It was all very small when it began. A couple liters of biodiesel here, a small wind turbine there. Maybe a few solar panels with an output just enough to run a pocket calculator.

But then April 1, 2000 came along. Chancellor Gerhard Schröder's government had been in office a mere year and a half. But on that day, a law came into power that was to completely alter the German energy market. The rather unwieldy name: Law for the Promotion of Renewable Energies -- EEG for short. Later, the law regulating biofuel quotas was added, as was another measure governing the use of geothermal power. The aim was clear. The fuel, electricity and heating markets were to be revolutionized.

And the new laws were effective. High government subsidies massively increased the demand for wind turbines and solar panels. Germany was soon transformed into an ecologist's paradise.

In the 1990s, the energy market was simple. Germans got their power from coal-fired power plants or nuclear facilities. They filled up their tanks with conventional fuel and heated their homes with oil or natural gas. But the last decade has seen a radical shift. Green power became popular, drivers switched to biodiesel and homeowners changed over to wood pellet heating.

Coal and nuclear power still dominate the market, as do oil and gas. But the tectonic shift has begun: Each year, the share of renewables rises. Indeed, electricity from renewable energy sources already supplies 15 percent of Germany's electricity needs. In some German states, wind power supplies more than 35 percent.

Yet, far from all questions surrounding renewables have been answered. When, for example, will renewable energy sources be able to survive without subsidies? Will they continue to grow? Will we be able to develop a way to store energy generated from the wind and sun? It seems clear that, whereas some energy sources will prosper, others are destined for failure.

SPIEGEL ONLINE takes a look at the individual forms of renewable energy, examines the technology behind them and examines their chances on the open market.

Wind Power

The past 10 years have been the decade of wind power. At the end of 1999, wind turbines generated 2,875 megawatts. By the end of 2008, that number had skyrocketed to 23,903.

The Principle

Wind is everywhere. Temperature differences in our atmosphere set gigantic masses of air in motion and the energy involved in those shifts can easily be captured with the help of rotor blades. Using the principle of electromagnetic induction, a generator can transform the circular motion of those rotors into electricity.

The rotors of the largest wind power facilities now reach a diameter of over 100 meters, and they are set on top of 200-meter-tall towers. Indeed, the height of the towers greatly increases efficiency because it allows turbines to take advantage of higher-speed and more consistent winds. Should these facilities achieve 40 percent efficiency, a single wind turbine can generate between two and five megawatts -- enough to supply electricity to 4,000 homes. One German company has manufactured a wind turbine that supplies six megawatts.

The Market

Germany now gets more of its energy from wind power than from hydro-electric sources. Last year, wind power supplied Germany with 7 percent of its electricity. In states like Saxony-Anhalt, Schleswig-Holstein and Mecklenburg-Western Pomerania, wind power's share was well over 30 percent. "State subsidies have really worked when it comes to wind power," Hubertus Bardt, an expert with the German Economic Institute in Cologne, told SPIEGEL ONLINE.

Wind power is relatively cheap. The EEG mandates that energy companies buy wind power for 9 cents per kilowatt-hour -- not much more than the price for conventional power on the electricity markets. "Wind power is the most economical of the renewable energies," says Bardt.

But the market is not immune. Higher steel prices have meant that the EEG has had to be altered to increase the amount paid for each kilowatt-hour of wind energy. "The fall in prices we have seen during the last decade has been unfortunately reversed," says Bardt.

The Potential

In one study, scientists calculated that wind power could produce many times the amount of energy needed globally. In theory, wind power could produce up to 1.3 million terawatt hours of energy per year -- against a global energy consumption of just 15,666 terawatt hours, according to the International Energy Agency. That's just 1.2 percent of the calculated potential of wind energy.

Experts believe that the wind energy branch is going to grow dramatically in the future -- primarily offshore. Offshore wind parks have the dual advantage that they take advantage of stronger sea winds and are not as disruptive as they are on land.

Offshore wind parks are generally several kilometres off the coast. The gigantic facilities are anchored to the sea floor, with large parks containing up to 100 generators. A high-tension cable can efficiently deliver the energy generated over long distances.

