Essay on Renewable Energy Towards a Brighter Future

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A global deal to cut emission and stop global warming signed in Conference of the parties in Paris, obligate oil and gas industry to reduce they co2 emissions. According to Carrington(2015),Paris agreement would leave more than $1tn of oil project without a return as the government increase measurement to cut down emission and tackle climate changes. The industry is facing a high risk of wasted capital in the future years. Oil and gas sector had and is still having an important role in the future of energy sector, but that position is changing. Oil and gas companies are towards planning for a low carbon future and adopting renewables technologies. In order to stay viable into the future they need to pressure some of the opportunity that are emerging in the market. In the long-term renewables technologies have the potential to reduce both carbon intensity and cost of energy sector operation.

As the role of electricity in economy expands and government stimulation towards electricity security and transition towards low carbon economy, renewable electricity became a priority by leaving behind oil and gas industry and increasing competition with natural gas. Even though natural gas is the considered as a transmission tool, investment in it may slow dawn due to being a short time investment as the cost of renewable electricity has continuous decreases. The economy of the business will have an impact on financing the way towards the transition and the presented business models needs to interact with government policies and market design to meet the energy goals. For example, in Europe, different utility companies have used vertical integration and the establishment of a wholesale market in line with retail competition to suicide energy transition, improve energy efficiency and decrease electricity demand (IEA ,2017).

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This would not be possible without government policies supporting renewable technology, encourage competition from independent owner companies and corporation investment in low marginal cost wind and solar photovoltaics. Taking together those factors, renewable electricity has significant dropped and spread the profitability of the companies. Government support of renewable technologies has a major impact in the transition of AX-Power company. If the country is offering subsidies and strong energy policies to strength electricity trilemma, the investment from above will be attractive to expand their activity in those country. Each country offers different opportunity and policies for expanding the AX-Power company.

According to Nicolas (2020), Netherland is fare behind compere with other EU countries in terms of energy produced from renewables sources where in 2018 only 7.4% of energy was produced from renewables. Since 1960s all the Dutch households are connected to gas grid and a change in infrastructure would require large capital and time. Currently, Netherland uses gas as the most imported source of energy. The Dutch gas market TTF is characterised by its maturity and market liquidity (CME,2019). Gas can play an essential key towards transition on a low carbo energy society till the renewable share increase. As AX-Power company is based in Netherlands, would be recommended to continue its activity in natural gas for the first 5-10 years. In terms of environment impact, carbon capture technologies would be favourite to put in place. In the future the government of Netherland is expected to stimulate renewables growth by favourite the company towards a smooth transition.

Renewable electricity penetration on the US grid is increasing stadly and in transforming the US electricity grid. Companies have increase solar and wind energy to 72GW in 2020 compere with nearly 6.9 GW of energy in 2010(Piper,2020).One of the reasen of large development of solar plant project ,is the investment tax credit and the federal production tax credit (PTC) which has been implemented from the government(ibid).The implemented tax ,the falling costs and continued implementation of aggressive Renewable portfolio standard(RPS),have maden the outlook of renewable energy in US very promising for the next decate.

For investor, renewable energy assets will further improve their portfolios by providing assets diversification and generating steady cash flows.

With climate changes concerns, UK has developed a clear pathway to reach net-zero by 2050.Recent data shown that UK generates more power from renewables that non-renewable and is a leader in offshore wind power installation (Davis,2020). According to McPhee (2019),UK is the most attractive country for renewable investment due to the government prioritise and schemes for increasing the capacity of renewable energy especial for increasing offshore wind energy. There are a few key drivers that investment are willing to invest in UK such as Contracts for difference, CDF has plaed a huge role in motivsting low carbon investment projects such as Hinkley Point C,Oyster etc . For example ,in order to have a successful investment and lower the risks of Orsted Walney ,largest offshore wind investment the has been possible to finance by CFD.Contract for different encourage investment in low carbon electricity by giving the guaranty to the investment for they project payback time and profits. The CFD can apply for the expansion of AX-Power company by giving the company the confidence and the security to invest in UK The UK government is planning to deliver 1GW of energy from offshore energy by 2030.As the government supports all the investment in offshore wind energy,AX-Power expansion could be towards offshore wind energy. The CFD can apply for the expansion of AX-Power company by giving the company the confidence and the security to invest in UK. Moreover the AX-Power expunction whill have large economic and environment impact in UK ,by generating jobs opertiunity and contributing in low carbon mix energy.Furthermore ,in UK there is a market for renewable hydrogen production.The UK government has make available £12 billion to use 4 gigawatt of offshore wind for hydrogen production by 2030(Deign,2019).

Germany is one of the countries that is high ambitious to achieve a cost efficient and sustainable pathway to meet its transition goals. Even though the country is struggling to achieve its emission target mainly due to its nuclear phase out and notable challenges in transport and heating sector (IEA ,2020).Currently renewable electricity account for 35% of gross electricity consumption and by 2040 it is expected to increase at 80% (ibid).As renewable energy is predicted to increase ,Germany is having issues with grid expansion that have generate considerable congestion management costs(ibid).There are network constraints that prevent transition from north to south by resulting in power surpluses in the northern states and southern once are facing deficits(ibid).Germany is in the top list of the countries that are experience a growth in renewable investment. As the issues with grid connection is relevant in Germany, the AX-Power company is recommended to expand its business in solar PV with storage technology such as battery storage. Germany is expected to install 60GW of solar PV and by instance this technology seems profitable for AX-Power company to expand its activity.

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