New industries are springing up all the time. Some survive and some die quickly. An example has been price comparison sites, particularly those promoting cheap car insurance - it was unimaginable in 2021 for motorists to do otherwise than insure their cars online in this way. You could buy short term insurance, insurance for female drivers, car insurance for motorists with convictions, even specialist policies for people with disabilities.

Things were changing though. Car ownership itself is going out of fashion - millennials prefer to borrow cars and insure them short term rather than own their own, the march towards electric cars that drive themselves seems unstoppable and car insurers from 2022 will be banned from giving cheaper prices to new customers. Price comparison sites selling car insurance are gettting distinctly edgy. Will renewable energy go the same way? Or is it just a fashion that will go out of fashion?

Renewable energy has dominated the news in recent years. From the implementation of large-scale products such as wind farms to the development of new technologies including affordable photovoltaics and hydroelectric power, many nations are now espousing the notion that these alternatives are indeed the way of the future. However, there is significant doubt as to whether or not this is an economically viable option. Let us never forget that the technology behind fossil fuel extraction and consumption has been established for decades. While renewable energy may very well represent a utopian dream, the fact of the matter is that this concept (as of the present) is simply not economically sound. Why is this the case?

To put this phrase in another way, the powers that be are simply unwilling to let their grip on traditional fossil fuels slip. It is critical to recall that major corporations such as Royal Dutch Shell, Exxon Mobile and BP have a significant influence in governmental bodies around the world. Thus, any major financial legislation that would otherwise be passed is likely to be blocked before it ever comes into fruition. This is perhaps the largest stumbling block (from a financial standpoint) that renewable energy faces.

In terms of sheer size, the current oil market is massive. Estimated to be worth no less than $2,183,000,000 dollars (1), investors will be very hesitant to reallocate their funds into an area that has not yet been viably proven to produce quantifiable results from a long-term perspective. However, this is not the only reason why investors may be hesitant. We must also take into account the fact that a paradigm shift away from traditional fossil fuels such as coal, natural gas and oil will cause instability across large sectors. This is particularly the case in very cheap regions of the world such as the Middle East. Foreign and domestic investors fully appreciate that if the demand for oil was substantially cut, economic instability and further internal strife would be the inevitable results. This could very well have a knock-on effect in regards to global markets; another full-scale depression would not be out of the question.

In order for any venture to attract investors, it has to be proven that the ROI is high enough to supersede any risks involved. There are problems with this in terms of renewable energy projects. One example which highlights this observation can be seen in the proposed offshore wind farms near the United Kingdom.

Many proponents of green energy have stated that these farms would be able to accommodate for the bulk of energy requirements. However, economist David McKay came to a rather dramatic conclusion. In order for the proposition to be valid, the country would need no fewer than 44,000 turbines which generate an incredible 3 megawatts of power each. They would also be required to stretch around the full 3,000 kilometres of coastline (2). Of course, this is not a realistic choice. There is also the unpredictable nature of the wind itself. This is only one example of why investors tend to be quite wary in terms of a substantial commitment.

It is also critical to realise that the ways in which fossil fuels are utilised have evolved dramatically during the past few decades. In developed countries such as Canada, the United States and the United Kingdom, much less pollution is now released into the environment. Innovations such as "scrubbing" the exhaust from gas- or coal-fired plants through the use of seawater are now being implemented on a moderate scale (3). Additionally, more efficient residential commercial and residential heating systems have likewise lessened the amount of energy required for basic needs.

One of the major financial factors which influenced some to consider the viability of renewable energy arose from the fact that in the past, it was thought that fossil fuels may simply run out within a handful of decades. Now that emerging technologies such as fracking (although debatable) and the extraction of oil from shale are now being practised, the supposed dearth of fossil fuels is much less of a concern. When these variables are combined with massive reserves that are now known to exist underneath the Arctic Circle (and easier access to these deposits), we once again see that investors will be keen to keep their long-standing positions where they are.

Assuming that all of these previous metrics have been accounted for, the final (and perhaps most financially daunting concern) would be the sheer implementation of renewable energy projects on a global scale. This would cost well into the trillions of dollars and pounds over the years. We must then consider the logistics of placing such schemes into countries such as China and India. This is even more of a concern in developing nations including those on the African continent. There is no doubt that a large amount of hesitance will exist and it is unlikely that countries from disparate parts of the world would ever come to any type of legally binding agreement. Once again, this trickles back down to the investors (both large and small).

Although it is likely that renewable energy will eventually replace the existing consumption of fossil fuels, it is simply not economically feasible at this stage in terms of a large-scale shift. The primary reasons behind this are once again:

•The hesitance of major corporations to embrace this technology.
•Investor reticence.
•Economic instability in certain regions of the world.
•The viability of large-scale projects.
•More efficient fossil fuel use.
•The ability to secure new sources of fossil fuels.
•The problems of globally implementing such systems.

These are some of the primary financial stumbling blocks which are simply undeniable. From a wholly economic point of view, the mass dependence upon renewable energy is still unrealistic.