Renewable Energies: A Viable Alternative to Fossil Fuels?

This presentation explores the feasibility of renewable energy sources as a replacement for fossil fuels. It analyzes the economic costs and benefits of both renewable and fossil fuels, considering factors like levelized cost of energy (LCOE), social costs, opportunity costs, and economic growth potential. The presentation concludes that renewable energy sources offer a cleaner, more sustainable, and economically advantageous alternative to fossil fuels, highlighting their potential to drive economic growth and create jobs while mitigating environmental damage.

Are renewable energies a real
alternative to fossil energies?

Table of contents
Slide 3-5: Introduction
Slide 6-14: Analysis
Slide 15: Conclusion

Introduction
As the Earth continues to grow and evolve,
various resources will gradually become scarce.
Through the ages, fossil fuels have continued to
be used as the major source of energy in the
households and industries.
This rampant usage of fossil fuels, coupled with
their limited availability, is responsible for the
upsurge in their prices and the climatic
fluctuations.

The idea of a world where electricity is generated
without oil might sound a bit impractical.
However, scientists and engineers have come up with
new methods of tapping renewable energy.
The debate that renewable energy resources can act as
perfect or even better substitutes of fossil fuels is
significantly important.
The fossil fuels are fast going to face extinction. In such
a scenario, a quest for their replacement becomes
imminent.

If the energy sources could be decentralized, then an
equitable reach and distribution of energy among all
can be ensured.
Moreover, such resources are affordable and can be
used by all.
Renewable resources will allow proper and equitable
energy distribution, which means energy would reach
the urban areas as well as the remote corners of the
country.

Analysis
Economic Costs
At present the world gets around 80% of
the supply of its energy from fossil fuels,
since they have provided energy at the
lowest cost till date.

Cost comparisons between different sources
of energy can be made by calculating the
levelized cost of energy (LCOE).
The costs of solar and wind energy have
continuously declined over the years.
The capital intensity of RE is comparatively
very high, that is to say it requires a huge
amount of investment to set them up.

The money paid to purchase fossil fuels is the
direct cost of it. But apart from that, there are
certain costs that the society is bearing for
allowing the use of fossil fuels. Such costs are
called social costs. The fact that fossil fuels are
associated with great health and environmental
damage cannot be denied. From the very
extraction to combustion, fossil fuels cause
significant health and environmental hazards

Opportunity cost is basically what has to be
forgone for undertaking any particular activity. For
assessing whether or not any form of energy has
environmental merit, an assessment of the
opportunity cost is required to be made. In case of
fossil fuels, say wood chips, the opportunity cost
would be the furniture which could be made out
of that wood. However, renewable sources do not
generally have such opportunity costs associated.

Economic benefits
It has been estimated that by 2030, the
renewable resources are going to shoot up the
GDP by 0.6% and the employment in US by 0.5
to 1 million. If the share of renewable is
doubled by 2030, then the global GDP would
skyrocket by 1.1%, that is to say USD 1.3
trillion.

The figure above suggest that the global welfare is going to
increase by 2.7%, much higher than the GDP growth. This
welfare can be judged by the economic effects on investment
and consumption, the social effects on the expenditure on
health and education, and the environmental effects,
measured by the emissions of greenhouse gases, which would
all move in the positive direction.

It is predicted that both the direct and indirect
unemployment would reduce by 24.4 million by
2030, by doubling the share of renewable.
More jobs will be created in the technological
sector.
The energy transformation will bring with it
greater exports of fuel and energy related
equipments and services in the countries that
are able to generate a competitive advantage.

While estimating the above benefits the
external costs involved in the deployment of
RE sources were ignored.
These benefits are also dependant on a
number of enabling factors, like diversified
economy sufficient capacity to capitalize the
opportunities for job creation, including
education and training that is helpful in
creating a versatile and skilled workforce.

While estimating the above benefits the
external costs involved in the deployment of
RE sources were ignored.
These benefits are also dependant on a
number of enabling factors, like diversified
economy sufficient capacity to capitalize the
opportunities for job creation, including
education and training that is helpful in
creating a versatile and skilled workforce.

Conclusion
The analysis of renewable sources and fossil fuels, as a
source of energy is indicative of the fact that renewable
sources are perhaps better than fossil fuels when it comes
to the sources of energy generation.
They are a clean source of energy imposing no social costs
on the society. There is no harmful impact on health and
environment when such energy sources are utilized.
Moreover, there is no opportunity cost involved in case of
renewable energy sources. They are thus, more beneficial
from the socio-economic perspective.

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