Renewable energy lies right in the middle of the transition towards a less damaging yet more sustainable energy system. Over the past few years, the usage of renewable resources has increased significantly as the cost of solar and wind power experienced a steep fall. The electricity sector is the largest sector using renewable energy, particularly solar and wind power. It’s only in recent years that it has also started focusing on hydropower. It is estimated that in 2023, 30% of the electricity will be produced by renewable resources.
The growth of renewable energy sources in the power sector has outpaced every other energy source, including fossil fuels. Fossil fuels such as oil, coal and gas were employed as the main power source before the introduction of renewable energy sources. Renewable energy, coupled with energy efficiency, has led to the biggest global energy transformation yet.
Uncertainty of Energy Transformation
The utilization of renewable energy sources has had a significant influence on the global energy landscape. While this impact may have become irreversible, there are still a few doubts floating around it. We live in an age of continuous disruption and change contributed largely by technology. The impact of these technological changes on global energy transformation is still very uncertain. Political conditions can also impact the use of renewable energy resources. These political factors can cause the entire process of the adoption of renewable energy to move forward at different speeds. This speed can vary from country to country and even according to different industrial sectors.
Three main factors or elements have characterized this global transformation—energy efficiency, renewable energy growth and electrification. Renewable energy, however, has played the greatest role in the global energy transformation.
Growth of Renewables
Renewable power sources have, perhaps, emerged as the fastest and most prominent growing energy source. Some of the main renewable energy sources are geothermal, hydropower, bio-energy, solar and wind power. Amongst the aforementioned renewable sources, wind power and solar energy are growing extremely rapidly, while other energy sources are growing at a slower pace. A unique characteristic of solar energy and wind power is that the power they generate varies depending upon the weather and the time of the day. These sources are also regarded as variable renewable energy sources.
The electricity sector is most affected by the use of renewable resources. Since the year 2012, renewable energy sources have contributed more to new power generation as compared to conventional energy sources that were utilized previously.
In 2017, solar power contributed more to the energy production capacity as compared to coal, gas and even nuclear power plants combined. Wind power and solar energy now produce almost 6% of the electricity across the globe. In totality, it can be estimated that a quarter of all electricity worldwide was produced by renewable resources. Some countries have shown more efficiency in adopting renewable energy as their main power source. One such country is Denmark, which generates more than half of its electricity through different variable renewable energy sources.
The development of renewable energy sources has created a whole new world of opportunities for emerging economies. Many of these developing countries can expect to experience a very exciting future. One such country is Morocco. By 2030, Morocco aims to produce electricity using renewable sources, even though right now the country imports 90% of its energy needs. This country sure has come a long way. Additionally, their installation of low-cost and renewable power generation is better than any fossil fuel power generation in the country.
Chile is also greatly leaning toward a zero-carbon energy economy. It has developed sources to produce renewable energy at a very low price. For these developing economies, this transition is not just a simple shift from the utilization of one fuel to another. It is a whole new paradigm of development based on the worldwide energy transformation.
While this global energy transformation is great for the environment, what about those countries that have only benefitted from the production of fossil fuels? Fossil fuel-producing economies are threatened by this energy transition. There are many countries around the globe that have structured their entire economy based on such resources. This transition has and will change the entire geopolitical environment. It will result in the disruption of power dynamics and global trade patterns.
One such economy that is affected by this change is UAE. The United Arab Emirates has devised a strategy that aims for decarbonization and clean power generation by the year 2050. This strategy is the foundation of their economic diversification strategy that aims to shift from the basic non-renewable resource their economy is built on – oil.
Many countries other than the UAE are also at crossroads. The majority of them are aiming for innovation and diversification, but change is not easy.
The Bottom Line
The shift from fossil fuels to renewable energy sources might be risky, but it is fundamentally important for the future. This transition will reduce all problems related to the scarcity of non-renewable sources. It will enable almost all countries to become independent as every economy will have access to their own renewable energy sources.
This will disrupt the entire geopolitical system and have a significant impact on the global economy. However, we must bear in mind that this transformation comes with its own set of consequences, some which may greater than those we’ve experienced in the past 200 years.
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