The German government foresees a capacity of 20,000 to 30,000 megawatts from wind parks in the North and Baltic Seas by 2030. Such an output would represent the equivalent of 20 to 30 nuclear power plants, assuming an optimal wind supply. The first of those parks, known as Alpha Ventus, located 45 kilometers off the coast near Borkum, has recently gone online. Its 12 wind turbines produce 60 megawatts -- enough to power 50,000 households.

On land, things don't look nearly as rosy. "In Germany, those areas with sufficient wind have already been built up," says Bardt. In addition, numerous citizens' groups have ramped up their protests to wind parks in recent years. One potential solution to this problem is known as "re-powering" -- a term meaning little more than re-equipping existing onshore wind parks with newer, more efficient turbines. The German Wind Energy Association thinks that re-powering has a huge potential and predicts that by 2020, a quarter of German electricity needs will be met with wind power.

But do wind parks have a negative effect on wildlife? While research by the nature conservancy group NABU has found that the number of birds killed by wind power generators is relatively small compared to those killed by automobile traffic, there is little data for offshore wind parks. A 2003 study by Germany's Federal Environment Agency looked at the risks of offshore parks for fish and birds, but was unable to produce reliable conclusions.

Wind power, though, has a potentially bigger problem: It is unreliable. The wind doesn't always blow, and when it does, it sometimes blows too hard for the facilities to harness it. Furthermore, there is as yet no good way to store excess energy produced by wind power, meaning that if strong winds are blowing at a time when consumers are using little electricity, much is wasted.

In addition, the wind blows stronger in northern Germany whereas the most energy is consumed in the west and the south of the country. New power lines stretching across the country are necessary -- which will drive up costs for the consumer. As a result, wind energy will remain just one element in Germany's energy mix. The hope is that long term the share will grow. Prices will go down as technology improves, and subsidies may soon be unnecessary. "In the next decade, wind energy will likely become economical," says Bardt.

Photovoltaic

The Principle

In solar cells, the energy of the sun's rays are transformed directly into electricity. The advantage is that even small solar cells can generate power on a localized level. Every roof is a potential mini-power plant and can produce electricity even in a country like Germany, which is not exactly known for its sunshine. Larger facilities, however, only make sense in sunnier climates, for example in deserts where there is plenty of space for the panels to be installed.

The Market

Solar power plays a much smaller role in Germany energy mix than wind power does. Its share of the country's energy needs is lower than 1 percent and the energy-conversion efficiency of mass-produced solar panels is between 16 and 20 percent.

Nevertheless, Germans spend a lot of money on solar power. The installation of photovoltaic facilities generated a turnover of €6.2 billion in 2008 against just €2.3 billion spent on new -- and much more efficient -- wind power facilities.

The difference also makes itself noticeable in the price per kilowatt hour of power generated. The EEG mandates that power generated by solar panels be purchased at 43 cents per kilowatt hour, against just 9 cents for wind power. "From an economic standpoint, photovoltaic is much less attractive," says Bardt.

But generous subsidies have resulted in marked growth in the photovoltaic market. From 2001 to 2008, the production of solar power has risen from 76 gigawatt-hours to 4,300 gigawatt-hours. Solar panel manufacturers in Germany, however, have profited relatively little from the growth, with producers in China and elsewhere flooding the market.

The Potential

Solar power has huge potential. The sun, after all, is free, and there are plenty of roofs to put panels on. The problem is the costs. The facilities already installed will require an additional €27 billion for maintenance, and each year, new panels are installed.

There is plenty of silicon available, the resource necessary in the production of solar panels, but production is difficult. That means depending on the type of panel and the amount of sun in the region where it is installed, it takes between four and nine years before it produces as much energy as was used in making it. Subsidies, on the other hand, mean that the facilities have generally paid for themselves after just four years. The life span of a solar cell is between 30 and 40 years.

The situation, of course, would be dramatically improved if the solar modules could be produced more cheaply. And recent years have shown that the process is underway. Just last year, prices fell by 25 percent, a trend driven primarily by Chinese manufacturers.

Should solar power one day become as cheap as conventional electricity, it would be nothing short of a revolution. Consumers would no longer have any reason not to buy solar panels and demand would explode -- meaning that solar power would begin to play a substantial role on the energy market. But most experts believe that it will be decades before such a process takes hold.

