Elfren
S. Cruz (The Philippine Star) - July 1, 2018 - 12:00am
The coming dominance of
renewable sources of energy will change geopolitics; and the Philippines is one
country that could benefit from these developments. By 2040, renewable sources
could account for one-third of the world’s needs, putting greater geopolitical
focus on certain regions and less on regions that are major energy suppliers
today. This trend will also increase the importance of technological and
financial innovations.
According to a recent
Stratfor analysis, the 21st century is ushering in the age of renewable
energy where the world is drawing more of its power from the sun, wind, water
and biomass fuel as the cost of these sources – down considerably from seven
years ago – continues to drop. In electricity generation, bid prices at
auctions for building solar and wind generation facilities are now comparable with
those for new coal or natural gas facilities. The report said: “The progressive
removal of subsidies has enabled market forces to work their magic on prices
for solar and wind power.”
The latest Bloomberg
New Energy Finance analysis projects that renewable energy will account for 64%
of electricity generation. Electric vehicles are expected to achieve price
parity with conventional automobiles before the year 2030. Government
regulations such as the bans in the United Kingdom and France, with other countries
planning to follow, on the sale of gasoline and diesel powered cars after 2040
will further ensure that electric cars will keep increasing its global market
share.
It may still take
decades before renewable energy will completely dominate the energy industry.
Fossil fuels – especially natural gas and oil – may never be completely phased
out in this century. The rate of consumption for renewable energy is reportedly
growing three times faster than the overall demand for energy.
Changing geopolitics
Fossil fuels –
especially oil and natural gas – have been one of the dominant factors on
geopolitics in the last century. The high concentration of deposits of oil,
natural gas and coal helped determine the global balance of power over the past
century. A small number of oil-rich states have given this select group of
countries – like Saudi Arabia, Gulf states, Russia, Kuwait, Iran – tremendous
economic and political influence.
According to a Stratfor
report: “Since World War II, the United States has acted as guarantor of global
energy security, protecting its own national interests... Washington formed
alliances – most significantly with the Gulf Arab states – to stabilize global
energy flows and has been the leader in safeguarding maritime choke points in
the Middle East and Asia. The result is a globalized oil, coal and natural gas
market and an international oil trade conducted in US dollars – a major boon
for the United States.”
The rise of renewable
sources of energy will do away with the global energy oligopolies because
renewable sources of energy are almost universal. There are very few places in
the world – in fact none that I am aware of – that lack wind, sunlight, water
and bioenergy of any kind. Stratfor adds: “...renewable energy is by its very
nature intermittent. The sun shines, the wind blows and river flows fully only
some of the time, regardless of geography, further evening the playing field.
And compared with more traditional fuels such as natural gas and coal,
renewable energies have much higher potential for decentralized
generation...The global transition to renewable energy will put electricity
center stage, since renewable energy overwhelmingly takes that form in supply
and usage. To reduce costs and to prevent shortages in the event of a still or
overcast day, countries will probably opt to integrate their electricity grids
regionally. As a result, today’s globalized energy world will become more
regionally focused...”
Germany, China and the
United States are the present leaders in renewable energy and are expected to
be the principal beneficiaries of this new energy age. Technology and
innovation – not natural resources – will be the principal drivers for
countries wanting to pursue renewable sources of energy. Varun Sivaram of the Council
of Foreign Relations in his book Taming the Sun, explains that the
growth of renewable energy will demand new solutions in finance, technology and
systems to fund clean energy products, reduce costs and boost efficiency and
improve grid integration. Even smaller countries like Sweden, Denmark, Morocco
and Kenya have the potential to gain more influence because of their potential
for exporting renewable energy and technology. On the other hand, traditional
oil exporters like the Gulf states, Russia and Venezuela will lose their
political clout. The Middle East, as a region, will face a vastly diminished
stature – economic and political – in the world of geopolitics.
The Philippines has no
known oil deposits and only the Malampaya is a source of natural gas. However,
it has tremendous potential for developing solar and wind power. The pioneering
work of two Filipino power companies – First Gen and EDC – makes the
Philippines a major potential beneficiary of the rise of renewable energy. Its
founder – Oscar M. Lopez – has made renewable energy not just a profitable
venture; but, more importantly a passion and a legacy to future generations of
Filipinos. Energy Development Corp. (EDC) is the world’s largest vertically
integrated geothermal company primarily engaged in the exploration,
development, operation, and optimization of geothermal steamfields and in power
generation. The Philippines can become the world’s most important developer and
exporter of geothermal technology.
The rise in renewable
energy will give rise to new risks. For example, as electric grids become more
interconnected and smarter, they will become vulnerable to cyber attacks.
However, the transition from fossil fuels to renewable sources of energy is
inevitable. Because of its potential in geothermal, solar and wind as sources
of renewable energy, the Philippines can be at the center of this
transformation in energy and geopolitics.
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