Academic journal article Global Economic Observer

Economic and Environmental Aspects Associated with the Technologies for Electricity Production from Conventional Sources and Measures to Mitigate the Produced Impacts

Academic journal article Global Economic Observer

Economic and Environmental Aspects Associated with the Technologies for Electricity Production from Conventional Sources and Measures to Mitigate the Produced Impacts

Article excerpt

1. Introduction

The energy sector represents the sector with the most important contribution to the generation of greenhouse gas emissions, mainly through the burning of fossil fuels. Given the association of greenhouse gases emissions with climate change, the technologies that produce electricity from conventional sources are the most responsible for producing climate change. Under these conditions, the energy from alternative sources is gaining momentum at global-scale.

At the same time, having in mind that, besides the negative impact on the environment of the classic technologies for the electricity production, by producing climate change, there are economic problems associated to the energy-climate change relationship. In the following we will be analyse both the economic and the environmental aspects associated to the technologies to produce electricity from conventional sources.

2. Economic issues associated with the technologies for electricity production from conventional sources

2.1 Limited fuel resources and the significant price fluctuation

A first important aspect related to the conventional technologies is represented by the limited resources of fossil fuels and their significant price fluctuation. "Statistical Review of World Energy, a report published by British Petroleum (BP) in mid-2014 reveals that the world has reserves of 892 billion tons of coal, 186 trillion cubic meters of natural gas and 1688 billion barrels of crude oil. According to the mentioned study, albeit these figures seem impressive at a first glance, taking into account the current level of extraction, the proven reserves of coal will be depleted in 113 years, the last cubic meter of natural gas will be extracted by 2069, and until 2067 there will be no reserves of crude oil/the reserves of crude oil is about to run out by 2067.

Fossil fuel reserves are concentrated in a relatively small number of countries. According to experts, 80% of coal reserves are located in only six countries, the European Union having only 4 percent of the stock. The EU share in total world gas reserves fell from 4.6% in 1980 to 1.3% in 2009. It is expected that these reserves will be depleted before the year 2030. Over half of global stock is found in only three countries: Iran, Qatar and Russia (24% in 2009), the latter representing a leading provider of gas for the EU. Ten countries (eight of which are members of the Organization of the Petroleum Exporting Countries - OPEC) own 80% of the world reserves of crude oil. Some of these countries can exercise their power to restrict the supply and to influence the price.

EU dependence on fossil fuels registered an upward trend, currently reaching approximately 55% of total consumption. Some Member States (e.g. Estonia, Italy, France and Sweden) have considerable stocks of shale gas. A reduced external supply can encourage them in to exploit these resources. It is estimated that in the Arctic region exist substantial quantities of crude oil, approximately 90 billion barrels, while the European Union reserves are around 12 billion barrels).

Besides the global consumption of fossil fuels, another important aspect is related to the fluctuation of prices. The quantities extracted from fossil fuels will fluctuate depending on economic conditions and, at the same time, their price will fluctuate. In other words, the quantities extracted will decrease when the price will be too low for these fossil fuels to be recovered economically advantageous, and they will increase when prices will cover the economically loss of fuel reserves. In addition, the price trend of fossil fuels affects the consumption. On the other hand, the price fluctuations affects other variables such as inflation, global GDP growth, etc. Consequently, the size of the reserves of fossil fuels depends on their price.38

2.2 Energy efficiency

The efficient use of energy, entitled "energy efficiency" represents the objective to reduce the amount of energy required to deliver products and services. …

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