Solar-Thermal Energy

The Principle

It seems so simple: mirrors collect and concentrate the sun's rays to heat water. The resulting steam is then used to power turbines. The technology is uncomplicated. The difficulties such as those inherent in nuclear energy and CO2 sequestration don't exist, and it has been used for decades. The first solar thermal plant was built in the 1980s in California. But when oil prices fell once again, solar thermal energy slipped into the background. Now with climate change on everyone's agenda, it is experiencing a renaissance.

The jewel of that renaissance is the Desertec project, a concept developed by a group of scientists that envisions gigantic power plants in the Sahara Desert that could, in theory, provide enough electricity for the entire world. High tension lines are to transport the power across the Mediterranean to Europe.

The Market

Solar thermal power plants for the production of electricity make little sense in Central Europe, where there is simply not enough sun. Large facilities would, however, make sense in regions such as southern Spain, North Africa or the Middle East.

Despite having been around for decades, the technology, with an energy-conversion efficiency rating of 15 to 20 percent, is not yet as efficient as coal or nuclear. A kilowatt hour of solar thermal electricity costs between 14 and 18 cents. But improvement is in sight, with experts predicting that technological improvements will sink the cost to below 10 cents per kilowatt hour by 2020.

When it comes to heating, however, the situation looks different. Solar collectors like those used in solar thermal plants can be used to heat water which can in turn easily be used to heat homes. Still, solar energy remains something of a niche product on the German heating market, while oil and natural gas remain dominant.

But solar thermal plays a subservient role even within the renewable energy sector of the German heating market. In 2008, it was responsible for 4,131 gigawatt hours of heating energy whereas biomass -- primarily in the form of wood pellets -- accounted for 97,108 gigawatt hours.

The Potential

When it comes to heating homes, solar thermal facilities remain too expensive to make much headway. Should costs ever drop far enough to make them affordable without state subsidies, demand will surely rise.

But even then, solar thermal can never completely replace more conventional heating systems -- after all, one would like to have hot water at night as well. Experts envision a home heating model that uses wood pellet heating for day-to-day needs, augmented by solar thermal to cut costs.

Large solar thermal power plants in sunny countries, on the other hand, have huge potential. Should Desertec in the Sahara Desert ever become reality, for example, then huge quantities of power could be generated by solar thermal technology. And for the moment, it looks like progress is being made. In October, a number of industrial and financial heavyweights joined forces to create the Desertec Industrial Initiative. The goal: by 2050, the project hopes to supply 15 percent of Europe's energy needs. The costs, however, are high. The power plant itself will cost some €350 billion with an additional €50 required for a new and efficient grid.

Hydroelectric Power

The Principle

Flowing water, like wind, contains enormous quantities of energy which can be transformed into electricity with the help of turbines. The problem, however, is that in most cases, the water must be dammed, which creates disadvantages for both humans and the natural world.

The Market

Around 5 percent of Germany's power comes from hydroelectric facilities. The biggest advantage is that the process produces reliable energy around the clock. As opposed to wind and sun energy, hydroelectric power does not vary with the weather nor is storage a problem. Furthermore, it is relatively cheap. Most power plants need no state subsidies to be able to compete on the open market. Many, in fact, existed long before the EEG came into existence.

The Potential

In Germany, there is virtually no room for the construction of further hydroelectric power facilities. Almost all German rivers have been dammed and have been for quite some time. But outside Germany's borders, there is still room for improvement. Huge hydroelectric power plants are currently under construction around the world, many of them in developing countries. Many of these projects, however, have a questionable reputation, as immense new dams flood huge land areas. Often entire towns disappear under the waves, and their residents are forced to move elsewhere. Environmental standards are likewise often ignored.

Bioenergy

The Principal

Burning wood for heat, just like in the good old days, seems particularly attractive in times of high oil prices. Wood pellet heating has developed such that it is now just as comfortable as oil or gas. Indeed, the days of stoking your own fire are a thing of the past, now it is fully automatic. Still, the units need to be cleaned and serviced every few months.

Bio-energy can also be used to power automobiles. Biodiesel or ethanol has the advantage that, when burned, the fuels only release as much CO2 as the plants used to make them absorbed out of the atmosphere when growing. A perfect cycle that doesn't harm the climate one bit. That, at least, is the theory. When it comes to biofuels, practice often looks quite a bit different, particularly given the fact that forest land is often cleared to plant crops used in the production of biofuels.

