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Rush Hour – The Green Transition

“There is no energy crisis, only a crisis of ignorance”
-R Buckminster Fuller

The ongoing Global Energy Crisis is yet another reminder for our unscrupulous world leaders to roll up their sleeves and take action. If this situation is not dealt with sedulously, the ongoing crisis would mark the beginning of a series of interrelated crises that can potentially devastate the global economy. This crisis is complicated and multi-faceted; there are a multitude of factors involved. Most world leaders are quick to point out that the COVID-19 Pandemic is causing supply chain disruptions. Some have pinned the blame on OPEC+, claiming that its production plans are based on faulty forecasts. While these claims are true to a certain extent, there’s one component that we tend to overlook: The Green Transition. The rushed Green Transition, to be precise. In this article, I shall probe how the Green Transition played a supporting role in wreaking havoc worldwide.

Right off the bat, I ought to clarify something: I do not oppose the Clean Energy Transition. I believe it is imperative that we shift to cleaner forms of energy pronto. However, our world leaders must go about it in a systematic and planned manner, but therein lies the rub- there are hardly any structured pathways toward energy development. Rather, most countries are haphazardly applying pressure for a rapid shift.

To quote Daniel Turner, CEO and Founder of Power The Future, “The precipitous move toward new forms of alternative energy, by governments, is a mistake.”

To illustrate what I mean, let us look at the case of the European Union. The EU went all-in on the North Sea Energy project, relying substantially on the North Sea winds for electricity. But climate change has rendered offshore wind farms unreliable. In September 2021 and January 2022, the UK witnessed a surge in energy prices amidst an ongoing crisis as the North Sea winds stopped blowing temporarily. This phenomenon has been termed ‘wind drought’. Wind energy, which supplied 26% of the UK’s energy needs in February 2021, supplied a mere 7% in September. Meanwhile, Norway, the ‘powerhouse’ of Europe, also faces a similar crisis, as its hydropower reserves have been hit hard by prolonged dry weather and drought. Though Norway doesn’t rely on gas for power generation, the effects of the Energy Crisis in Europe are felt there, too. Recently, hydropower producers have been advised to refrain from using more water for hydropower generation and to save water for the winter. They were also asked not to export too much electricity to the rest of Europe as reservoirs are not as full as in previous years, and not to rely on imports from Europe, which is struggling with energy supply. This is an additional nightmare for Europe. Back in 2021, the EU turned to Russia for help and managed to soldier through the winter. But after the war in Ukraine, the EU’s ‘self-sanctions’ on Russia have had grave implications for Europe itself.

The war in Ukraine has exposed the rushed transition, which has forced countries to scramble for fossil fuel supplies. Moscow is using oil as a geopolitical tool to punish the EU for the sanctions. The consequences of Putin's gas war on Europe are being felt widely. Desperate energy conservation measures are being taken across the EU: German cities have dimmed street lights. Italy is asking people to reduce the usage of air conditioning. France plans to ban illuminated advertising. It’s not difficult to understand why this is happening once you acknowledge that the EU relied on Russia for 40% of its gas needs before the invasion. To numerically emphasize the severity of the consequences, gas prices in July 2022 were 700% higher than last year

Likewise, the USA was susceptible to blackouts in the summer of 2022. Energy providers attributed this shortage to extreme temperatures coupled with drought conditions across the Midwest. These droughts affect the hydroelectricity output as well as the amount of water available for the cooling processes of regular thermal generators. States like Texas, California, and New York, for instance, have relatively weaker power grids due to the internal political pressure that is being exerted for a quick transition.

