Renewable energy has attracted a great deal of attention
over the past decade, alongside climate change debates and decreased fossil
fuel security. Indeed, renewables now account for over half of the net additions to global energy production. However, this has still
not led to the majority of our energy mix coming from renewables, due to the
relative difficulty of changing away from fossil fuels, with economic, spatial
and social barriers to overcome. As of 2010, only 13% of our global electricity came from renewable energy sources. A focus will be drawn
therefore on these barriers to wide scale energy source changes, taking a
particular emphasis on the economic issues surrounding renewable energy at the
moment and going into the future.
Whilst there is a wide variation of different renewable
energy sources, major debates concerning renewable energy usually concern
photovoltaics (PV) and wind power. The former due to its direct generation of
electricity, and the latter due to its position as a mature renewable resource. Wind power has been harnessed in many forms for centuries, and
our modern application of wind to generate electricity has also been widely popular in many developed nations. However, social pressures in areas
such as the UK lead to opposition of wind farms in many areas due to their
audiovisual disturbances – which has in turn led to the development of
off-shore wind farms. These turbines are more efficient as wind speeds tend to
be higher over oceans, giving higher energy yields. However, the economics of
off-shore turbines is contested, with maintenance costs, as well as
infrastructure costs of transporting generated electricity to demand areas
leading to overall higher costs compared to on-shore farms. This begins to
describe the complexity of the renewable energy arena, with high cost and
supply uncertainties.
However, there are a number of positive outcomes of the
recent years’ energy debates and movements. Efficiencies of wind energy are
increasing, with larger turbines capable of production up to 5MW. In
the same vein, prices in nearly all renewable energy sources are decreasing (Figure 1).
Renewable Energy Source
|
Price (€ct/kWh)
|
Wind (offshore)
|
5 (18)
|
Photovoltaics
|
20
|
Hydro
|
4-19 depending on site
|
Tidal
|
10
|
Geothermal
|
7-15
|
Figure 1 - Price of renewable energy
Figure 1 shows the current prices of major renewable sources. A
consequence of this price drop is that renewables have become increasingly
feasible as a primary energy source, leading to a valuation of the renewable export market at £6.1bn. Nevertheless, this market is
difficult to access for a great number of nations. Renewables usually require a
high capital investment, even in countries with established renewable sectors. This alienates much of the developing world in producing energy
renewably. Investment has been suggested to be a product of policy stability, as
well as a baseline of capital, that many developing nations cannot afford to
achieve. As a counter to this, a number of studies have suggested the
need for a global ‘supergrid’, which allows for global provision of renewable
energy based on connected hotspots of each renewable resource – for example, solar
power from the Middle East and wind power from Northern Europe. This
would allow for an efficient infrastructure of renewables not limited to
wealthy or resource rich nations. However, it relies on a global communication
and cooperation that has not been possible before, and a level of global trust.
Also, countries such as the UK have moved to a greater renewable focus
partially to reduce reliance on other nations, and a supergrid would combat
this priority. Perhaps in the future, such an agreement will not seem so
ambitious, but for the moment it seems that renewables will remain open only to
those who can obtain sufficient investment and have the correct natural
resources.
This brings the focus to the future of renewable energy.
With the constant pressure of climate change, many expect the renewable
industry to continue to grow exponentially over the coming decade. High profile
studies, such as those conducted by Stern highlight the need to adopt
renewable energy methods as soon as possible. The premise of the argument is
that a small (1%) contribution of global GDP will allow for the establishment
of a primarily renewable society that is able to minimise the impacts of global
warming, in comparison to a ‘Business-as-usual’ model, or adopting renewables
too far into the future. Failure to swap to renewables in the short term will
mean greater losses of GDP in the future to accommodate for climate change
induced losses. As a result, it is expected that renewables will show a clear superiority over fossil fuels by 2020, due to high investment over the coming
years, and further technological advances. However, there are a number of
developments needed to complement this economic advantage of renewables.
Renewable energy incurs significant costs transporting the generated
electricity to areas of demand. Avoiding these costs will require the movement of energy-intensive industries to the areas around power plants, thus reducing
the amount of transmission lines and infrastructure needed. Furthermore,
whilst PV panels have received increased traction, with government grants in some European countries, in order for them to become a fully-fledged
energy source, a method of energy storage is required – such that energy can be
provided throughout periods of low solar radiation e.g. at night. Alongside
technological developments, social pressures impact the viability of renewable
energy in the present. Societal growth demands an annual increase of energy
demands by 1.8% to enable greater equality and development of poorer nations. Renewable skeptics do not see this able to be achieved using
purely renewable energy. However, given our current rate of technological
innovation, this could be achieved through increased efficiency of consumption,
such as a movement to LED lights, which are around 5 times as efficient as
traditional tungsten lights.
It has been found that we are capable of achieving a 100%
renewable society. However, in order to reach this point, innovations
into storage and transport methods must occur, which will facilitate the
adoption of renewables on a global scale. Renewables are limited in their
ability to supply all our energy needs, but based on real world data and future
trends, it is possible that we can become a renewable society in an
economically sound manner.
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