4.4 Mitigation costs and potentials of energy supply

Assessing future costs and potentials across the range of energy-supply options is challenging. It is linked to the uncertainties of political support initiatives, technological development, future energy and carbon prices, the level of private and public investment, the rate of technology transfer and public acceptance, experience learning and capacity building and future levels of subsidies and support mechanisms. Just one such example of the complexity of determining the cost, potential and period before commercial delivery of a technology is the hydrogen economy. It encompasses all these uncertainties leading to considerable debate on its future technical and economic potential, and indeed whether a hydrogen economy will ever become feasible at all, and if so, when (USCCTP, 2005; IEA, 2003b).

Bioenergy also exemplifies the difficulties when analysing current costs and potentials for a technology as it is based on a broad range of energy sources, geographic locations, technologies, markets and biomass-production systems. In addition, future projections are largely dependent upon RD&D success and economies of plant scale. Bioethanol from ligno-cellulose, for example, has been researched for over three decades with little commercial success to date. So there can be little certainty over the timing of future successes despite the recent advances of several novel biotechnology applications. Energy technological learning is nevertheless an established fact (WEC, 2001; Johansson, 2004; Section 2.7) and gives some confidence in projections for future market penetration.