Renewable energy and geopolitics

The coming dominance of renewable sources of energy will change geopolitics; and the Philippines is one country that could benefit from these developments. By 2040, renewable sources could account for one-third of the world’s needs, putting greater geopolitical focus on certain regions and less on regions that are major energy suppliers today. This trend will also increase the importance of technological and financial innovations.

According to a recent Stratfor analysis, the 21st century is ushering in the age of renewable energy where the world is drawing more of its power from the sun, wind, water and biomass fuel as the cost of these sources – down considerably from seven years ago – continues to drop. In electricity generation, bid prices at auctions for building solar and wind generation facilities are now comparable with those for new coal or natural gas facilities. The report said: “The progressive removal of subsidies has enabled market forces to work their magic on prices for solar and wind power.”

The latest Bloomberg New Energy Finance analysis projects that renewable energy will account for 64% of electricity generation. Electric vehicles are expected to achieve price parity with conventional automobiles before the year 2030. Government regulations such as the bans in the United Kingdom and France, with other countries planning to follow, on the sale of gasoline and diesel powered cars after 2040 will further ensure that electric cars will keep increasing its global market share.

It may still take decades before renewable energy will completely dominate the energy industry. Fossil fuels – especially natural gas and oil – may never be completely phased out in this century. The rate of consumption for renewable energy is reportedly growing three times faster than the overall demand for energy.

Changing geopolitics

Fossil fuels – especially oil and natural gas – have been one of the dominant factors on geopolitics in the last century. The high concentration of deposits of oil, natural gas and coal helped determine the global balance of power over the past century. A small number of oil-rich states have given this select group of countries – like Saudi Arabia, Gulf states, Russia, Kuwait, Iran – tremendous economic and political influence. 

According to a Stratfor report: “Since World War II, the United States has acted as guarantor of global energy security, protecting its own national interests... Washington formed alliances – most significantly with the Gulf Arab states – to stabilize global energy flows and has been the leader in safeguarding maritime choke points in the Middle East and Asia. The result is a globalized oil, coal and natural gas market and an international oil trade conducted in US dollars – a major boon for the United States.”

The rise of renewable sources of energy will do away with the global energy oligopolies because renewable sources of energy are almost universal. There are very few places in the world – in fact none that I am aware of – that lack wind, sunlight, water and bioenergy of any kind. Stratfor adds: “...renewable energy is by its very nature intermittent. The sun shines, the wind blows and river flows fully only some of the time, regardless of geography, further evening the playing field. And compared with more traditional fuels such as natural gas and coal, renewable energies have much higher potential for decentralized generation...The global transition to renewable energy will put electricity center stage, since renewable energy overwhelmingly takes that form in supply and usage. To reduce costs and to prevent shortages in the event of a still or overcast day, countries will probably opt to integrate their electricity grids regionally. As a result, today’s globalized energy world will become more regionally focused...”

Germany, China and the United States are the present leaders in renewable energy and are expected to be the principal beneficiaries of this new energy age. Technology and innovation – not natural resources – will be the principal drivers for countries wanting to pursue renewable sources of energy. Varun Sivaram of the Council of Foreign Relations in his book Taming the Sun, explains that the growth of renewable energy will demand new solutions in finance, technology and systems to fund clean energy products, reduce costs and boost efficiency and improve grid integration. Even smaller countries like Sweden, Denmark, Morocco and Kenya have the potential to gain more influence because of their potential for exporting renewable energy and technology. On the other hand, traditional oil exporters like the Gulf states, Russia and Venezuela will lose their political clout. The Middle East, as a region, will face a vastly diminished stature – economic and political – in the world of geopolitics.

The Philippines has no known oil deposits and only the Malampaya is a source of natural gas. However, it has tremendous potential for developing solar and wind power. The pioneering work of two Filipino power companies – First Gen and EDC – makes the Philippines a major potential beneficiary of the rise of renewable energy. Its founder – Oscar M. Lopez – has made renewable energy not just a profitable venture; but, more importantly a passion and a legacy to future generations of Filipinos. Energy Development Corp. (EDC) is the world’s largest vertically integrated geothermal company primarily engaged in the exploration, development, operation, and optimization of geothermal steamfields and in power generation. The Philippines can become the world’s most important developer and exporter of geothermal technology.

The rise in renewable energy will give rise to new risks. For example, as electric grids become more interconnected and smarter, they will become vulnerable to cyber attacks. However, the transition from fossil fuels to renewable sources of energy is inevitable. Because of its potential in geothermal, solar and wind as sources of renewable energy, the Philippines can be at the center of this transformation in energy and geopolitics.

Creative writing classes for kids/teens

Young Writers’ Hangout on July 7 and 21, Aug. 4 and 18 (1:30pm-3pm; stand-alone sessions) at Fully Booked BGC. For details and registration contact 0945-2273216 or [email protected].

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