Low Cost of Oil Deterring Renewable Energy Projects
With the recent low hydrocarbon costs, alternative energy projects have taken a hit. After all, alternative energy is uneconomical: consequently, until unless established energy costs arise to what it costs to bring forth power from wind, sun, tide or river, the last mentioned will forever be a tomorrow-technology.
Nowadays low energy prices are consequently a fundamental dilemma for governments bidding to bring down carbon footprints, and in the case of Washington, United States of America addiction on oil imported from uncongenial sellers. This goal, reincarnated by every United States. administration for 30 years, has been systematically undercut by market forces too powerful to resist. No government can indefinitely break loose with unnaturally forcing up the price of a key industrial input, thereby decreasing its economic competitiveness. Oil, it will be recalled, was selling for a record $147 a barrel, and natural gas had spiked to $13.
Real change seemed impending, and in one of the year’s curiosities, Texas oilman T. Boone Pickens became an effective, if unlikely, advocate…
Awhile it was hard to miss him on U.S.TV channels, standing by a wind-powered genera-tor, deploring how America’s dependency on high-priced imported oil meant it was exporting $700 billion a year, to its enemies. He proposed building massive amounts of wind-powered electricity generators to displace natural gas generation, the gas then being diverted to automotive use to lessen the demand for oil. It would be, he said, a bridge to fundamental changes in national energy use.
Technically, it was perfectly feasible. Wind generators work, and there is nothing remarkable about running cars on natural gas; the bounding factor is the lack of fuelling stations, not modifying fuel-systems. Convincingly, Pickens was even soughing the project with his own money and was building a wind farm in Texas, which at 4,000 MW had a capacity one-third of Alberta’s formidable total generating inventory.
Closer to home, a promising 100 MW hydroelectric project on the Peace River faces similar obstacles. The plan has received regulatory approval, no mean feat in itself. However, a company spokesman told the Herald while he was confident the run-of-river project would be built one day, “the economic case has yet to be made.”
More than half of Alberta’s electrical power is still generated from coal; it remains the least expensive option by far. Most of the rest is based on natural gas, so that only when the price of gas forces up the price of electricity, do the high initial capital costs of wind and hydro generation look less forbidding.
Frankly, it is 1998 all over again, when energy prices slumped due to low demand and ample supply. With oil at $10, and natural gas fluctuating around $2, the alternative energy industry was set back years.
If government is to have a role in this, it is to try and keep afloat the most likely ones until their economic opportunity returns. Or to put it another way, now is not the time to kill the Chevrolet Volt.
Read more about Renewable Capacity Forecasts-1990 to 2010
Loading ...
