The Cost of Fossil Fuels
January 15, 2014

The Cost Of Fossil Fuels

A recent article described the fact that in Australia, renewable wind energy is now less expensive than fossil fuel sources. The article stated that, according to the Bloomberg New Energy finance, the renewable energy is at least 14 percent less expensive as its fossil fuel counterparts in the land down under.

Renewable energy is still somewhat a new concept when you think about things like solar panels and electric cars. As such, these types of energy have not been as widely accepted and are not in high demand. When there is a low demand, and therefore a low supply, prices remain high. It is simple economics. The same goes the other way around; high demand causes lower prices. As such, more widely used fossil fuels have always been less expensive. It appears, however, that this trend may be reversed in the near future.

One of the reasons for this is that, whether or not you believe that the world’s fossil fuel supplies are being used up, fossil fuels must be obtained from somewhere, and that somewhere is usually not right in your own backyard. There are many costs associated with fossil fuel sources including discovery of where the source is located, obtaining it, refining it and shipping it. Renewable energy sources in contrast are readily available. You don’t have to discover where wind is blowing or where the sun is shining. This essentially happens everywhere. It’s no wonder that these sources are becoming cheaper.

Also, beginning in the 20th century there has been a sort of Green Revolution happening. This has influenced more research and development of renewable energy sources and also increased the demand. Once all the kinks have been worked out, the cost inevitably decreases. The same happens with everyday technology. It used to be that items such as computers could only be purchased by the extremely wealthy; now, however, there are more compact and cheaper versions that allow the everyday person to have access to such technology. Computers used to be as big as an entire room and now they can fit in your hand as a smart phone. The advancement of technology has made things more affordable, and the same is happening in the area of renewable energy.

Another factor that is not taken into account in the figures above is the carbon cost of fossil fuels versus that of renewable sources. The carbon cost of energy sources is based off of the environmental impact that they have whether that is from pollution or harm to ecosystems. Now, you may not believe in global warming and the fact that humans burning fossil fuels has a huge impacts on our planetary health; however, one can’t deny that whenever we burn something like gasoline in our cars smoke is spewed out of the exhaust pipe. This definitely causes haziness and smog in larger cities. So, regardless of personal beliefs it is at least clear that there could be some cost associated with the pollution of fossil fuels. If this factor is taken into account, then in Australia, fossil fuels are at least 45 percent more expensive than renewable wind energy. Regardless, this is a perfect example of how renewable energy could be affordable and more widely used in the near future.

Image Credit: Thinkstock

Facebook Twitter Pinterest Plusone Digg Reddit Stumbleupon Email