Clean and Affordable Energy? I'm a big fan
Authored by:
Ankit Mallick, Diptisikha Dash, Kashish Gupta, Raghav Grover, and Rucha Kalekar
Why is Clean and Affordable
Energy important? – An Introduction
The world, as we know it, is
hungry for energy and that is something that is not going to change for a long
while. Energy is one of the basic requirements for living, whether it is for cooking
of food, for illuminating the darkness of the night or for providing heat in
the cold of the winters, amongst other things. But, as with all good things
there is more than meets the eye here: production of usable energy accounts for
more than 60% of the greenhouse gas emissions around the world [1].
Fossil fuels have provided a steady albeit unsustainable source of energy and
have fuelled the growth story of the world. There has been a rapid increase in
the standards of living across the globe wherever energy has been there, and
the trendline is not slowing down either. There has been a symbiotic increase
of global incomes along with the trinity of industrialization, urbanization and
motorization. The global average temperatures have been rising [2] over
the same time frame in which there has been an expansion of global income
levels and the middle-class population (as per Goldman Sachs consumption growth
forecasts) and this is not a mere coincidence [refer graphs].
Even though we need to shift from
non-renewable to renewable sources of energy, to meet the energy demand of such
a demographic in a sustainable manner that is clean and affordable is going to
be challenge, given the dependency we currently have on fossil fuels, namely
oil, gas and coal.
So, what are these clean and
affordable energy sources that can drive our growth and consumption pattern in
the future? Let’s find out.
What next?
“Our dependence on fossil
fuels amounts to global pyromania and the only fire extinguisher we have at our
disposal is renewable energy” - Hermann Scheer
Non-fossil fuel
sources of energy have been rising steadily, and for the first time, have
contributed (including nuclear and hydropower) more to the growth of energy
basket than any single fossil fuel[3]. Despite this, there is still a long way for us to go
if we need to shift completely to clean energy. This change might also not be
abrupt.
Natural Gas has been showing incremental growth even when oil and coal
growth rates are declining, and this is due to improved technology that led to
the discovery and extraction of Shale Gas and CBM (Coal Bed Methane); in all
probability, Natural Gas will be serving as the transition fuel Further, the
prices for renewable sources have been falling drastically over the past few
decades thanks in part to the technological advances as well as the support of
governments through well placed policies and subsidies for the producers and
users of clean sources of energy.
Now, let us quickly glance at what the different non fossil
fuel sources of energy are, that have potential to form a major chunk of the
energy basket of tomorrow, and look at them in the context of India.
India is standing at the crossroads where our per capita
consumption is increasing but is not close to developed countries. This gives
India a chance to focus on renewables as a major growth driver of our energy
basket, to give it strategic leverage in the future, and emerge as a leader in
the upcoming domain.
The current scenario is as follow, as reported by the UN:
The current scenario is as follow, as reported by the UN:
An
Interesting development in solar energy
|
International Solar Alliance:
It is a cohort of 121 countries, initiated by India, that have joined hands
voluntarily to work for efficient exploitation of solar energy. The alliance
has committed USD 1 trillion, and can prove to be a catalyst for India to
achieve its target of 100GW of solar energy generation by 2022. Harvested
using Photovoltaic PV cells, solar energy is practically a limitless source
of energy marred only by the cyclic, non-continuous availability (because of
day/night) and the challenge of storing it efficiently. As the technology for
batteries and energy storage will improve, the share of Solar Energy will
increase as well.
|
Business Implications and
the challenges businesses face
The Sustainable Development Goal
7 of ensuring access to affordable, reliable, sustainable and modern energy for
all [4] has many opportunities for businesses in the energy sector.
The proportion of people having access to electricity has increased [4]
over the years; however, many people still live in the dark. This gives
opportunities for companies involved in transmission and distribution of
electricity for setting up infrastructure for the same. The focus on
sustainability implies moving away from traditional coal-powered plants, and
this gives many opportunities for businesses in the renewable energy sector
like solar, wind, water, biomass and geothermal energy as these sources are
abundant and do not face the danger of depletion [1]. Governments
world over are investing in renewable sources. Electric trains in Netherlands
are fully powered by wind energy. In India, over 21 GW worth capacity of
renewable energy has been installed between 2012 and 2018[5].
Widespread use combined with technological advancements has reduced the cost of
generation of these forms of energy. The cost of generating solar energy, for
example, has decreased over 80% in the decade starting 2009[4D].
Apart from electricity, Goal 7 also focusses on fuel for cooking and vehicular
fuel. Due to the pollution caused by fossil fuels, electric vehicles are
gaining focus. The usage of cleaner sources like gas and electricity for
cooking is confined to urban areas, and the number of people using polluting
fuels for cooking has increased over the years [4]. These people
give a significant opportunity for clean energy manufacturers to increase their
customer base.
