The Belinda Energy Project: Ethical and Environmental Considerations - Assignment Example

 The Belinda Energy Project: An overview of the ethical and environmental considerations Table of Contents 1. Introduction…………………………………………………………….4 2. Alternative or renewable energy sources………………………………4 3. Pros and cons of renewable energy systems……………………………5 4. Discussion………………………………………………………………8 5. Bids considered…………………………………………………………9 6. Conclusion and recommendations……………………………………..10 7. Appendices……………………………………………………………..11 8. References………………………………………………………………15 Executive Summary The objective of this report is to consider the bids received and accepted by the company for the energy project at Belinda in Africa. While the bids are all accepted and equally valid as per the terms of our company, Karsson,, and it is of utmost importance to consider the costs involved and analyze all the bids so as to maximize profitability, it is also expedient to understand the ethical and environmental requirements which need to be scrupulously met in order for the project to be sustainable in the long term. As most of us are aware, the world is facing a crisis situation in so far as environmental pollution is concerned. It is also essential to conserve the earth’s biodiversity and sustain the scarce resources at any cost. Research bears out the fact that energy projects need to replace commonly used fuels with renewable energy sources. This report examines the basic idea that it is time to adopt renewable energy sources for energy projects like the one at Belinda, not only because of the need for sustaining the world as we know it, but also because our company is a corporate body with high brand value and this brand salience must be safeguarded through appropriate corporate social responsibility. Corporate social responsibility means adopting the right sources for energy; it necessarily includes the highest ethical standards to be adopted by the company in its policies, goals and activities as well as protecting the earth’s ecological system through effective measures. Accordingly, this report first tries to understand the ethical and environmental issues related to establishing large private energy projects like the one at Belinda. Next, it seeks to explain why ethical and environmental concerns need to override all other considerations of the company, including the cost and profitability factors of the project. The bids are objectively evaluated and arguments provided for adopting only renewable energy sources in the Belinda project. The report also tries to assess the appropriateness of a renewable energy project at Belinda in relation to the location, climate, demographics and other factors that characterize Belinda. 1. Introduction Sustainable development as a global goal has been brought into focus from 1987 onwards when the World Commission on Environment and Development defined sustainable development as one that would be Able to meet the needs or desires of the present generation of humans without in any way compromising on the abilities of future generations to satisfy their needs (Brundland, 1987). In relation to the energy sector, the concept of sustainable development can be taken to mean the promotion of easily available, accessible and cost-efficient electricity which can benefit the economy, society and the environment; the end-use of electricity sources would also need to be economical, maximize the use and cost-effectiveness of carbon generation minimizing energy sources, as well as improve the efficiency and minimize the environmental impact of production, transmission, distribution or use of the electricity energy (E7 & UNEP, 2002). Again, research also indicates that renewable energy systems can be vital for sustainable development. Such renewable energy sources include solar, wind, hydro, solar and geothermal energy sources. Another source already being used for producing electricity is biomass. 2. Alternative or renewable energy sources All the renewable energy sources are abundant, available indigenously, diverse and also inexhaustible; additionally, they produce less atmospheric emissions as compared with traditional fossil fuels (IEA, 2000). The cost of renewable energy sourcing is generally high, but this is decreasing. Such cost decrease is due to improved technology, growing environmental concerns and new market valuations like carbon trading. While energy is critical for providing basic services like cooking, lighting, refrigeration, education, telecommunications, mechanical power and transportation (Najam, et al., 2003), around 2.4 billion people still rely on charcoal, wood, and even dung for their cooking,, and as per one estimate, indoor air pollution mainly caused by heating or cooking solid fuels causes 36 percent of all lower respiratory infections and 22 percent of chronic OPD (WHO, 2002). Smith and others (2000) even estimate that this indoor air pollution can be effectively decreased by around 95 percent simply by changing over from crop residues to LPG or biogas, among others. However, in another report, Smith (2002) also observes that such transition to LPG can increase global Greenhouse gases substantially. Tradition