Eric Reguly writing in today's Globe and Mail asks Has the Sun Set on Cleantech? In his words:
"There is no longer any doubt: As far as investors are concerned, the sun has set on solar power, one of the hottest growth industries of the past decade."
Of course, as far as investors are concerned, these days the sun has set on just about every sector. Mr. Reguly is one of the more sensible journalists I know of, but he rather oddly quotes Jim Buckee, formerly of Talisman Energy to support his case.
"Jim Buckee, the former CEO of Canada's Talisman Energy, thinks the clean-tech industry will revert to fringe status because it can't seem to thrive without government subsidies and because the wind doesn't always blow and the sun doesn't always shine, meaning the technologies can never fully replace coal, oil and nuclear plants.
'I think economic reality will kill the green industry,' said Mr. Buckee, who now lives in Britain and lectures on climate change."
Of course this is the same Mr. Buckee who spent 10 years telling any that would listen that climate change science was all wrong.
Reguly must have been talking with the Wall Street Journal's Keith Johnson, who also wrote today about the troubles facing the renewables sector. Gas Pains: Another Reason Clean Energy Should Hate the Downturn, in the WSJ's Environmental Capital blog makes the case that with gas prices expected to remain flat in the coming year, the drive for utilities to invest in clean renewable power will be slowed.
"The lousy economy is forcing down the price of crude oil and gasoline in spite of OPEC’s best efforts to slam on the brakes. It’s also pushing down the price of natural gas—and that could make challenging times for clean energy even tougher."
While I wholeheartedly agree the combination of low energy prices, an economic downturn and a credit crunch are going to cause a significant, and difficult, downturn, in the outlook for renewable energy, I rather doubt that the current conditions will kill the industry as Jim Buckee suggests.
Why?
Three reasons:
- We need the energy! Even the International Energy Agency agrees on this (for more detail see the press package PowerPoint).
"The International Energy Agency (IEA) has warned that massive investments are needed in the oil industry and alternative power sources if the world is to avoid a shortage of fuel. In its outlook for 2008, the agency predicts that demand from India and China will cause the price of oil to reach $US200 a barrel by 2030. The agency's chief economist, Dr Fatih Birol, has told ABC Radio's AM program that even though prices have fallen recently the era of cheap oil is over. "Once the economy recovers and the demand bounces back, we think about 2010, 2011, we may be caught by surprise and this will be a nasty surprise, which would mean that we can see prices which may be even higher than what we have seen last summer,""
- Climate Change remains an issue and even the U.S. now appears to be moving to begin acting on it.
"even as Obama transition leader John Podesta is coy about many of the details of just what the Obama administration will do, Center for American Progress President John Podesta has helpfully mapped them out in a book released yesterday"
- We need cleaner energy!
"A noxious cocktail of soot, smog and toxic chemicals is blotting out the sun, fouling the lungs of millions of people and altering weather patterns in large parts of Asia, according to a report released Thursday by the United Nations." (UN Reports Pollution Threat in Asia, NYTimes, November 13th)
The cleantech sector will no doubt suffer some significant blows in the coming year but its unlikely to disappear. We need it too much.
