Do You Want to Mitigate the Negative Impacts of the Rush to Renewable Energy?
Published on September 13, 2021 by Vivek Mishra
The world is now shifting towards renewable energy, after years of depending on fossil fuels for energy generation. The race to become carbon-free has accelerated, especially after the implementation of the 2015 Paris Agreement.
The renewable energy industry is growing rapidly, with a focus on reducing carbon emissions while meeting global energy demand. However, we believe there are areas that require attention if it is to remain sustainable.
This article highlights aspects of the industry readers may be unfamiliar with and possible solutions to areas still unclear, in line with industry standards.
Ecosystem: Environmental safety has become a major concern. Although the three major sources of renewable energy — hydropower, solar energy and wind energy — are ecofriendly in nature, when they are harnessed to generate power, they create problems for the ecosystem. These problems should be addressed before they become toxic for the industry.
Research and development (R&D): Environment-related discussions show the importance of R&D in the renewable energy industry. It would help advance the current technologies used for functioning. The following points illustrate the scope for R&D in the industry
Bidding procedure: Companies follow a bidding process for constructing projects. We highlight challenges in the process and possible solutions:
- Aggressive bidding in a competitive environment is a potential weakness of auctions, as most of the time, companies try to secure projects at low profit margins. This delays the provision of services to the end customer. With low profit margins, the industry sees low budgets for R&D.
- Mitigation: Policymakers should introduce performance clauses in contracts, as these would enhance the quality of service. Second, involving financial institutions at the early stage of a project would reduce risk of delay and provide a budget for extensive R&D.
Waste management: The process of renewable energy generation would improve if waste produced by the plants is reduced.
- Solar, wind and hydropower plants produce different forms of waste. However, the waste impact is currently minimal, as this industry is still in the inception stage. Waste produced includes wind turbine blades, PV cell panels, lithium-ion battery cells, concrete and dam gates.
- Mitigation: Best practice would be to reuse, recycle, dispose of all waste properly or prevent use. Significant allocation for R&D could also help reduce waste. Companies could implement a mechanism with the support of manufacturers to make the recycling process efficient and economical.
Closure and reclamation: Any project comes to an end, and a reclamation and closure plan is required to ensure that when the activity is completed, the plant is closed and the land is reclaimed and restored.
Mitigation: The renewable energy industry should approve land for projects only after proper approval in line with government regulation. Companies should have qualified environmental professionals onsite during the reclamation stage.
How Acuity Knowledge Partners can help
We have a large pool of experts with diverse experience in the power and energy sectors. We can assist with a range of consulting and business research projects including idea generation, deep dives, strategic research, competitive landscaping and essential value chain support. We have dedicated renewable energy- and clean energy-focused teams that keep abreast of market trends to help clients capitalise on investment and M&A opportunities across the globe.
Originally published at https://www.acuitykp.com.
About the Author
Vivek Mishra, Senior Associate, has over five years of experience in delivering various market research projects by implementing secondary research, market forecasting, and data skills. He is graduated in Bachelor of Technology in Mechanical Engineering from Anand Engineering College, Agra. At Acuity Knowledge Partners, he works in Mining & Metals industry, with special focus on analyzing ‘Coal’ and ‘Uranium’ as a commodity across the globe.