Oil prices are nudging closer to $50 a barrel. That’s nearly an 80% rally since prices hit bottom in January 2016. The recent glut of oil has been eased slightly by increasing demand and production disruptions, from wildfires in Canada to militant attacks in Nigeria. However, analysts don’t see oil returning to $100 anytime soon.
Will the rise in oil prices be enough to make renewable energy competitive again? If oil prices stay low, are investment and innovation in sustainable energy technologies at risk? What happens if high oil prices aren’t coming back? Will we cause catastrophic damage to Earth’s climate well before we run out of cheap oil?
Curious to know more about renewables and CO2 emissions in Europe? We’ve put together some facts and figures in the infographic below (click for a bigger version).
We had a comment sent in from Matej, arguing that cheap oil is slowing down progress towards a sustainable energy mix. He believes it’s having a negative impact on innovation, delaying investment in technologies that could make renewables more competitive.
To get a response, we spoke to Clare Wenner, Head of Renewable Transport at the Renewable Energy Association. How would she respond to Matej?
Renewables certainly find it difficult to compete when oil prices are as low as they have been in 2016, and it’s true that there will be a balancing act between renewables and continued production of oil and fossil gas. However, I don’t think that that will always be the case. Certainly in 2014, oil prices were higher than the prices for bio-ethanol, for example. And consumers weren’t able to take advantage of that cheaper source of energy, so I think there are anomalies.
Certainly the economics are absolutely fundamental, and that’s why those of us who believe we have to combat climate change really have to be a lot more coordinated and firm about saying that the options for renewables have to be explored and go on being explored. The more renewables we have, the cheaper they become. And that’s been very much the case, for example, with wind and solar. So, to just simply say this new technology can’t compete is very defeatist, and it’s anyway not the case. Both because oil will become more expensive, and because renewables will become cheaper…
We also had a comment from Susie, who wonders about the EU’s progress on green energy. Is Europe on course to meet its 2020 renewables target (i.e. 20% of energy being produced by renewables by the year 2020)?
I think, perhaps, on balance, that the whole of the EU will meet its renewable energy target. I think there is a big question mark, however, whether transport will be able to meet its 10% target, and will be able to contribute in the way that it was envisioned at the outset. So, I think the power sector is, generally speaking, fine; heat is probably okay; but I do think there’s a big question mark over transport.
Can renewables compete with cheap oil? Or does sustainable energy need higher oil prices to encourage investment and innovation? Let us know your thoughts and comments in the form below, and we’ll take them to policymakers and experts for their reactions!
IMAGE CREDITS: CC / Flickr – nate2b
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