Warren Buffet once said that investors into airline business “would have been far better if Orville had failed to get off the ground”. Historically two industries, airlines and automobiles, have been in red for about a century, despite the huge amounts of equity capital that investors had ploughed in them. The more growth, the worse are investors.
The same goes for renewables industry: huge Capex, more money to finance growth and what even worse – the industry has to compete with cheaper fossils. Does it mean that the renewables industry is doomed? Not at all, for all the troubles of the airline and car industries they are still with us and not going anywhere. What are the forces that keep afloat losing industries for decades?
- Benefits for national economy and security;
- Creating mass employment;
- Social benefits at the consumer level;
- Accumulating technological knowledge beneficial for other industries and nation as a whole;
- Creating profitable niches and opportunities;
- Leveraging geopolitical disbalances;
- Improving or reversing wealth transfer;
- Creating infrastructure for new businesse and opportunities;
- The product is commodity with virtually unlimited demand if the price is right.
It’s true that renewables industry will experience many setbacks and downturns before integrating into mainstream energy industry. However, increasing rate of technological advance and energy insecurity of fossil resources ensure that it will not take another century for reneawables to become significant part of the global energy portfolio. Probably even investors may live to see vast riches beyond imagination in the elusive but promisisng alternative energy market.