BNEF report more accurately compares renewable, fossil resources

By Erin Voegele | March 22, 2013

A new report published by Bloomberg New Energy Finance analyzed wind and bioenergy resources in the U.S. and Brazil using a lifetime production method, allowing for more accurate comparisons to oil and gas reserves. According to the analysis, wind and bioenergy reserves in the U.S. and Brazil are “significant compared to oil and gas.”

The report, titled “Renewable Reserves: Testing the Concept for the U.S. and Brazil,” found that the energy existing renewable energy projects in Brazil amount to two-fifths of the country’s proven oil and gas reserves. In the U.S., existing renewable energy projects are equivalent approximately one-seventh of oil and gas reserves. It is important to note that these estimates apply only to existing projects, not future renewable energy development.

“Traditional energy companies, and the financial markets, have tended to disregard the reserves inherent in wind, biomass-to-power and biofuel projects, while heavily weighting those offered by the hydrocarbon extraction industry. There has been little focus on this issue to date,” said Guy Turner, head of economics for BNEF. “However, this pioneering report shows that if you calculate the reserves embedded in renewable energy projects on the same energy basis – millions of barrels of oil equivalent – they can add up to big numbers. This work should give investors a new way of assessing the value of the sector.”

Combined, the report shows biofuels and biopower in the U.S. have a combined 6 billion barrels of oil equivalent (bboe) in existing commercial capacity. Renewable reserves from these two sources are an additional 20 bboe. In comparison, there is only 31 bboe of proven oil reserves.

In Brazil, the analysis notes that there is 6.6 bboe in commercial biofuels and biopower capacity, with an additional 22 bboe of potential commercial projects. This is significantly higher than the country’s 15 bboe of proven oil reserves.

A full copy of the report can be downloaded from the BNEF website