Analyzing the economic benefits of renewable energy in the present world context
The role of renewable energy as a savior of the environment is unquestionable. But, the enormous impact of renewable energy on the economy is something that we often don’t realize. Renewable energy sources like solar energy, wind energy, geothermal energy, and hydropower have a definite influence on the global economy.
We did extensive research on this subject matter. And this blog is an attempt to present our research in a precise manner.
So, let’s explore the impact of renewable energy on economy from both positive and negative perspectives.
Economic Benefits of Renewable Energy
Substitution of conventional energy with renewable energy will bring stability to energy prices. There will be a substantial increase in the number of energy sources to meet the public demand.
According to the report published by IRENA (International Renewable Energy Agency), if the world double’s the current share of renewable energy, we can expect an impressive 1.1 percent of GDP growth by 2030.
This 1.1% of GDP growth translates into a whopping $1.3 Trillion. Impressive, isn’t it?
|Renewable Energy Source||Investment Percentage (%) in Billion of Euros (2016)|
|Solar Energy||Photovoltaics- 11,1 |
Solar Thermal Energy- 5,3
|Wind Energy||Onshore wind- 46,2|
Offshore wind- 18,3
|Biomass||Biomass Heat- 9,7|
Biomass Electricity- 1,8
1. Renewable energy provides job opportunities
Renewable Energy extraction uses both workforce and technology. Therefore, this sector has great potential in creating job opportunities for youth.
According to the 2015 IRENA (International Renewable Energy Agency) Report, the Renewable Energy industry as a whole created more than 7.7 million jobs in 2014 alone.
Download the PDF of the report here.
Furthermore, you can expect a sharp surge in job creation when the industry will mature properly.
The 2018 IRENA Report predicts renewable energy to create as many as 14 million additional jobs by 2050.
2. Reduces health expenses
The harmful emissions of fossil fuels in the air and water deteriorate human health.
Adapting Renewable Energy would improve water quality, air quality, and overall health. And Indeed will have a positive impact on the economy and human resources.
3. Reduces energy costs
Generating renewable energy is the best practice for commercial, home, and industrial usage to save money on electric bills.
Besides, by embracing renewable energy sources, families will become self-dependent on their energy requirements.
4. Energy regulations
To maintain a balance between the Energy Demand Management which consists of Demand-Side Management (DSM) or Demand Side Response (DSR).
Here, the primary objective is to encourage the consumers to use less energy during peak times, like in the summer season.
Peak times: The time where electricity demand is higher
In this way, there would be a balance by storing the energy at units during off-peak times and releasing it during peak times.
Hence, this initiative would help to regulate energy efficiently.
5. Economic sustainability
The creation of Aggregators operating Virtual Power Plants aims to enable small energy sources. In addition, to provide energy grids and use energy units according to demand.
Power grid distribution is the final stage of electricity distribution to the end-users.
Renewable energy sources also promote small-scale industries like manufacturing solar panels, solar ovens, wind turbines, etc.
6. Boosts in property price
Building the infrastructure demands large portions of land and specifically for the production of renewable energy sources. If a piece of land produces energy, its monetary value increases exponentially.
The increase in property price is always an early indication of economic growth.
Negative Economic Impacts of Renewable Energy
Enough of positive things, but at the same time, one must not ignore the negative impact of renewable energy on economic growth. There are some risk factors associated with renewable energy sources.
Let’s explore them one by one.
1. Giant investment requirements
Considering the amount of time and money investment in these projects, Infrastructure generation for renewable energy is never a one-day process.
But, in return, the power generation is relatively on the lower side. So it’s in no way cost-effective, at least, at the beginning stage.
The weather has a direct impact on renewable energy production. As the weather condition keeps on changing, prediction becomes entirely uncertain.
Sometimes, there is a lack of power generation even after a huge investment in building large infrastructures.
Therefore, from an economic point of view, it becomes relatively unreliable.
Besides, the end-consumers who are dependent on that particular energy source also suffer, as
Energy Production < Energy Demands
3. Training expenses
Joint ventures of world organizations in developing renewable energy infrastructure sound easy but generating it for a large population demands trained professionals. And, you can’t accomplish it without the help of local people.
These trained professionals must have experience at a small scale, so it would become easy for them to handle energy generation at a large scale.
Thus, economically it is less reliable and requires a lot of time to provide high-level training to your local population.
The non-conventional resources are continuously replenishing and become crucial for the economic development of a country. Going towards these resources will reduce environmental pollution. And the proper implementation of correct technologies will boost the economy.
The process of installation, job creation, and development requires adequate knowledge and guidance. Embracing the abundance of nature would offer pollution-free resources without hampering economic growth.
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The writer believes awareness is the solution for change. Her comprehension in the field of ecology and environmental studies is impactful. With her knowledge, she had written much content for academic websites and well-known publishing platforms. Here, at BleedGreen, she urges us to share her wisdom of words to bring cognizant in the society for our green resources.