The Essay On Renewable Energy's Importance And Challenges For Business Sustainability.

Renewable Energy and Sustainability

Question:

Discuss about the Developing Solutions to Sustainability Challenges or Not.

In this essay, it has been analyzed whether system thinking is critical in developing solutions to sustainability challenges or not. Business is all about change. It is about renewal, innovation and developing new methods to develop things. Lam and Law (2016) stated that in present ear, business has become imbued with a strand of ethical behavior and its underlying values.  Companies have to take care of both environmental and social issues. At the same time, they have to be concerned about wellbeing of people, cultural diversity and their future generation. Robinson (2012) stated that in order to bring change in the behavior and outlook of doing business ethically, it is required to understand what “change” is and how “change” comes. Robinson (2012) had identified five major myths about change. According to Robinson (2012), people will change 1) if the learn the correct facts 2) if we sell the case harder 3) if they feel enough pain 4) if they are shocked into action and 5) if rewards are high enough.  Robinson (2012) had developed theory of change management named “A good enough theory”. According to this theory no theory is can work perfect in the complex real life situation. However, a theory can be useful if it provides good ideas, wicked problems, human element and entropy. Sustainability has become an essential part of business in the present era. It can be considered as the long-term commitment of a company to change the way it conducts business. It helps to recognize that a business is a part of complex system and it is interdependent with social, environmental and economic issues (Noori et al. 2015). Awareness and management has significant impact on business sustainability.  

In this essay “shifting to more renewable sources of energy” has been selected as the wicked problem related with sustainability. Masini and Menichetti (2013) stated that there are three major dimensions of sustainability can be found in a business they are such as vibrant economy, healthy environment and equitable society. The selected wicked problem belongs to the environmental sustainability of an organization. Importance of this issue and development of appropriate solution to solve this issue has been discussed in this essay.   

Lam and Law (2016) stated that energy is essential part of life. Without energy, millions of people would leave hungry and cold. It has been found that major source energy is fossil fuels. Industries of most of the developed and developing countries use fossil fuels such as natural gas, coal and natural oil. Rodriguez-Ubinas (2014) mentioned that, low cost of converting natural resources to energy is the major reason behind using conventional energy sources by companies. However, in the last decade fossil fuel consumption had been increased by double. Sheth and Sinha (2015) stated that, at this rate the total amount of natural oil will last only 20 more years. In future, it will increase the price oil, which will affect all type of business. According to Tejeda and Ferreira (2014), it will possibly lead to international economic crisis (EIA).

The Wicked Problem of Shifting to Renewable Sources of Energy

There are various ways to convert energy without using fossil fuel such as nuclear energy and geothermal energy. Many countries and industries have striated to shift from traditional energy sources to renewable energy sources. However, they are still not used in full potential. Norgaard (2017) stated that, in order to maintain sustainability of business in future, organizations have to think about shifting fully towards renewable energy sources from traditional sources. It will help them to become prepare for the situation when the supply of fossil fuel will not be adequate.

It has been considered as wicked problem for two major reasons. They are such as increased amount of population and growing demand of developing countries. Li et al. (2014) stated that, for the last thirty years, the world population is increasing drastically. It in term increases the amount of energy consumptions. If the population rate keeps increasing as the same pace, fossil fuels will not last more than 20 years.  Industries of developing countries are consuming more energy than industrialized countries as they are in the process of development. Doci et al. (2015) stated that, most of the companies of developing countries are still able to reach their peak efficiency rate. Hence, it increased consumption and waste development rate. For this reason, it has become utter necessary to shift towards renewable energy for business operation. The unconventional nature of the issue has made it a wicked problem. In order to solve this wicked problem, it is required to develop systems thinking. Three major questions need to be answered using systems thinking. They are such as 1) what are the major challenges that company might face due to the shift towards renewable energy source 2) what are the major advantages that a company can get from the implementation of renewable energy? Is it worthy enough? and 3) what strategies a company can implement to shift towards renewable energy and achieve sustainability

In order to shift from conventional energy sources to non-conventional energy sources, it is required for company to find out what are the major challenges that it has to face during this shifting. These challenges are such as infrastructural issues, lower cost efficiency rate and high cost of maintenance. Stoeglehner et al. (2014) stated that, in most of the case, development renewable resources need huge amount of initial investments on infrastructure. It includes factors of prospecting, permitting and marketing. All these factors increase the price of development of renewable energy. For this reason, Most of the companies are unable to use the renewable energy due to its high price. It can be describe in terms of cost efficiency as well.        

