This article was originally published on IMPACT magazine (#43, 2023), issued by American Chamber of Commerce in Azerbaijan.
As the world faces the urgent need to address energy trilemma, energy companies find themselves at a crossroads – balancing the increasing demand for energy, mitigating the environmental impact, and ensuring affordability and accessibility. Amidst this complex challenge, renewable energy sources have emerged to offer viable solutions effectively manage and balance the trilemma and pave the way towards a sustainable future.
As more and more players of the energy ecosystem strive to transition towards a greener and more resilient future, this complex dilemma has become a central focus, demanding innovative solutions and collaborative efforts from governments, industries, and societies.
Renewable energy, developed from sources such as solar, wind, and geothermal power, possesses unique characteristics that align with the objectives of the energy trilemma. It has been systematically proved that transition to renewable energy choices can effectively address each dimension of the trilemma and lay the groundwork for a sustainable and prosperous energy sector.
While the transition to clean energy sources is crucial for a sustainable future, it is important to acknowledge the ongoing need for fossil fuels during this transitional phase. Fossil fuels have long been the backbone of our global energy infrastructure, providing reliable and affordable power to support economic growth and meet the energy demands of our society.
Fossil fuels continue to play a vital role in ensuring energy security and stability, and offer a consistent and reliable energy supply. This stability is especially critical in times of high energy demand and geopolitical tensions and conflicts (e.g. conflicts in Syria, Ukraine and their tough consequences) or when renewable energy sources may be insufficient, such as during extreme weather events or in regions with limited renewable resources.
Moreover, fossil fuels possess the advantage of established infrastructure and distribution networks. Decades of investment and development in the domain have resulted in a robust system that efficiently extracts, transports, and utilizes fossil fuels. Shifting entirely to clean energy sources requires significant investment in new infrastructure, which takes time and resources. During the transition period, relying on fossil fuels ensures uninterrupted energy supply and avoids potential disruptions that may occur during the transition.
However, it is important to note that the need for fossil fuels during the transition to clean energy should not undermine the urgent necessity to reduce our reliance on them. One of the most pressing challenges of our time is mitigating the impact of climate change and preserving the world’s ecosystems. Renewable energy sources offer a compelling solution by emitting little to no greenhouse gases during operation. Gradually, shifting away from fossil fuels and embracing renewables reduces carbon emissions, curbing climate change and contributing to a cleaner environment.
Moreover, the deployment of renewable energy technologies facilitates the transition towards a circular economy, minimizing waste and promoting resource efficiency. By harnessing the power of the sun, wind, and water, we can break free from the destructive cycle of extraction, combustion, and pollution that characterizes traditional energy sources. Unquestionably, to ensure more balanced approach, collaboration of governments, businesses, and research institutions to allocate resources to advance technologies like solar, wind, energy storage, and grid integration solutions is key. Investments to research and development can lead to cost reductions, improved efficiency, and new breakthroughs in clean energy.
Ensuring energy security
Renewable energy plays a vital role in enhancing energy security by diversifying the energy mix. It is no secret that, unlike fossil fuels, which are subject to price fluctuations and geopolitical tensions, renewable sources are abundant, widely distributed, and domestically available in many regions. By reducing reliance on finite and imported resources, countries can strengthen their energy security, achieving a more stable and self-sufficient energy supply. Furthermore, the modular and decentralized nature of renewable energy systems empowers communities to generate their own electricity, fostering energy independence and resilience. From solar panels on rooftops to small-scale wind turbines, individuals and businesses can contribute to a more robust and secure energy network, reducing vulnerability to disruptions and power outages.
One common misconception about renewable energy is its perceived high cost. However, ongoing technological advancements and economies of scale have significantly reduced the cost of renewable energy generation. Solar and wind power, in particular, have witnessed substantial price declines in recent years, making them increasingly competitive with conventional energy sources.
Moreover, governments have been committed to create a conducive environment for renewable energy. In Azerbaijan, for instance, over the last few years, the government has implemented supportive policies and incentives to promote renewable energy development, including solar power across the country. These initiatives aim to encourage investment and facilitate the growth of solar energy projects. Supportive policies, such as feed-in tariffs and tax incentives, create a conducive environment for solar energy production in the region.
As a result, both local and foreign energy companies have started to display more and more interest in investing in renewable energy development. The recent MoUs and cooperation agreement between the government of Azerbaijan and energy companies like Nobel Energy, TotalEnergies, and China International Energy Sources Group are just few examples.
This follows the government’s systematic efforts in promoting clean energy and reducing carbon emissions by establishing ‘green energy zones’ across the country, and signifies an important milestone in advancing sustainable energy solutions and fostering environmental stewardship.
Fostering social equity
Investments in renewable energy create jobs and drive economic growth, offering opportunities for innovation, research, and manufacturing. By embracing renewable energy choices, businesses, jointly with the governments, can stimulate local economies, reduce energy poverty, and foster social equity. Moreover, the decentralized nature of renewable energy systems empowers communities and individuals to become active participants in the energy sector, generating income and reducing energy expenses.
While renewable energy presents a set of advantages, it is essential to acknowledge the challenges that must be overcome to fully harness its potential. Issues such as intermittency, grid integration, and energy storage require innovative solutions and robust infrastructure investments. Policy support, market incentives, and international cooperation are crucial to accelerating the adoption of renewable energy technologies and addressing these challenges effectively.
All in all, while fossil fuels have served as the primary energy source for many decades, the urgent need to address climate change and transition to cleaner energy cannot be ignored. Acknowledging the continued need for fossil fuels during this transitional phase is essential, considering their role in ensuring energy security, stability, and affordability. However, it is important that we prioritize the rapid development and adoption of renewable energy sources to minimize the environmental impact of fossil fuels and pave the way for a sustainable future.