Actual impact of oil price collapse for clean energy

Polaris solar PV net news: alleged that oil prices hit 45% the development of clean energy. Bloomberg new energy analysts say that in practice, however, the impact on different sectors and regions are not the same. Policy support for the stability, coal-and gas-electricity has been the lack of cost competitiveness, a major market for renewable energy, had limited effect.

According to research firm Bloomberg new energy finance report 2014 World oil prices collapsed in the second half for the rapid development and transition to a low-carbon global power systems have little effect. Over the past five years, average annual global clean energy investment of $ 266 billion. Most of these investment flows to renewable power generation, and oil use is not in direct competition. Due to the rapidly improving cost-competitive and eliminate network bottlenecks and other barriers, subsidies and other support have repeatedly reduced, wind and solar are still maintained a rapid development trend.

However, Brent crude oil prices in June 2014 from US $ 112.36 per barrel plummeted to us $ 48.16 per barrel on January 26, 2015 and will hit all areas and regions:

If oil prices continue to fall, or the will, to a certain extent hinder the development of the electric car market. Bloomberg new energy finance’s previous analysis shows that, if the gasoline price of $ 2.09 a gallon, by 2020, electric vehicles in the United States of the small vehicle market penetration will be 6%, and if the gasoline price of $ 3.34 a gallon, electric vehicle market share will reach 9%. Currently, this value was less than 1%.

Part of the oil-producing countries, and many low-income developing countries, most electricity comes from diesel generators and fuel power plants. When oil prices are as high as 100 dollars a barrel, using renewable sources of energy to replace the above power supply of its hybrid technology momentum had just begun. And now, although the diesel oil prices to 60 dollars a barrel and oil supply is still not affordable, but alternative energy pressures have eased. Saudi Arabia 2012 announced plans to invest US $ 109 billion, by 2032 solar power installed capacity increased from 41 gigawatts. The plan can be implemented is still unknown. Saudi Arabia burned up to 900,000 barrels of oil per day to produce more than 50% of electricity.

United States the situation is abnormal, lower oil prices might be rising gas prices: due to the shale oil production are usually accompanied with, so the decrease in oil production will inevitably lead to gas supplies fell slightly. Research for Bloomberg new energy finance shows that oil price by 100 dollars per barrel when the dollar fell to 60 dollars a barrel, gas prices rose US $ 0.90 per million British thermal units. Because on the one hand, wind energy and solar energy in the absence of subsidies compared with coal and natural gas increasingly competitive; for one thing, many utility companies subject to constraints of renewable portfolio standards; and United States Environmental Protection Agency (EPA), the new rules will force coal-fired power plant decommissioning, therefore, in the United States impact of low oil prices for renewable energy are expected to be negligible.

European gas prices are usually linked with the oil, so oil prices will drive down gas prices, although they are intertwined: the European spot gas prices in between 2014 and ahead of Brent began to fall a few months. In any case, the specific emission reduction targets and policy initiatives often are key factors in promoting the development of the European renewable energy, low oil prices and from the beginning of 2014 to February 2015, representing an increase of 50% under the combined action of the carbon emission quota prices, trend or reversal of the recent sharp increase in coal-fired power stations. For example, in December 2014, the United Kingdom Department for energy and climate change (DECC) released energy trends indicate that third quarter of 2014 United Kingdom coal electricity a decrease of 11.5 TWh in 2013, a decline of 43%, while burning natural gas power generation and renewable energy are increased by 8.0 TWh and 2.6 terawatt hours.

Biofuels in the transport fuel and oil in direct competition, the low oil prices will be no small challenge. However, the United States provided proportion of ethanol in gasoline capacity must be 10%, it can still maintain the current demand. In Brazil, ethanol retail prices has been able to enjoy subsidies at $ 65 a barrel of gasoline competes. Therefore, ethanol, less affected by the current fall in oil prices.

All in all, depending on the effects of low oil prices depending on whether it is durable. Some analysts believe that oil prices will quickly bounce back to $ 100 a barrel, because there is only maintained that price to ensure that exploration and development of new resources, but falling oil prices point is not unreasonable. Bloomberg new energy finance, research has shown that, if the oil price is 75 dollars a barrel, United States 19 shale or unprofitable. However, as long as the existing drilling to recover the variable costs (cheap lot, usually 20 to 30 dollars per barrel), these wells will not turn off. Therefore, only 1-2 years in these areas without adding any new drilling activity, production will fall causing a permanent shutdown.

Perhaps more noteworthy is that it is increasingly recognized that falling oil prices this year is not so much supply shocks, rather than demand shock, the reason is a slowdown in China and the United States reduced dependence on imported oil.

Bloomberg new energy finance Advisory Board Chairman MichaelLiebreich pointed out: “engines are extremely efficient, electric cars prevail in today’s world, serious pollution problems and climate change need to be tackled, that oil demand growth without limit conservative views are out of date. From 2007 to the end of 2014, United States economic growth to 8.9%, while the demand for finished petroleum products dropped by 10.5%. Compared to a new type of fuel products, gas mileage improvement and reduction of per capita miles driven to reduce United States oil imports more.

“The emphasis is not on falling oil prices will affect the development of clean energy, but in the transformation to clean-energy how to affect the price of oil. ”

Bloomberg new energy finance, said Angus McCrone, Senior Analyst: “the price effect also brings other benefits. Falling crude oil prices should be reinforced in Europe, India, and Japan and the oil-importing countries, such as China’s consumer confidence and boost economic development. That, in turn, could boost power demand, reduce the purposes of the political burden on energy bills and increase investment in clean energy. ”

Original title: oil price collapse practical impact on clean energy

Posted in News.