The production of wood pellets, however, has in general been more sustainable. For the most part they are produced using wood waste that would otherwise be simply thrown away. But wood pellet heating also releases fine dust particles that can lead to respiratory disease.

The Market

Biomass is one of the most important renewable energies in Germany. Biogenic combustibles (usually wood) and fuels (biodiesel for example), biogas and combustible bio-waste make up some 73 percent of all renewable energy used in Germany. Wind power, by comparison, provides 14.9 percent.

The greatest advantage is that biomass is essentially stored energy. When one wants to set that energy free is a matter of choice -- as opposed to wind or solar energy. Plus, biomass plays a role in all energy markets: wood can be used for heating; bio-fuel can be used in cars; and biogas can be used to generate electricity. A further advantage is that they reduce dependence on foreign sources of energy.

The Potential

Recently, bio-energy has come in for intense criticism. The central question is whether the burning of biomass is really as environmentally friendly as it appears at first.

Forestry worker and author Peter Wohlleben has pointed out that it is not just the trees in forests that function as carbon sinks. The ground too absorbs CO2. Which means that when trees rot, not all of the CO2 they contain reaches the atmosphere -- some of it remains in the ground. In other words, when one burns wood, more CO2 is released than otherwise would have been. Furthermore, increasingly all parts of trees are being used, from the roots to the very tips of the branches -- a process which robs the forest floor of vital minerals.

The production of bio-fuels is perhaps even more problematic. Crops needed to produce bio-fuels require space -- space that can also be used for the production of food. A moral dilemma quickly becomes apparent: Can one justify using corn for the production of fuel when others need that corn for food? The early years of the bio-fuel boom were characterized by euphoria. That enthusiasm, however, has largely waned.

An additional problem is represented by the sheer amounts of space necessary to slake the thirst for energy. Were Germany to meet all of its gasoline and diesel needs with biofuels, it would require cropland greater than the area of the entire country. The same is true were all Germans to heat their homes with wood pellets. Imports would be necessary -- which would quickly destroy the ecological advantage of wood pellet heating. The CO2 balance of the process is strongly linked to how far one must transport the wood. In addition, were wood from rain forests to be used in the production of wood pellets instead of carefully managed forests, the method would contribute to further deforestation and destruction of one of the world's most important carbon sinks.

The CO2 balance of biofuels is also worse than it appears at first glance. Indeed, a recent study conducted in the US found that biofuels actually do more damage than traditional fossil fuels. The reason: in order to meet the growing demand, forests must be chopped down, resulting in a disappearance of CO2 sinks. Furthermore, the fertilization of biofuel crops results in the release of N20 into the atmosphere, a greenhouse gas that is much more damaging than CO2. Plus, the entire process is inefficient. Energy is lost in the process of transforming plants into liquid fuel. It would be much better just to burn the plants and use the resulting heat to heat homes or to power turbines, thus producing electricity that could be used to power electric cars.

Scientists, though, are still reluctant to abandon the dream of biofuels. Second generation biofuels are to be produced by plants that cannot also be used for food and which can grow in poorer soil -- where food crops can't. Plants such as the oil-rich Central American native Jatropha are seen as a possible solution as is agricultural waste. Algae may also play a larger role in the future of biofuels.

But technological problems remain. Transforming agricultural waste into biofuel is a complicated procedure. The cell walls of plants are made of cellulose. These molecules must first be broken down before fungus or bacteria can produce alcohol. One can either use chemicals in the process, or micro-organisms. But finding the right "superbug" to do the job has proven difficult -- standard yeast can make no progress against cellulose. So far, the low yields obtained from the process make it unlikely that this type of bio-fuel will be able to compete anytime in the near future.

Geothermal Power

The Principle

Our Earth is a gigantic heater. The core of our planet, 6,000 kilometers below the surface, is several thousand degrees Celsius -- an inheritance from the time when the Earth came into being. In addition, radioactive processes maintain that temperature. One can tap into that energy by drilling deep into the Earth's crust. In some places, one must drill up to five kilometers deep, but in others, the heat is much closer to the surface.