Barack Obama on Renewable Energy
Barack Obama has been elected as the 44th President of the USA and with his election, Solar Integrated Technologies rose by 30% yesterday after increases of 22% by Renewable Energy Corporation and 16% by the wind turbine maker Vestas. Barack Obama promised to spend $150 billion over the next 10 years developing alternative energy. Promises like these leave a legacy for future generations to imitate. Clean technology and green energy stocks have registered a new high as City analysts anticipate a major boost from the incoming president. The US election result has provided a much-needed encouragement at a critical time and that too for an industry which is still in its nascent phase. And this sector is threatened by the banking crisis and emerging economic recession. Some companies had seen their share prices halve in the turmoil that began in September. Reduction of carbon level, a cushion against fluctuating oil prices and creation of more jobs in economic slowdown would be the natural offshoots of this policy.
How the green energy analysts view Obama’s election to the highest office? Their mood is quite upbeat and they predict a major shift in the renewable energy policy of the USA. Earlier they were of the view that the Bush administration is not doing enough for the alternative energy. Kate Hampton, head of policy at Climate Change Capital, a UK-based investment manager, was delighted with the poll outcome and views it as a massive step forward for renewables. She opines, “We cannot overstate how divisive the Bush administration was, how far behind the US now is in the transition to the low-carbon economy and how high expectations are now that Obama is the president-elect.” Dean Cooper, alternative energy analyst with Ambrian Partners in London, is also expecting widespread change in the US widespread change in the US, considering that production tax credits for wind power generation companies and industries has been increased from one year to seven years, and more push towards a greener economy.
In the era of globalization, even European markets can’t remain immune to the fluctuations faced in the US market. “Since the onset of the most recent phase of the credit crisis, the European wind sector has been battered with an unweighted average decline of 45% compared to a decline of 23% for both the S&P 500 and FTSE Eurofirst 300 over the same period,” said Michael McNamara, analyst at Jefferies & Co, in a research note published at the height of the sell-off. “Much of this has been linked to fears that wind power developers would see themselves cut off from access to financing due to a toxic combination of a potential global closure of the project finance market and a drying up of demand for tax equity investment in the US.”
It’s highly unlikely that Barack Obama will abandon his commitment to create a new energy economy although the times are tough and public financing is not thriving. Obama’s energy and environmental fact sheets are chalked out well with details. In October, in an interview with Time magazine he confirmed that energy would be his number one priority if he gets elected to the highest office.
Obama and the Democrats intend to tackle the excessive carbon emission problem legislatively by floating “cap and trade” system. This legislation intends to impose a cost on harming the planet, boosting the alternatives and feeding public coffers. The president-elect also has a good investment plan to finance some of his investment program via a windfall profits levy. And he also wants to make crude obsolete in future. For instance, he proposes showering buyers of plug-in electric and other “advanced” vehicles with a $7,000 tax credit, as well as getting serious about producing ethanol from plant waste.