ABSTRACT

There is little doubt that the Renewables are the energy resources of the future, for the simple reason that, unlike the fossil fuels, they do not get depleted when used. Most are related to sun in some way. Sunlight produces solar energy directly. It indirectly produces hydropower (through the movement of rain water), biomass (through photosynthesis), and tidal power (through tides caused by moon and sun). The green, renewable energy economy is fundamentally different from our 20th

century economy with its overdependence on fossil fuels. The renewable fuels, such as, wind, solar, biomass or geothermal, are entirely indigenous. The fuels themselves are often free. They just need to be captured efficiently and transformed into electricity, hydrogen or clean transportation fuels. In effect, the development of renewal energy invests in people, by substituting labour for fuel. Renewable energy technologies provide an average of four to six times as many jobs for equal investment in fossil fuels. For instance, while natural gas power plant provides one job per MW during construction and ongoing operations and maintenance, equivalent investment in solar photovoltaic power technology would generate seven jobs per MW. The approval of the Renewable Electricity Standard (RES) by USA would involve the construction and maintenance of 18,500MW/yr of wind, solar, geothermal and biomass plants, and if all the components needed for the project are manufactured in USA, this would generate 850,000 jobs. If a society decides that climate change should be mitigated, such a policy should be

reflected in the choice of technologies made by that society. It should not be forgotten that a desirable outcome, say, the development of renewable energy technologies, does not happen by itself – it should be made to happen through appropriate policy change. Policy and markets are generally in conflict, as their objectives are different. “A policy

is a market intervention intended to accomplish some goal – a goal that presumably would not be met if the policy did not exist’’ (Komor, 2004, p. 21). The object of the public policy is to promote public good, while the object of themarket is tomakemoney as quickly as possible. On the basis of considerations of public good, a governmentmay decide on a policy of promoting renewable energy technologies, but the market would not wish to participate in it unless there is a reasonable prospect of profiting from it. The trick is in figuring out the “intersection’’ point, where the two pathways

converge – i.e. whereby the market finds that it is possible to make money from an activity that the government wishes to promote. This is easier said than done. The intersection point is not a fixed point – it is a floating point. It is changing all the time in response to changes in technology and market penetration. It follows that the policy makers and private makers have to engage one another in continuous dialogue in order to arrive at the “intersection point’’ which is acceptable to both the sides. The share of the total renewables in the world primary energy supply (TPES) in

2005, was 12.7%. Coal: 25.3%, Oil: 35.0%, Natural gas: 20.6%; Non-renewable waste: 0.2%, Nuclear: 6.3%, Hydro: 2.6%, Renewable combustibles and wastes: 9.9%, others: 0.57%. Product shares in the world renewable energy supply, 2005: Renewables com-

bustibles and waste: 78.6% (comprising liquid biomass: 1.6%, renewable municipal waste: 0.7%, solid biomass/charcoal: 75.6%, gas from biomass: 0.9%); Wind: 0.6%, hydro: 17.4%, solar/tide: 0.3%, geothermal: 3.2%. The power of the technology innovation and market penetration can be illustrated

with two recent examples. Apple’s iPhone-3GS, costing just $200, sold more than one million pieces in three days after it was issued – busy people queued for hours to buy the gadget. Similarly, the demand for Tata’s nano, the world’s cheapest car at USD 2,000, is in millions – it has already sold 100,000 units. As Komor (2004, p. 12) puts it succinctly, “If renewables are to succeed, they must

succeed in a competitive market’’. Policy should be aimed at facilitating it. Energy policy of any country has to have two objectives: job generation as a way of getting out of the recession, and mitigation of climate change impacts through low-carbon technologies. Consequently, governments could consider formulating sustainable energy policy frameworks for their countries based on the following strategy:

(i) how to promote greater use of renewable energy for on-grid, large-scale electricity production – this will also help to overcome the intermittency problems of wind power and solar PV,

(ii) how to use discentives, such as carbon tax, to phase out fossil fuel use; how to use technology to reduce the carbon footprint and improve efficiency of fossil fuels, where the use of fossil fuels is unavoidable,

(iii) how to use market-based strategies, such as green certificates, and how to develop innovative technologies for the production of new kinds of fuels (e.g. algal biofuels), new ways of energy storage, and demand-side management, etc. Energy policy case histories of some countries are analyzed to delineate what works, and what does not work.