Appraising sustainable investment in renewable energy

Summary

This investigation, inspired by the environmental implications of climate change, looks at the problems faced by an individual, household, small enterprise, voluntary organisation or local authority considering making a capital investment in a renewable energy system and wishing to make the best choice on grounds of sustainability. A switch from fossil fuel to renewable energy is widely recommended and encouraged as an essential element of any programme to implement sustainable development.

Traditionally, the simple to use 'payback' calculation has justified most capital investment decisions. An enquiry was conducted because there did not appear to be any method for sustainability appraisal that was as easy to apply. Individuals and organisations with expert knowledge of the subject were asked to comment by email, letter and telephone.

As a result, 5 methodologies and 5 techniques were suggested. Although there are some promising concepts, none can yet fully meet the needs of local decision-makers. Thus, further work is necessary to ensure that globally significant local investment is encouraged.

 Conclusions

  1. There is a growing scientific, political and religious awareness about the impact that the use of fossil fuels is having on the environment and renewable energy is being encouraged as a potential solution to this problem.
  2. Money based investment appraisal techniques are not suitable to measure sustainability, whereas sustainable development indicators are being designed to monitor broad economic and social as well as environmental issues.
  3. The current choice of sustainable investment appraisal methods requires wider communication and further development.

Recommendations

  1. That there should be further investigation of the factors that limit the potential for local investment in renewable energy and other sustainable developments and the means by which such limitations can be overcome.
  2. That there should be wider dissemination of information about the existing methodologies and techniques for sustainability appraisal.
  3. That those conducting research should be encouraged to consider the potential of 'networking' as a method of establishing the parameters of an unknown population.

An edited version of the Introduction and Chapters 2 and 3, which explain the background to this study, are also available on this web site.

The full report is available in an A5 paperback version, which can be obtained directly from the author at the price of £5 (in UK sterling) plus the cost of postage and packing (add £1 within the British Isles). Payments can be made by using a cheque drawn on a British clearing bank or by an international money order acceptable to the UK clearing mechanism. For further information before ordering, please contact The Renewable Way.

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