Economic Issue essay
The life of our civilization is virtually impossible without electric power. Let us imagine that electricity will disappear for one day in big cities – the result will be chaos. It is necessary to mention that volumes of consumption of electricity by the average person increase twofold every 20 years. The private sector consumes one-third of electricity produced in the country, and it also accounts 35% of environmental pollutants. Thus, the role of electricity increases because it is a kind of highly mobile energy source that can be produced with the use of very different fuels; it also can be easily delivered to consumers via power lines. Currently, electricity production accounts 40% of all energy production in the world. Moreover, living in highly technological era humanity needs more electricity and it is necessary to think how to solve existed problems with energy. Thus, we are going to discuss current problems connected with excessive energy consumption and find a solution how to solve them in contemporary world.
First of all it is necessary to mention that electrical power engineering, as a basic sector of the vast majority of economic systems, has always been under scrutiny of investigators. Explaining relevance of the problem we see that qualitative changes, occurring in the domestic power industry, meet global trends, but some problems become more urgent in terms of reforming the industry. Due to the fact that contemporary transformations directly affect consumers of electricity we can mention that tasks of particular importance are those, the quality of solutions of which significantly affects the financial and economic results of the consumers’ activity. One of them is the problem of optimizing energy consumption, which usually involves the development and adoption of decisions on energy saving, requiring certain financial investments. Nevertheless, it is important to note that even the implementation of low-cost projects of organizational character can give tangible effect.
Defining the economic problem of nowadays in a sphere of energy consumption, we can even compare it with situation that had a place two decades ago, using numbers for the best understanding. Different researchers have predicted that our generation would face to energy problems and serious energy shortages would be our nearest future. And now we live in this nearest future as it was said by researchers decades ago and, so, have really big problems connected with increasing level of our demands. In continuation Pimentel and others demonstrated that “High energy consumption and the ever-increasing US population will force residents to confront the critical problem of dwindling domestic fossil energy supplies. With only 4.7% of the world’s population, the United States consumes approximately 25% of the total fossil fuel used each year throughout the world. The United States now imports about one half of its oil (25% of total fossil fuel) at an annual cost of approximately $65 billion. Current US dependence on foreign oil has important economic costs and portends future negative effects on national security and the economy” (Pimentel and others, 1994) Thus, summarizing facts mentioned above it is possible to say that Pimentel’s and others prognoses became true and our problems in energy sector are real.
Analyze the economic problem of excessive energy consumption from a variety of perspectives it is necessary to use specific facts for the purpose of to show the complexities of the problem. Thinking about different energy needs of our country it is necessary to note that they are determined by three main factors: domestic consumption and trade; industry and agriculture, and transportation. In many countries and regions, each of these positions is about one-third of all energy needs, although the size of the domestic consumption depends on the climatic characteristics of the country. Thus, basing on this information it is possible to say that distribution of energy resources on the planet means that the role of international trade in this area will increase with increasing level of consumption. For example, energy-poor countries would be more dependent on energy supplies countries rich in energy resources, in such a way importing countries would be vulnerable from both political and economic points of view because of the fundamental importance of energy for the economy.
In accordance with contemporary situation in the USA and explaining it we can read on Energy Solutions for our Future website that analyzing a rise of prices on energy and a possible risk of energy supply shortage, the current U.S. situation with energy resources is full of a big variety of serious concerns. These concerns are extending on different spheres of contemporary country’s activity and among them we can find economic, political, security and environmental components. Worldwide energy demand, as it was previously mentioned, is caused by the growth of demand for higher living conditions and technological progress and the last, in its turn, causes higher prices for energy sources (www.pnwer.org). Thus, basing on the above presented analysis it is possible to mention that every country needs a way how to decide the problem and in the next paragraphs we are going to discuss one of possible decisions for existed problem situation.
Proposing a solution for the problem of excessive energy consumption, we could suppose that investing in more efficient technologies and practices in our homes, businesses, schools, government institutions and industries (which account for 70 percent of natural gas and electricity in the United States) is one of the most constructive and cost-effective ways not only to solve a problem in energy sector, but also to create new jobs and improve the situation in the employment sphere. It is necessary to emphasize that at the same time, such investments will help effectively address problems associated with high energy prices, energy security and independence, environmental protection and global climate change in the nearest future. Thus, the increase of energy efficiency will help the U.S. to cope with the expected in the coming decade increase of 50 percent or more of the level of consumption of electricity and natural gas, reducing energy costs by billions of dollars and significantly reducing greenhouse gases and other pollutants in the air.
Exploring benefits of the above presented solution we can say that realizing new opportunities that energy efficiency can give to the USA, more than 60 leading organizations representing various stakeholders all over the country have joined forces to develop the National Action Plan for Energy Efficiency to improve energy efficiency in 2006. The Action Plan identifies the key barriers to investment in energy efficiency. It outlines five key recommendations to achieve the goal – economically feasible energy efficiency. The plan also provides a basis strategy and was entitled “National Action Plan for Energy Efficiency Vision for 2025: A Framework for Change”. It is also necessary to add that National Action Plan for Energy Efficiency provides actions to achieve sustainable development and evaluation towards the objective (A Resource of the National Action Plan for Energy Efficiency, 2008). It will be unfair to say that there are no problems in this project’s realization because different obstacles are distributed widely both by consumers and energy companies on the way of growth of investment in energy efficiency. Defining these obstacles we can mention that people, who do not pay their bills for electricity directly, for example, those who rent apartments in apartment complexes, have no desire to spend more money on energy-saving lamps or TV sets, because they have no profit and cost benefits in this situation – only renter could receive a benefit from such situation, but not a tenant.
Presenting benefits A Resource of the National Action Plan for Energy Efficiency demonstrated that “based on available studies, the cost-effective energy efficiency resource available may be able to meet 50 percent or more of the expected load growth nationally. This is similar to meeting 20 percent of electricity consumption and 10 percent of natural gas consumption given current forecasts for future energy demand. Benefits from achieving this magnitude of energy efficiency can be estimated to be:
- More than $100 billion in lower energy bills in 2025 than would otherwise occur.
- Annual energy savings exceeding 900 billion kWh.
- Equivalent to over 50 GW of power, or more than 100 500-MW power plants over 20 years.
- Over $500 billion of total net savings.
- Reductions in greenhouse gas emissions on the order of 500 million metric tons of CO2 annually, equivalent to 90 million cars off the road”(A Resource of the National Action Plan for Energy Efficiency, 2008).
Thus, taking into account information about energy problems presented in this paper we can say that only energy efficiency policy will be a good solution for it. It is pleasant to understand that government pay attention on existed situation with increased level of energy consumption and lack of energy sources. Thus, it is possible to suppose that best practices and knowledge that are contained in ‘governmental hands’ can be used to achieve rapid and effective investment funds, in the framework of a package of measures to stimulate the economy.
