better generation

The IEA's World Energy Outlook for 2011 was released yesterday in London, which takes a look at the latest data and policy developments to provide an analysis of today's global energy markets and the outlook for the next 25 years. The main issue that becomes clear in this report is that limiting global warming to a ‘safe' 2°C is becoming more and more unrealistic. This is not too much of a surprise if you look at data that was revealed back in May by the International Energy Agency (IEA), that despite the worst recession for 80 years, emissions had risen by a record amount in 2010.

A deadline has been given of 2017 for new international climate action to take place; if this is not seen then limiting global temperature rise to a safe level may no longer be achievable.

Now it is fairly common knowledge that the energy market is not like other markets; primarily in the sense that, the economic rate of return is significantly less than the social rate of return. This of course, reduces the incentive for private investment. However, it does give the government the chance to add value to the industry if smart policy decisions and investments are made.

But what makes a smart investment? Let's take a look at the US Obama administration, which, in 2009, called for the doubling of renewable energy in the next three years. Now they have seen some success, as by the end of 2010 the wind industry had increased its total capacity by 60% and the solar power capacity had doubled.  However, there has been some recent news of what some could call, a rather embarrassing investment in the renewable energy industry.

Statistics released yesterday by the Department of Energy and Climate Change have revealed that the renewable energy sector contributed to a record breaking 9.6% of the electricity supplied by the UK grid. This is an encouraging 50% increase on the figures from 2010. A statistic that is also rather encouraging is the percentage decrease on last year's figures in energy consumption. Domestic use in particular can be rewarded for its decrease in final consumption of energy with a percentage decrease of 3.7%. This decrease may have something to do with the current state of the economy, with households trying to be a bit more careful with their domestic electricity use. It could also partly be attributed to the mild spring we experienced this year. Maybe it is a bit too hopeful to think that this decrease is due to households trying to reduce their energy consumption as a way of decreasing carbon emissions but still, it is a positive figure all the same.