Wednesday, February 24, 2016

Will Gazprom have the fate of Kodak?

If you have not seen this TED talk from Al Gore about the Climate Crisis then I would recommend it. Surprisingly optimistic!
https://www.ted.com/talks/al_gore_s_new_thinking_on_the_climate_crisis

Al Gore makes the point that we can be optimistic because renewable energy solutions are on the verge of becoming cheaper than fossil energy solutions. Is the situation in the energy sector similar to the situation with film and digital photography in the beginning of the 21st century? I would be optimistic and say Yes. Here are some arguments I would like to add to this discussion:

- When comparing fossil and solar-wind energy then besides the cost of the energy production it is also important to note the costs of grid. As most of us can read from their energy bill the grid costs stand for more than 2/3 of the whole cost - with the current low energy prices. Grid companies are usually huge monopolies, powerlines are expensive and therefore the costs of the grid will not go down. However, with a solar-wind-wood production unit and a battery one can get off-grid and skip the costs. It is definitely the winning solution in places where there is no grid.

- Price decrease of solar, wind production units and batteries has been linear if not exponential. We always underestimate exponential progress.

- If usage of renewable energy grows on the expense of fossil energy then soon the fossil fuel installations start becoming more expensive per kW and support of the technology exclusive. Think buying a film camera and finding a studio to print photos from films in 2016.

- Fossil fuel energy production is really expensive. Think of the huge infrastructure, tankers, pipelines and so on. If we would add to that the costs of the environment, land and water used....well then there would not be a business case in it at all.

So if the turn-around from fossil to renewable happens fast enough then there is maybe hope afterall. And investing in the oil industry or in the East-Estonian "cooking oil from oil shale with no care of the environment" is something one should consider with big skepticism.

No comments:

Post a Comment