When it comes to renewable energy there is a plethora of resources available on the market. For example, we could all be pulling almost limitless amounts of energy from the sky in the form of solar power; or, we could build a windmill in our backyards that powers our entire household needs.
So that means most people and businesses are signing on to renewable energy sources, right? Unfortunately the answer isn’t that simple, in fact only about a quarter of the world’s electricity supply is generated from renewable sources.
The question remains, why is it difficult to adopt renewable energy practices? Scientist and entrepreneur Dr. Jacob Gitman explores the reasons people are still relying on fossil fuels as a primary source of energy, despite renewable power sources being better for the environment.
Industry is Mostly Built For Coal
In theory, the world could get rid of the coal energy which is responsible for about 40 percent of the world’s power. However, by solving that problem, you create another.
That’s because the vast majority of industry is suited to coal, and it would require substantial changes in infrastructure to be able to operate using more sustainable forms of energy. Switching from coal to renewable energy sources would require a major investment in both time and money.
Unfortunately, there is not a lot of incentive to make this switch, considering that coal does the job of powering industry very efficiently — not to mention the fact that it’s relatively cheap due to its abundance.
With an undergraduate degree in Physics and Mining, Jacob Gitman can tell you that advanced technology has also found ways to burn coal more efficiently, as well as make mining it more efficient through employing some green technologies in the process.
Policy Isn’t Attracting Investors
Jacob Gitman also explains that in order to stimulate more investment in the renewable energy sector, governments need to enact clear policies. Without a defined set of legal guidelines around renewables, private investments in this expensive infrastructure can be precarious.
Basically, without the government developing strong policies, putting money into the renewable sector will be perceived as high-risk by private investors.
Not only that, but government incentives can also encourage more people to adopt the greener technology — whether it’s a tax credit for producing energy from renewable sources or providing rebates on creating renewable infrastructure.
Introducing sufficient carbon pricing for companies may also be a factor when it comes to growing the renewable energy industry. By putting a price on carbon emissions by the metric ton, it may stimulate more industries to turn towards cleaner energy alternatives. But so far only a handful of countries have implemented carbon pricing.
Costs are Ultimately Prohibitive
As previously mentioned, the cost of renewable energy projects compared to conventional energy sources remains high. According to Jacob Gitman in order to recoup the cost of a renewable energy source, the costs of the energy produced will remain high as well — which could put it out of reach for the consumer.
Aside from the initial investment scaring some people off, there are also transactional costs related to renewable projects that drive up the cost of production. These transaction costs include the cost of resources, forming partnerships, as well as establishing procedures.
Depending on the country where the green project originates, access to renewal energy incentives and subsidies may be slim to none (while remaining high for fossil fuels.) Meanwhile, some banks are hesitant to loan money towards these types of sustainable initiatives.
Fossil Fuels Are Still Reliable and Economical
From the high cost of startup to a lack of private investment due to policies that aren’t renewable-friendly, many industries continue to rely on coal as a way to keep their costs down