Innovation: New Energy Solution Innovative Large-and Small-scale Business Models
Climate Scouts 4기
The world is seeking several countermeasures against unprecedented climate change. Amongst them, the most actively discussed topic is “Renewable Energy.” In line with the global trend, South Korea also announced a “Plan for the Implementation of Renewable Energy 3020” in late 2017 that will expand the portion of renewable energy generation to 20 percent by 2030. The government, which has strived to play a leading role in renewable energy, hosted the KIREC this year to seek the role and direction of renewable energy to slow global warming. At the event, they discussed about the future of new and renewable energy through a multi-pronged approach of policies (urban, economical, technological innovation and social aspects). The area of greatest interest was in the field of “technological innovations.” Innovation has expanded access to technology, and various renewable energy projects are playing an important role in establishing start-up companies focusing in this area. Sustainable energy technologies are now becoming more advanced, easier to implement, and more competitive, in terms of cost. In particular, the “Grid Parity” phenomenon refers to the cost of producing 1kw/hr of electricity in solar power, which will be equivalent to the cost of coal-fueled power. This will speed up the expansion of renewable energy.
The session with the theme of “Innovative Small and Large Business Models” was meaningful because it covered small renewable energy business models that are also used around the world, away from the limited scope of generating energy through large plants, such as conventional offshore wind farms. Small renewable energy projects provide the expertise and needs necessary to rapidly implement large-scale projects. It also acts as an infrastructure that can rapidly implement projects at a scale of efficient cost. This renewable energy is gradually emerging as a new player that may solve energy shortage issues in undeveloped countries and small rural areas because it provides opportunities for many people to share the same reliable and stable energy together. In addition, these small renewable energy sources helps build up ‘prosumers’, who are people that may create and use their own energy for individual use. Prosumers’ feel responsible for the energy they use. Moreover, they express a strong will to solve the climate change issues through a sustainable energy source.
Despite these positive aspects, barriers exist that make the operation of small renewable energy more difficult. Operating a small-scale renewable energy business requires a balance of “cooperation, common understandings, and government regime.” If none of this is achieved, small renewable energy will lose its original purpose in securing broad access to energy. It is the spread of ‘wrong information’ that causes an imbalance amongst the three factors. For example, the majority of implementations of small solar and wind power plants in the neighboring areas are facing opposition from residents. Despite promoting eco-friendliness and human innocuousness based on the results of verified statement of proof, residents’ distrust of renewable energy cannot be completely resolved. On the other hand, in Germany, local residents are raising funds through crowdfunding websites to attract small renewable energy into their district, and local governments are welcoming small renewable energy projects, in hopes to extending jobs for local residents. Through accurate fact checking, we should try to resolve the misconceptions of ordinary citizens to ensure that small-scale renewable energy can be expanded without any difficulties.
As mentioned earlier, the spread of small renewable energy has been achieved through ‘technological innovation’. However, depending on the government’s stance, these innovations can benefit or harm small renewable energy sources. Experts agree that market stabilization of renewable energy will be difficult without the government’s accurate framework. Although it has its own regulations depending on the region, a national framework to encompass these local governments is needed. Indeed, as the government actively participates and intervenes in the renewable energy sectors, it is creating a “hockey stick phenomenon” that draws a sharp upward curve in data of the “spreading of renewable energy” and “the installation and operation cost of new and renewable energy.” Some point out that the government’s increased subsidies might lead to a mass production of many small businesses that are less economical. However, in order to solve the problem of energy shortages resulting from the ever-decreasing amount of energy from fossil fuels, this process is necessary from an environmental perspective and the government should do its part in bridging the gap between energy sources.
Finally, it is necessary to nurture next-generation players who will develop and manage this energy source, in order to expand the small renewable energy. Renewable energy is a new source of energy that has emerged to address the unprecedented climate change problem. It is the current children and adolescents who will develop and operate it in the future. Since renewable energy will be diffused under their initiative, the process of educating the usefulness and necessity of renewable energy in public and private schools will be vital. In addition, it is also necessary to educate local residents on renewable energy in coastal and plain areas, where many small renewable energy sources are installed. By generating energy in their region and getting it from its closest area, they can have a strong sense of responsibility and understanding of energy. In addition, educating and hiring them can be a great opportunity to boost the devastating local economy.
The methods that participants in the meeting have advocated for are essential to the expansion of renewable energy. However, I think it is important to first establish an independent energy institute that does not deal with regulations focusing on the expansion of small-scale energy. The biggest problem with the nation’s energy policy is its’ inconsistencies, which is also affected by changes in administrations. For example, the number of companies involved in this increased by three-folds in year 2017 when the government started its energy policy centered on renewable energy. Eventually, there continued to be a decline in the growth of renewable energy since August of last year when the government began to reduce tax benefits on renewable energy companies. This kind of incongruous policy is a big entry barrier for people who want to start new eco-friendly businesses. In the face of ever-changing energy policies, entrepreneurs will passively invest in renewable energy, and citizens will not be willing to use small renewable energy sources to generate power for themselves. They may not even have the right sentiment revolved around issues with global warming. In order for small-scaled, new and elusive renewable energy to settle, an independent energy organization responsible for the “energy stabilization and effective energy conversion” must be established as soon as possible.