RE < C

When all the external costs (climate change and other environmental and health effects) of fossil fuel generation are accounted for many renewable technologies are cheaper than fossil fuel alternatives.

As markets don't price these externalities, governments provide subsidies for renewable electricity. However, government's generally only set subsidies at the level where renewable electricity is marginally profitable (government's generally do not want to spend excessive amounts of money on subsidies and be seen to fund private profits).

Making money from investing in renewable electricity is therefore very difficult. The real breakthrough (and profit!) will be when renewable electricity is cheaper than fossil fuels - or as Google puts it when:

RE < C

Until then investing in renewable electricity is about finding the location with the best subsidies.

China, India & oil demand

One common way of forecasting future oil demand is linking GDP and oil consumption. The standard outcome of this kind of analysis is that China & India's growth is going to lead to massive increases in oil demand in future years.

This chart of population density across the world made me wonder if there is another factor. Oil is predominantly a transport fuel. India and Eastern China have extremely high population densities. When people live closer together they need to drive less. This may temper the growth of demand in India and China somewhat.











These gapminder charts (all with log scales !) show that although the link between GDP & oil consumption is strong, there is a definite link between oil consumption and population density also.