The Big Future of Energy Business
Interest in alternative energy sources has grown steadily over the past few years, with both government agencies and large businesses investing billions of dollars in the development of “clean” energy systems.
World Energy Demand
Current trends in worldwide economic growth have been characterized by increasing involvement by the population of underdeveloped and developing countries in the sphere of industrial production. The associated increase in living standards has been accompanied by an increase in energy consumption, as well. The emerging tendency to equalize the living standards of the world’s population, plus emerging prospects for eliminating poverty and disease in disadvantaged regions of the world, can only bring positive outcomes.
At the same time, the associated increase in global energy consumption has become a source of some concern about the future fate of world civilization.
The rapid increase in energy consumption poses the danger of exhausting fossil energy resources. It also contributes to further environmental pollution from fuel combustion products, creating a high probability of catastrophic change in the planet’s climate. Along with the greenhouse effect, increased consumption threatens to exacerbate the sun’s ultraviolet and gamma radiation due to the loss of the Earth’s ozone layer. These and other risks associated with the development of the energy sector have created increased interest in assessments of future dynamics in terms of world energy and its consequences.
Renewable energy is currently the main element of global electricity production. Along with energy efficiency, renewable energy plays a crucial role in reducing emissions from both the energy sector and end-use sectors. In many regions, new renewable energy sources are currently the cheapest and most efficient way of providing electrical service. Renewable electricity has spread worldwide through replicated, reliable technologies and broad political support.
There is a wide range of proven technologies for using renewable energy sources to meet the thermal needs of building and industry, including bioenergy, solar and geothermal heat, and renewable electricity for heating and cooling. However, challenges remain in integrating renewables to meet energy needs in these sectors.
The types and objects of construction are extremely diverse, and are characterized by different needs for thermal energy, climate solutions, and affordable infrastructure. This leads to a wide range of consumption characteristics. In industry, the use of renewable heat is limited mainly to sectors involved in bioeconomics such as wood processing, pulp, paper, and cement.
Options for expanding the use of renewable energy sources depend upon the industry in question and have not yet become widespread. Therefore, there is no one universal technological solution for either building or the industrial sector. Special policies are fundamental to increasing the use of renewable energy in these sectors, and should take into account their characteristics.
The Smart Future of Energy
The world is becoming digital, and the transition between physical reality and virtual is being erased. Businesses are transforming in the wake of changes in consumer behavior. People do not let gadgets far from their hands, even when they are sleeping or taking a shower. Artificial intelligence is processing big data in super-powerful giant data centers, generating a new class of software products: voice assistants, smart wearable devices, security robots, and more. Not far off is the emergence of autonomous vehicles, robot chefs, and other devices straight out of science fiction films. All of these amazing possibilities are accompanied by one side effect: humanity is consuming more and more electricity. According to forecasts from the International Energy Agency, the global demand for electricity between 2015 and 2040 will increase by 70 percent.
Opportunities in the industry exist but are not being fully utilized. For example, solar heating and cooling in industrial processes (for example, in the food, pulp, and paper industries) have continued to grow in recent years; but without constant political support, the global market has not been able to maintain stability. Renewable electricity can also be used in industry: for example, by producing renewable hydrogen to meet the needs of technological processes in the metallurgical and chemical industries.
Reducing energy demand in buildings and industry is also a key factor in the transition to renewable energy. An integrated policy approach to renewable energy and energy efficiency is therefore fundamental. Today, nearly two-thirds of global energy use in buildings occurs in countries that do not have energy-efficiency policies, while energy efficiency standards and goals cover only about a quarter of industrial energy consumption. Subnational governments play a key role in developing action policies for renewable energy and energy efficiency in buildings, as many of these approaches are bottom-up and specific to local conditions and markets. Fortunately, the heating and cooling sectors can draw on examples of effective policy measures in the electrical sector.
Targeted policies are important for supporting the industry. This happens by increasing the cost-effectiveness of well-known technologies, deploying new market models, and advancing progress in new technologies, especially those with intersectoral potential. There are also promising transport opportunities, though fossil fuels still satisfy the vast majority of energy needs in this sector. A policy is needed to support the use of renewable energy in all transport sectors in order to accelerate decarbonization. The role of renewable energy can be enhanced through the wider use of sustainable types of biofuels, mixtures with a high percentage of biofuels, and alternative biofuels.
Comprehensive political support is needed to expand the use of ethanol and biodiesel. So are advanced biofuels — through the development of a wide range of technologies and supply chains. An ambitious policy like Brazil’s 27% mandate for mixing with ethanol has successfully demonstrated how biofuels can expand the contribution of renewables to the transport sector. Similar attempts are spreading in Europe, including policies to support advanced biofuels. Special blending mandates are key to ensuring demand for advanced biofuels and attracting the necessary level of investment.