The situation for businesses in
other sectors isn’t very promising. To ensure the fulfilment of Goal 7,
businesses have to move towards renewables and energy-efficient technologies.
Energy intensity, which is the energy needed for producing 1 unit of economic
output, is decreasing but the rate of decrease isn’t sufficient to meet goals
[4]. This necessitates the need for advanced technologies which can
increase energy efficiency, and businesses need to invest substantially in it.
The shift to renewables poses some problems,
especially in the manufacturing sector[7]. The steel industry, for
example, needs a continuous electricity supply to keep its boilers running and
a high temperature of over 1500 degrees Celsius, both of which cannot be
provided by the existing clean energy sources. Therefore, while clean energy
can be used to meet daily requirements like that in offices, they can’t
completely replace conventional thermal energy. Moreover, the one-time cost of
shifting to clean energy sources is also high, as adjustments will have to be
made to factor in power quality issues which are usually prevalent in renewable
energy. The per-unit cost of clean energy is higher as compared to
non-conventional sources. This may lead to an increase in cost leading to price
rise. In case the market isn’t willing to pay the increased price, companies
may lose customers to competitors. In case of electric vehicles, factors like
lack of charging infrastructure, Governmental regulations, and unavailability
of local suppliers of batteries pose problems in many countries.
Shifting to renewable energy and
improving efficiency has proved to be beneficial for organisations. Hilton
Hotels started setting annual targets for energy, waste and water in 2009, and
since then have reported saving $1 billion and a 30% reduction in carbon footprint
[6].
What steps have businesses
taken?
Organisations all over the world
are taking steps to move towards cleaner sources of energy. For example, Infosys
[8] has installed solar panels in their campus, and this met 32.8% of
their energy requirements in the fiscal year 2019. The company has also
installed biogas plants to aid cooking in rural areas. Apart from this, they
are constantly involved in technological research. Infosys has partnered with
IIT Bombay for evaluation of PV modules in Indian conditions. Research is also
ongoing on improving the efficiency of lighting systems. Infosys has been
awarded the ‘Energy Conservation Award’ under Buildings category by the
Telangana State Renewable Energy Development Corporation for executing the
‘Best Practices in Energy Conservation’.
Mahindra [9] generates
15.2% of its electricity from renewable sources. Solar panels, along with solar
LED lights and solar heaters are being used to reduce dependence on the grid.
Across various locations, the company has installed energy-efficient lighting
systems and motion-controlled sensors to reduce the consumption of energy.
Many of these businesses claim
that they procure energy from green sources and they have certificates to prove
the same. However, most of them are via the book and claim method in which the
companies buy certificates for the amount of energy they consume from
generators who produce renewable energy irrespective of where the electricity
has been generated.
One thing that can be observed is
that companies report what is being done on their premises, but rarely focus on
what is being done at the consumer’s end, i.e. how much the usage of their
product is contributing to emissions. For example, a fridge manufacturer may
have very good systems in place to ensure that the footprint of the company at
its premises is minimum. In case the fridge isn’t energy-efficient, it will
contribute to emissions through the customer’s end. This is an important aspect
to be considered; however, it is often neglected as tracking emissions far from
the premises is difficult.
How is it linked to other
SDGs?
Great benefits can be derived
from the SDGs devised by the UN if the interlinkages between them are
strengthened. We come closer to achieving the SDG 7 targets by not only
focusing on how other SDGs can work together with this SDG but also by taking a
look at the goals of the Paris Agreement[10]. Currently, SDG
7 has a strong linkage with SDG 1- Poverty Alleviation. For example, the poor
end up paying prices beyond their pay to afford electricity while for others it
is just a regular expense. The targets of SDG 7 actually make an impact on the
bottom of the pyramid. Selco, a social enterprise based out of Bangalore has
been focused on improving the living standards of the poor and off-the-grid
through sustainable energy solutions primarily through solar energy[11]. And although there are entities worldwide
like Selco which have managed to carry out such operations by even tying up to
offer microfinance to finance energy initiatives, there is still a lack in
legal frameworks and the problem of underdeveloped economies [10].
SDG 7 also interlinks with SDG 3
Health in various ways. The usage of cleaner energy will reduce the pollution
levels in our cities which will make the air more breathable and the water
cleaner for us. It will reduce pollution related issues like asthma, lung
disease and even heart attacks. Moreover, providing reliable electricity to
countries like those in Sub-Saharan Africa could make a huge impact on their
growth of medical facilities. Electricity means energy to cook and energy to
heat and light up homes and this definitely has positive health benefits. Clean
household energy as well as energy to drive healthcare needs, needs to be made
a focus [10].