oil supplies and gas sources are also subject to increase in prices and unstable conditions (Turton & Barreto, 2006). The rising GHG pollution is also in major part caused by electricity generation and also cause for global concern in view of the continuing increase observed. Conventional oil and gas reserves are not in-exhaustive and are also not distributed even across the globe. Coal also is unevenly distributed. However, most GHG emissions are due to use of such fossil fuels for sourcing energy. It is estimated that around 70 percent of GHG emissions are due to such fossil fuels and the emissions include harmful gases like carbon dioxide, methane and nitrous oxide. Nuclear energy is a possible substitute for energy based on fossil fuel combustion. However, although such energy can help ensure a carbon free environment, nuclear energy supply is beset by certain endemic problems like high costs, security concerns and concerns of proliferation of harmful technology, waste management, safety and even averse public opinion (IPCC, ). Again, unlike fossil fuels, the renewable energy sources are generally widely distributed, cause lower pollution and are also renewable without destroying the resources of the earth. 3. Pros and cons of renewable energy systems Renewable energy systems can contribute energy supply security as well as provide some degree of environmental protection unlike traditional energy sources. Although still costly, such energy technology costs are gradually coming down with evolving technology and faster learning curves in both the developed and developing countries. Energy storage technology is still evolving for solar, wind or wave based energy, although other renewable energy forms like biomass, hydro or geothermal sources can be used in back-up energy systems. Hydro energy systems are cost effective but often hydro projects face significant mass oppositions in developing countries owing to the displacement of entire human settlements due to dam building, etc. There can also be short term ecological concerns, during the building stage. The generating costs are usually around 20 to 90 USD per Mega Watt Hour. Often, the costs can be prohibitive, particularly for mini grids. Often, hydro power systems, particularly in tropical countries are found to lead to emission of methane or other harmful gases. Hydro power systems offer benefits like large water supply and resource creation, and fast response to grid demands fluctuations. In contrast to water based systems, wind based systems are lower costing and tremendously improved technology. Indeed, the development of wind systems has been rapid with as much as 40 percent increase in such systems globally (BTM, 2005). However, wind energy systems have some basic constraints like noise pollution, EMF interference, bird collisions and airline flight path obstacles. Capital costs for wind turbines are about 900 USD per Kilowatt, with a major cost being due to the rotor and nacelle. Onshore wind plants cost from USD 1000-1400 on average and operational costs increase substantial with passage of time. Often, given good conditions, power can be generated by wind plants at 30 to 50 USD per MWh (Morthorst, 2004). However, more accurate weather forecasting is necessary (Giebel, 2005) in order that naturally fluctuating wind speeds can be predicted and energy supply can be stable. Also, storage systems need to be developed (EWEA, 2005) and there are also high costs for ensuring a reliable wind energy system. Nonetheless, wind energy systems can even provide five times the approximated global electricity production by year 2030 according to one estimate (IEA, 2006). Again, costs for the back up power plants are found to decrease substantially with increase in grid area, distributed wind turbines across larger areas and so on (Morthorst, 2004). As against wind or nuclear energy, biomass is a great renewable resource for hydrocarbons that can be profitably used for generating electricity, chemicals or heat. Woody biomass and straw can also be reused at the end of their life as energy sources. Biomass includes forest, agricultural or livestock residues, certain herbaceous crops, organic part of the municipal solid wastes, and organic waste in liquid streams or effluents. These can serve as rich energy sources, solid, liquid or gases. The quantity and quality of biomass resources available, costs involved and various co-products, etc. help determine choice of various biomass sources of energy (IEA Bio-energy, 2005). Biomass storage, collection, handling and transport are costlier compared with fossil fuels (Sims, 2002) but this can be resolved also. Biomass technology is advanced and providing better cost-efficiency with passing years. Costs of biogas plants can vary from USD .05 to .12 per kWh (Martinot, et al, 2005). Capital outgoes are estimated to fall off substantially by year 2030 (Specker, 2006). Geothermal energy is generated from resources forming low enthalpy field located in several sedimentary basins of geologically stable platforms. Temperatures need to be above 250 degrees Celsius for direct electricity generation and plant capacity factors range from 40 to 95 percent