//Renewable Energy Projects Cancelled

Renewable Energy Projects Cancelled

Abandoned Solar Power plant – Carrizo Plain

Until September, cleaner technology was on a roll, collecting some $3.3 billion in venture capital investment during the first nine months compared with $2.6 billion for all of 2007. Then the downturn hit, the credit markets froze up and prices plummeted for oil, coal and natural gas. Retail gasoline prices have fallen nearly 32 percent in past last month and now are below $2 a gallon in several states.

The reality today is that it’s more expensive to produce renewable energy than it is from traditional resources, and consumers suddenly strapped for cash will start moving away. Billionaire oilman T. Boone Pickens put his massive wind farm plans on hold in Texas. A Maryland solar plant project has been called off, and the nation’s second-largest ethanol company has filed for bankruptcy protection. Pickens has delayed a plan to develop a wind farm on thousands of acres in west Texas, citing the drop in natural gas prices. He has even reduced his renewable energy advertising campaign he started to promote wind and natural gas by $10 million.

In October BP Solar scrapped plans for a $97 million expansion of its Frederick, Md., plant citing intense global competition. And, China-based Yingli Green Energy Holding Co. said it has no plans to boost its manufacturing capacity once it reaches 600 megawatts next year.

Yet this may be just the time to bank on a future for renewables. The International Energy Agency expects renewable energy technology to overtake natural gas to become the second-largest source of electricity by 2010. In a forecast released this week, it based the forecast on an assumption that fossil-fuel prices will climb, costs will fall for renewable technology and supporting government policy.

“Excluding biomass, non-hydro renewable energy sources – Wind, solar, geothermal, tide and wave energy – together grow faster than any other source worldwide, at an average rate of 7.2 percent per year over the projection period,” the agency said.

“We’re in a moment now where people are taking a deep breath and really challenging their business models and really making sure that they’ll be able to sort of weather the storm,” said Joseph Muscat, Ernst & Young’s Americas director of cleantech and venture capital.

“I think we need confidence to return to the overall markets. People have to get a perspective on what will this recession look like,” he said.

On a personal note I think are at a unique moment with new administration which has energy security and green jobs as a top priority. Clean tech electricity generation including solar, hydro, wind will all be part of that solution.