US crude oil futures reached a record US$111 a barrel on March 13, while thermal coal prices exceeded $116 a tonne at Australia’s Newcastle port, the benchmark for Asia’s market. Spot liquefied natural gas cargoes recently sold into Japan for as high as US$20 per million BTU, more than twice the usual price.
The buoyant mood has spilled over into the renewable energy sector as panicked governments, companies and investors pile heavily into ethanol, biodiesel, biomass, biofuels, solar, wind and hydro power projects.
Despite the hype and the early promise, all of them are at least several decades away from significantly replacing fossil fuels in providing the volume of energy that the modern economy needs. There are other issues as well.
Solar energy companies listed on the stock exchanges in New York have been among the biggest beneficiaries of this desperate search for a viable alternative to fossil fuels. Warnings of a bubble in the making have yet to touch the sector, but the day of reckoning could soon arrive as investors start to grapple with the usual problems of rising cost, and feedstock and labour shortages. There is also the possibility of hidden costs, now becoming apparent, to treat waste and environmental issues associated with solar cell production.
The full version of this story is available in the March issue of Renewables Report. Please contact Admin@EnergyAsia.com.