The year 2017 bore testament to a revolutionary phenomenon where ten percent of all electricity generation in the US was contributed by wind and solar energy.
Though ten percent might sound inconsequential, it was a milestone that was marked by these technologies, which had to traverse a melange of impediments and face its robust contenders like coal, natural gas, and nuclear power.
These impediments vary with some being intrinsic, while others have been engendered as a result of distorted regulatory framework and marketplace.
The Hassle of Capital Costs
The initial installation of renewable technologies, such as solar and wind are expensive. The capital costs incurred with the building of infrastructure are on the higher side. At the same time, they are cheap to operate with fuel and maintenance at a minimum.
Therefore, the cost is associated with the building of technology. This amplified construction cost might deter many developers from the investment. Though they feel relieved about evading the initial investment with the traditional technologies, the fact remains they have not escaped the grasp of erratic electric bills.
The truth is that considering the lifespan of energy projects, wind and solar technologies are the least expensive. The other beneficial aspect is the dramatic de-escalation of capital costs from the 2000s.
The Quandary of Siting and Transmission
The decentralized model of renewable energy technologies confers certain obstacles, and these include siting and transmission. Siting involves locating solar farms or wind turbines on the land. The choice of an appropriate location can be a daunting task.
The cost of projects can also escalate with the deployment of permits, contracts, community relations, and so on. The other disadvantage is the transmission, which constitutes the infrastructure required to transmit electricity from its area generated to consumed.
However, the issue here is that these renewable energies being relatively new, most transmissions are fashioned to support the traditional energy that includes fossil fuels.
For the most part of the yesteryears, coal, nuclear, and natural gas dominated over electricity. All these fields have been well studied, established, and invested in for quite a sum. Thus, the area, therefore, held enormous power.
This well-established system is a significant hindrance to the entry of renewable energy sources. Therefore, renewable sources like the sun and the wind need to compete with these high infrastructures and policies. This makes things difficult for sustainable forms of energy.
Newer energy sources face a much greater struggle to establish a foot in the current market structure. However, increased government investment in clean resources in the form of subsidies, loan assistance, and others greatly encourage these newer resources.
Unequal playing fields
The growth of any multinational company can only be seen, coupled with strong political influence. The Oil industry is never an exception. Direct subsidies, tax breaks, other incentives help the fossil fuel industry to grow.
This, in turn, has led to the diversion of the tax payer money away from other productive works like energy efficiency and renewable resources research and development.