14 DAY TRIAL // One of the main arguments brought by critics to renewable energy such as solar and wind power is that these methods of generating electricity are very expensive, and that continuing to produce the needed amounts of power from oil and coal is justified by the lower costs, especially in the crippled economy. Now, new assessments of these statements seem to prove that even this point is invalid, as economists say that the fluctuations in prices that oil and coal register are more than enough to make these two products unable to compete with wind-generated electricity, whose price doesn't fluctuate.
For Western nations, the Middle East is the main source of oil, but relying on foreign providers for the most vital part of their economy can have serious repercussions. For one, the producers are free to lift the prices per barrel whenever they want, and with no justification, thus placing their customers in a very uncomfortable position – either pay or get your oil from somewhere else. The main problem is that, for countries such as the US, the world's leading oil and coal consumer, there is no “somewhere else” wherefrom to get the amounts of oil they need.
As such, because the international crisis can severely affect the prices of oil and, implicitly, gas, as evidenced by the surges that were recorded last year, the countries getting their power from oil need to increase the costs for the general population accordingly. There is currently no way for these nations to regulate the amount of money they pay to oil producers, and so the prices fluctuate depending on the marketplace, almost each day.
On the other hand, electricity coming from wind farms, although admittedly less in amount than that obtained from burning fossil fuels, is more reliable, on account of the fact that the source (the wind) is not owned by anyone, and it costs nothing.
“Power companies which are building new electricity generating capacity are taking on that risk but if fuel prices go up, that extra cost is transferred to consumers. If the markets don't work I can't prove that wind is cheaper and that's why, even though it makes economic sense, it doesn't have a market impact yet and that's why you still need frameworks (subsidies),” European Wind Energy Association (EWEA) Chief Executive Christian Kjaer told Reuters.
“Adjusting for fuel price risk when making cost comparisons between various energy technologies is unfortunately very uncommon and the approach is not yet applied at International Energy Agency (IEA), European Commission or government level,” the EWEA report said on Monday.