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Sustainable Initiatives in Energy Industry Essay

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Updated: Jan 14th, 2020

Energy Background

Any industrial and technological progress depends on energy that is readily available. The industrial and technological progress experienced in developed countries was made through exploitation of fossil fuels found under the earth surface (Ayres, 2002).

These fuels were often imported from countries which did not have the required technology for effective utilization, therefore, countries which had the required technology attained affluence at a faster rate, and they started controlling counties that were less developed (Peters &Feldman, 2001). Today, these countries consume about four-fifth of the fossil fuel in the whole world.

In 1973, countries that produced oil increased the prices of it, which created economic chaos both in developed and developing countries. This made all countries to realize that using oil in a wasteful manner was not acceptable, and they needed to make efforts to set up programs that ensured energy-conservation. They also realized that they had to look for alternative sources of energy (Brown, 2000).

Since then, countries dependent on oil have always been affected by the ever-increasing oil prices. Some of the developing countries have faced serious shortages of power, which has pushed them to import the cheapest oil (Prindle et al, 2003).

This cheap oil is utilized by technology that is less efficient; therefore, wastage is still an important issue for these countries (Ayres, 2002). In addition to the high cost of oil, which is suffered by countries dependent on it for energy production, oil utilization poses health and environmental risks.

The gases emitted during extraction, energy production and utilization, are harmful to human health, and when these gases escape into the atmosphere (Warren, 1987), they contribute to the effect of global warming and ozone depletion. However, despite all these effects, countries still import oil, it is due to the simple reason that they need it for industrialization and development (Andreason, 1995).

These countries face the issue of uncertainty in the continuous supply of oil as well. It occurs because the rate at which it is been used exceeds the rate at which it is being replenished.

Who Should Regulate Sustainable Development

Why should countries insist on using a source of energy that is ever-increasing in price and has a great effects on human health and is not sustainable. Yet, are there other alternative sources that are more reliable, cheap and environmentally friendly? According to some researchers, the government should make sure that countries are utilizing energy resources that are economically and environmentally sustainable.

Therefore, they are mandated to regulate the use of energy in the country (Andreason, 1995) Some researchers argue that, private companies should regulate the production of energy resources, while others argue that end users should also be involved in the energy regulation for energy to be sustainable.

Using technology that conserves energy helps in reducing energy wastage and emission of harmful gases into the atmosphere (Atiles et al, 2003). This paper provides the discussion of the question: who should do and what should be done to ensure that sustainable energy would be used in future, if people involved do not identify what is supposed to be done to ensure sustainable energy.

Energy Situation in New Zealand

New Zealand is a country that is heavily dependent on oil import as a source of energy for its economy. New Zealand realizes that this resource is finite, and its demand is higher than its production. This means that country will face oil shortages in the future, which will affect its economy.

Therefore, the New Zealand government is challenged to come up with a plan that will help them cope with shortages in the short-run, as they consider their options in the long-run.

Today, New Zealand is getting prepared for peak oil; the government is concerned that the peak in production of oil will encourage its people to use fuels that are heavier, dirtier and harder to extract, this include oil shales, tar sands among others, and the amount of energy used in their extraction might be more than the energy extracted from them. Also the emission of the greenhouse gases will be more severe that it is at the moment.

New Zealand Energy Options

The New Zealand government has proposed the use of bio-fuels as an alternative to fossil fuels. According to this government and its financial circles, the rise of oil prices will make people opt for its alternatives, such as bio-fuels will be viable economically. Thus, the society and its economy will make a transition to renewable energy without any problems.

This step seems viable, considering that today many people in New Zealand prefer using smaller cars and public transport. However, bio-fuels can only cater for 6% of diesel demand, therefore, it cannot completely replace fossil fuels; this is because there are equipments, which will continue using oil for a long time.

Another setback for the government’s proposal is that bio-fuels will bring about competition for land that is meant for food farming (Tullock Seldon and Brady, 2002). The government also looks at bio-fuels as a means used to reduce the greenhouse gases emissions, and this helps saving the environment.

Companies which are regulated by the government benefit from research and development funding; this help companies with the expenditures that are difficult to fund. Sometimes, such investment provided by the government provides a social welfare and advocates for change in behavior of private companies, which reduces harmful externalities (Andreason, 1995).

Apart from bio-fuels, New Zealand can also consider using renewable energy sources, which include geothermal, wind and hydropower. These sources of energy are considered to be clean sources; they are friendly to the environment. These sources are also economically viable if they produce substantial energy during the lifetime.

