Energy Policy – Social, Economic and Environmental

Energy Policy. By Lucas Flynn

The role of renewable energies can vary differently from country to country. In The United States in 2013, 8.85% of the country’s energy consumed came from renewable resources(1). In 2013, Germany’s renewable energy produced 25% of the country’s energy used (2), while In Sweden renewables accounted for an incredible 47% of the energy consumed(3).

How can these values vary so much? It often has to do with resources available in each country, and governmental policies that are in place in each country. Sweden’s resources allow for the country to thrive in the renewable energy department, using it’s many northern rivers and water falls for hydroelectric power, and plentiful forests to help fuel combined heat and power plants that run on woody biomass. But this difference of available resources can not account for the whole difference between these three countries’ energy usage distributions.

Energy policies can often influence the amount of renewable energy technologies present in any given country. These policies are generally put in place to:

  • reduce greenhouse gas (GHG) emissions
  • diversify fuel supply sources
  • develop long term replacements for fossil fuels
  • offer new opportunities for rural income

Germany has implemented what is called a feed-in tariff, which gives incentives for research and development in different renewable energy fields. The general idea of the the feed-in tariffs is that businesses who are using renewable energy technologies receive funding from the national government, because it is hard for renewable energies to compete on the free market with relatively inexpensive fossil fuels. As an example, a company that is generating electricity from renewable energy sources will get paid more money per kilowatt-hour (kWh) of electricity produced compared to what is paid to companies that produce electricity from fossil fuels. In this policy the consumers pay a flat rate for their electricity, and the government will pay the renewable companies the difference in the price per kWh between the flat rate and the rate set by the energy policy for each separate renewable resource technology. This “flat rate” is generally the price that fossil fuel electricity is sold at. The different electricity prices for different energy technologies are dependent on how expensive it is to create the technology that is producing the electricity. For example, solar power may be priced lower than tidal energy per kWh because tidal energy is a more recent technological advancement, and therefore tidal electricity costs more money to research, develop and produce.

These feed-in tariffs allow for new, innovative, and expensive technologies to have a competitive chance in the market, and gradually become cheaper over time as more research and technological advances are made. As these technologies become cheaper over time they begin to compete with fossil fuel prices. If the United States could put similar feed-in tariffs on renewable energy technology, we may see sharp rises in the 8.85%  of total energy generation in the U.S being from renewable sources. More information on Germany’s feed in tariffs can be found here (4).

Wind turbine outside of Frankfurt, Germany. An example of new technology Feed-in tariffs help to make competitive.

Wind turbine outside of Frankfurt, Germany. An example of new technology Feed-in tariffs help to make competitive.

ROPA's anaerobic digestion system

ROPA’s anaerobic digestion system. Another example of new energy technology becoming competitive in the German marketplace.

Sweden has a slightly different approach to accomplish the four goals of their energy policy. Sweden implemented a heavy carbon dioxide tax, starting in 1990. This tax charges both industry and consumer 100 Euros, or approximately 140 dollars, per metric tonne of of carbon dioxide released into the atmosphere. This simple tax can have a major impact, reducing a 5 megawatt natural gas power plant’s revenue by $6.3 million dollars per year! This tax also pushes auto manufacturers to design cars with very efficient engines to achieve high gas mileage, because they will pay less tax the less fuel their car consumes. More information on the Swedish carbon dioxide tax can be found here (5).

Sweden's woody biomass for heat and power.

Sweden’s woody biomass for heat and power. It is easy to see how the harvest and transportation of this biomass creates rural income, an objective of energy policy.

ROPA's Tiger model beat harvester. Renewables helping to create both farming and manufacturing jobs.

ROPA’s Tiger model beat harvester. Renewable sources helping to create both farming and manufacturing jobs.

Energy policy greatly influences everything that this group of engineers will do in the future. Policies will help to determine our job field, and what type of technologies we will be developing in the future. I would love to see the United States update their energy policy to model Sweden’s simple but very successful carbon dioxide tax. I believe this would greatly reduce the country’s fossil fuel consumption, along with creating jobs for both young and opportunistic engineers along with farmers and transportation companies.

Policy is the only way that we can help to change this:

Coal Fired Power Plant

Coal Fired Power Plant

To this:

Wind Turbine

Wind Turbine

Switchgrass Energy Crop

Switchgrass Energy Crop (6)

references:

(1) U.S. Energy Information Administration – EIA – Independent Statistics and Analysis. (n.d.).Short-Term Energy Outlook. Retrieved June 4, 2014, from http://www.eia.gov/forecasts/steo/tables/?tableNumber=3#

(2) German Renewables Reach 25 Percent. (n.d.). – IEEE Spectrum. Retrieved June 4, 2014, from http://spectrum.ieee.org/energywise/green-tech/solar/german-renewables-reach-25-percent

(3) Obama Names Sweden A Model For Energy Policy — Here’s Why. (n.d.). CleanTechnica. Retrieved June 4, 2014, from http://cleantechnica.com/2013/09/10/why-obama-just-named-sweden-as-a-model-for-energy-policy/

(4)German Feed-in Tariffs 2013. (n.d.). German Energy Blog. Retrieved June 4, 2014, from http://www.germanenergyblog.de/?page_id=14068

(5) International Energy Agency. (2013). Energy Policies of IEA Countries 2013 Review Sweden The framework: energy policy and climate change. Retrieved April 30, 2014 from http://www.iea.org/textbase/nppdf/free/2013/sweden2013_excerpt.pdf

(6) Dr. Kurt Thelen. MSU

3 responses to “Energy Policy – Social, Economic and Environmental

  1. Do you think that the size of the country had a significant role in determining the mentality towards renewable energy?
    We also know that education is a considerable factor in understanding humanities impact on the environment and vice-verse, is it possible that if educational initiatives are taken, renewable energy will become more accepted?

  2. Yes, I believe both education and the size of the country majorly influence feasibility and attitude towards renewable energy technology. We know Sweden only has a population of 9 million people, so they need less energy production to satisfy the population. Because they require only a portion of U.S energy consumption, Swedes need much less renewable energy production to account for a large part of their total energy usage.

    I definitely believe that educational initiatives could significantly make renewable energy technologies more accepted. I think if climate change and natural resource depletion were commercially advertised and discussed at an early age in education systems, then more people would be on board with paying slightly higher electricity prices to help sustain our planet.

  3. I am loving the idea of widespread use of FITs, but would love to know what the efficiency trade off is. There is a clear economic benefit for the independent electricity generation plants, but the amount of electricity that must be generated from non-renewable sources is unchanged. We are losing a percentage of our generated electricity each time we sell to the grid and buy it back. The ideal scenario from an environmental perspective would be to immediately use all energy produced at the site of production, but would the consequence be fewer independent renewable generation plants?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s