The world has come a long way since Faraday produced an electric current from a magnetic field and invented what we now know as electricity. This ‘electricity’ has gone on to permeate every sphere of human life and ushered in an era of increasingly sophisticated devices and appliances. Every major industry requires electricity to function and according to The Economist, current global consumption is around 15 terawatts of power.
At the outset,
electricity was primarily generated from fossil fuels- coal, oil, and natural
gas. These sources, however, are available in limited supplies and take a long
time to replenish. Furthermore, burning fossil fuel emits carbon dioxide (CO2)
which slows down the production of ozone and indirectly enhances the greenhouse
effect, a precursor of climate change.
Solely continuing
along this path would not only be detrimental to the earth’s condition, but
eventually, the world wouldn’t be able to cope with the overwhelming energy
demand.
Soon enough, nuclear energy emerged as a viable
alternative to fossil fuels. Not only was this method cleaner, but it also produced far
higher yields than oil or coal. However, all enthusiasm was swept away with the
Chernobyl and Fukushima disasters and public opinion soon turned.
The world had to come
up with cleaner, safer sources of electricity whose supply was unlimited, and
that was naturally replenished. This conundrum birthed what we now know as
renewable energy.
Comprising solar,
wind, geothermal, biomass, and hydro sources, the renewable energy industry
currently generates over 20 percent of the world’s electricity. Fuelled by
massive investment, public and regulatory support, the industry continues to
make giant strides in growth. In the United States, for instance, companies
purchased 6.43 gigawatts (GW) of renewable power in 2018. And, as of December
that year, 100 U.S. cities and over 155 companies globally had
committed to 100 percent renewable energy goals.
Moreover, the costs of
renewables continue to fall. In many
countries, it is now the cheapest option for generating electricity. This
cost-competitiveness, Elena Giannakopoulou- head of energy economics at BloombergNEF- has attributed to technology
innovation, economies of scale, stiff price competition, and manufacturing
experience.
Solar, in particular,
has attracted around half the total investments in renewables over the last
decade. Spurred on by increasing environmental awareness among Governments
and individuals, it has grown from the global output of 25GW to over 600GW. In
the US, 10.6 gigawatts were added to the solar PV capacity in 2018 alone.
After the price of
crude oil slumped in 2014, analysts projected a stunt in the growth of
renewable energy. Lower oil and gas prices, it was figured, would push
countries to shift their generating efforts to oil and gas. These projections
proved far-fetched. And, flawed.
Because not only did
renewables continue to grow, more technological advancement was made in the
industry.
With this seemingly
unstoppable surge in solar and other renewables, should executives in the oil
and gas industry be worried? Maybe not.
It’s worth mentioning
that despite the overwhelming benefits of renewable energy sources, there are
considerable drawbacks to the technology. Firstly, there’s the ‘small matter’
of intermittence. The sun doesn’t always shine and the wind doesn’t always
blow. Additionally, there are yet limitations in available transmission and
storage technology.
These shortcomings
make a supplementary, regular source of power necessary. In this, oil, and
particularly natural gas (which accounts for 27% of power generation in the US)
have a role to play. The US is the world’s leading producer of natural gas and
based on geological surveys, global reserves in 2012 were estimated at over 180
trillion cubic meters. Natural gas is relatively cheap and more than ample
enough to supplement renewables.
All the same,
renewables are the future. And even oil and gas executives, it would seem,
agree. Nowadays, Chevron is the world’s largest private producer of geothermal
power and shell is the leading retailer of biofuels. In addition, renewable
energy is taking an increasingly vital role in the policy-making of oil and gas
companies.
In reality, a complete
transition to renewables will take time. The energy industry is of such
enormous significance that wholesale changes are not feasible, nor are they
practicable.
And, until wind
turbines are manufactured in wind-powered factories and solar panels are
assembled in sun-powered workshops, the oil and gas industry will remain a part
of the energy conversation. For better or for worse.
Precious Marho is a freelance copywriter. He covers the
safety, oil and gas, and green energy industries.
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