UK climate secretary: renewable energy pays off when oil exceeds $100 barrel

Recently, the UK's energy and climate change secretary, Chris Huhne, spoke of his country's ambitious low-carbon energy plans, telling conference-goers at the Royal Geographic Society that the billions invested in renewable energy will pay off economically. There's a caveat, though: this only happens if oil exceeds $100 a barrel. As Huhne predicts, consumers will see reduced utility bills from low-carbon energy investments when oil soars above what he calls "the break-even point" of $100 a barrel. Huhne worded it like this:

If we relied on oil and gas, and the price stayed relatively low at $80 a barrel then consumers will pay more under our policies – about an extra 1% on their bills by 2020.

At the oil price reached this month – $100 a barrel or more – consumers will pay less through the low carbon energy policies than they would pay for fossil fuel policies.

And if the U.S. administration is right, and the price is $108 a barrel in 2020, then our consumers are winning hands down.

We know that accurately predicting future oil prices is next to impossible, but with price up to $95 right now, doesn't investing in alternative seem like the smart bet?

[Source: Guardian.co.uk | Image: David Spender – C.C. License 2.0]