Renewables: The Fast, Flat Price Alternative

Why are oil prices at record highs?

The reason: global oil production hasn't kept pace with growing global demand. Low oil prices during the 1990s discouraged development of new fields. All throughout the 1990s, financial newspapers such as the Wall Street Journal and Financial Times warned of a coming energy crunch due to underinvestment. This was a train wreck we saw a mile away.

Oil is a resource that takes a long time to develop. Geologic surveys must be made, exploratory wells sunk, analysis undertaken and endless engineering studies completed in order to ensure maxium extraction. This takes a long time. It sets markets up for trouble.

Compare this to concentrating solar power. New capacity can be brought on line in as little as two years. Plants are modular. Added capacity can just be bolted on. It's arithmetically scalable virtually ad infinitum.

Construction times for concentrating solar power plants are little more than two years

Source: "Potential of Solar Trough Installations in Europe in Europe," Solar Millenium

In a world marked by rapidly-developing emerging economies, the long time periods needed to develop aging, harder-to-find fossil fuel resources is creating unnecessary disuption, dislocation and economic pain. Therefore, completely apart from the necessity of reducing greenhouse gas emissions, this is another strong argument for concentrating solar power, solar photovoltaics hot dry rock geothermal, wind and biomass. It can be ramped up much more quickly than fossil fuels.

The macroeconomic stability brought to the global economy through the ability to rapidly add new energy capacity over the short- to medium-term provides a powerful argument for expanding renewable energy supplies. Supplies of fossil fuels are just too slow to respond to market signals.

Once they're built, renewable energy sources bring another benefit: predictable pricing. That's because renewable energy is a 'flat-price' resource. Most of the price of the energy resource occurs during construction. Fuel is free. The result is highly-predictable production costs.

Once these advantages are more widely realised, the trend toward cleaner, safer, faster-to-deploy renewables will become unstoppable.