Summary
Renewable energy projects are still going ahead in many parts of the world in spite of the reluctance of some of the high profile project developers such as T Boone Pickens to proceed with their ideas in the current climate. One wonders whether the basis of their development proposals was really simply attention seeking. There are many new developments currently being quietly commercialised right now that have the ability to make non-renewable power generation look archaic. In spite of any economic downturn, investors still need to invest to make money and it is simply a matter of identifying appropriate projects with secure futures for them to invest in. Government subsidies and support are not one of the requirements for such projects and by their existence government incentives imply that the project is not inherently viable.
Analysis
In my part of the world, New Zealand, there is no such thing as tax incentives, production credits, or feed in tariffs for any form of sustainable energy. Projects have to stand or fall on their own commercial merits. But it is an exciting and dynamic area in which to be working because the technological opportunities are immense.
Wind power projects using the latest technology are continuing to be developed and are 100% privately funded in NZ. Geothermal projects are going ahead as fast as people can develop the sites. Solar projects, both photovoltaic and thermal are being worked on with strong investment support from the electricity generating companies, based on existing expectations of power prices, but using technology that is new, innovative, and often has been developed in Australia or New Zealand. (But there is also some great USA technology). Local NZ technology for the production of bio-plastics and bio-ethanol from Salix or Miscanthus is currently at the pilot plant stage. And the first commercial Biochar plant in NZ has just been signed up, for the production of electricity and Biochar from municipal waste, forest industry residues and other organic waste products. We have no doubt this will be the first of many such plants, with the Biochar being permanently sequestered in agricultural soils and the agricultural soils being more productive with a lesser requirement for fertiliser as a result.
All of this is being done with private investment funding and there is no sign of government subsidies anywhere. With a place the size of the USA, it has to be considerably more straightforward to develop such projects on a private funding basis without any requirement for government support. Such projects do exist.
It seems to me that the problem with most North American sustainable energy developers is that they have become reliant on government handouts of one form or another and they are also extremely narrow in their thinking. They almost never look at issues holistically. With sustainable energy there are almost always positive synergies that can be engendered involving other commercial activities, often in other industries. This makes them much better investments than they appear on the surface. This is exactly the opposite of what is normally the case with fossil fuel power generation where there are negative synergies, particularly negative ecological and often social impacts. If the cost of these is taken into account as increasingly it is being forced to be, fossil fuel power generation is expensive.
It is clear therefore that no matter what has happens in the international finance markets, sustainable energy is going to be a major part of all our futures. So don't believe the headlines. Just get on with the job of investing in and developing sustainable energy projects.
