Low oil price not threatening renewable energy investments
Despite the current low oil prices, renewables across the globe will receive US$250 billion in investment according to the International Energy Agency in the next decade.
The constant decrease in price of fossil fuels that the world has been lately experimenting has raised concerns regarding the “cooling” down effect that they might have to renewable energy development. The South China Morning Post says otherwise since,”Green energy will receive almost 60 per cent of the US$5 trillion expected to be invested in new power plants over the next decade, according to the International Energy Agency. That is because the United States, China, Japan and the European Union are all pushing for global limits on greenhouse gases. The effort has resulted in local and national incentive policies for renewable power around the world, effectively insulating the industry from market fluctuations such as the almost 40 per cent plunge in crude oil since June. Developers are on track to invest more than US$250 billion this year on wind, solar, geothermal and other types of renewable power, the first gains in two years. “Renewables are supported by policies, and that is not something that will be amended quickly just because oil prices fall,” said Takashi Hongo, a senior fellow at Mitsui Global Strategic Studies Institute, which advises the Japanese government on energy policy.”
This is definitively good news for the industry but another point is raised in the article, were the longer these price falls extend, the more likely will countries put renewables into question.
Regardless, tougher and more comprehensive environmental protection rules are signed and enforced which will lead to a higher adoption of renewables across the globe.
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Source: South China Morning Post