if deployed on the large scale necessary to substitute fossil energy, is likely to face public resistance. If 100% of U.S. energy demand were to be supplied by windmills, about 80 million hectares (i.e., more than 40% of all available farmland in the United States) would have to be covered with large windmills (50m hub height and 250 to 500 m apart). It is therefore not surprising that the major environmental impact of wind power is related to land use and less to wildlife (birds, bats, etc.) mortality. Unless only a relatively small fraction of electricity is generated by windmills in remote locations, it is unlikely that the public will tolerate large windfarms given concerns about blade noise and aesthetics.
There are additional issues that may arise from switching to alternative energy. “Increasing the nation’s use of natural gas for electricity generation could result in adverse economic consequences”, especially since “natural gas currently costs about four times more than coal”. Furthermore, if there were a widespread switching to natural gas from coal some countries would become increasingly dependent on international supplies. Also, “large-scale fuel switching would require substantial investments in pipeline storage and storage capacity and new terminals to process imported natural gas”. There is also the question of whether to convert existing coal-burning plants or to construct new ones. “Burning natural gas at an existing coal plant would require a pipeline with the ability to meet the plant’s fuel supply requirements”. It would also require “expansion of interstate and intrastate pipelines to transport increased volumes of natural gas”  Overall it would be more feasible and cost-effective to construct new natural gas units than to switch coal-burning plants.