and often support base load (WEC, 2004). There are some sustainability issues with land subsidence, higher heat extraction rates that rates of natural replenishment and so on (Bromley & Currie, 2003). Capital costs are high although technology has improved tremendously, and power generation costs vary with high or low enthalpy of fields, shallowness or depth and size of filed, temperature of the resource and resource-permit conditions (IEA, 2006). Solar power is also sourced by concentrating solar radiation in plants and these power plants are known as concentrating solar power plants (CSP). Such plants need to be located best in low latitude areas receiving high and direct insolation. There are advanced technologies using troughs which can generate steam directly and can reduce costs by 20 percent. Again, there are the photovoltaic solar cells which help generate direct energy by using solar photons to create free electrons in a PV cell. This is estimated to have a potential of 450,000 TWh/year (WEC, 22004). Another energy source is also the use of wind driven waves in oceans. The installation costs of such power systems are very high and still being developed technologically. Ocean waters are often subject to jurisdiction of multiple countries and this has compounded the development of this energy system. 4. Discussion A diagram below (Appendix 2) shows the comparative analysis of the different forms of energy sources. From the chart, it can be observed that the generally more energy resource is supplied by conventional fossil fuels like coal or gaseous hydrates (100,000 or 60,000 EJ), although recycled uranium energy can yield as much as 220,000 EJ and renewable energy yields only 5000 EJ per year (geothermal) with least energy being provided by hydro power (2 EJ per year). Again, environmental impact of fossil fuels appears to be higher and even unknown. The nuclear energy systems do have certain effects on the environment like waste disposal and spent fuel dispositions. But renewable energy sources also cause some impacts like land-use, air pollutions, and some other minor issues. Another diagram in Appendix 3 compares the cost, convenience of use, efficiency, quality, reliability, and emissions characteristics of the different types of energy sources. The intersecting spots represented by large circles show the critical transformations needed for future energy systems. Another diagram in Appendix 4 shows a comparison of the GHG emissions from the various energy sources studied (WEC, 2004). It is clear from the diagram that nuclear power, wind energy hydro, PV, and tree plantation systems release the least GHG emissions. Coal and lignite release the most such pollutants into the atmosphere. There are high stack emissions in cases of all natural fossil fuels while other stages are also more than for renewable sources of energy. 5. Bids considered Among the bids considered, one is a nuclear plant, offering attractive subsidies or loans. But the capital expenses will be quite prohibitive. There are also chances of nuclear proliferation and lack of safety in third world developing countries like Belinda. There is also the possibility of Sudeten discontinuing its support for the project due to possible public opposition. Again, there may also be serious pollution concerns. Another bid is by a wind energy concern and this is promising in as much as the firm is European and has the knowledge of latest technology. Also, wind speeds are promising, although such plants are more costly (medium costs). However, the costs can become prohibitive in the very long term and this can be complicated by the small size of the farm. A third bidder is a traditional oil based energy producer. Oil is to be sourced from the Gulf. The costs are attractively low. But, at all times, oil supply and costs can become severe constraints. Also, the pollution generated by oil plants is among the highest and with depletion of scarce oil reserves possible in the distant future. Supplies of oil may be intermittent thus constraining power plant operations. This is also true of the other bid, which is represented by an LGNG based plant. LNG sourcing also may be problematic owing to erratic supply and costs may increase. The most promising appears to be the biomass plant since this plant can be built on the nearby available land with sourcing of biomass from the adjacent agricultural field. Biomass is also one of the least pollution causing systems and the livestock, agriculture or other ready sources of biomass energy may be easily utilized for continuous production of energy. Additionally, employment opportunities can be better developed owing to the tremendous opportunities that can develop around a biomass plant. However, above all, based on ethical and environmental considerations, the choice of a biomass system appears the most promising. 