Renewable Energy

Renewable Energy

Introduction

Over the past decade, governments around the world threw money at renewable power. Private investors followed, hoping to cash in on what looked like an imminent epic shift in the way the world produced electricity. Much of that enthusiasm has now fizzled. Natural gas prices have plummeted in the US, the result of technology that has unlocked vast supplies of a fuel that is cleaner than coal. The global recession has pushed global warming far down the political agenda and led poor countries to pull back renewable energy subsidies. Governments will have to redesign their renewable power policies to focus ruthlessly on slashing costs. Renewable power producers will also have to act more strategically, picking the technologies they deploy, and the locations where they place them, in ways that make more economic sense. Taking wind and solar power mainstream will also require better ways to get it to consumers when they need it, since the times when wind turbines and solar panels generate the most electricity are not necessarily the times when people use electricity most (Goffman, 2008).

Discussion

Over the past decade, governments around the world threw money at renewable power. Private investors followed, hoping to cash in on what looked like an imminent epic shift in the way the world produced electricity. It all seemed intoxicating and revolutionary a way to boost jobs, temper fossil fuel prices, and curb global warming, while making new fortunes in the process.

Much of that enthusiasm has now ended. Natural gas prices have plummeted in the United States, the result of technology that has unlocked vast supplies of a fuel that is cleaner than coal. The global recession has nudged global warming far down the political agenda and led cash strapped countries to yank back renewable energy subsidies. And some big government bets on renewable power have gone bad, most spectacularly on Solyndra, the California solar panel maker that received a $535 million loan guarantee from the U.S. Department of Energy before going bankrupt last fall (Energy Kids, 2012).

Critics of taxpayer sponsored investment in renewable energy point to Solyndra as an example of how misguided the push for solar and wind power has become. Indeed, the drive has been sloppy, failing to derive the most of results. In the United States, the government has ramped up and down support for renewable power, confusing investors and inhibiting the technologies' development. It has also structured its subsidies in inefficient ways. In Europe, where support for renewable power has been more sustained, governments are being too generous. And in China, the new epicenter of the global renewable power push, a national drive to build up indigenous wind and solar companies has encouraged U.S. allegations of trade violations and has done little to curb China's reliance on fossil fuels.

But these tests don't justify putting an end to the pursuit of renewable power rather they justify reforming it. It is important to focus harder for renewable power, but it is also important to do this in a smarter way. Recent advances have made wind and solar power more competitive than ...