How sustainable energy evolved from being a moral issue to an economic one

I remember the day An Inconvenient Truth came out on DVD. I was home, still oblivious to many things, and me and my parents decided to go for a documentary. I always had a soft spot for documentaries, but I heard about this particular one often on the news and reviews. An hour and a half later we were not quite the same, the way the movie was put together and the way it communicated the message was masterful, and that message weighed heavily on my personal morals. As it turns out, I was not alone as showed by this study by Nielsen:

“Sixty-six percent of viewers who claimed to have seen An Inconvenient Truth said the film had “changed their mind” about global warming and eighty-nine percent said watching the movie made them more aware of the problem. More importantly, three out of four (74%) viewers said they changed some of their habits as a result of seeing the film.”

To me, although global warming had been an existing issue for a long time, this documentary brought it to the main podium. Our lives could not continue on the current path, and we needed to change habits drastically.

But it felt hard to do. Furthermore what does it change if I become more environmentally friendly? If others don’t do it, why should I? Businesses would just continue doing what they do best, which is business as usual.”. Deep down we would know it, feel it weighing on our sense of morality, but the scale of the challenges was such that it felt like being just a speck of dust on a beach. The USA didn‘t even ratify Kyoto, twice.

But something did change over the years. Awareness and attitudes changed, leading to a change in behavior. I like to think that change took place in Germany. In fact as early as in 1991, Germany passed the Erneuerbare Energien Gesetz, or the Renewable Energy Act, the goals of which are pretty self-explanatory. Over the years the act got constantly revised and more complex to keep the technicalities and legislation up to date, but it helped Germany set the course to become a solar-energy powerhouse on an international scale, despite the fact that Germany is not known for being a sunny country. In June 2014, solar energy managed for the first time to provide 50% of German energy demand, which is massive, not to mention way ahead of other countries. How massive exactly? Roughly 23 Gigawatts, or roughly 19 times the amount needed for Marty McFly and Doc to travel back in time.

Great Scott!

 
But what is really interesting is that although initiatives can be traced early in Europe, the reduction in costs and the explosion of solar panels ending up on the rooftops of Germans and other areas may never have been viable if it weren’t for China. China! The world’s biggest polluter! They are helping the world fuel the energy of tomorrow by driving down the global manufacturing costs with its army of factories and heavy subsidies. And the result of that is that today, solar energy now costs cheaper than fossil fuels, although the Chinese were doing so well one might say they overdid it, outcompeting western companies to bankruptcy, sadly.

Moreover although investors were timid in renewables, like children learning to swim in the water, this also changed with big names like Warren Buffet and Elon Musk warring over control of the market. When these guys are investing in a particular market, you know they’re onto something.

Solar farms in Dubai can offer less than 6 US cents per KiloWatts/Hour, and are currently expanding to bring it even lower. Assuming the price for solar is 5.84 cents per KW/h, it would cost 706,64 US dollars to keep the energy needed for the time traveling DeLorean over the course of an hour, or roughly 2 US dollars per second. Who here fancies a trip?

Time-travel dreams aside, it is clear that renewable energy is no longer a moral incentive, but an economic one, Being eco-friendly has now become part of economic policy for businesses and governments alike. For the European Union, there is definitely a huge stake in energy efficiency. According to the Commission the EU imports more than half of its energy, and because there is no common structure on energy policy between countries, the bill ends up being higher too. The EU outlined its goals as early as 2008 in its integrated energy and climate change strategy, aiming for a 20% increase in energy coming from renewables, as well as for a 20% reduction of consumption and greenhouse emissions for 2020. While it provided a framework for promoting the shift to renewables, it was also the starting point of its vision for an “integrated energy”, and later an energy union. In order to boost energy efficiency and revitalize its energy market, the EU introduced many strategies and goals such as its 2030 energy strategy.

If you take a look at this map:

What you see here is one neat, beautiful map underlining the potential solar energy can have over Europe. See how most of the countries who happen to have the biggest potential are those who were in the deepest of economic troubles during the Crisis: Portugal, Spain, Italy, Greece… Even France gets a chocolate chunk of the cookie. These are areas suffering from high unemployment, so investing in these areas where there is such a high potential can help revive their economies and close the gap between north and south. Seeing Germany’s performance, imagine how well southern countries could do, not to mention eastern countries like Bulgaria and Romania. The money-saving potential is just immense! Not to mention that another advantage is that the price for renewables is more stable than shifting oil prices, or gas, because there is no finite resource. Solar will last as long as the Sun exists, wind or geothermal will continue to supply energy as long as planet Earth exists. Although some days there may be less wind or less sun than others, with data analysis, statistics and forecasts we can easily predict average output, it’s easier to figure out than consumer behavior through CRM.

Lastly, making the EU more energy independent has also a political incentive: Russia. Despite recent events from previous years the EU still currently imports most of its energy from Russia, giving them political leverage. Switching to renewables as fast as possible might perhaps be more effective than applying more sanctions.
For anyone who might be interested to know more, I wholeheartedly reccomend this abridged documentary made by Tegenlicht. Despite the fact that some parts may be in Dutch, English speakers shouldn’t be worried.

-Max.