It must be odd to be in the renewable energy business at the tail-end of 2012.
In the US, presidential hopeful Mitt Romney wants to kill off wind subsidies. In Scotland, Donald Trump has shelved plans for a hotel because he says its views will be wrecked by “industrial monstrosities” of bird-butchering wind turbines. In Canada, authorities are studying claims that living near a wind farm can give you anything from high blood pressure to headaches. Worldwide, the blogosphere pulses with indignation about solar subsidies.
But the peculiar thing about all this wrath is how rarely it is directed at what is becoming a remarkably destructive aspect of renewable energy: its ability to drive down wholesale electricity prices.
For anyone rendered slack-jawed by the latest monthly power bill, this might sound like good news. But it is not quite that simple, especially for companies that derive a lot of profits from generating power via conventional fossil fuels such as coal or gas.
Some utilities risk having as much as half their power generation profits wiped out by 2020 as renewables reshape energy markets say analysts at UBS, which recently downgraded RWE, the German power company, EDF of France, and the Czech Republic’s CEZ Group as a result. Other effects are only starting to be understood as the growth of renewable power soars.