Renewable Energy: Challenges and Opportunities
Power generation capacity from new renewable energy sources globally was 280,000 megawatts (MW) in 2008 compared to 240,000 MW in 2007, registering a growth of 16 percent. Hence, in spite of recession impacting the expansionary plans, there has been a robust growth in the renewable sector. This proves that there is immense growth potential for the sector going forward.

For the last few decades the two major concerns for countries globally has been climate change and energy security. The policy makers are becoming aware of the importance of renewable energy for addressing the above mentioned concerns. In 2005, 48 countries had renewable energy targets, which increased to 73 by the end of 2008. The fastest growing market for renewable energy is China, which has doubled its wind capacity every year, for four years continually. This augurs well for the renewable energy sector and provides immense opportunity of growth for the sector.
Companies in developing countries see merit in use of renewable energy, as it enables them to get carbon credit. Carbon credits are aimed at monetarily rewarding companies, which reduce greenhouse emissions and are traded in many countries. In countries such as India and Oman, government also provides tax initiatives to companies, which make investment in renewable energy. Hence, promoting renewable source of energy not only makes environmental sense but also business sense.
During recession, developed countries have been promoting renewable sector as a major job provider. The U.S has planned an investment of $150 billion over ten years in renewable energy, with a view of creating jobs.
A major focus area for renewable energy companies globally has been opportunities in the agricultural sector. Renewable energy sources which can play an important role in improving fuel efficiency in farms include solar, wind and bio fuels. Wind energy alone has a potential to create additional income of $1.2 billion for farmers and rural landowners by 2020. It can also create 80,000 new jobs. The major advantage of solar energy is that it is environment friendly and unlimited. On the other hand US could create $20 billion additional income for farmers and rural communities, by tripling its bio fuel consumption, by the end of 2020.
However in spite of the immense opportunity for the sector, there are two major roadblocks in the path of its universal acceptance. They are cost and reliability.
For instance, in Europe, due to concerns about overall reliability, bio-diesel production is facing economic challenges, with several plants being shut down. During recession, the consumers have become more cost conscious and hence, are not ready to pay more for environmental reasons. With wind energy the cheapest source of non renewable energy (other than hydro power) being 50% more costly than traditional coal plant, it is a major challenge that the governments promoting non renewable energy are facing.
Companies have been making conscious efforts to reduce the cost of production for solar PV and wind energy. Hence, going forward non renewable sources of energy is all set to grow at an exponential rate.