Economic Woes Slam Renewable Energy Agenda

Writing in the Wall Street Journal, Rebecca Smith gives a snapshot of the state of affairs in the alternative-energy-devlopment world, and speculates about what impact it will have for President-elect Obama's ambitious green agenda.

We've made mention (a lot) of Obama's aggresive plans to develop new green energy projects, and how the political stars appeared to aligning in Congress to support that effort, but all of that could be for naught if the actual companies responsible for building and implementing the projectrs can't get financing to make them happen.

Smith notes:

"Hobbled by the financial crisis, power companies across the U.S. are slashing capital budgets and canceling projects for clean electricity. Financing for new nuclear power plants appears shaky. And some energy companies are even having trouble satisfying their short-term needs for cash.

Forging a new energy future by creating vast amounts of wind, solar and, possibly, nuclear energy is one of Mr. Obama's highest priorities. But enacting that policy depends to a large degree on the ability of energy companies and utilities to finance the massive new investments that would be needed. With many of those companies cutting spending, a lot of those investments are being pared back or eliminated."

Evidencing this trend, Smith points to the cancellation of a massive solar project in the Mojave Desert by Clear Skies Solar, and points out that Calpine is hoarding cash (not spending it on development) to offset its ongoing financial woes which are illustrated by its stock price which is down 60%.

So add one more obstacle to the list of roadblocks confronting the new green-energy future. Not only is it inefficient and and poorly positioned to hook into the grid, it is capital-intensive at a time when there isn't much capital to be had.

No one will dispute that green energy is the way of the future and much-needed, but the road ahead is long and increasingly bumpy.

Clean Energy Confronts Messy Reality [Wall Street Journal]