The initial cost for power plants and machines used in harnessing energy from these sources are very expensive; this makes investors to shy away from investing in renewable energy (Copeland and Taylor, 2003). When compared to fossil fuel power plants.

For instance, some renewable energy power plants are dependent on availability of wind in the case of wind power plants, and availability of rain in the case of hydro power plants. Despite all the inconveniences, renewable sources of energy are still the most sustainable. Therefore, the New Zealand government should take an initiative of putting renewable energy sources in use.

To encourage investors to venture in renewable energy production, the government gives incentives for anyone investing in renewable energy; these incentives include lowering taxes on importation of equipment used in plant construction. In New Zealand, hydropower has a potential to increase its capacity by approximately 50% and wind has a potential of approximately 20%.

However, wind resource has issues of intermittency, making it not suitable for a large-scale use. Hydropower faces social and community challenges, such as disputes related to diversion of water. People living down-stream have problems with water diversion to hydro-power plants.

The government and private investors should take the responsibility for educating locals on how a hydro-power plant works, as well as raise issues on its importance; It is done to remove the doubt that they will be denied water down-stream if the plant is build on the river.

New Zealand Energy Conservation Options

For sustainable energy, New Zealand also strives to reduce the energy demand through efficient extraction of energy, its generation and utilization. The government ensures that companies producing energy do this when using the most efficient equipments. There are companies which do not care about wastage of energy, as long as they produce and sell it to consumers.

The little resources available should be efficiently exploited without wastage and during transmission; responsible companies should minimize losses (Brennan and Schwartz, 1985). End users should also be encouraged to use end-use equipments that are efficient, this include energy saving bulbs and use of efficient electrical appliances.

The government can support energy conservation program by providing goods such as energy saving bulbs and financing public awareness on how to save energy (Chao and Wilson, 1993). The government can also support the program through providing loans for a low interest rate to the private investors who wish to install energy efficient machines.

New Zealand Plan for Sustainable Energy

New Zealand has increased its emissions from the transport sector and the utilization of fossil fuel. However, these emissions can be mitigated with the use of alternative fuels and new technologies. This plan cannot be achieved overnight, therefore, the government of New Zealand has come up with a visionary plan; this visionary plan will run up to 2050 (New Zealand Government, 2007). According to the plan, the government wants to reduce the county’s dependency on oil (Botterud, 2003).

The government started the plan in 2007 by giving incentives for exploring renewable resources, and investing in hydrogen and bio-fuels. This was meant to ensure a smooth transition to energy options that are more sustainable. Incentives will be given out until 2020, together with the expansion of the major grid and increasing the efficiency of vehicles (Botterud, 2003).

It should be noted that everything is not going to be at stand still for this plan to be implemented, therefore, before the transition from oil to bio-fuels and renewable energy are introduced, the country will be using oil. To reduce the oil pollution by utilization, the government plans to adopt more efficient ways of utilizing fossil fuels.

Between 2020 and 2030, government plans to increase the use of bio-fuels and reduce the use of fossil fuels (New Zealand Business Council for Sustainable Development, 2007).

During this period, the government is also planning to build smart houses and grids, the government would have already be looking for the appropriate technologies that can be used in exploiting renewable energy resource such as wind, hydropower among others. Between 2030 and 2040, government will fully adopt renewable energy and drop all fossil fuels.

The use of hydrogen as a source of energy will also be adopted during this period; it will be used in the transport sector, therefore, vehicles that utilize hydrogen as a source of energy will also be adopted (Robinson, 2006).

By 2040, according to the New Zealand government, the country will not be dependent on oil, and this means that the economy will not be affected by the ever-increasing oil prices (New Zealand Government, 2007). Sources of energy adopted will be friendly to the environment.

Therefore, the companies will not worry about compliance to international standards for environment, such as the Kyoto protocol, which demands that emissions of greenhouse gases must be reduced (Diaz, 2004). Energy in New Zealand will also be affordable to its people, this will help the New Zealanders to engage in business activities that will lead to economic development.

New Zealand, therefore, will be sustainable economically, as energy is a source of economic development and if it is sustainable, than economic development will be sustainable (New Zealand Government, 2007).

Conclusion

The government of New Zealand has played a very important role in ensuring that the country is moving towards sustainable development. It has formulated energy policies that ensure that New Zealand does not depend on oil. This is because of the ever-increasing prices of oil, environmental pollution and its expected shortage in future (Blyth and Hamilton, 2006).

