Barriers to Renewable Energy Technologies Development

(Keele University) – Since the beginning of the 21st Century, renewable energy has been a significant area of research amongst scientists. However, despite scientists coming up with practical and convincing technologies on renewable energy, the process of getting people to switch from their use of non-renewable energy sources has been quite slow and uncertain especially in the developing nations. This essay aims to identify and explain why many countries have stuck to the use of non-renewable energy resources, specifically coal, and the challenges facing renewable energy technologies adoption which, consequently, affects the potential of the technologies in many countries. In the essay, these barriers to renewable energy adoption have been discussed under the following seven categories: over-reliance on fossil fuels (coal), political and regulatory barriers, technical barriers, market-related barriers, social-cultural barriers, financial and economic barriers, and geographical and ecological barriers. The paper will be useful to renewable energy researchers, students, policymakers and individuals or organisations who may be concerned with promoting renewable energy technologies, as it highlights gaps in renewable energy development which they may need to address in their research and decision-making processes.

Introduction

Use of energy is a necessity for physical and socio-economic development in rural and urban settings (1). However, despite being the major contributor of energy in the global energy mix, fossil fuels are also the main contributor to the high levels of carbon dioxide emissions in the atmosphere (2), hence an increase in global warming. Access to sustainable energy is, therefore, one of the leading factors that contribute to the difference between the developed and the developing countries (3). Due to the increased use of conventional sources of energy such as fossil fuels (coal, gas, oil and radioactive ore) all over the world and the associated environmental impacts, efforts have been directed towards minimizing dependence on these resources by increasing renewable energy supply, with little impact to date (4).

Many studies indicate that most countries have an enormous potential for renewable energy production (5). However, for some reasons, the current renewable energy application in these countries is negligible compared to their potential (3). For example, though India is rich in both renewable and conventional energy resources, coal has continued to be the dominant source of electricity due to its availability, suitability to the needs and relatively low cost (6).

Similarly, Africa experiences a slow development rate as a result of little access to renewable energy; this is because of the high levels of limitations from underprivileged energy policies, inadequate funds, lack of technological advances, as well as lack of adequate infrastructures (7). Additionally, rapid growth in population and subsequent increase in energy demand in the developing countries has led to emerging energy crisis which in effect increases people’s dependence on non-renewable energy sources (8).

The following sections of this essay discuss the use of coal as a barrier to renewable energy development, as well as six other categories of barriers to renewable energy technologies which in turn favours people’s over-reliance on coal. These categories of barriers are political and regulatory, technical (technology and infrastructure), market-related, social-cultural, financial and economic, and geographical and ecological.

Why are people still using coal?

According to International Energy Agency (2017), coal contributes one-third of global energy supply, making up about 40% of electricity generation; as well as playing a very significant industrial role. This means that it will be hard to replace coal as a source of energy, especially in our industries. The kind of infrastructural changes that are required in changing from coal to other renewable sources of energy is prohibitive—in terms of cost and time.

Also, industries require a lot of energy. Coal has a high net energy yield compared to other sources of energy (9). This means that for a unit of coal a lot of energy is produced compared to other sources of energy. Therefore, coal is very efficient for producing the high amounts of energy required in the industries, which makes it very hard to replace it with other energy sources.

Additionally, coal is an abundant source of energy. In most countries, coal is readily available and is in ample supplies (9). Therefore, it can hardly be replaced by other forms of energy, because people usually prefer to use what is readily available to them. For example, about half of electricity in the United States of America is generated via coal plants: mainly because they have abundant coal deposits (10). This is because when something is in abundance, it becomes cheaper compared to something that is in limited supply.

With the advent of technology, burning of coal has been made cleaner and efficient than it used to be (10). Therefore, there might be no need to replace it with other cleaner energy sources such as solar and wind power. In this regard, the technological advancements have made it more efficient to mine and burn coal to produce high amounts of energy. Therefore, it is challenging to convince people to abandon coal power for other sources of energy.

