Posted: January 17, 2017, 3:19pm
Every country has a once in a generation opportunity to create a greener and more reliable energy future by streamlining energy policies. I think it’s time for the major energy industries to evolve their business models and strategize new market designs.
I recently read an article that talks about obtaining a cleaner and cheaper energy future by eliminating the fossil fuel subsidies. Since the second half of 2014, the oil prices plunged to half of what they used to be and the natural gas was at its lowest cost since a decade. That year the reduction in energy costs led the governments all over the world to throw out approximately $550 billion. The dip in the prices gave the countries an opportunity to change their reforms for a better future. Countries such as India and Indonesia that are massively cash-strapped began to heavily cut fuel subsidies and used that money on developing the nation by investing it in schools and hospitals. However, most of the countries haven’t followed this lead and just refuse to raise taxes on fossil fuels as politicians believe that an increase in taxes would trouble the citizens and hurt the economy. But on the other hand, a tax increase would force the people to conserve energy and reduce the possibility of future price swings. The article states that targeting petrol would be a major start as the federal government of America levies a tax of only 18 cents a gallon. It also suggests collecting a tax on carbon as that would then act as a reason for energy industries to go towards cleaner fuels. Burning fossil fuels also have serious impacts on the planet and the health of people. Thus, politicians must look at removing subsidies and encourage the growth of more efficient energy markets.
Apart from getting rid of subsidies, the governments must also be able to manage the abundance of energy that the world can produce. Electricity is being consumed better with the help of new technologies and this has helped reduce waste and subsequently cut costs. Now, due to the construction of new electrical infrastructures, referred to as DC supergrids, electricity can flow across continents. Known as ultra-high-voltage-direct-current (UHVDC), these links can transmit electricity over long distances whereas most electricity being transmitted today over short distances is as alternating current (AC). The UHVDC links also balance supply and thus make the grid stable and greener. China’s state-owned electricity grid, State Grid, had devised a plan to spend $88 billion on this infrastructure between 2009 and 2020 and aims at 23 operating lines by 2030. These UHVDC lines will help bring a zero-carbon grid. China’s largest connector is the Changji-Guquan link that will carry 12,000MW over 3,400-km from Xinjiang to Anhui. India has also followed China’s suit and is working on two such lines. The 1,700-km line connecting Assam to Uttar Pradesh and the 1,400-km line connecting Chhattisgarh to Haryana via Delhi will each transmit 6,000MW at their peak capacity. The first UHVDC connector in America is being developed in Oklahoma. A UHVDC grid in Europe is also under talks and will require new technology as the lines will interconnect with each other. For example, when Germany has high winds and the demand for electricity is low, these lines can divert the electricity to Scandinavian hydroelectric plants that will store the electricity as potential energy and release it when the need arises. Thus, the use of renewable energy sources will be easier.
Maintaining a balance between different energy sources is the need of the hour. The fact that fossil fuels cannot keep up with the long-term energy demand must itself serve as an incentive to bring forward the use of renewable energies. For instance, using gas instead of coal is a cleaner alternative but gas isn’t low carbon and so a solution to carbon capture and storage is a need for the future. Thus, wind and solar energy must also be utilized while striking a balance. The energy industry is going through rapid change. We need to eliminate technologies that seem to be disrupting the energy sector and think about what lies beyond a few years. The conditions in different areas need to be examined before any technology is deployed. The real question today is what energy sources are the eco-friendliest and how do we see the growth of the energy market.