Renewable energies mean generation of power thru natural resources without adversely impacting the environment, like solar, wind, bio-mass, hydro and waste. Renewable energies are clean and green which are reducing our carbon footprints while supplying us energy. It also comes at competitive cost due to very low operating cost and various incentives from the Government. Renewable energies are continued to be on the agenda of United Nations, G7 and G20 for over several years as it has already established as a key source of energy. Most of the governments have come out with a dedicated policy initiatives, incentives, cheaper financing, research and development, investment in technologies, and other benefits to encourage setting up more and more capacities for renewable energies.

Wind power and Solar power that form significant part of renewable energies have its own inherent problems. They are dependent completely on nature. In case of no wind and no sun, these plants cannot produce power and thus creating huge uncertainties in the supply of uninterrupted power. Hence, one cannot depend upon them 100% and always need full ready power backup to meet their peak demand.

At present about 19.2%1 of total world electricity consumption come through renewables and remaining 78.3%1 and 2.5%1 come from traditional method (i.e. fossil fuels) and nuclear power respectively. Due to environment concern and to reduce carbon footprint, worldwide governments are focusing on generating more and more power through renewables. They are giving various incentives to encourage private producers to build capacities to generate power through renewables. As a result, gradually share of renewable energy is increasing year by year.

Since Governments are focusing on renewable energies and making them more affordable for consumers by offering incentives and other benefits, traditional power plants are finding it difficult to compete with them. Some Governments are also putting an obligation on State owned grids to draw certain dedicated percentage of power from renewable sources and give them priority over power generated through fossil fuels. Sometime in few developed countries, in case of good power supplies from renewable sources, supply of electricity increases over demand and thus traditional power plants remain idle. With this pace, traditional plants may gradually shut down and will create a huge demand supply gap in the long run. If Governments do not allow them to shut the plant, they will be in loss due to fixed cost which makes their power costlier due to absorption of fixed cost over lower capacity. If that be the case, what will happen to huge investment which has already gone in building the traditional power plants? There could be a scenario where we will have excess supply of electricity over demand.

Have we ever thought of that what will happen when the share of renewables increases from 19.2% to say, 60% of total world electricity consumption? Assuming a scenario that if we witness unfavorable wind and sun in any year, the world will have only 40% of power, it means 60% demand will not be met as it is dependent upon renewable power sources. This will have huge impact on the business as well as on people.

Should not we be thinking of a good mix of renewables and fossil fuels power to bring more certainty on availability of power that matches with demand?

Should we be killing traditional power plants by giving more and more incentives and benefits to renewables?

Should not we be thinking of a balanced approach which encourages all power sources while balancing environment concerns?

I hope that this must be on the agenda of UN, G7 and G20!

Author: C M Sharma

Twitter: @cmsharmag

  1. Source: Renewables 2016 Global Status Report
  2. Picture Source:

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