Renewable electric power is beginning to soar. The current surge of activity, which has been accelerating over the last few years, is driven by several factors: high fuel prices; ongoing improvements in renewable power technologies; and increasing political support, which grows out of concern about energy security and climate change.

Although renewable power is still generally more expensive than electricity generated from fossil fuels, the cost of renewables has declined significantly. Moreover, energy investment decisions are increasingly made not solely on an economic basis, but with environmental and sociopolitical considerations factored in as well.

It's taken a long time to get here. Three decades and $30 billion of research funded by the United States and other industrial countries have gone into renewables, along with billions more from the private sector. The effort has been marked by booms-and-busts, ups-and-downs in research funding, disappointment and long dry periods. But after languishing for many years on the fringe, renewable power is now headed into the mainstream.

Renewable power technologies generate electricity using natural regenerating resources such as sunlight, wind and waves. Traditional renewable power technologies include hydro, geothermal and biomass. Familiar to most people, hydro power involves the use of dams and running water to drive electric turbines.

Geothermal systems capture steam and hot water in geologic reservoirs to generate electricity. Biomass plants burn forest products and agricultural residues to produce steam to accomplish the same. These traditional renewable power technologies account for more than 90 percent of global renewable power capacity and are growing at a modest pace.

The menu is being widened with more exotic technologies. Concentrated solar power plants use mirrors to focus sunlight and boil a fluid to produce steam to drive a turbine. Enhanced geothermal systems produce electricity with steam made from water that is injected into the earth and heated by contact with hot rocks. Biomass gasification plants turn biomass into a gas that can be used in a combined-cycle generator. These technologies have great potential, but are still developmental.

Wind turbines and solar photovoltaic (PV) cells occupy the middle ground between the traditional renewable power sources of today and the promising technologies of tomorrow. Although both wind and solar PV have been commercially available for decades, these technologies have matured over the last thirty years due to ongoing research and accumulated know-how. They are now experiencing rapid market growth.

The big winner so far is wind. Global wind power capacity has tripled since 2000 and reached nearly 75 gigawatts (GW) by the end of 2006. This is still small-less than two percent of total world capacity-but it is enough to meet the annual electric needs of nearly 20 million U.S. households.

Germany, the United States, Spain, India and Denmark have the largest installed wind base, but in 2006, North America saw the fastest growth. In the U.S., nearly 3 GW of new wind turbines were installed last year, with overall wind capacity breaking 10 GW along the way. U.S. wind growth was fueled by a federal tax credits and state renewable portfolio standard programs, which require utilities to purchase a certain percentage of their power from renewable sources.

At the same time, continuing technological advances are being made in the design and operations of windmills.

Asia is emerging as a center of growth for both wind energy use and wind turbine manufacturing capacity. Over 3 GW of new capacity was installed in Asia in 2006, the bulk in China and India. This came as a result of policies supporting renewables, such as China's new Renewable Energy Law, which requires 5 percent of China's electric capacity to be renewables-based by 2010. India is the world's fourth-largest wind power market, thanks to sustained government support for the sector.

Solar PV is hot, too. It works by converting sunlight directly into electricity using semiconducting materials such as polysilicon. Global solar PV installations have grown by an average annual rate of 35 percent over the last five years. Germany, Japan and the U.S. are the leaders in solar PV use, combining to account for 85 percent of the global installed base of more than 6 GW. PV installations in the U.S. grew by over 20 percent last year due to the expansion of federal and state support.

Solar PV is also on the rise in Asia, particularly in China, which is positioned to emerge as one of the world's largest solar PV manufacturers and consumers over the next several years.

The surge in wind and solar PV over the last several years is creating its own obstacles. The wind industry is currently struggling with turbine component shortages. These shortages have driven up the installed cost of wind turbines from as low as $1,100 per kilowatt a few years ago to $1,500 or higher today-if you can find them.

Polysilicon demand from PV manufacturers is now greater than demand from the semiconductor business, and there is simply not enough silicon production capacity today to meet these twin sources of demand.

This has created a shortage and driven up prices. Polysilicon prices exceeded $100 per kilogram in 2006, up from $35 per kilogram a few years ago. These shortages are expected to persist until 2008, when new wind turbine component and silicon manufacturing capacity comes on line. In the meantime, technologists are seeking to find ingenious ways to innovate around these shortages.

The rapid growth in renewable power has been accompanied by an associated increase in investment. According to New Energy Finance, investment in clean energy reached $70 billion in 2006, up from $50 billion in 2005. Venture capitalists are now focusing on this sector as well. According to the Cleantech Venture Network, the North American venture capital community invested $758 million in wind and solar startups in 2006, a threefold increase from 2005.

Policy uncertainty and fossil fuel prices are among the biggest threats to renewable power in the short and medium terms. Renewable power options have yet to achieve cost parity with fossil fuel sources, although some wind projects are competitive today in favorable sites with abundant wind resources and tax incentives.

Solar PV still has a way to go, with current costs of PV-generated power approximately five times those of electricity from a natural gas plant. As a result, wind and solar must rely upon robust and stable government supports to fuel industry growth. But renewable power policies can be just as intermittent as the wind and sun themselves.

Although recent events have spurred strong support for incentives and renewable power targets, declining fossil fuel prices could make such policies less tenable. Especially important is what happens to natural gas prices and whether and when a price is put on carbon emissions from fossil fuel-fired power plants.

When considering the future prospects for renewables, perspective is important. Despite their recent rapid growth, wind and solar together account for just two percent of global power generation capacity. Even with a continuation of the strong growth seen in recent years, wind and solar are likely to account for less than five percent of global capacity a decade from now.

Moreover, there are questions as to how renewables will interface with existing technologies and infrastructure.

But by the middle of the next decade, as wind and solar PV continue to grow-and as concentrated solar power, advanced biomass and geothermal technologies become increasingly competitive-renewables can begin to make a more significant impact in global power markets. Indeed, it is likely that renewable power will continue to grow at a rapid rate, given the prospect for continued technology improvements and the likelihood that climate change and energy security will remain important concerns.