Further, the cost of infrastructural development required to develop and set-up renewable energy plants is prohibitive. Aside from its abundance, most countries find coal a cheaper alternative to natural gas and is therefore favourable (11). In most cases, countries prefer a cheaper option that is more economical, because the main goal of any economy is to reduce the cost of production and increase its profits. Since coal power plants have already been established, there is no need to set up other power plants that are very expensive to the economy. Therefore, most countries will be reluctant to change from the existing power plants and establish new clean energy power plants (such as solar and wind energy).

Another factor that discourages use of renewable energy is that coal power requires fewer workers to produce high amounts of energy compared to renewable energy sources. For example, in the USA, solar energy industries employ more workers compared to coal industries; (337807 and 160119 respectively) (12). However, even with a more substantial workforce in the solar industries compared to coal industries (almost twice), coal produces more power than solar energy and wind energy combined (13). Therefore, since coal requires fewer men to produce more power, it is seen as an economical energy production method, and that is why most countries (both developed and developing) still want to use it. Why would people want to employ more workers in an industry that produces less power while there is another industry that can produce more power with fewer workers?

The continued use of coal is a barrier to renewable energy development, and people need to be sensitised on the negative effects of coal. These effects include environmental pollution; emission of carbon dioxide and methane which are greenhouse gasses leading to global warming; and other toxic gasses released when coal is burnt which can be detrimental to the health of people when inhaled. However, according to (11), despite being associated with high levels of emissions, coal-fired energy production will remain a significant energy source for decades to come. But (11)International Energy Agency on their part trusts that renewable energy technologies are the only solution to the reduction of over-reliance on fossil fuels globally (14).

Other Barriers to Renewable Energy Development

Apart from over-reliance on fossil fuels, most people can also attribute their reluctance to adopt renewable energy technologies to several other categories of barriers as described in the following sections.

Political and regulatory barriers

Lack of policies and regulations favouring the development of renewable energy technologies can hinder adoption of these technologies. Due to the nature of renewable energy structures, renewable energy market needs clear policies and legal procedures to increase the interest of investors (15). This is because “enabling policies create stable and predictable investment environments, help overcome barriers and ensure predictable project revenue streams” (16). Additionally, regulatory measures such as standards and codes enhance the adoption of renewable energy technologies by minimising the technological and regulatory risk that comes along with investments in these projects (17).

However, in some countries like India, there are no complete renewable energy policy declarations simply because most renewable energy technologies in the country remain in the advancement stage (8). Similarly, Mohammed et al., (2013, p.461) in his study on renewable energy adoption in Sub-Saharan Africa noted that many countries in the region have distinctive national renewable energy policies whereas regional policies are not fully formed because of unsuitable implementation approach. This means that, despite the many renewable energy policies developed in most of these countries, it has been difficult to implement them mainly because they are immature.

Additionally, private sector participation in renewable energy projects in some countries is hindered by the lack of well-defined policies on private investment and delays in the authorisation of private sector projects (8).  Therefore, because large-scale renewable energy projects require large amounts of capital to run (17), many countries’ progress toward renewable energy is held back by policymakers’ failure to implement measures to attract private investors.

Technical barriers

Technical barriers to renewable energy development include inadequate technology and lack of infrastructure necessary to support the technologies. From a study conducted by (18), in Saskatchewan, Canada, technology was identified as one of the main barriers to the willingness to invest in wind-generated electricity. This is particularly true in cases where core renewable energy technologies are not provided in many places or are not sustained well in some areas where present in the developing countries, especially Sub-Saharan Africa (7). Because of lack of trained personnel to train, demonstrate, maintain and operate renewable energy structures, especially in regions with low education levels, people are unwilling to import the technologies for fear of failure.

