Ethanol's A Fraud, But Other Renewables Aren't

In the Financial Times today there is a story about the struggles of the renewable energy industry.  Not surprisingly, the capital-intensive industry is struggling along with the banking industry.

The problem here is that the FT is painting the whole industry with a broad brush.

The struggles of ethanol aren’t necessarily a harbinger for what’s to come for wind or solar. They are radically different technologies, with radically different goals. Ethanol was supposed to be able to replace gasoline, it clearly cannot. (Even if it could, it wouldn’t be a good decision. It’s a poor use of land.)

Solar and wind power aren’t supposed to completely eradicate our use of coal in the short term. Maybe in a century it’ll be possible, but that’s a ways away. The need to use ethanol arose in knee-jerk reaction to the rise in prices at the pump–coupled with xenophobia. Those two factors don’t really contribute to solar and wind run investment. They are more about producing cleaner energy that limits emissions.

For the tech savvy audience, we’ll make this analogy: If LinkedIn goes bankrupt some day, does that mean that Twitter will also fail? They’re both social networks. Of course, they’re under the same tent, but on different sides of the pole.

But, to the over-arching struggles with most renewable energy projects: Yes, it’s true that alternative energy projects–wind, solar, better batteries, etc.–are capital intensive and many will not make it through the downturn. But so what?

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