Are you willing to bet on future fossil fuel prices?


 

NOTES:

Renewable energy sources like solar and wind are often criticised for their ‘variability’, in terms of when they are and aren’t available to capture. 

However one aspect where they provide predictability and security compared to fossil fuel alternatives is when it comes to price. Since a solar or wind project’s costs are mainly capital, the long-term price of energy is largely known even before you put a spade in the ground to build it. It’s just a case of setting the price high enough to pay back that capital and make some profit on top.

Contrast that with power projects or other energy applications where you have to pay for the fuel you burn. As this chart of selected indexed fifteen-year fossil fuel prices shows, it’s a brave person who can predict the price and competitiveness of fossil-fuelled energy applications for any length of time into the future!

 

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