Another shadow lurking in the midst is the investment which energy firms such as BP or Shell , who are putting vast amounts into renewable energy research and projects. The numbers are staggering, while no official numbers have been given out on the total amount and investments by these firms represent only a fractionally small part of their overall budgets.  The clout which these firms form is however sizeable enough to tower over any other ventures at the moment. Add to the mix the fact that these companies are leaders in some fields of renewable energy and that they have a interest in controlling the way in which energy markets move in the future and we could see key decision makers continuing to be part of big oil.

 

The renewable energy market is also far from insulating itself from the market mechanism of the price of oil, while a greedy OPEC over the last couple of years has meant that oil prices have been well above 50 dollars a barrel, the question is whether this will remain this way if the industry starts to take market share away from oil products.  No doubt global thirst for cheap and readily available energy as well as the under developed part of the world along with BRIC countries discovering a sure insatiable thirst for oil will mean that demand side oil output will continue to be consumed by all nations.  High oil prices remain in the interests of the producing nations (OPEC), oil companies, and indeed the renewable energy industry as well as investors in this industry.

 

One needs to be realistic about the amount of money being invested in the renewable energy industry as well, considering the TXU deal which some are saying was worth up to $45 billion USD ($32 accounting for debt) makes even the overall investment into renewable industry look like peanuts.  But again this part of the energy sector is already very mature and big deals here will outshine any deals being made in an industry which despite having moved past its infancy stage is still a long way off from becoming mainstream. 

 

Surely as well many upstarts will prosper in this environment finding capital easier to raise. There are many advocates of the energy mix with many solutions coming together to offer a total package which will offer smaller scale solutions combining to replace larger power production units. Venture capital and private equity may fund many ideas, which in the end will help the market to remain attractive to buyers in the form of energy companies, governments, co-ops, and consumers.  Overall an infusion of capital into the renewable and alternative industry may bring some side effects, but overall it will allow the industry to accelerate it’s growth and research potential.  It also remains to be seen whether investments will also be made in projects in the developing world where energy shortage is acute and there is a great chance to anchor clean technology before traditional cheap ones like coal gain a foothold.