Now, before all the green energy sceptics get hyped up, let me reiterate that I am a proponent of clean energy. The advancement in the diversification of renewable energy is indubitably beneficial and imperative. But the root of all our problems lies in phasing out traditional energy sources. Many countries are placing the burden of energy generation on a power grid whose foundations are rather shaky and unreliable. This puts them in quite a precarious situation when renewable energy systems fail since there’s virtually no backup. Such failures have become more common recently, which can be attributed to climate change. What Europe is experiencing has been termed ‘greenflation’ and ‘fossilflation’ by some analysts. Increasing government restrictions on traditional energy sources to encourage renewable energy has led to substantial under-investment in the fossil fuel sector, leading to insufficient supplies. According to Rystad Energy, fresh investments in oil and gas field development by American and European oil companies have declined by more than 50% between 2015 and 2021

On the other hand, some countries have fuelled their energy crises by aggressively implementing curbs to meet their pledge toward climate change. Last year, for instance, China pledged an aggressive 65% reduction in its emissions by 2030 and had cracked down heavily on coal mining ever since. China’s power supply shortage is multifaceted, but there are three dominant factors: import restrictions on Australian coal, the Chinese Government’s plans to reduce carbon emissions amid adverse weather conditions, and a surge in exports. Signing up for the climate control program will have grave implications for a country that is vastly dependent on coal. To sum it up, the Chinese made this hasty decision to compensate for their ignorance which played a significant role in China’s energy crisis.

Ed Yardeni, a veteran Wall Street Economist, sums up the issue in 2 concise lines: “Renewables aren’t ready for prime time. So instead of a smooth transition, the rush to eliminate fossil fuels is causing their prices to soar and disrupting the overall supply of energy.”

Our world leaders are to blame for this crisis. Instead of formulating a structured pathway toward energy development, they’re going with the flow. They didn’t plan for this transition; instead of a well-planned pivot, our economies are being placed on the edge of the precipice. When confronted, our leaders do what they do best: they equivocate. This haphazard approach may result in clean energy, but the journey will indubitably be excruciating and perilous.

Here’s what needs to be done: First and foremost, if power grids are to be made dependent on clean energy, it is essential to invest in technology that would enable energy storage during periods of excessive output, which in turn would cool energy prices during future shortages. Now, this technology already exists, but it is not cost-effective yet. Therefore, investing in the research and development of such systems would undoubtedly play a pivotal role in the transition toward a carbon-neutral economy. Above all, we need to recognize that the green transition will take time and require ruminative and thoughtful planning. The clear lesson is that we should not adopt climate policies that lead to high energy costs that would burden consumers. We ought to keep investing in low-cost, low-carbon energy that can provide the baseload power that the world relies on. The ongoing crisis is an eye-opener, for it has made it evident that this shift cannot be rushed. The pressure to divest from hydrocarbons has resulted in a supply crunch that is having adverse effects on countries, especially the ones where ignorance and insouciance have prevailed over critical analysis.

I would like to conclude with a quote by Bruce Lee, which establishes an important guideline for the world’s clean energy endeavors, “Long-term consistency trumps short-term intensity.”

Rishabh Rupani
High School Student

References:

Makholm, J. D. (2021, April 13). The Texas Energy Debacle and the Economists. Climate and Energy, 37(10), 19–25. https://doi.org/10.1002/gas.22229

Gil, A. (2022, July 20). “Rushed” transition to green energy is a mistake, says expert. INVESTOR TIMES. Retrieved October 16, 2022, from https://investortimes.com/rushed-transition-to-green-energy-is-a-mistake-says-expert

Stuttaford, A. (2022, January 17). Another Low Blow — Wind Energy Falters (Again). National Review. Retrieved October 16, 2022, from https://www.nationalreview.com/corner/another-low-blow-wind-energy-falters-again/

Kern, M. (2022, July 7). Norway’s Hydropower Reserves Hit Hard By Drought. OilPrice.com. Retrieved October 16, 2022, from https://oilprice.com/Latest-Energy-News/World-News/Norways-Hydropower-Reserves-Hit-Hard-By-Drought.html

European Central Bank. (2021, October 28). Sorry, this page does not exist. Retrieved October 16, 2022, from https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220317_2%7Edbb3582f0a.en

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