Additionally, the worst of the
energy poverty that affects millions is experienced by the women and children
of the household and household air pollution is said to cause a whopping 2.8
million deaths a year. The cause of this air pollution is the usage of solid
fuels for cooking, improper stoves and kerosene on open fires which produce particulate
matter that causes deadly diseases like pneumonia, stroke and ischaemic heart disease
[12]. By implementing SDG 5 Women Empowerment, barriers for women
in the energy sector can be reduced [10].
SDG 4 Education boosts when
electricity is reliable. Literacy is larger issue in countries which have
electrification below 80%. If there is electricity, schools will be able to
function properly and millions more could be educated. Energy investment in the
education sector along with collaboration and support from stakeholders will
drive both these SDGs a long way [10].
In the long run SDG 7 is crucial
for SDG 11 Sustainable Cities which in turn is a response to the SDG 13 Climate
Action. Further, SDG 9 can be promoted through “green” industrial transformation
and SDG 8 Decent Work and Economic Growth can be furthered by providing jobs in
the clean energy business. Responsible manufacturing and products developed
through cleaner technology leads us to SDG 12 Responsible Consumption and Production
[10]. It is pretty evident that that the initiatives of SDG 7 must
synergize with the other SDGs to truly transform our world.
What more can we
do?
Energy production and consumption is critical
to nearly all major challenges and opportunities that the world is facing
[1]. By now, it might be pretty clear that a lot is being done to shift
towards a cleaner and affordable form of energy. But is this enough? By no
means are we anyway close to achieving complete reliance on clean fuels. Fossil
fuels are still being used and don’t show any signs of declining consumption.
Canada, the ‘torchbearer’ in the fight towards
this cause has itself shown duplicity in this matter. Prime Minister Justin Trudeau was among the few who
argued that even the Paris Agreement was not stringent enough. On the other hand,
in a conference with oil tycoons, he said that “No country would
find 173 billion barrels of oil and just leave it in the ground” [13]:
for which he received a huge standing
ovation! His government decided to go ahead with the Trans Mountain Pipeline System [14] despite facing flak
from environmentalists and massive protests from First Nation groups whose
habitat and livelihood were being destroyed.
Hence, mere words and empty
promises are no longer going to be enough to deal with this issue. We need to
take conscious steps and make all stakeholders accountable. The climate change
crisis has reached a stage where the shift to affordable and clean energy is no
longer optional. So, what more can we do? Let's look at an analysis along the
lines of Affordable and Clean energy. Though every individual must do their
part, the overall scope has been broadly classified based on Governments,
firms/companies [including those companies that generate energy] and
individuals/households.
Government level
1.Putting a price on Carbon
A recent research by the Global
Commission on the Economy and Climate has shown that taking strong action
towards climate change can help deliver more than $26 trillion by 2030. This
shows that not only are initiatives towards rectifying climate change
necessary, they are also economically prudent. Shown below is a map indicating
the countries where a carbon tax or an ETS [Emissions Trading System] has been
implemented.
An example of this is Chile,
where the government passed a carbon tax in 2014. It was aimed at reducing
Chile’s carbon footprint and curb the menace of fossil fuel associated
pollutants. This tax was in the form of $5/ton of CO2 for the
thermal power plants and helped the government generate more than $150 million
through tax collection. This additional tax burden was subsequently used to make
energy more affordable. It also forced power plants to reduce their carbon
footprints while continuing to produce electricity.
2. Removing subsidies from
fossil fuels and incentivising renewable energy production
Desperate times call for
desperate measures. Today’s governments need to introduce more (stringent)
schemes that promote the use and production of clean energy. Also, it needs to
introduce more schemes and initiatives promoting clean energy.
The Indian Government has
launched some programs to support solar power, including KUSUM scheme “for
farmers for installation of solar pumps and grid-connected solar and other
renewable power plants in the country [15].”
The “2nd phase of the
Grid Connected Rooftop Solar Programme”
[16] has been another such initiative wherein the Indian government
has financed the installation of 400MW capacity using solar panels across
India. Such schemes should be diligently carried forward and implemented across
all states in order to maximise its benefits.
3. Access to clean cooking
Governments, especially in
underdeveloped and developing nations, can focus on providing rural households
with cleaner alternatives to cook their meals. An exemplary initiative is that
taken by the Bangladesh government through their Grameen Shakti project wherein
they have focused on clean energy “by bringing off-grid households the
opportunity of buying photovoltaic solar-home-systems (SHS) for lighting and
small appliances.”[17] India has immense scope for the same and much
more can be done in this regard.
Firms & Company level
At the producers level, it
becomes imperative to drive this change. Companies can contribute a lot by
incorporating these fundamentals of Sustainable Development into their Vision
and Mission.
