Renewable Energies in North America
Moving Toward a Richer Mix - Ernst & Young Economist Intelligence Unit Survey of Business Executives
Executive Summary
Proponents of renewable energy in the US and Canada say there has never been a better opportunity to replace carbon-based fossil fuels — coal, natural gas and oil — with alternatives such as wind, hydroelectric and solar power. The governments of both countries are evaluating their long-term energy policy, and the Obama administration has touted renewable energy as a driver of future growth.
Despite the favourable environment, however, businesses are only tentative consumers of renewable energy. And many energy producers are still waiting to see if there are significant opportunities to generate new revenue.
To investigate the views of Canadian and US senior executives with regard to renewable energy, the Economist Intelligence Unit conducted an online survey of 132 executives, interviews and related research. These are the main findings.
- The bottom line matters. For renewable energy to contribute significantly to reducing North America’s heavy reliance on fossil fuels, the cost of renewable forms of energy must fall. Supply of renewables is limited by the need for heavy investments in infrastructure and relatively lower margins. Uncompetitive pricing vis-a-vis fossil fuels constrains demand from energy consumers.
- The public eye matters — for suppliers. Public perception is a significant driver for energy suppliers, pressuring them to commit to incorporating renewables into their energy portfolio. In contrast, there is less pressure on energy consumers.
- Governments are in the driver’s seat. If renewables are to meet public expectations, governments must pursue a clear agenda to provide incentives for suppliers and consumers alike. Both groups say that governments have a key role in creating an environment favourable to renewable energy. Consumers are most influenced by government tax incentives. For suppliers, government regulation remains the biggest barrier to greater investment in renewables.