Another transportation opportunity is associated with the increased use of renewable energy for the world’s growing electric vehicle fleet (EVs). The potential of electric vehicles to provide dynamic network-balancing services is another opportunity for sector integration. Integrated policy approaches that link renewable energy with electric vehicles will contribute to their overall development. At the end of 2018, Austria was the only country in which there was a policy that directly linked renewable energy sources with electric vehicles. Renewable electricity can also be used to produce electric fuels such as hydrogen. Renewable electric fuel creates opportunities for the further use of renewable energy in the transport sector: for example, in aviation and shipping. It also has potential applications in the heating sector.
The success of renewable energy in the electrical sector could be extended to transport by increasing investment in applied research and development to accelerate large-scale solutions and reduce the cost of renewable fuels that are technologically less mature. This is especially important for sectors like long-haul transport, aviation, and shipping, where fewer alternatives are currently available.
Investment in the Environment
According to long-term forecasts from Bloomberg New Energy Finance (2017), it is expected that the share of wind and solar power generation in the global energy basket will increase six times by 2040, exceeding all other types of energy.
The use of renewable energy sources (RES) has become an important criterion for the development of the world community. The main reasons for this attention are the depletion of reserves of organic fuels, a sharp increase in prices, imperfection and low efficiency of application technologies, and harmful effects on the environment. That is why alternative energy is very attractive to investors overseas. According to the international organization REN21 (a division of the International Renewable Energy Agency), in 2016 alone, $287.5 billion was invested in renewable energy sources. From the graph below, we can see that this number is $37 billion more than in 2015, which means that the number of investments is growing.
Active alternative energy is developing in China, the U.K., the U.S., Japan, and Germany. Many power plants operating on renewable energy are commissioned annually. The share of alternative sources in the installed annual capacity exceeded 50% worldwide last year. According to global energy experts, by 2100, the share of oil and coal in the global fuel and energy balance will be 2.1% and 0.9%, respectively, and more than a quarter of all global electricity will be generated from the sun. According to the long-term forecasts of Bloomberg New Energy Finance (2017), it is expected that the share of wind and solar power generation in the global energy basket will increase by six times by 2040, exceeding all other types of energy.
Examples of Progress
China has long been considered the world’s largest source of greenhouse gas emissions, but now, the IEEFA (Institute of Energy Economics and Financial Analysis) has noted China’s record spending of over $44 billion on international renewable energy projects. China has become a leader in the production of clean energy. The country is implementing hundreds of projects related to alternative energy.
It is worth noting that Chinese manufacturers of solar panels occupy foreign markets quite actively. This dynamic allows China to create the image of a responsible, environmentally oriented state while becoming a leader in green technologies, which are already bringing in serious financial dividends today. At the same time, China is making sufficient effort to fulfill its obligations in accordance with the Paris Agreement.
Renewable energy in the UAE is currently presenting a real opportunity for ensuring the energy independence of the state. In 2015, the construction of a solar power plant began in Dubai. The Emirates believes that the success of such a large project will draw the attention of investors from around the world to national alternative energy. By this time, the UAE plans to increase the capacity of renewable energy plants, thereby gaining an additional advantage in the global market. Meanwhile, in the Emirates, a solar-powered safari park has been opened, and it is an environmentally friendly project in which guests can move about in specially-designed electric cars.
In 15 years, the construction of the largest “solar park” in the Middle East, which will unite several powerful plants for the production of solar energy, should be completed in Dubai. The total capacity of these enterprises should be about 1,000 MW.
It is estimated that by 2030, 5% of all energy in the UAE will come from solar panels. In addition, the UAE is financing large-scale projects from alternative energy sources around the world. Today, there is active investment in the construction of renewable energy facilities in Iran, Mauritania, Argentina, Cuba, and the islands of Saint Vincent. The development of international cooperation is another step toward the stimulation of investment activity in the Emirates.
Final Word
In recent years, energy efficiency has been adopted by many companies around the world. Renewable energy can obviously benefit business, but it is worth looking further. Renewable energy is important for all of humankind. To create a better world for us and future generations, we need to change our ideas about energy and its generation, consumption, and distribution. We are seeing the birth of a new energy model, and that implies efficiency, environmental friendliness, and safety. We need smarter equipment to control the reliability of energy supply and optimize production and consumption. The world needs systems that meet the challenges of sustainable development and comply with new standards, rules, and codes. We need an infrastructure that provides ease of implementation of electrical components and systems while protecting people and property from cyber attacks.
In light of this, Karvuon has set the goal of building and nourishing infrastructure for the fourth industrial revolution. Karvuon will build a state-of-the-art industrial park in Mongolia to provide the entire blockchain industry with sufficient power and establish a highly profitable company for our stakeholders. We strive to become a world leader in the production of renewable energy through the construction of wind farms and solar power plants.