Some steps they can take are:
- Increased
investment into R&D to look for cleaner means of energy generation.
- Firms
can try and reduce an internal demand for transportation through
intelligent use of technology. They can incentivise the use of sustainable
technology and products. Also, logistics and supply chains can be modified
to shift towards a use of cleaner modes of transport.
- Companies
can invest more in promising renewable energy ventures and help this
market grow as is being done by Tesla [ SolarCity].
- As
discussed earlier, companies that do take initiatives to use clean energy
usually restrict the purview of their scope to their own premises. There
is an increasing need for such companies to encourage individuals and
customers to carry forward their initiative. An example is that of ITC’s
hotels taking small steps such as the “Give back as much as you take” campaign
[18] which encourages its customers to be environmentally conscious
by providing small eco-educational toolkits.
Households & Individual level
- There’s
a famous saying that ‘Energy saved
is energy generated.’ While it is important for governments and firms
to implement policies that are aimed at generating cleaner and affordable
energy, as individuals, we need to do our bit by reducing our energy
consumption. A reduced consumption will ease the strain that producers
currently face in the transition towards renewable energy sources.
- Using
public means of transport is another step. People can shift to hybrid and
electric vehicles to reduce their carbon emissions.
- Turning
off computers, fans etc when not in use, walking or cycling to nearby
places and avoiding frivolous spending on HVAC [Heating,
ventilation and air conditioning products] can greatly help reduce energy
consumption.
With SDG 7 being the GOAL OF THE
MONTH amongst the SDGs, now would be the right time for us to collectively
pledge to positively contribute towards reducing our energy consumption so that
we can make energy affordable for others.
REFERENCES:
[1]: SDG 7: Affordable and Clean Energy. (n.d.). Retrieved
from https://in.one.un.org/page/sustainable-development-goals/sdg-7/.
[2]: GISTEMP Team, 2019: GISS Surface Temperature Analysis
(GISTEMP), version 4. NASA Goddard Institute for Space Studies.
Dataset accessed 20YY-MM-DD at https://data.giss.nasa.gov/gistemp/.
[4]: Ensure
access to affordable, reliable, sustainable and modern energy for all - SDG
Indicators. (n.d.). Retrieved from https://unstats.un.org/sdgs/report/2016/goal-07/.
[5]: India's renewable energy growth. (n.d.). Retrieved from
https://www.teriin.org/infographics/indias-renewable-energy-growth.
[6]: SDG 7: How business is acting as a market shift for
renewable energy - The Climate Group Blog. (n.d.). Retrieved from https://www.edie.net/blog/SDG-7-How-business-is-acting-as-a-market-shift-for-renewable-energy/6098653.
[7]: What are our biggest challenges in transitioning to
100% renewable energy? (n.d.). Retrieved from https://www.sciencecanchangetheworld.org/en_US/buzz/blog-what-are-our-biggest-challenges-in-transitioning-to-100-percent-renewable-energy.html.
[10]: UNITED NATIONS DEPARTMENT
OF ECONOMIC AND SOCIAL AFFAIRS. (2018). ACCELERATING SDG7 ACHIEVEMENT.
[11]: India, S. (2019). SELCO
| Innovative Energy Solutions. Retrieved 5 December 2019, from http://www.selco-india.com/
[12]:
Household air pollution and health. (2019). Retrieved 5 December 2019, from https://www.who.int/news-room/fact-sheets/detail/household-air-pollution-and-health
[13]: Berke, J. (2017, March 10). 'No country would find 173 billion
barrels of oil and just leave it in the ground': Justin Trudeau gets a standing
ovation at an energy conference in Texas. Retrieved from https://www.businessinsider.com.au/trudeau-gets-a-standing-ovation-at-energy-industry-conference-oil-gas-2017-3.
[14]: Trans Mountain Pipeline. (2019, November 17). Retrieved from https://en.wikipedia.org/wiki/Trans_Mountain_Pipeline.
[15]: PM KUSUM scheme. (n.d.). Retrieved from http://vikaspedia.in/energy/policy-support/renewable-energy-1/solar-energy/scheme-for-farmers-for-solar-pumps-and-power-plant.
[16] India Project Update: Grid
Connected Rooftop Solar Photovoltaic Program. (n.d.). Retrieved from https://www.worldbank.org/en/results/2019/02/27/grid-connected-rooftop-solar-photovoltaic-project.
[17] Grameen Shakti: Ashden
Award Winner 2008. (2018, January 12). Retrieved from https://www.ashden.org/winners/grameen-shakti#continue.
[18] WelcomEnviron, ITC Hotels'
Initiative for a Green World. (n.d.). Retrieved from https://www.itchotels.in/environment.html.
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