Additionally, currently, in some countries, renewable energy technologies are cost-disadvantaged compared to commonly used non-renewable technologies, such as coal-fired production. (8); maybe because most renewable energy technologies are imported. The high costs of the technologies, therefore, means that most people are more likely to go for coal-generated energy because it is readily available hence reliable and affordable compared to renewable energy.

On the other hand, lack of physical facilities for transmission and distribution networks, as well as equipment and services necessary for power companies (8), is a major infrastructural challenge for renewable energy development in most developing countries. Most of these equipment are usually not readily available in those countries and are therefore imported from the industrialised nations (8). Because imported equipment are expensive compared to locally made, the production of renewable energy becomes expensive and even unaffordable in most countries.

Another significant infrastructural barrier to renewable energy technologies expansion is inadequate connectivity to the grid, more so in wind power sector (2). In such cases, energy (whether electrical or mechanical) is transported from the production points to consumption points; during which high levels of transmission loss are experienced (8). As a result, many investors lose their confidence in renewable energy technologies and are not willing to invest in them for fear of losing.

Additionally, inadequate servicing and maintenance of equipment, together with low reliability in a technology lowers customer confidence in some renewable energy technologies and hence hinder their adoption (18). This is because most renewable energy equipment in developing countries are imported from the developed nations, and therefore, lack of spare parts and adequate skills to repair/service the equipment leads to equipment failure which in effect halts the supply of energy. Many consumers, therefore, opt for fossil fuels because they are reliable and readily available.

Social-cultural barriers

Socio-cultural barriers, for example, households’ unwillingness to adopt renewable energy for fear of unreliability (19), form one of the bases for failure to adopt renewable energy technologies in some countries. For example, general public disinterest and disengagement in wind energy development were identified as the main social issues hindering renewable energy development in Saskatchewan, Canada (18).

Further, lack of knowledge and awareness of renewable energy technologies and systems amongst rural communities is another challenge encountered in renewable energy development (20). For example, a majority of people in Sub-Saharan Africa are uneducated and, therefore, they do not understand the concept of renewable energy (7). These uneducated people in the region are also hardly oriented to technical and environmental impacts associated with over-use of combustible renewables (3). These factors coupled together have slowed down the rate of development, circulation and usage of renewable infrastructure and technological knowledge. Therefore, the creation of awareness of renewable energy among communities and a critical focus on their socio-cultural practices is required (21).

Financial and economic barriers

Initial capital, transaction costs, economic status, and availability of incentives and subsidies are important factors that determine the rate of renewable energy technologies adoption. Initial capital cost of renewable energy is relatively high when compared to conventional sources of energy, which in turn raises the cost of renewable energy generation (8). Because many producers prefer to keep initial investment costs low while maximising profits, high costs of investment remain a significant barrier to implementation of sustainable renewable energy solutions. For example, many developing countries lack adequate renewable energy technologies and therefore, rely on imports from industrialised nations. Initial investment costs are, therefore, high and discouraging to potential investors because imported technologies from technologically innovative and highly developed countries are more expensive compared to technologies made locally (22).

Many transaction costs are involved in the generation of renewable energy which in return raises the total production costs. Transaction costs refer to costs of resources and time needed to come up with an establishment and to identify problems that this establishment aims at solving (23). Naturally, renewable energy projects are multifaceted in their formation when compared to establishing an individual fossil fuel plant (24). This means that more transaction costs are required in renewable energy projects because whether small or large, the activities, procedures and products/by-products involved are the same. For example, many parties need to come to an agreement, multiple products or by-products fuel the projects and the fact that most of these projects are broadly connected with other socio-economic and community aspects as well as affairs of development (25). This makes renewable energy technologies unaffordable to producers and even to consumers.

Additionally, a country’s economic status determines the level of renewable energy adoption. For instance, due to poor economic conditions in the developing countries in Sub-Saharan Africa and South Asia, a great distortion of renewable energy market has been experienced (3). One example is Tanzania where the rural communities earn very minimal incomes while the prices of solar power systems remain too high, and are, therefore, unaffordable to most households (26). Therefore, although some renewable energy uses low levels of technology, they are less commercially competitive compared to fossil fuels (27). It is, therefore, only wise for governments to support investment in renewable energy development to speed up commercialisation of the technologies.

