Once the promised land for clean energy companies, Europe has become a much tougher place to succeed. With the European economy stuck on life support, the once-generous subsidies for renewable energy projects are slowly but surely evaporating. But maybe that’s not such a bad thing, as Stanley Reed outlines in a recent New York Times piece:
[T]he harsher environment is fostering a tough-minded approach that may be healthy for the effort in the years ahead to curb the greenhouse gases that are blamed for.
Reed cites the case of Enel Green Power, one of the world’s largest renewable energy companies, with wind, solar, geothermal, and biomass projects. The troubles in Europe pushed the Italian company to explore emerging markets like Brazil, Chile and Mexico.
In developing countries, demand for power is surging. Whether for benevolent reasons or–more likely– to conserveand gas for exports, these countries want to harness renewable power sources to meet demand. To do so, clean energy companies like Enel Green Power have to compete head-to-head against fossil fuels to win projects:
[Francesco Starace, Enel Green Power CEO] especially likes long-term deals like the ones he has worked out in Mexico with Nissan and Nestlé to build wind farms to supply factories with power. He hopes to replicate this sort of arrangement across emerging markets, including east Africa. These private, one-on-one arrangements are more sustainable, he figures.
The less the regulator gets involved with subsidies that can be reduced or eliminated at any time, the lower the risk. And the more competitive renewable power is within the broader energy market, the more attractive it is to investors.
What do you think? Are declining subsidies for renewable power helpful in the long run? Read the article and let us know what you think in the comments.
Photo: Stillwater, Enel’s 59-watt hybrid geothermal-solar power plant in Churchill County, Nevada. (Enel Green Power)