Renewable energy may cause a revenue drop in the fossil-fuel industryMay 2, 2014
Report predicts that fossil-fuel industry will see a drop in revenue in the coming years
As renewable energy gains more ground, the global fossil-fuel industry is losing money. A new report from Kepler Chevreux, a European broking house, predicts that revenues within the fossil-fuel industry will plummet over the next 20 years. The report indicates that old companies specializing in traditional forms of energy have been seeing an increasing amount of revenue disruption due to the success of clean energy. The issue is becoming so serious that many of these companies may begin shifting away from fossil-fuels in order to embrace clean power.
An estimated $28 trillion in revenue could be at stake due to the growing popularity of clean energy
The report from Kepler Chevreux shows that the fossil-fuel industry’s revenues will drop by an estimated $28 trillion over the next two decades. This is largely due to the rapidly increasing adoption of renewable energy, but this is not something that is guaranteed to happen. Kepler Chevreux notes that revenues are likely to see a dramatic fall only if the world takes decisive action on issues concerning climate change. Without concerted efforts to embrace clean power, the fossil-fuel industry will likely continue seeing a high degree of financial success for the foreseeable future.
Economic prospects of clean energy prove attractive
One of the attractive qualities of renewable energy is its impact on the economy. Clean power is beginning to become less expensive than traditional fuels like coal and oil, which means that it is costing less to produce electrical power from renewable resources than it is from fossil-fuels. New energy projects help create jobs, which generate economic activity and with clean electricity becoming less expensive, the energy costs that governments are forced to managed become less burdensome.
Fossil-fuels likely to remain a staple of society for the foreseeable future
While renewable energy is gaining momentum throughout the world, fossil-fuels are likely to remain a primary focus for most countries for the foreseeable future. This is partly due to the fact that clean energy is still relatively expensive, but countries are also quite financial invested in the fossil-fuel industry as a whole. Governments often provide fossil-fuel companies with subsidies in order to receive coal and oil at a discounted rate.