Clean energy is not just a choice between extremes, says IoM’s John Spellman
Investing in clean energy is not a simple choice between right and wrong, says John Spellman, director of Financial services at the Isle of Man Government.
The issue of clean energy investment is often discussed under the auspices of a false dichotomy between the polluting dinosaurs of old and the burgeoning alternative energy sector.
But the simplistic picture that dismisses those traditional providers in the energy business as ‘old energy’ (gas and oil) – dirty, polluting and finite – is wrong. In contrast, there is the perception that the new energy world of renewables is led by brainbox, new-age hippy types that see solar, wind and tidal power as natural and inexhaustible sources of clean energy that will rid the world of excess, and curb the carbon dioxide emissions behind global climate change.
The perception of nuclear sits uncomfortably between the two, and causes more fights than either. And then there is aspirational, future-tech notion of fusion power. The reality is rarely as simple as the commonly-held picture.
Renewable sources of energy are appealing in a lot of ways but various technologies have a long way to go to reach true commerciality. Furthermore, projecting technological and cultural trends into the future can be a futile activity – will the hi-tech windfarms of today be the vertical estates (or tower blocks as we now call them) of the future? In the interim, politicians distort the market by making it subsidy-driven, for renewables in the developed world and for fossil fuels in poorer countries. Such artificial support is never a good thing in the long-run and certainly not sustainable.
To make renewables attractive, “saving the world” – while admirable and even profound – is not enough. There needs to be sustainable profit in doing so and it can be necessary to look further afield to find it.
A good example of such a venture is The Land Rescue Fund which is undertaking the clean-up of immense garbage sites strewn across Asia and Africa. The concept takes account of both the direct and indirect effects of clean-up.
First the fund buys the land surrounding the sites. Second it cleans up the site using existing technology to turn the mountains of methane-producing trash into energy, and feeding it back to the local grid. This stops the dump polluting the area, pushing up the value of the surrounding land, which can then be sold or developed.
The site is clean, value and jobs are created. The main contributor to a good financial return is the land appreciation – power revenue alone cannot do it.