Capital investments in renewables have also increased significantly and are set to reach $494 billion in 2022, outstripping upstream oil and gas at $446 billion for the year, according to Rystad Energy research. This is the first time that investment in renewables is set to be higher than for oil and gas.
In addition, our research and analysis show more capital is being pumped into renewables than upstream oil and gas (including brownfield and greenfield but excluding exploration) for the first time.
âCapital investments in renewables are set to outstrip oil and gas for the first time this year as countries scramble to source secure and affordable energy. Investments into renewables are likely to increase further moving forward as renewable project payback times shorten to less than a year in some cases.â
says Michael Sarich, senior vice president, Rystad Energy
Alternative energy has become an synonym of security to investors now.
The rebranding of âgreenâ energy to âsecureâ and âaffordableâ energy is far more enduring and important than those investment graphs. That will have a long-term effect on political policy.
Germany has invested billions and billions of euros in wind and solar, but they are restarting coal plants and cutting forests for firewood to avoid blackouts and freezing in their homes this winter.
To date the only country that that has successfully moved to renewable energy is Iceland, which has unique geology. Iceland is basically one giant volcano which allows it to use geothermal energy for the vast majority of its needs for electricity and hot water 24/7 year round.
Wind and solar would require massive energy storage systems capable of a storing week of output in order eliminate the need for fossil fuels. Government subsidies may make them look attractive, but it will not change the basic physics.
Germany is messed up a long with the rest of the world economically. They will have to ration gas, clearly if they could offset that with renewables they wouldnât have fired back up the coal plants.
What we are seeing imho is what happens when you transition to fast and then some bombshell happens like this stupid war now people will freeze or go hungry. The UN is saying the word (food insecurity) for millions incoming. Thatâs a nice word for starvation, the price of energy is unsustainable especially for the poor.
I am all about getting off oil in the future the pace needs to slow down and let it transition by market conditions not by government.
Government shuts down investment spending on fossil fuels.
Government increases increases investment spending on select renewables.
Government releases press release touteing âCapital investments in renewables are set to outstrip oil and gas for the first time . . .â
Deer thinks headlights are something natural. Oh pretty. âMust be a good thing.â
Biden targeted the Keystone Pipeline during the campaign. He terminated it on his first day in office.
âThe Permit is hereby revoked,â Bidenâs executive order says. âLeaving the Keystone XL pipeline permit in place would not be consistent with my Administrationâs economic and climate imperatives.â Keystone XL pipeline halted as Biden revokes permit | AP News
The message is clear to investors in oil and gas infrastructure: There is a high risk that the Biden administration will target your infrastructure for termination, and you will lose your investment one way or another.
When the government pays people to place solar panels on their rooftops at taxpayer expense, I can see why others would invest in building them. Now remove all taxpayer money from this equation and letâs relook at this in a more fair, capitalistic viewpoint.
Do you realize than building the storage and the associated transmission infrastructure would require an investment that is much larger than that for the wind turbines and solar panels themselves?
Currently the only viable system for storing weeks-worth of energy is pumped hydro. We would need to expand existing dams, reservoirs, and generating plants by a factor of ten or more. We would also have to build new transmission lines to get the power into and out of the storage facilities.
When renewables are only 20 or 30% of the total power generation, you can rely on existing gas turbines to come on and handle the peak loads. Coal and nuclear can handle the base load at night. Getting rid of fossil fuels and nuclear power means that energy storage becomes a huge issue.
Yes, the investment has been driven by government subsidies and government policies.
California and Germany have been leading the way. California will need a large increase in its electric infrastructure to handle the load from electric vehicles, but instead it is shutting down power plants at the same time it is banning gasoline-powered vehicles.
+1
The fact that the government now spends more in an area
than the free market does
is not necessarily a good thing.
.
.
.
.
What if (and this is obviously ridiculous. I am just trying to illustrate a point). . .
Free market: âWe want food and housingâ
Government: âWe want money to go to churches.â
Headline: âLots oâ Money Sent to Churches Proves that Sending Money to Churches is a Good Thing. Letâs all celebrate!â
Everyone realizes that. And investors still find alternatives attractive enough to pivot their money. Infrastructure projects are not the insurmountable political challenges they used to be. Storage and transmission are needed, and they will be built.
