Human economic development is closely tied to humanity’s ability to replace human power with other sorts of power and global per capita GDP growth took off as soon as humans extensively utilized fossil fuels. Recent developments, however, with prices for major primary energy sources going from boom to bust and significant supply disruptions due to political issues, have revealed the weakness of the current energy system the world economy relies on. Erste Group analysts think renewable sources of energy could remove the shortcomings of the current system: renewables generate no additional CO2 emissions; hydro, wind and solar power are unlimited in their supply; technological progress reduces costs for renewable energy and nearly every region on earth is well suited for at least one renewable energy source, biomass, hydro, wind, geothermal or solar power.
But can renewable energy sources like solar, wind and hydro power cover the global demand for energy? Gerald Walek, Equity research analyst at Erste Group, thinks the answer is a resounding yes. “So far, we lack the technologies to economically harvest this potential, but we believe several economic and political considerations will support the development of renewables in future: 1) replacement of imported fossil fuels with energy from renewables creates jobs; 2) the recent gas row between Russia, Ukraine and the EU has reminded politicians of the importance of energy independence; 3) rising R&D spending will lead to declining costs for renewables”, says Walek.
See full Press Release.
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