Green tech ready to step in when oil prices rise: Don Pittis

As hard-hit investors in the energy sector hang on the latest price for crude and await news of this week's oil company results, they aren't the only ones. People in the green energy business also want to see an oil and gas price recovery.

"Obviously, higher cost of fossil energy is beneficial to renewable energy because we typically replace fossil energy," says Klaus Dohring, president of Green Sun Rising, based in Windsor, Ont.

Dohring's solar energy company has not only survived but prospered despite the plunge in the price of fossil fuels.

According to a U.S. report out later this week, Green Sun is an example of a trend. And green advocates expect business will only improve as prices rise and governments get more serious about their their climate change commitments.

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The report, expected on Thursday, will show that not only have green alternatives to fossil fuels survived the plunge in fuel prices, they've hit new records, says Ethan Zindler, one of a worldwide group of analysts who monitor investment in alternative and renewable energy.

Solar power record

"There was a record amount of gas burned for power generation last year," said Zindler, a contributor to the forthcoming report. "But there was also a record amount of photovoltaics and the second highest amount of renewables that we have seen added in a year." 

Thursday's report from Bloomberg New Energy Finance, part of the highly credible Bloomberg financial research company, will be called the Sustainable Energy in America Fact Book. 

The research shows that both gas and renewable energy are expanding at the expense of coal, says Zindler. The falling price of technology plus greater efficiency mean that solar panels and wind often remain cheaper than gas. 

One area where that is especially true is solar panels on the roofs of houses and small businesses.

Cheapest alternative

"Those projects are very rapidly expanding the territory where they compete and win," says Zindler.

To be profitable, the rates of return only have to be lower than the retail price paid by the home or business owner. But even at commercial prices, wind remains the cheapest alternative in many parts of the continental United States including West Texas, Oklahoma, and Iowa.

"The winds are so strong and they have developed the equipment so that they can basically collect a great deal more of the wind to generate power," says Zindler.

He says that for the most part oil and renewable energy are not in direct competition, but Dohring says that's not strictly true.

He and his company have built a number of solar recharging stations for electric cars, but Green Sun Rising earns its bread and butter building solar plants in isolated Canadian communities, many in the far North, that have generated all their power with diesel generators.

People are often surprised Dohring can make a living selling solar power plants, like his latest on Banks Island in the Canadian Arctic, which has 10 weeks a year of constant darkness.

When the sun never sets

"However, if the sun never sets in summer, I have a nearly infinite amount of energy supply," says Dohring.

While diesel fuel is cheap down South, by the time it is sent north and turned into electricity it has lost its edge on cost. Green Sun Rising's crucial advantage is that Dohring is competing with some of the most expensive energy on the globe, estimated at as much as $6 to $8 a kilowatt hour. That compares to about six cents per kWh in Alberta.

Dohring has found a niche market, but he is convinced that solar and other alternative energy technologies, including electric cars, are becoming mainstream. Tesla's battery vehicles have continued to sell well throughout the oil glut.

And while cheap gas may give many consumers a reason not to choose electric, that's going to change.

Stephen Munro, an expert at Bloomberg New Energy Finance on low-carbon energy policy, agrees there are changes afoot, but he says new laws — such as those in London and many Chinese cities capping the number of internal combustion engines — not higher gas prices, will force the transformation.

"Alternative-fuel vehicles, just simply because of their market share, are really not in a position right now to be dictating price in the market," Munro says.

More influential, he says, will be investor concerns about the long-term risk to fossil fuel assets. 

"These are regulatory risks and policy risks that are going to be applied to fossil fuels and are not going to be applied to alternative energy," says Munro.

"Investors are taking note of that. It's making them look at alternative energy on a lot more of a favourable basis than they did just a couple or three years ago."  

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