Jan 17, 2015

Oil at USD 20 per barrel ! Solar Scenario

A research study doing the rounds suggests that the oil producers are deliberately reducing prices, to counter the rising use of renewables. And to make this less attractive to deploy.

Will this help a lost cause ?

Preliminary analysis shows clearly so - and will accelerate the development of new and viable models, to deploy renewable energy solutions in mature markets. New financing models shall emerge faster and with greater efficiency, albeit with lesser margins. This is likely to be compensated through greater volumes of deployment as large tranches of power requirements move to renewable.

The producers seem to realize that is it better to consume oil to the maximum extent possible - and the oil producing economies realize that it perhaps may be imprudent to wait forever, and try and outlast the other oil producers as regards production and reserves are concerned. This seems to be a smart strategy then.. !

Imagine the world economy moving to a scenario where oil is at USD 20 ( or 25) ? A resource which is clearly not going to be around forever - moving to lower rates is currently unthinkable. We are yet to find other examples of similar resources or use cases, where this has happened. Typewriters ? Cassette tapes ? Walkman ? Sure... but natural resources - we cant think of any !

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