When the price of oil peaked at $147 a barrel in July – and with Goldman Sachs predicting a not-too-distant future in which $200 oil would become very much the norm – green energy suddenly became the holy grail. Wind farms, solar power, hydrogen fuel cells and electric cars had all faced derision for years as nice ideas but impractical and too expensive. Not so in 2007. All of a sudden, the economics of alternative power sources made sense.
But the price of oil has plummeted in recent months, touching $47 a barrel at the beginning of December. And that's raised the spectre that, as alternative energy once again becomes comparatively uncompetitive, investment in renewable energy sources could be curtailed in the coming years, despite a growing body of scientific evidence supporting the need to reduce carbon emissions.
It seems that the imperative to 'go green' has been a short-term financial one and not an environmental one – as economic hardship bites around the world, many simply can't afford to save the planet. The costs of wind and solar technologies are increasing as a result of problems in the supply chain, and although efforts are being made to increase industrial capacity, these are proving slow to come online. The tightening of credit markets is also hurting, with many green projects unable to secure financing.
Governments remain committed to reducing their reliance on fossil fuels, though, and there is much optimism that next year's global environmental summit in Copenhagen will give the industry renewed impetus. The recent passing into law of the Climate Change Bill has committed the UK to an 80 per cent reduction in carbon emissions by 2050 from 1990 levels, and the government will need to lay out its plans next year. US President-Elect Barrack Obama, meanwhile, has said that he will pump $150bn into renewable energy projects once he gets to the White House, to create jobs and to improve the country's energy security.
And ultimately, it will be energy security and not just plain energy economics that drive renewable investment forward. Many see the precipitous drop in oil prices as a mere temporary blip, and that constraints on supply and returning demand will see the cost of crude once again begin its ever upward ascent. The UK, for one, needs to reduce its dependence on oil and gas as domestic supplies dwindle, with nuclear power and clean coal technologies seen as the most likely alternatives. Households and business, too, will need to work out ways of reducing their carbon footprint - all of which could prove a long-term boon to a growing army of environmental consulting groups, such as RPS and White Young Green.
