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The outlook for renewable energy development looks bright in 2015, despite the fall in oil prices, according to a report by Citigroup Inc.
While oil is the single largest source of energy at the moment, the constant change in the price of oil globally has urged world leaders to consider other sources of energy.
The report has stated that renewable energy is the most economical substitute to coal-fired power. In the long run, conventional clean energy sources such as wind and power will emerge bankable due to their economy, reduced environmental impact and energy security.
In addition, the price of wind and solar energy has also fallen drastically. A report by the National Bank of Abu Dhabi has stated that the price of developing solar and wind technologies is far lesser than oil or fossil fuel – for US$10/barrel or US$5 million British Thermal Units (mbtu), solar is still a cheaper option.
Specifically, in the Middle East, companies are focusing on installing solar and wind technologies. Large-scale solar farms in the region are competitive with oil at US$30/barrel and an onshore wind farm can rally against oil at US$23/barrel, said the Citigroup report.
Essentially, even with reduced oil prices, conventional clean energy generation will not be threatened.
In addition to Citigroup, research from finance institutions such as Goldman Sachs Group Inc. and Deutsche Bank AG have also indicated that renewable energy will shrug off crude’s decline, and the banks too expect significant investment in wind and solar projects this year.