Where does the low oil price leave green energy?

Where does the low oil price leave green energy?

New renewable energy projects are in danger of being stunted and overlooked if the price of oil remains at its five year low.

The cloud of uncertainty hangs heavily over the energy market at the moment. Cheaper oil is forcing governments to rethink renewable investments. Nobody knows when oil prices will rise or if they will fall even further.It makes sense that the cheaper source of fuel will be favoured by government, to help push a slow moving economy into recovery.A memorable example of this taking place was in America, when oil prices spiked in the 1970s. The then president Jimmy Carter covered the White House roof with solar panels, only for his successor Ronald Reagan to remove them all when the oil price fell.New green / renewable energy projects struggle to get UK government planning permission and investment at the best of times. As oil prices remain low the argument for renewable energy sources is drowned out by the ringing of the country’s cash registers. Inevitably, share prices for the renewable companies have been hit hard in recent months.

Where the oil and renewable markets differ


Oil is dominant in the transport market and will remain so until a mass produced reliable, greener alternative vehicle is made. If electric cars are ever going to be seen as a genuine alternative, electricity prices must consistently beat that of oil.

Electricity Generation

Wind and solar power continue to play a dominant role in the electricity market using ‘free’ sources of generation.The use of oil at power stations has been on the decline since the 1970s. It was replaced by gas, which is considered a cleaner and more secure option with supplies less vulnerable to international politics.renewable solar

Gas power

In a few parts of the world, the fall in the oil price will create a fall in the gas price - as gas remains renewables’ main competitor, a long-term dip in gas prices could threaten the greener alternatives further.The United States are producing a substantial amount of shale gas which has brought down the price of gas and is only set to continue. Unless a strong government green policy is in place, renewable energy may not get a look in.

Affordable & Greener

The manufacturing costs of renewable equipment has been steadily falling over the last 10 – 15 years. Refined manufacturing techniques, high demand and intense market competition have brought the option of using renewable energy to the average man on the street. Increased forecasting accuracy technology has added to the reliability of solar panels and wind turbines.Although setting up a new renewable energy project is met with many a government hurdle, there are subsidies in place to help the existing renewable sources, and this doesn’t look set to change.

Reaching Targets

Price and reliability aren’t the only drivers in the energy market - Britain is bound by EU targets, forcing it into greener alternatives to cut emissions. The United States has as many as 30 states mandating that power companies produce a designated proportion of their output from green sources.At the end of the year a summit on climate change is set to take place. 190 countries are set to agree targets on cutting greenhouse gases, using more renewable energy and relying less on fossil fuels. If the low price of oil remains, it may ruin what could have been a climacteric change for the planet.