‘Green energy makes economic sense’

Pia Ranada

This is AI generated summarization, which may have errors. For context, always refer to the full article.

But renewable energy can only take off when the right policies are in place and when some technological glitches are fixed

SOLAR POWER. Two men stand in the new solar power plant of operating company Norddeutsche Energiegemeinschaft in Buetzow, Germany, 15 March 2013. Photo by EPA/Jens Buettner

MANILA, Philippines – Investing in renewable energy is not only good for society, it also makes a lot of economic sense, said a South Korean energy executive during a session of the 23rd World Economic Forum (WEF) on East Asia

“For us as a for profit organization, as much as we like to help out in the environment and help with society, it has to make economic sense for us. But looking 20 years into the future, we’ve made a big bet in renewable energy just because it made economic sense for us,” said Dong Kwan Kim, managing director of Hanwha Group, a South Korean business conglomerate that is now investing in solar power.

His words were part of a larger discussion during a WEF session held on Thursday, May 23, entitled “Climate-smart Growth.” The session, moderated by CNN news anchor Andrew Stevens, featured lively exchanges between financial institutions, private sector and environmental advocacy groups. 

Kim, whose company also runs two coal co-generation plants and is one of the largest petrochemical companies in South Korea, is confident about the future of the renewable energy market.  

“If you think about the portion of the energy in the entire economy, I think the potential is huge. I think that’s why even for a company like us, we see this as where the biggest and most profitable, but also socially responsible, growth opportunities are.” 

One major plus for renewable energy is its “democratic distribution.” Sunlight, water and wind – the raw materials for RE generation – can be found in any country in the world in varying amounts. 

The abundance of RE also lets users to sell energy back to grids, eventually allowing a return on investment. RE technology is also steadily improving, bringing costs down and making them more accessible to consumers.

Renewables or “green” energy is widely regarded as a possible mitigation measure against climate change. RE generates electricity with zero greenhouse gas emissions (GHG) unlike the more conventional fossil fuel sources – coal, oil, natural gas – which spew tons of carbon dioxide into the atmosphere. 

Fossil fuel companies have emitted more than 60% of global GHG emissions since the Industrial Revolution, according to studies.

RE-friendly government policies

But energy industries and many countries continue to be “married” to fossil fuel energy because of its cheap production cost, according to Rachel Kyte, World Bank Vice-President and Special Envoy for Climate Change, one of the session’s speakers. 

GREEN GROWTH. Speakers at a session during the 23rd World Economic Forum on East Asia talk about how economies can flourish in a world threatened by climate change. Screengrab from official WEF webcast

Many governments continue to give billions of dollars of subsidies to fossil fuel companies to enable them to provide the energy the country needs to drive economic growth. So far, fossil fuel energy remains the most stable source of energy needed to run factories and industries. 

Renewable energy technology is still not as reliable. Nuclear energy, another low-carbon-emitting energy source, is still haunted by safety issues. (READ: The problem with renewable energy)

Because of government subsidies, fossil fuel energy has a distinct advantage over renewable energy.

For renewable energy to take off, governments must give them a chance.

Fossil fuel subsidies must be taken out to level the playing field, said Kim. Governments should create policies to help RE companies get on their feet.

Kyte agreed: “Stop subsidizing what you don’t want and what will not sustain your growth and will not help the poor. Start using that financing to incentivize the growth where you do want it – leveling the playing field for renewable energy, leveling the playing field for other technologies and innovations which is low carbon.”

Governments need to make an infrastructure investment to set the stage for renewable energy in their countries, added Kim. Fiscal incentives for RE companies and RE users, for example, would help.

Governments can also tax carbon. More than 20 countries in the world, plus the European Union, are putting a price on carbon emissions and are developing carbon trading systems, she added.

Better technology needed

But renewable energy faces not only financial challenges, but technological ones.

For it to be truly viable, RE companies and innovators must improve the capacity of RE to store energy. 

“If you can develop a high-powered energy storage battery, you will solve 90% of the world’s energy problems,” declared Atsutoshi Nishida, Chairman of the Board of Toshiba Corporation.

The energy storage problem is one major obstacle stopping the large-scale adoption of RE. Solar panels and wind turbines for instance, can only generate electricity when their is sunlight or wind. 

Solar panels would have to store energy in order to run at night or at times when clouds block sunlight. Wind turbines would have to be able to do the same thing when the wind dies down.

Because their ability to store energy is still limited, renewable energy can’t be used as a base load for factories or plants because these facilities need stable and reliable sources of electricity. 

Today, RE is only viable for powering households, providing emergency power or augmenting fossil fuel energy supplies.

With improved technology and the right policies, Kyte says RE can become an ideal component of “climate-smart growth,” one that thinks through the impact of carbon emissions and aspires to the resilience of every sector of the economy. – Rappler.com

Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.

Summarize this article with AI

How does this make you feel?

Loading
Download the Rappler App!
Sleeve, Clothing, Apparel

author

Pia Ranada

Pia Ranada is Rappler’s Community Lead, in charge of linking our journalism with communities for impact.