The government has also come up with a plan for sustainable energy by 2050, which will make New Zealand to be economically sustainable, if the plan comes out as planned (Chaton and Doucet, 2003). This shows that government initiative to regulate economic development should be appreciated.

There are some issues, which are difficult for private companies to initiate because of the financial constraints and their limited power. For instance, the exploitation of renewable energy should be initiated by the government; this is because of the large capital involved in the construction of renewable power projects (Atiles et al, 2003).

However, this does not mean that private companies should not be involved in production of renewable energy. In fact, the government should provide favorable conditions for them to venture in production of renewable energy (Bender et al, 2002).

There is also the issue of power, whereby; the government has power over all resources in a country, therefore, companies can only exploit these resources under permission of the government. For instance, a company cannot exploit a river for hydropower without the knowledge of the government (Atiles et al, 2003). Therefore, the government comes first, especially in the formulation of policies (Anonymous, 2006).

The government formulate policies, but it cannot work alone to regulate the economic development. Thus, there must be people who will implement these policies. These people include, companies producing, distributing energy and the end users. This means that as the government plans for economic sustainability, they should include these groups of people for the plan to be successful (Anonymous, 2006).

Reference list

Andreason, A.R. (1995). Marketing social change: Changing behavior to promote health, social development, and the environment. San Francisco, CA: Jossey- Bass.

Anonymous. (2006). The limits of efficiency. [Review of the report Don’t supersize me!: Toward a policy of consumption based energy efficiency]. Energy Design Update, 26, 12, 9-12.

Atiles, J.H., Wysocki, J.L., & Tremblay, K. R. Jr. (2003). Energy Star: Introducing a new cooperative extension partnership. Housing and Society, 30,1, 59-68.

Ayres, R.U. (2002). The energy we overlook. In Hostetter, M. (Ed.) Energy policy. New York: H.W. Wilson Company.

Bender, S.L., Moezzi, M., Hill Gossard, M., and Lutzenhiser, L. (2002). Using mass media to influence energy Consumption behavior: California’s 2001 Flex Your Power campaign as a case study. Proceedings of the 2002 ACEEE Summer Study in Energy Efficient Buildings, USA, 8: 15-28.

Brown, M.H. (2000). The link between energy efficiency and air quality. National Conference of State Legislators State Legislative Report, 25, 16, 1-13.

Blyth, W., and K. Hamilton (2006): “Aligning Climate and Energy Policy,” Briefing paper, Chatham House.

Botterud, A. (2003): “Long-term Planning in Restructured Power Systems – Dynamic Modelling of Investments in New Power Generation under Uncertainty,” Phd thesis, NTNU.

Brennan, M., and E. Schwartz (1985): “Evaluating Natural Resource Investments,” Journal of Business, 58, 135–157.

Chao, H., and R. Wilson (1993): “Option Value of Emission Allowances,” Journal of Regulatory Economics, 5(3), 233–249.

Chaton, C., and J. Doucet (2003): “Uncertainty and Investment in Electricity Generation with an Application to the Case of Hydro-Qu´ebec,” Annual Operations Research, 120(1), 59–80.

Copeland, B., and M. Taylor (2003): Energy and the Environment. Pronceton University Press, Princeton.

Diaz, M. (2004): “Valuation of Exploration and Production Assets: An Overview of Real Options Models,” Journal of Petroleum Science and Engineering, 44(1-2), 93–114.

New Zealand Business Council for Sustainable Development. (2007). A Sustainable Energy Future for New Zealand by 2050, a business view.

New Zealand Government. (2007). New Zealand Energy Efficiency and Conservation Strategy, Energy Conservation, 8.pp 145-222.

Peters, J.S., Feldman, S. (2001). I can do it!The role of self-efficacy in motivating change in attitudes and behavior relating to energy efficiency and renewable. Proceedings of the 2001International Energy Program Evaluation Conference, USA: 479-486.

Prindle, W., Dietsch, N., Elliot, R.N., Kushler, M., Langer, T., & Nadel, S. (2003).

Energy efficiency’s next generation: Innovation at the state level (Report Number E031). Washington, D.C.: American Council for an Energy Efficient Economy Savage, I. (2005). Building value with building science: High performance green building in the housing industry. Carolina Planning. 30 (2), 23-25.

Robinson, G. (2006). Understanding economic sustainability. New York: Wilson Company.

Tullock, G., Seldon, A. and Brady, G.L. (2002). Government failure: A primer in public choice. Washington, CD: E. Cato Institute.

Warren, A. (1987). Saving megabucks by saving megawatts. Energy Policy. 15 (6),

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