15.01.15 What comes down must go up

Posted on January 15, 2015
Archive : January 2015
Category : Energy News

Are the current low oil prices damaging the renewables sector? You'd think so, but actually renewables like onshore and offshore wind and solar power (not forgetting the lowly domestic wood burning stove) are such an important part of the UK's energy make-up these days that analysts are saying the impact is likely to be minimal. For example, it would take the oil price to drop to something like $14 a barrel from its current $48 (six months ago it was $112!) before it becomes cheaper to use oil than onshore wind to generate electricity. Realistically, it's never ever going to get that low – but equally it could just as easily quickly bounce right back up to more than $112. We just don't know – and that's really the point of renewables and their energy independence. Once you've paid for the plant you always know exactly what the cost of the wind and sun are going to be. They're free. In fact, the analysts also tell us that it is the renewable energy industry's rapid growth that is in part contributing to oil's nose dive. Less than 1% of the UK's electricity now comes from oil compared to nearly a quarter from renewable sources. So, are we down-hearted? Absolutely not.