That’s at least the consensus from Citigroup, the latest investment researcher to say clean energy won’t be slowed by cheap oil, Bloomberg reported Monday. Deutsche Bank and Goldman Sachs have also predicted that the oil price slump won’t affect renewable energy growth.
There’s a simple reason for this: oil and renewables aren’t really in competition. Oil powers cars and heaters, and renewable energy — by and large — powers the electricity grid. (As we get more electric cars, transportation could increasingly rely on renewable energy, but we’re still pretty far from widespread electric car adoption.)
The United States generated merely one percent of its electricity with oil in 2014, according to the Energy Information Administration. Globally, only 11 countries get more than 20 percent of their electric power from oil, Bloomberg reported.
Natural gas, not oil, is in competition with renewable energy. The fastest-growing source of energy, natural gas-powered plants now provide more than a quarter of the U.S. electricity supply. However, if low oil prices cause suppliers to limit production, natural gas prices could actually go up, making renewable energy even more cost effective.
Renewable sources, including hydropower, contributed about 12 percent of the U.S. electricity supply last year.
Citigroup’s optimistic prediction about renewables comes at a time when clean energy investment is growing across the globe. Worldwide, investment in renewable energy went up 17 percent last year, according to a U.N. report released Tuesday.
“Once again in 2014, renewables made up nearly half of the net power capacity added worldwide,” Achim Steiner, UN Under-Secretary-General and Executive Director of UNEP, said in a statement.
Read more at Why Low Oil Prices Won’t Stop the Growth of Renewable Energy
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