Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Oblomov who wrote (67515)	8/14/2005 6:37:48 PM
From: Elroy Jetson	Read Replies (1) of 74559

Supplying something like 10% of all consumers with renewable power may cost only a 1% premium. Why? Only a small percentage of consumers are willing to pay even a tiny premium. Your use of hydro or other green fuel displaces use by industry which is not willing to pay a 1% premium. If more consumers demanded renewable power, there would not be enough and the price would rise dramatically. Excluding hydro, even the small current production of renewable fuels is heavily subsidized by the government. More use would require massive additional subsidies or a much higher price. There is an oil price where renewable energy is economic. The problem occurs when that level is reached, and new investments are made, then oil prices collapse - once again making renewable energy uneconomic. The alternative is doing what Brazil did and imposing a import tax on oil to maintain a domestic price adequate to support the break-even level for alternate fuels. .

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