Eight Obstacles Stand in the Way of Renewable Energy

Despite the benefits, obstacles continue to stand in the way of renewable energy consumption and technologies.
Published: Fri 31 Jan 2014

Renewable energy accounts for only 23% of the world’s electricity generation. This is according to the latest figures from the National Renewable Lab.

One would be forgiven for thinking that this is a rather low figure since the development of renewable energy technology has been growing significantly and their costs are on the decrease.

So what is holding the industry back?

  1. A lack of reliable energy storage technologies - Technologies are still in the early stages of research and development. Although a great deal of money is being ploughed into their development, utilities will not rush in until the technology has proven its reliability. Where storage solutions are available, for example hydroelectric pumped storage, it is normally not located close to the renewable source which makes the supply less controllable than fossil fuel supplies.
  2. Outdated business models- There are utilities which continue to receive rewards for the construction and maintenance of fossil fuel plants.
  3. High initial capital costs-Although the costs of renewable energy technology are coming down, it’s the initial implementation costs that can be rather high. Transmission systems must be adjusted in order to handle renewable energy integration and a huge investment is required to construct power lines across jurisdictions.
  4. Balance of system costs-These can add up as they include the cost of the inverter and electrical system, mechanical racking, installation, and permitting. However, large installations could work out cheaper than smaller installations.
  5. Perceived technology performance uncertainty-There are numerous startup companies in the renewable energy sector. This can be very confusing for the utility and they may opt for the cheapest option. Often, it doesn’t pay to go cheap and utilities may end up being disappointed by poor performance levels. This may lead utilities to believe that all renewable technology is of poor quality.
  6. Lack of appropriate transmission infrastructure to support these projects-There is a need for new transmission corridors to serve remote sites, as well as extensive environmental impact assessments which can take years to complete.
  7. Ideal locations for renewable energy development-Sometimes these may be too far from demand centres and existing distribution networks. To extend the transmission network, may cost a great deal of money.
  8. Use of dated technology- Old models do not adequately consider input from renewable resources, preventing grid companies from including them in to the supply mix. The smart grid will also assist in the integration and management of renewable energy. It is therefore essential that the right technology exists to support the introduction and maintenance of renewables.

What would instigate renewables’ growth?

  • Negative preconceptions about renewable energy and technologies will need to be changed

  • Increasing renewable energy requirements

  • Dropping the “rate of return” as a basis for utility profit

  • Rewards for utilities that switch to renewable energy

  • An increase in research funds for energy storage solutions

  • Upgrading of transmission infrastructure and technologies to support renewable energy integration

  • An increase in the number of microgrids- This would solve the transmission infrastructure issue

  • Institutional funds ploughed in to renewables

Despite the long list of negatives, renewable energy will continue to grow for the simple reason that our fossil fuels are dwindling. We cannot ignore the fact that renewables provide us with a sustainable energy source. Today, renewable energy is at a technological advantage-the technology simply needs a chance to develop further and compete with existing energy sources.

Regulators and utility companies must recognise the need for energy models to adapt, with smarter logic and comprehensive scenario planning. In addition, they have to develop comprehensive policies which will create a fair playing field for all energy technologies.
Only then can the role and potential of renewable energy and its technologies be fully realised.

Further Reading

NREL-2012 Renewable Energy Data Book [pdf]