The Big Energy Chill; This winter's heating bills may mark a turn to the new era of higher oil prices. But there's an upside: the business case for alternatives is warming up quickly.(alternative energy market)(Cover Story)

Byline: Brad Stone (With Emily Flynn Vencat in London and Hideko Takayama in Tokyo)

Energy prices are starting to make the rich world feel poor. The European Union recently warned that heating costs are set to rise "sharply," even in nations like France, where the state still controls the bills. In Japan, spiking prices have prompted a flood of media reports on how to cut costs (try laying newspaper under the carpets). Fuel bills are even turning Americans against their McMansions. Gina Martin of Mentor, Ohio, says she has come to hate the house she loved, a six-bedroom giant, as she faces $700-a-month heating bills this winter. "Something is very wrong with this picture," says Martin.

But the picture is changing. More countries are mandating a shift to renewables; China plans to double the alternative share of energy ouput to 15 percent by 2020. This year investment in alternatives, from solar to wind and biofuels, is expected to shatter the record of $30 billion, set last year. The alternative share of the world's energy supply, now just 4 percent, could grow sharply.

Big Oil is divided on the new boom. High prices are driving interest in ...