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Problem 3

In developed countries existing systems and infrastructure creates resistance to adoption of renewables.

Problem Dimensions

Unlike much of the developing world, existing infrastructure – physical buildings, electric grids, legal frameworks & traditional business models – within developed countries creates hurdles towards developing a sustainable Energy Ecosystem.

Stakeholders in developed nations are comfortable with the status quo.

Costs of energy from renewables are often higher than current energy prices.
Current economic incentives alone are insufficient to instil energy conservation initiatives.[1]
The public has not internalized the urgency of climate change.[2]

Policies

Altering existing infrastructure via federal policy remains difficult

Politicians popularity is reliant upon them not jeopardizing the lifestyle of their constituents.
Political turnover creates risk and uncertainty, preventing transformative long-term energy policies.
Current policies focus largely on low-cost, rather than efficient use and proper pricing of energy

Technology & Business Models

Implementing new technologies is crucial to changing our Energy System but this involves revolutionizing systems that support our current lifestyles.

Most existing infrastructure (e.g. transmission lines and distribution stations) is outdated and inefficient
“Smart Grid” systems can overcome many deficiencies of current infrastructure, but political, legal and financial barriers obstruct greater dissemination of this technology.[3]
Utility companies are risk averse and slow to adopt changes.
Incumbent firms in the energy industry resist new technologies as competitors.[4]
Adopting renewables and sustainable systems will require businesses to identify revenue sources that arise from efficiency rather than abundant use

Solutions

Conventional Solutions

Bridge the technical gap between conventional and renewable sources of energy:

Channel revenue from carbon taxes into building the necessary infrastructure for renewables.

  • E.g. Charging stations for electric cars or hydrogen fuel cells.

A fund built from offsets can be used to finance clean-tech start-ups that venture capitalists deem too risky.

  • A combination of renewable sources of energy will usually be required to replace conventional fuels.
  • As one technology becomes more competitive with fossil fuels, subsidies can be redirected to other renewable
  • E.g. Chrysalix is working on scaling up a solar power system that can be competitively priced with natural gas.[5]Once this is accomplished, focus can be shifted to wind energy

 

Political determination and coordination amongst countries is required to: [6]

  • Steer public awareness. [7]
  • Promote the uptake of smart grids and new clean-technologies.
  • Provide proper legislative and incentive structures to market players. [8]
  • Public policies will determine the growth rate of renewable energy development in the short and mid-term. [9]

 

Progressive Solutions

Price conventional sources of energy above that of renewable sources of energy

In the short to medium term, only regulations that internalize the cost of environmental damage to producers can accomplish this.[10]

Building on Solution 3 – EnerBucks:

  • The energy efficiency of homes is reflected in property taxes, but EnerBucks can be used to pay a portion of property taxes.
  • The fuel consumption and emissions of cars are reflected in annual insurance rates but EnerBucks can be used towards these payments.
  1. [1] Dr. Dale Griffin, Advisory Council Chair in Consumer Behaviour Professor and speaker for the Power to the People session at ISES 2011.
  2. [2] Expanded in Problem 9.
  3. [3] Dr. Hassan Farhangi, SM-IEEE, Director of Group for Advanced Technology, British Columbia Institute of Technology and speaker for the Smarter Grids for Smarter Communities session at ISES 2011.
  4. [4] Richard MacKellar, Managing Director of Chrysalix and speaker for the Venture Capital: Where is the Money and Who’s in the Game? session at ISES 2011.
  5. [5] Richard MacKellar, Managing Director of Chrysalix and speaker for the Venture Capital: Where is the Money and Who’s in the Game? session at ISES 2011.
  6. [6] Explained in Problems 3, 4 and 5.
  7. [7] Expanded in Problem 9.
  8. [8] Expanded in Problem 7 and 8.
  9. [9] Message from SSREN presented by Dr. Ralph Sims, Professor of Sustainable Energy and Director of the Centre for Energy Research at Massey University, New Zealand and speaker for the Economic Outlook of Global Energy Markets session at ISES 2011.
  10. [10] Explained in Problems 2, 3, 5, 8, 9 and 10.

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