Many environmental activists see capitalism as an enemy. While the debate is endless, we must admit that the economy and society are intertwined in the capitalist world of today.
As society is slowly realigning and adopting environmental reforms, the economy cannot be far behind. The ideas such as ‘green economy’ are proof of that.
Energy economy refers to the study of the supply and usage of energy. It also includes the impact of this consumption of energy.
There is a shift in the energy economy in response to the growing environmental concerns. And there is an interesting mechanism operating underneath this ‘new economy.’
Here are the facts about the new energy economy that you might want to know.
Why do we need to study the new energy economy?
The new energy economy will have an impact on three levels: the individuals, the companies, and the governments. The direct impact on our lives in these three verticals is in the same order, and as we proceed towards this new economy, we must prepare ourselves for the changes that will arise from all three.
It is no secret that, historically, energy consumption has been linked to economic growth.
Since 2018, the demand for energy has been driven by climate change. The number of extremely hot or cold days has increased, leading to dependence on air conditioning. Thus, climate change is driving the economy.
These reforms will regulate the national economies in the long run for many countries with high potential for solar and wind. The shift from fossil-fuels is imminent; a conscious move towards clean-tech can be beneficial to the country and its citizens.
The current state of the energy economy
Many companies claim to have a green plan today. It has become a trend.
But technology is not catching up at the same pace as the trend. There have to be some drastic improvements in technology for the dream of a green economy to be feasible.
Disruptions are the modern form of miracles. That’s what we need.
According to the US Energy Information Administration, the World Energy Consumption was 5.67 × 1020 joules in 2013. Hydrocarbons are responsible for supplying more than 80% of energy worldwide. Whereas, solar, and wind energy account for a mere 2% of the global energy.
For a complete shift to renewable energy, we need a 90 fold increase in its production over the next two decades.
Canada, U.S.A., and Saudi Arabia have the highest energy demand per capita today.
Benefits of moving to a new energy economy
While people are becoming increasingly conscious about the environment, the governments and some companies have a more significant incentive. Green energy is beneficial for the economy.
Green economy reduces wastage, and hence waste treatment.
Renewable energy is indigenous since it exists within the national territory, an essential factor in avoiding external dependence or the need to import energy in the form of oil or gas.
The development of renewable energy also generates many new jobs throughout the chain, i.e., manufacturing, construction, operation, and maintenance.
Companies are driven to shift to green energy in order to remain competitive. In a survey of 240 companies with revenues of $100 million or more, 85% said they plan to take action for carbon reduction within three years.
The move to a new energy economy
Many hurdles need to be overcome before we can realize the dream of a new energy economy. Many of these are technical, but some have to come from companies and their policies.
We have to move beyond the facade that we’ve put up and imbibe green and clean energy in our culture.
China dominates the global production of batteries. But 66% of its energy supply is coal-fueled.
EVs that use Chinese batteries are said to create more carbon dioxide than is saved by the replacement of oil-burning engines. Over 30 years, $1 million worth of solar and wind farms produce 40 million and 55 million kWh respectively.
An equal investment in shale wells produces a natural gas that can generate 300 million kWh over 30 years.
Thus, there is much scope for technological improvement.
In a report by Manhattan institute, it was found that 80% of participating companies had a two-year plan for adopting green energy practices. But only 23% were found to have demand response strategies or plan to in the near future.
According to a report by Schneider Electric, most organizations think that they are ready for a “decentralized, decarbonized and digitized future.” Still, many are not deferring major decisions about their energy and sustainability programs.
The future of energy
Startups are the new superpowers. We have to turn to these engines of innovations to lead us on the path to green energy. Much of the interest shown by investors in green energy is because of these companies.
We can hope that this trend continues and supports the cause.
The batteries produced by the Tesla Gigafactory annually can currently store three minutes of the annual US electric demand. Storing the energy that could be supplied by a 300-pound barrel of oil requires 20,000 pounds of Tesla batteries.
But the interest shown by companies such as Tesla has led to many investors and venture capitalists to give consideration to energy companies. This shift has led to the emergence of many innovative energy solutions such as energy storage facilities and AI-powered micro-grids.
The journey to a green-economy is still a long one. While individuals are beginning to adopt green energy, companies are expected to eventually follow the same path.
We start doing it because it’s right. We start doing it because everyone else is doing it, or we start doing it because it has to be done. At some point, though, we start moving towards green energy.
Soon enough, the movement will catch the pace. And the change won’t be led by our environmental concerns but will be driven by economics.