Rising fuel prices affect households directly. Suppliers say that they “have no choice but to pass on some of the costs to the consumers”. Britain’s fourth largest energy supplier NPower raised its electricity prices by an average of 12.7% and its gas bills by 17.2% on 5 January this year. In France, whose government has agreed to a 4% price rise for gas, the biggest supplier Gas de France nevertheless claims that the increase, is “not sufficient” and will “provoke a loss of around €90 million in the company’s operational results for the first quarter of 2008”.

As the costs of the shrinking reserves of conventional fuels climb ever higher, renewable energy sources, which are unlimited in supply and whose costs are therefore stable, become more economically attractive, a phenomenon boosted by awareness of the need to cut carbon emissions. Indeed, in 2007, investment in clean energy increased by a third to $117.2 billion. This is 36% more than for 2006, and $20 billion more than originally predicted by analysts. This boost in investment stems partly from the global fear of uncertain energy supply from conventional sources and the universal mobilisation to fight climate change by turning to alternative energies such as wind, followed by solar power and biofuels.

New Energy Finance has identified the four investment areas which have benefited most:

• Asset financing, leading with 40% more investment than in 2006, a total of 54.5 billion. Wind Energy accounts for almost half of the projects, attracting $24.8 billion of investment. Europe, the Middle East and Africa saw $9.8 billion, the Americas $6.6 billion, and Asia and Oceania $8.4 billion.
• Public markets have known the biggest growth rate with an increase of 80% since 2006, which translates into $18.9 billion. The main financing contribution came from Iberdrola Renovables: a flotation of $6.6 billion.
• Venture capital and private equity have seen new investment of $8.5 billion - an increase of 27% from 2006. Solar power was the leading sector, with $3 billion of new equity, and biofuels with $2 billion, wind energy attracted $1.8 billion and energy efficient companies $1.2 billion. In Europe and North America, early stage venture investment in energy efficiency companies more than doubled, reaching $96 million and $316 million respectively.
• More clean energy funds, which in 2007 were launched by a number of high street asset management companies in 2007, such as HSBC and Virgin

Moreover, there has been important regulatory progress: in December 2007, US President George W. Bush signed off the US energy bill, which strives for ambitious goals for the use of biofuels by 2022. On the other side of the Atlantic, the European Commission’s recently proposed renewable energy directive lays out how the EU will reach its 20% reduction in CO2 emissions, with national targets for the Member States.