Risk Management
Adding renewable energy technologies to an energy investment portfolio can provide the diversification needed to hedge against unplanned events that threaten either the delivery or the affordability of energy. Renewable energy and energy efficiency can help protect against security threats, natural disaster, or human error by distributing energy supply sources rather than concentrating them in one central station power plant. The combination of renewable energy and energy efficiency also can help increase energy security by smoothing fluctuations in energy availability and providing emergency power during disruptions.
Adding renewable energy and energy efficiency to the mix of resources used by utilities to generate electricity can provide a needed hedge against rising or fluctuating prices of conventional fuels. The costs of conventional fuels tend to rise; the capital costs of renewable energy technologies are likely to come down and in the case of wind and solar, the fuel is free.