The Future of Renewable Energy Looks Bright Again
At the year-end prospects for renewable energy looked very, very bleak. Article headlines read "Green Bubble Goes 'Pop"" (WSJ), "Gathering Clouds" (The Economist), and "Financial Crisis; The End of Green?" (RES). A reading of the Wilderhill New Energy Global Innovation Index that tracks the performance of large energy stocks worldwide shows almost a 70 per cent drop between the start of 2008 and November. Below you can see for yourself the dismal daily PBW and cash flow trends in the last few months.
But this week, the renewable energy sector received two very high profile boosts to its medium and long-run viability.
The first was the World Future Energy Summit in UAE that showcased the soon-to-be Masdar City, endorsed by the WWF as an official 'One Planet Living Community'. While the content of the summit does not appear to be anything particularly new or exciting, other than perhaps the high-profile guests, the importance was seen in the global realization that the $50 million Masdar City project was real and legitimate--most people had to see it to believe it! Similarly, unlike many other industries, companies like Mustang (Texas), Solyndry (California) and Atkins (UK) were able to talk about their very real multi-million dollar contracts with Masdar developer, Mubadala Development Company.
The second was the successful passage of the energy portion of the American Recovery and Reinvestment Act in the House Energy and Commerce Committee. While President Obama has pledged $100 billion to renewable energy over the next 10 years and to double renewable energy production, most people whose job depends on these measures still felt uneasy. The bills in the House helped to substantiate Obama's promises and ease the market's fears by committing $25 billion a loan guarantee program to genuine renewable energies (not nuclear). Very soon even more US-based renewable firms will too be able to talk about winning contracts.
The cumulative effect of these developments, I think, is enormous. They show that renewable energy should not be ruled out as a medium-term business opportunity