We work a great deal with clients in the energy sector. There is obviously a great deal of drive to engage in and discuss alternate energy technologies and infrastructure – wind, solar, biofuels, geothermal, hydrogen, etc. But just because alternate energy gets the green stamp of approval does not mean stakeholders will give carte blanche to new developments. Communities and governmental stakeholders will continue to have concerns that need to be managed and communicated.
Concerns about alternate energy developments include:
- Endangered species impacts from windmills
- Political ‘favor-brokering’ for companies in exchange for clean energy investment
- Piggy-backing traditional (coal, natural gas) energy with green energy legislation
- Using green energy to justify controversial transmission line routes
- Disruption of sight lines in protected areas
…and the list goes on.
Many of the companies investing in alternate energy are the same that have established corporate responsibility and sustainability programs. We would expect the same standard of care would be applied to alternate energy projects as traditional. This would include stakeholder engagement mechanisms, risk management assessments and performance management tools. More often than not, however, these companies are silent on the challenges associated with alternate energy development – and their responses to those challenges.
A good starting point for energy companies is an introspective look at the stakeholder engagement processes surrounding alternate energy development – a topic discussed in a recent article by Two Tomorrows associate Elizabeth Murdock. Odds are that some valuable feedback and win-win opportunities can be gained through systematic stakeholder engagement.
Tags: climate change, renewable energy, stakeholder engagement, todd cort
Within a few miles of me there are actually hundreds of wind turbines. Even when the wind is blowing they may be not using them. They sit idle. Their enormous propellers just doing nothing. All they have done is increased our utility bills. I just got my electric bill and there can be a “surcharge” for your these monstrosities. They have crews that go around and pick up the dead and injured birds that fly into the blades.
hopefully, we would be shifting more and more towards green energy in the future.;*~
Really informative blog. Much obliged.
Thanks for your comment, Paul. But let’s not lose track of the point of my original post – that the ‘green aura’ of alternate energy projects does not provide an excuse to forego robust stakeholder engagement.
However, the economics of alternate energy development are certainly a timely and interesting topic. Undoubtedly, the development and scale-up of new technologies requires subsidy. That is the nature of innovation which requires careful analysis of loss-leader investment and tenable return on investment. The jury is still out as to whether there is any alternate energy technology that will produce real return without subsidy – primarily because no technology has yet achieved scale sufficient to reduce costs or because the return on investment is so long that we have not yet reached ‘pay-back’.
In the face of these murky economics, I think it is worth noting two things.
First, where there is a societal need and the business case for investment is unclear, it is a legitimate role for government to implement subsidies.
Second, we should at least acknowledge that the economic playing field is not currently level and that oil, gas and coal-derived energy benefits from an extraordinary amount of subsidy – from tax incentives to political mandates to government-funded military action. It would be too simplistic to apply a strict ‘return on investment’ equation to alternate energy development if the point is to forge a comparison with traditional energy economics.
Please, enough double speak nonsense. The biggest reason alternative energy isn’t taking hold is simple economics. Absent $0.50kWh subsidies in Europe (vs $0.05-$0.10kWh cost for conventional), there wouldn’t be a single watt installed. And as soon as Spain and Germany began cutting subsidies, their solar industries fell off a cliff. Spain spent billions trying to become “Green” and have almost bankrupted themselves – many projects will never even repay their cost of capital, let alone be cost competitive.
If you want to drain the life blood out of an economy, a sure way to do it is force hugely expensive energy costs down their throats. And as Spain and Germany soon found out, their high cost subsidies were unsustainable, especially when “green” China became the lowest cost solar producer.
Time to stop promoting self righteous nonsense!