Nowadays due to the increasing population our natural resources for energy are in danger. The energy sources that we are using today such as coal, gas and oil (fossil fuels) are finite and will be depleted someday. Furthermore, fossil fuels are very harmful for the environment as they release carbon dioxide and greenhouse gasses, which leads to problems such as global warming. Due to the environmental effects of fossil fuels it has become crucial to find alternative sources of energy. That is why renewable energy is becoming more and more important everyday. Even though some countries have renewable energy sources they still have problems and it does not seem like they will be able to replace fossil fuels with renewables in the near future. The Netherlands, for instance, is still relying on fossil energy for over 90% of its energy demand. One of the main obstacles that make it difficult to transform to renewable energies are the costs.
Investing in technological advances can diminish some of the costs of wind energy. Furthermore, with the support of the government it is also possible to overcome some of the policy uncertainties. For the sustainability of our planet we need renewable resources. Even though there are some costs, with long-term investments on wind technology, wind energy can become affordable.
Bottom line: it is important to make financial analysis before making investment. It is more difficult to make predictions about wind energy as wind fluctuates; however with investments in technology and appropriate policies it is possible to overcome some of the challenges.
* Please comment on these posts from my environmental economics students, to help them with unclear analysis, alternative perspectives, better data, etc.