Whether we like it or not, the economy dictates our lives. It determines the value of our pound, the number of jobs available to the citizens of our cities, the interest rates we pay, and how much we can get away with spending.
For many years, environmentalists have argued for the adoption of renewable energy as a replacement for fossil fuel energy resources. Today governments are singing the same tune simply because it makes good business sense. it is estimated a conversion from fossil fuels to renewables would add $1.3 trillion to the global economy each year
The renewable energy industry supports jobs – renewable energy development is relatively more labour intensive, so it creates more jobs per pound invested than fossil fuel resources.
On average Renewable energy is creating jobs 12x faster than the rest of the economy, which is evidenced by the fact that the Renewable sector is the fastest growing sector on the planet. The renewable energy industry has already created 9.6million jobs globally in development, technology, manufacturing, construction, installation and sales. This number is expected to grow to 24 million by 2030.
Renewable energy projects promote investment in the UK economy – in 2016 the renewable sector attracted £22.2 billion of investment into the UK, making it 4th in the world in terms of investment into renewables.
Perhaps overlooked sometimes, is an economic theory called the ‘multiplier effect’ or commonly known as the ripple effect. This states that a single expenditure in an economy can have repercussions throughout the entire economy, much like ripples spreading across a pond. The multiplier is a measure of how much additional economic activity is generated from an initial expenditure. To highlight this, a research study was carried out in Ohio at a local goods store, and they concluded in that particular place every $1.00 spent in the local store generated a further $1.90 of economic activity in the local economy. This occurs as the pound is re-spent; the store pays its employees, who purchase more goods, all with the same original Pound.
Whilst accurately predicting the multiplier effect for an entire economy is a lot more complicated (if not impossible), the principle still holds true. Therefore in theory the £22.2 billion of investment could be worth £64.38 billion. Fossil fuels cannot make this claim, quite simply because we are a net importer of fossil fuels so the money to purchase these goes abroad where the exporting companies benefit.
Stability of Pricing – despite the fact that oil, coal and gas are trading a lot lower than their highs. It is the volatility of fossil fuels that is the real crux of the problem. In the last 10 years oil has traded as low as $28 per barrel and as high as $140 per barrel. That is $112 per barrel difference. The problem with this is that we have no influence on these price movements, and they can have a massive impact on the economy. Volatility can be caused by many things, Wars, Embargos, Policy changes, Supply and Demand. What’s more, its highly probable that the frequency of such invents will increase as the finite resources diminish.
A further benefit is that the fuel to generate electricity is free, unlike fossil fuels. This means that once the initial investment has been recuperated, other than maintenance the cost is free.
Access to power – It is estimated that around 1.2 billion people live without electricity, this is due to the fact that fossil fuels require an enormous infrastructure to be economical, you cannot simply build a viable coal plant for a village of 200 people that is 100 miles from the nearest grid connection as it is too expensive. However, renewables fix this problem, the implementation of a solar panels can provide a simple cost effective solution the can also make a dramatic impact to people’s lives – These development are known as ‘off-the grid’ systems as they do not require connection to the national network and are totally self-sufficient.
Security and reliability of power – the National Grid was designed and built to have a nominal amount of very large power plants. Whilst when it was designed this was the most cost effective, efficient methodology to implement there are shortcomings with this way of doing things. Firstly, the risk of power outages is much greater when you are reliant on only a small number of production units rather than many. There are a number of examples of this: -
Northern India, July 2012 - 700 million people affected due to a power outage.
Northern India, January 2001 - 230 million people affected due to a power outage.
Java, and Bali, August 2005 – 120 million people affected due to a power outage.
Southern Brazil, March 1999 – 97 million people affected due to a power outage.
The ramifications of these power outages can have a huge impact on the population and the economy. Renewables alters this scenario, being able to build out a larger number of smaller power units, placed in more strategic locations can significantly reduce this risk.
The voters want renewable Energy – despite what you hear from political ideologues and read about in the news. People want more home grown, renewable, clean energy. They want this not only because it will make the air they breathe cleaner, but because they know that competition for their money is a good thing and that economic growth will come with the continued growth of a home grown industry.
The Military loves it – soldiers and sailors are already fans. In the U.S. The Department of Defences’ clean energy investments increased 300 percent between 2006 and 2009, from $400 million to $1.2 billion. They are projected to eclipse $10 billion annually by $2030. Why? Because sun and wind –not gas stations - can be found deep in the Afghani Mountains, in the Iraq desert, and on the high seas. When combined with brilliant new battery technologies that store energy when the wind is not blowing and the sun is not shining our military has the energy and fuel it needs wherever it goes – rather than waiting for huge, vulnerable tanker convoys.
Huge fuel savings – It is estimated that in order to meet the global climate change targets we will need to invest about $320 billion a year from 2020 to 2050, but the benefits would far outweigh the these costs.