Energy Basket: The World in Shifting Dilemma

Shubham Sharma


Category: Diversifying our energy mix
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World primary energy consumption is projected to grow by 1.6% p.a. from 2010 to 2030, adding 39% to global consumption by 2030. We reside in a world marred by energy insecurity and environmental chaos. Coal and oil continue to occupy a major chunk of our present energy basket. OECD nations’ energy demand is expected to remain relatively flat over the coming years whereas the major portion of the non- OECD consumption will be supported by coal and oil. Therefore, it is these countries that will have the maximum detrimental environmental impact in terms of CO2 emission.


Our energy basket need a paradigm shift from the conventional hydrocarbons to the renewables which we feel might not be technically and economically feasible. Or, do we need an indirect path through the unconventional resources.


Unconventional hydrocarbons namely shale gas, gas hydrates, CBM, Heavy oil etc. have the ability to play a pivotal role in ensuring a gradual and smooth transition by easing the demand pressure on renewables.


Renewable Resources- nature’s healing touch to the growing environmental concerns, stem from harnessing the force of the wind, tapping the solar potential, hauling out the nuclear energy and exploiting the world of biomass. The main hindrance that exists in the way of an all-out implementation of renewables is the Economic factor. The amount of new investment in renewables by the major players in this sector in the last year, 2012 goes like this China: 50 billion dollars, Germany: 41 billion dollars, USA: 30 billion dollars, Italy: 14 billion dollars, Brazil: 7 billion dollars. And the trend continues for the next few years.


In contrast, investments in conventional hydrocarbons, say coal is mere 13.67 billion dollars in one year as compared to hundreds of billions in renewable resources. But still, renewables together contribute just over 16% to the global energy mix while conventionals continues to dominate with an 81% share.


Comparing the unit electricity generation cost of different renewable resources with the conventional resources, although it increases for conventionals whereas the cost of renewables keeps decreasing on account of improvement in clean technology but despite this, a substantial gap still exists between the two. Thus the dilemma is quite evident: Despite the huge investments, renewables do not always become commercially competitive with coal, gas and oil. To achieve this the IEA has suggested a further 4.8 trillion dollars in subsidies until 2030. Hence, the question at hand is are we trying too hard to make something work which is not yet ready and may not even be worth it?


Shift of focus towards much cleaner Unconventional resources and continuous development in renewable energy resources makes this optimal solution. An ideal energy basket for 2030 should look like – Oil – 26%; Coal – 22%; Gas – 12%; Unconventionals – 15%; Nuclear – 7%; Biomass – 10%; Solar – 1%; Wind – 2% and rest – 5%


As Al Gore has said, “what gets us into trouble is not what we don’t know, but what we think we know that just ain’t so.”

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