WEALTH CREATION AND THE NEW ENERGY ECONOMY
Looking at the markets from a 30,000 foot level, some interesting shifts are occurring. And yet they are almost completely under the radar screen. While many in the oil and gas industry make comments that the renewable energy markets are not sufficiently mature for the world to transition, it is interesting to note that that may not be the case at all. A recent report issued by Bloomberg New Energy Finance makes some interesting prognostications. Bloomberg states:
“By 2030, the world’s power mix will have transformed: from today’s system with two-thirds fossil fuels to one with over half from zero-emission energy sources. Renewables will command over 60% of the 5,579GW of new capacity and 65% of the $7.7 trillion of power investment.”
And that is without much shift in current policy to incentivize renewable production. If countries were to get serious about climate change, these figures could presumably be accelerated. In fact, Bloomberg states that most of this global growth will be driven by economics rather than policy. Costs are falling quickly and the financial markets are becoming more comfortable with the investment profiles. That means that we don’t have to rely completely on political will. But even in this arena, all is not lost.
The World Bank issued a report on global carbon pricing in May, 2014 which stated:
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