Figure 1: Cost effective source of energy

(Source: Norgaard 2017)

It has been found from this graph that for 1 MWh energy, a company has to pay $396 for using Solar photovoltaic energy source, $257 for solar thermal and $ 191 for wind- offshore energy sources (Larcher and Tarascon 2015). All these are non-conventional energy sources. On the other hand, a company has to pay $140 for using natural gas, $130 for using coal and $120 for using hydroelectric power sources to get energy of 1 MWh (Fritsche et al. 2014). All these are traditional or conventional energy source. These figures indicate that it is profitable for any organization to use conventional energy sources rather than non-conventional one. In addition, a company has to make some necessary amendments in order to shift from traditional energy sources to conventional energy sources. It can cost extra money to the company (Hinrichs-Rahlwes 2013). For example, in order to use photovoltaic energy, the company has to install solar plates, which is very costly. In addition, it requires high maintenance. Along with that due to the small amount of energy generation (for one or two factories only), the cost of energy production is high. These are the major challenges that a company might have to face while shifting from conventional energy to renewal energy.

Challenges of Shifting to Renewable Sources of Energy

Now the second question occurs. The second question is that despite of all challenges why a company should shift towards renewable energy sources. The answer is that, in future when all fossil fuels reach the verge of ending, renewable energy source will become the only option for all countries and all industries (Finn and Fitzpatrick 2014). From the usage rate of fossil fuel, it can be assumed that at the pace fossil fuels will last 50 to 100 years maximum. After that, all companies will be forced to use renewable energy sources. From the above discussion about change, it has been analyzed that this is the condition that will lead company to change. Kaldellis and Kapsali (2013) stated that if all companies do not start to shift towards renewable energy source then in future their sustainability will be lost failure is inevitable.  Companies should not ignore the huge potential of renewable energy sources as well.  According to European Photovoltaic Industry Association, solar energy has the ability to provide energy to more than 1 billion people within 2020 (Norgaard 2017). By 2040, solar energy will be able to meet 26% of the total energy demand.

In terms of cost efficiency, it can be stated that, although it is lower than conventional energy sources, dramatic increase of efficiency can be observed by increasing the amount production. Hinrichs-Rahlwes (2013) stated that by increasing the production to double, the efficiency of solar photovoltaic cells can be increased by 26%, which is huge increment. There are also some other advantages as well. As solar photovoltaic energy, wind energy and tidal energy are renewable, hence they are sustainable as well.  Management of an organization of organizations never has to worry about running out of energy anymore. It can also bring economic benefit. The renewable energy sources produce little or no waste products. Hence, a company does not require to spend huge amount of money for waste disposal anymore. It will save huge amount of money for an organization. It will also have less impact on the environment as well.  Overall, it can be stated that shifting towards renewable energy sources can really be a major step of a company towards sustainability.

Now, the third and the last question occurred. How or what are the strategies a company to use to shift towards renewable energy sources. Before developing strategies, it is required to remember that one or two companies cannot get much success or profit by implementing renewable energy in their plants. Multiple entities are associated in this course of transformation. They are such as equipment manufacturers, suppliers, bank and other financers, installation providers, maintenance providers, subsidy providers, regulators and validators. They work together, even take help from the government to shift towards sustainable green energy. 

Six major strategies that companies can take together with government agencies to implement sustainable renewable energy. They are such as  1) assessment of resources 2) reduction of cost 3) development of market channels 3) improving policy and regulatory initiatives 4) arrangement of proper financial instruments for green energy 5) proper human resource development through training in order to use renewable energy properly 6) strengthening government policies related with renewable energy use. A matrix has been given below to show the priorities of every initiative.

Cost Efficiency of Renewable and Conventional Energy Sources

Figure 2: Priority Matrix

(Source: created by author)

Now an implementation plan has been given below in another table.

Figure 3: Implementation plan

(Source: created by author)

In conclusion, it can be stated that shifting towards renewable energy has some major issues. These issues can be identified using systems thinking. It can also found that despite of all the challenges, implementation of renewable energy can make a company sustainable. Management of a company never has to think about running out of energy anymore. However, companies need to work together with government to make successful implementation of renewable energy. For that purpose, some strategies have been developed along with appropriate implementation plan. These strategies can make a company successful in long run and make it sustainable. 

References

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