Investment in Clean Energy Slowing Down?

The fall in oil prices has reversed the cost equation which previously favored investment in renewable energy.

Monday, February 2, 2015

EDITORIAL

The effect of the price of a barrel of oil falling below $50 is now being felt in the decisions which must be taken by energy buyers and regulatory officials in the electricity markets. The thing is that -suddenly - electricity produced using hydrocarbons may cost less than energy from solar power, and even hydroelectricity. Only the existence of long-term contracts justifies carrying on buying electricity based on renewable resources.

But investment decisions are being revised, based on forecasts of developments in the coming years in the oil industry, estimates of global reserves in deposits, and development of new techniques for exploitation.

In Central America, as well as in the rest of the world, investors, up until last year favored backing renewable energy. What will happen from now on depends on so many factors that it is impossible to speculate either way. What is indisputable is the need for investors to check the viability of clean energy projects, and governments to rethink their policies.



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