Green Energy Technology, Economics and Policy Part 9 ppsx

Energy economics and markets 267

which minimizes transaction costs. Thanks to Internet, we need fewer intermediaries.

For instance, a bank transaction costs $1.07 at a bank branch, $0.52 by telephone,

$0.27 at ATM, but only $0.01 on the Internet. Digital transactions have the additional

advantage of being less liable to distortion, and providing for more interactivity. Goods

and services will still be needed to be produced, but they could be produced better,

faster and more customized.

Experience has shown that technology changes faster than the ability of new tech￾nology users to make the psychological adjustment to the new technology. Hence the

continuous upgradation of the knowledge of the employees, is cost effective.

Chapter 21

Renewable energy policy

U. Aswathanarayana

21.1 WHY RENEWABLES ?

The green, renewable energy economy is fundamentally different from our 20th. cen￾tury economy with its overdependence on fossil fuels. The renewable fuels, such as,

wind, solar, biomass or geothermal, are entirely indigenous. The fuels themselves are

often free. They just need to be captured efficiently and transformed into electricity,

hydrogen or clean transportation fuels. In effect, the development of renewal energy

invests in people, by substituting labour for fuel. Renewable energy technologies pro￾vide an average of four to six times as many jobs for equal investment in fossil fuels.

For instance, while natural gas power plant provides one job per MW during con￾struction and ongoing operations and maintenance, equivalent investment in solar

photovoltaic power technology would generate seven jobs per MW. The approval of

the Renewable Electricity Standard (RES) by USA would involve the construction and

maintenance of 18 500 MW/yr of wind, solar, geothermal and biomass plants, and if all

the components needed for the project are manufactured in USA, this would generate

850 000 jobs.

If a society decides that climate change should be mitigated, such a policy should be

reflected in the choice of technologies made by that society. It should not be forgotten

that a desirable outcome, say, the development of renewable energy technologies, does

not happen by itself – it should be made to happen through appropriate policy change.

Policy and markets are generally in conflict, as their objectives are different. “A

policy is a market intervention intended to accomplish some goal – a goal that pre￾sumably would not be met if the policy did not exist’’ (Komor, 2004, p. 21). The object

of the public policy is to promote public good, while the object of the market is to