The case for
renewable energy
Today, the energy industry is facing major challenges
due to a confluence of macroeconomic factors.
1.
Peak Oil
According to most estimates, we have now reached
peak oil, or if we have not, we are sure to within the
next decade. The implications of this are massive as it
means that the rate of oil production has now entered
terminal decline.
The gargantuan increase in the output of affordable
oil since the turn of the century was the driving
force behind the creation of the prosperity that
accompanied it which lead to population growth
and the modern way of life. Every indication shows
that demand for oil is set to increase considerably in
coming years.
This fact combined with dwindling oil reserves
globally, mean that the race to gain exploration and
production rights to remaining oil fields is fierce, as
evidenced by the multitude of geopolitical conflicts
occurring in places where oilfields or pipelines are
located.
2.
Climate Change
The urgent necessity to address climate change
has coincided with the issue of peak oil to create a
problem that requires globally coordinated action in
creating viable alternatives to fossil fuels.
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Cleantech Green Energy projects have therefore
become major recipients of investments in recent
years as the necessity to expedite their usage has
become paramount. Solar, Wind, Hydro and
Geothermal projects are now paving the way
forward for humanity to avoid the harshest of the
consequences that will result from the twin issues of
peak oil and climate change.
3.
The Financial Crisis
Although in the short term, the financial crisis has
resulted in a decrease in energy demands, ultimately,
the demand is set to rise considerably due to an
increase in living standards in developing countries,
China in particular.
The financial crisis has affected the energy industry
because a large number of projects have run into
financing difficulties due to the lack of liquidity in the
global banking system. There are, therefore, a lot of
companies that have viable business plans, but cannot
proceed due to a lack of capital. This is particularly
true of start-ups that would have relied on venture
capital, especially in the US.
As fossil fuels dwindle and their effect on the climate
and their accessibility becomes prohibitive, viable
Cleantech becomes increasingly necessary.