6. Conclusion and recommendations A corporate body like Karrson should be responsible socially and environmentally. While it does have the profit motive as the core objective, in the international business community, adopting renewable energy systems can help it gain new recognitions as a responsible and ethical enterprise as well as help contribute its bit to the worldwide sustainability efforts. Any actions of the firm must be ethical and socially responsive to emerging situations and needs of larger communities. In this way, if the firm go for e renewable energy system, it can set the right example, stand by our government’s commitment to the international community to adopt eco-friendly systems and also build its brand value through its ethical and sound environmental practices. 7. Appendices Appendix 1 Bids Received Bid No 1: EUROGEN - international nuclear engineering company – main offices in Sudeten, a member of the European Union 1GW Pressurized Water Reactor nuclear plant, company to supply fuel over the plant licensing period of 40 years, and to deal with the spent fuel Contract for building the station is clearly partly subsidized by the Sudeten government. Attractive loans offered from Sudeten financial companies. Fuelling and fuel removal cycle dependent upon Sudeten continuing to support its own nuclear industry for the next 50 years. Unit generated price – low/medium, and unusually attractive for a conventional nuclear option. Bid No 2: Windiber- experienced European wind engineering company 1MW individual capacity wind turbines, in arrays on farms of 50 turbines on the ridge where wind speeds justify building. Unit generated price – medium. Bid No 3: RelRose - international engine builder, main offices in the USA 3×300MW combined-cycle units on a site near the coast where liquefied natural gas (LNG) carriers bringing supplies from the Middle East can be docked. Unit generated price – medium. Bid No 4: Atishi – conventional oil-fired system, Japanese conglomerate 2×500MW units on a site near the coast where fuel oil tankers from the Middle East can be docked. Unit generated price – low. Bid No 5: NATFUEL – European consortium developing biomass systems 100MW units, fuelled by fast-growing woody crops from the inland agricultural area inland Unit generated price – medium/high. Bid No 6: MINIGEN - international nuclear engineering company – main offices in UK 100MW Pebble Bed Reactor nuclear units, company to supply fuel over the plant licensing period of 40 years, and to deal with the spent fuel. Building contract underwritten by a consortium of international financiers. Unit generated price – low. Appendix 2: Table comparing different sources of energy Appendix 3: Comparing accessibility, availability and acceptability of energy sources Appendix 4: Comparing emissions from the different energy sources 7. References Barreto, L., (2001), ‘Technological learning in energy optimisation models and deployment of emerging technologies’. PhD thesis, Swiss Federal Institute of Technology, Zurich, Switzerland Bromley, C.J. & Currie, S., (2003), ‘Analysis of subsidence at Crown Road, Taupo: a consequence of declining groundwater’, Proceedings of the 25th New Zealand Geothermal Workshop, Auckland University, pp. 113-120. Brundland, G H (1987), Our Common Future, World Commission on Environment and Development, Geneva: WCED, pp. 254-8. E7 & UNEP, (2002), ‘Industry as a partner for sustainable development: Electricity’, Quebec: E7 network expertise for the Global Environment, Report, Copyright © 2002 E7 and United Nations Environment Program EWEA, (2005), ‘Large scale integration of wind energy in the European power supply system: analysis, issues and recommendations’, retrieved online Mar 10, 2011; http://www.ewea.org/fileadmin/ewea_documents/documents/publications/grid/051215_Grid_report_summary.pdf Giebel, G., (2005), ‘Wind power prediction using ensembles’ Rise National Laboratory, ISBN 87-550-3464-0, September, pp. 43 IEA, (2000), World Energy Outlook 2000, OECD/IEA IEA, (2004), Renewable energy - market and policy trends in IEA countries, Paris: International Energy Agency, OECD; retrieved online Mar, 10, 2011, http://www.iea.org/textbase/nppdf/free/2004/renewable1.pdf IEA Bioenergy, (2005), ‘Benefits of bio-energy’, International Energy Agency, retrieved online Mar 10, 2011; http://www.ieabioenergy.com/library/179_BenefitsofBioenergy.pdf IEA, (2006), World energy outlook 2006, International Energy Agency, OECD Publication Service, OECD, Paris; retrieved online Mar 10, 2011; http://www.iea.org Martinot, E. et al., (2005), ‘Renewables 2005: Global status report’, REN21 Renewable Energy Policy Network, retrieved online Mar 1, 2011; http://www.ren21.net/globalstatusreport/g2005.asp Morthorst, P.E., (2004), Wind power - status and perspectives in future technologies for a Sustainable Electricity System, Cambridge: Cambridge University Press. Sims, R.E.H., (2003) ‘Renewable energy - a response to climate change’, Proceedings of the International Solar Energy Society World Congress 2001, Adelaide, W.Y. Saman and W.W.S. Charters (eds.), Australian and New Zealand Solar Energy Society, Issue 1, pp. 69-79. Specker, S (2006) Generation technologies in a carbon-constrained world, California: Electric Power Research Institute. WCD, (2000), ‘Dams and development - a new framework for decision making’, World Commission on Dams, retrieved online Mar 10, 2011; http://www.dams.org WEC (2004), 2004 Survey of energy resources London: World Energy Council Read More