Inadequate or lack of credit facilities to purchase sustainable energy technologies and high-interest rates on credit facilities is also a significant barrier to renewable energy development. Most conventional power plants were built with substantial subsidies, and their capital costs are also covered (15). However, in most countries where renewable energy technologies are not well established, very few financial institutions (both public and private) are willing to offer considerable loans for execution of renewable energy projects (15). For example, in some countries such as China, “from the perspective of promoting renewable energy development, in the long run, China’s existing economy regulatory policies in terms of tariff and subsidy incentives are relatively weak” (28).

Further, the high levels of subsidies on fossil fuels in some countries raise unfair competition to renewable energy technologies. For example, Malaysia is one of the countries with the highest level of subsidies on fossil fuels, and as a result, renewable energy technologies are economically weak to compete in the markets (29). This means that because there are many incentives to acquire fossil fuels than renewable energy in most countries, many people still stick to the use of what most favours them, fossil fuels.

Market-related barriers

Initial investment costs for renewable energy systems are usually high. Consequently, market prices for these systems remain high and unaffordable to many potential customers, especially in the developing countries (21). This is because the total production cost of renewable energy also become relatively high compared to fossil fuels, and therefore, market prices for renewable energy remain relatively high. Consequently, because in most cases many people prefer to go for cheaper options, renewable energy technologies, therefore, suffer unfair market competition from fossil fuel technologies whose establishment and operational costs are usually subsidised.

In connection, other factors that make renewable energy technologies less competitive or unavailable in the markets include: lack of successful and replicable renewable energy business models to help turn small-scale projects into commercial businesses  (30) ; inconsistent biomass supply in some areas like Europe (31); lack of market for renewable energy; and the high and fluctuating prices of renewable energy in some countries like China (28). Therefore, most people cannot afford renewable energy technologies because their initial installation costs and operation costs are usually high which raises their market prices, ultimately limiting their marketability. Since the market for renewable energy sources is limited, its development is also limited. This is because, when something is not marketable people do not invest so much in its development. In this case of renewable energy technologies, it is clear that most people are not motivated to acquire or develop them.

Geographical and ecological barriers

The geographical location and natural conditions in a region can be a form of barrier to renewable energy development. For example,  the incidence of solar energy on the surface of the earth is dependent on geographic location, therefore, in some countries like India where solar and wind energy are sporadic, solar power is sporadic too (32). This, therefore, limits the people of such regions from the use of solar energy as it will not be reliable.

Additionally, as human population increases, natural resources and renewable energy resources have continued to get scarce (8). Consequently, renewable energy resources have become expensive to obtain and therefore expensive to produce renewable energy which then becomes unaffordable to the consumers. This in effect hinders renewable energy technology development in some countries.

Conclusion

The discussion above has made it clear that there are so many factors that hinder the adoption and development of renewable energy technologies. Starting with the continued use of coal as an energy source, which means that people are reluctant to use alternative renewable energy sources. Other factors are politics and governance, technical, social-cultural, financial and economic, market-related, geographical and ecological. All these factors work in tandem to restrict the development and use of renewable energy sources. For instance, most countries are not able to adapt and develop renewable energy due to the high initial cost required to set up. And since there is a cheaper alternative (coal), most people prefer not to use renewable energy sources; despite their immense benefits not only to the environment but also to the economy in the long run. However, this is not to mean that all countries have not embraced renewable energy technologies, some have; and the question that should linger in every person’s mind is, why have others been able to do it despite the challenges? If others have, we all ought to follow suit.

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Dorcas Kariuki is a Postgraduate Student of the Department of Geography, Geology and the Environment at Keele University in the UK.

For further inquiries email at kariuki.dorcas55@gmail.com

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