The energy industry arguably hasn’t experienced this much turmoil since the invention of the steam engine.
Climate change is a global crisis that most countries around the world are recognizing, and for the most part, they are trying to do their part to combat the problem. Tradition fuel sources, like gas and coal, are a large contributor to the climate change problem, so the issue can’t truly be addressed without a complete remake of the very foundations of the energy industry. But, as long as it is cheaper for large manufacturers to burn fossil fuels than it is for them to erect wind turbines or install solar panels, corporations will continue to contribute to global warming.
Cleaner, greener fuel sources are available, like wind and solar. But it is up to governments to discourage harmful forms of energy production and usage, and it is up to the industry itself to develop cleaner fuel sources into efficient, cost-effective, sustainable business models. Fortunately, some progress has been made on both fronts.
From July to September of this year, renewable energy sources, like wind and solar, accounted for almost a third of the electricity used in the UK. Offshore wind farms are being built along the coast, and they are producing more energy than initially projected. The Walney Extension in the Irish Sea, the largest offshore wind farm in the world, produced at 70% of capacity in November and can provide the power needs of 600,000 households. Large corporations, like Siemens and GE, are taking notice and getting in on the action for potentially huge future profits, innovating to become more efficient and cost-effective along the way.
Meanwhile, some of the old players in the energy industry are seeing the writing on the wall and positioning themselves appropriately for the approaching paradigm shift. Engie closed its coal power plant in Staffordshire in 2016 amid pressures from environmental regulators and consumers alike. But instead of selling the site, Engie is re-using it to build 2000 super energy-efficient homes in a “sustainable village”. The homes built there will run on a combination of solar and battery power, be heated with electricity instead of gas, and use only two thirds the energy that most new homes require on a daily basis. This move is a strategically significant one for Engie, drastically changing the perception of the company and positioning it well for growth in the new clean energy market. The seven remaining coal plants in the UK are set to shut down by 2025.
Governments, on the other hand, have not been progressing quite as quickly as an industry. Around the world, often in response to labour lobbying groups and corporations with deep donor pockets, governments continue to prop up and even promote, gas, oil, coal, and fracking, despite overwhelming scientific evidence of their harmful impact on the environment.
Some administrations are at least offering tax incentives for consumers to make an investment in clean energy on their own. The UK’s feed-in tariff (FIT) has been in place since 2010 and played a large part in getting over 800,000 homes to install solar panels. The spark in demand has resulted in increased production of solar panels, ultimately bringing the cost of installation down by half since the tariff began.
But unlike some other industries (agriculture comes to mind), governments don’t seem too keen on providing ongoing support to the clean energy industry. The feed-in-tariff in the UK is being allowed to expire without replacement next year, taking with it a provision for consumers to sell excess clean energy they are able to generate back to the grid.
Customers, though, are waking up to the benefits of clean energy for the environment, their own health, and their pocketbooks in the long run.
And those customers are also voters.
The Labour party is tapping into that consumer sentiment. In September, Rebecca Long-Bailey, the shadow business secretary, outlined the party’s commitment to converting all homes and businesses to run on wind, solar, and nuclear power by 2030. They are also considering using 44% renewable heat sources and reducing heating demand by 25% by 2030. On top of all that, they intend to reduce greenhouse gas emissions all the way to ZERO per cent by 2050.
This isn’t only a shrewd move for a political party to garner constituent votes. It would also signal to the rest of the world that the UK will be a major player in green energy. The infrastructure required to meet the Labour party’s goals would mean seven times today’s wind farm capacity and three times as much solar usage. They would also like to see twice the number of onshore windfarms there are today. This is a critical move for the UK to attract foreign investment in a post-Brexit world. Being a leader in climate change reduction efforts would make the UK the place to be for innovative clean energy start-ups. And in a marked departure from US policy regarding both labour and climate change, the Labour party is securing the backing of unions by guaranteeing protection for workers in the rapidly changing energy industry.