It is no secret that energy powers the global economy. Whether it is for industrial or domestic use, its importance cannot be overemphasized. Think of energy as the lifeline of the global economy, without adequate energy to drive our economic growth; human society will drift back to the stone age. According to studies, the increase in global population, rural-urban migration, rapid industrialisation, etc., will keep pushing the global energy demand to an upward trajectory. Energy is majorly categorised into renewable and non-renewable energy. Renewable energy, otherwise known as clean or green energy, is generated from natural renewable sources like the wind, sunlight, water, etc.. In contrast, non-renewable energy is derived from natural and unrenewable sources like the fossil fuel such as natural gas, oil, and coal.
Why Renewable energy?
There has been a vigorous campaign against the use of non-renewable energy sources by scientists and environmentalists over the past three decades. Why is there a bias against the use of non-renewable energy sources, you may want to ask? According to scientists, non-renewable energy sources pollute the environment and putting human life at risk of diseases. It is damaging the ozone layer with the resultant effect of a rise in the earth’s temperature. This can cause the arctic ice to melt into the ocean, which may cause coastal erosion, and may expose coastal cities to flooding. Renewable energy sources as the alternative to non-renewable energy sources are seen as clean and environmentally sustainable. It has no serious adverse effect on the environment.
Renewable Energy use.
According to statistics, renewable energy sources have grown yearly at an average rate of 2.0 per cent since 1990. According to an International Energy Agency report, renewable energy capacity is poised to increase by 50 per cent between 2019 and 2024. The same report stated that renewable energy sources constitute about 26 per cent of the global electricity consumption; this is expected to reach 30 per cent by 2024. Experts suggest that by 2050 global energy demand will rise from c.60,000TWh per year to c.120,000Twh per year, and non-renewable energy will still feature in the equation as renewable energy sources alone will not be able to meet the demand. For the renewable energy sector to reach its full potentials, there is a need for robust governmental policies to attract direct investment in the sector.
Renewable Energy Investment Outlook
According to the World Economic Forum, there has been a sharp decline in renewable energy investment over the last two years. It was noted that the year 2017 was the golden year for investment in this sector as investment reached a peak of $326.3 billion. It fell to $288.9 billion by 2018. This report was corroborated by a Bloomberg New Energy Finance report, which showed that the global investment in renewable energy fell by 14 per cent during the first half of 2019. Experts have hinged the fall on investment to reduce government subsidies to stakeholders in the renewable energy sector.
It is notorious knowledge that renewable energy sources are cleaner, cheaper, and safer for the environment. However, they constitute a threat to companies dealing with non-renewable energy sources. It is only logical that the advancement of the renewable energy sector spells doom for oil companies; it will bring a sharp fall in demand for most of their products. A significant number of countries derive their revenue from non-renewable energy sources. What does the future hold for them? Your guess is as good as mine. Their surest bet is to diversify their economy.