Last year alone, more than US$1.6 trillion was invested in producing
and delivering energy, according to the International Energy Agency.
While the market is massive, geopolitical events mean it’s also highly
volatile. In this context, business leaders are weighing the risks and
benefits of a known entity—traditional energy projects—against those
of renewable energy initiatives. For these leaders, renewables offer the
promise of a cheaper way of providing energy—and, in turn, a cheaper
way of doing business.
The renewable revolution hasn’t happened yet, however. Fossil
fuels account for 82 percent of the world’s energy consumption— 31
percent coming from oil alone. This year, U.S. petroleum production hit a 44-year high. Meanwhile, world coal use is expected
to increase by 16 percent between 2012 and 2035; India, for
instance, still gets nearly 60 percent of its energy from coal.
Yet fossil fuels’ prices are rising along with the demand for them. The U.S. petroleum
boom contrasts with oil production elsewhere in the world, which is seeing a decrease in
output and an increase in cost. With the price of oil routinely hitting US$110 a barrel and
expected to go above US$140 by 2040, many global leaders have begun looking for new
energy sources, says Jeremy Rifkin, president of the Foundation on Economic Trends in
Bethesda, Maryland, USA.
“It’s all based on energy, because if you can get to a near-zero marginal cost of energy, that
cheapens your cost of communication, logistics, transport, materials and everything across the
value chain,” says Mr. Rifkin, who serves as an adviser to the European Commission, the European Parliament and several European Union and Asian heads of state. “To the extent that any
project manager can do that, that’s the future.”
Last year alone,
was invested in