Monday, December 4, 2017

Why should we bother with Renewable Energy?

If you are hoping that in the future fuel costs will reach a peak and then start to reduce then I am afraid you are going to be bitterly disappointed. There may well be short term reductions, however it is inevitable that fuel costs will not only continue to rise, but rise significantly

Source: Business Standard
There is no shortage of media coverage in respect of the impact of global warming, climate change, energy conservation, sustainability, greenhouse gas emissions and so on........ Our understanding and concern about these issues will vary significantly from those who have a genuine concern about protecting the planet for future generations to those who’s work may be directly related to these issues, right through to those who know very little and even those who make a conscious choice to ignore them!  The problem however is that even if you are one of those who fall into the latter categories, it does not change the fact that you will be affected in exactly the same way as everyone else.  This is no more starkly demonstrated than in the increased cost of energy over recent years, which have soared to record levels.

Over the last two hundred years we have become dependent on fossil fuels such as gas, oil and coal, which has allowed us to develop our world at a staggering pace.  All of this development in terms of infrastructure, buildings and the like require large amount of energy, to heat, cool, ventilate, provide light and power etc.  If we are to maintain, or more likely increase the rate of development around the world then we also need to consider alternative ways of creating this energy. The problem with fossil fuels is that they are a depleting resource and at some point, in the future it will run out.  Now this is unlikely to happen in our generation or indeed generations in the foreseeable future, but one thing is for certain in that at some point, however far in the future, fossil fuels will become incredibly scarce and are likely to run out.  If you are under the impression that we should not be concerned about this now, as it will not have any major impact on us in our lifetime then think again!

Source: Daily Record
The problem with anything that is in short supply is that basic economical principles come into play.  Fossil fuels are a prime example of this. Remember they are a depleting resource and therefore a commodity in short supply.  The impact of this is that when demand is high (which it always is) and supply is limited (which it is), then market conditions allow energy providers to increase costs as they know that they are providing something that people actually need. The market then adjusts to these increased costs. The Guardian (November 2017) reports; ‘Gas and electricity companies have been the biggest culprits for raising prices over the past 20 years, according to an analysis published just a day after utility giant’s SSE and npower revealed plans for a mega-merger – prompting fears of yet more price rises. The research found that the cost of utilities has risen at triple the rate of inflation over the past two decades. The average rise in prices for a basket of goods between 1997 and 2016 was 50.7%, but utility bills went up by 139% – far outstripping the average 78% rise in weekly household income, which has gone up from £316 to £562 over the period’ (Link).

If you are hoping that in the future fuel costs will reach a peak and then start to reduce then I am afraid you are going to be bitterly disappointed. There may well be occasional short term reductions, however due to the economical principles described above it is inevitable that fuel cost will not only continue to rise, but rise significantly. Of course, the majority of articles that you will see in the media focus on the damage to the environment caused by greenhouse gas emissions, particularly carbon, from the burning of fossil fuels. This is something that we need to deal with immediately, however I would suggest that if you were to talk to most people on the high street they would be more concerned about the increase in fuel costs rather than the need to reduce greenhouse gas emissions. The positive thing however, is that if we can create energy by using alternative renewable technologies then we can deal with both issues at the same time!

In future articles I will focus on the use of renewable technologies as a way of impacting on greenhouse gas emissions, however for the remainder of this article I will continue to demonstrate the financial effect of creating and using energy from fossil fuels, which is happening and impacting on us all right now!  The Committee on Fuel Poverty annual Report – October 2017 (Link), in its Executive Summary states; ‘The Department of Business, Energy & Industrial Strategy (BEIS) Fuel Poverty Statistics published in 2017 report the number of households in fuel poverty has increased from 2.38 million in 2014 to 2.50 million in 2015 (the statistics provide data on a two-year time lag). The average fuel poverty gap (this is the average additional amount that fuel-poor households need to spend to meet their energy needs, compared to the national median spend) has only fallen £18 per year from £371 to £353’.  The reference to fuel poverty is defined by (Link) as: ‘Households are considered by the Government to be in 'fuel poverty' if they would have to spend more than 10% of their household income on fuel to keep their home in a 'satisfactory' condition. It is thus a measure which compares income with what the fuel costs 'should be' rather than what they actually are.  Whether a household is in fuel poverty or not is determined by the interaction of a number of factors, but the three obvious ones are: The cost of energy, the energy efficiency of the property (and therefore, the energy required to heat and power the home) and Household income’.

It is abundantly clear that many in the UK are continuing to suffer financial hardship as a result of increasing energy costs, and unless we can find alternative ways of creating and conserving our energy, then this situation is likely to become even more critical. Increased demand for a depleting resource is a recipe for disaster. We therefore have to introduce alternatives, which is now a necessity not a choice. If you are in one of those categories described at the beginning of this article who have not really paid much attention to global issues, perhaps it is now time to think very carefully about how you individually, and all of us collectively can save energy as well as also being open to consider retrofitting of  new renewable technologies. This will not only provide benefits from a financial viewpoint, which may not be immediate (although costs associated with enhancements is an article in its own right!), but also from an environmental viewpoint, where we can start to have a real impact on reducing greenhouse gas emissions.

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