Energy diversification is a term often thrown around. From politicians advocating for wind farms to businessmen pushing natural gas, energy diversification is seemingly sought after by all parties.
However, what are the advantages and disadvantages of having a diversified energy portfolio? As a customer, there are certainly many different pros and cons when compared to the portfolio as a country or as a supplying party. Claiming that having a diversified energy portfolio is a positive, may not always be true depending on the situation.
First, the pros:
Energy portfolios that are diversified are less prone to direct sustainability failures. For instance, if you only rely upon oil, and the well dries up, you are in a bit of a pickle. However, when you diversify your portfolio, especially with regards to finite energy resources, you open the door for many different energy suppliers to absorb the falls that may be incurred by the failure of a single, point source. This ability to absorb the blow also applies to peak-energy issues. For instance, when you are in an urban area and do not have a diversified energy portfolio, you are burdening one plant to take all of the energy demand. This means that when energy peaks, the plant may not have the capacity to handle the increase in demand. Especially in the summer with increased AC use, we see a peak in energy demand. This causes consequential black outs due to the lack of diversification in the energy portfolio.
Not surprisingly, when you have an energy platform spread out among many different plants and incoming sources, you are able to handle the dips and peaks that occur in a given building/ communities energy consumption on a daily, and seasonal, basis. Similarly, many different types of energy generation sources peak during different points in the day. For instance, solar generates more electricity when it is needed most (around 3 pm) and so does wind (usually). These patterns, when used as a coupling into a diversified portfolio, can really help decrease the vulnerability of an energy supply region.
From a country wide perspective, a diversified energy portfolio opens the door to a variety of freedoms. Without being overly dependent on one source for energy, you have more diplomatic freedom (and leverage) in the world of international affairs. Therefore, having a diversified energy portfolio opens you up to a variety of different actions and motives in the international community. You do not necessarily have to be a pawn and aligned with one energy provider, to whom you owe a significant amount of your attention and resources.
On the negatives, there are some reasons why you might not want to have a diversified energy structure. The first of which, and arguably most dominant, is efficiency. When you have a streamlined production method, you tend to get very good at producing your product. In the case of energy, some countries are excellent examples of how energy production can be streamlined. For instance, France is remarkably efficient with its nuclear program. This is because around 75% of France’s energy demands are met by its nuclear system. This is a remarkable percentage, far more than most countries. The efficiency of the reactors and the entire nuclear process in France make it an excellent example of how streamlined, effective, energy portfolio’s work well.
Other reasons why a streamlined energy portfolio may work is due to abundance of resources. For instance, in the desert, it is rather hard not to justify building up a large solar intensive system. Of course this needs to be augmented by energy storage capacity or by other nighttime producing power sources, but it is foolish for us not to exploit the full capacity of heavily, sustainably rich, energy sources.
Either way, the energy portfolio at hand has a lot more factors to work through than merely a whether or not it is diversified or not. The energy portfolios for countries are even more complicated. It is crucial to look through the big picture when dealing with energy decisions to find out what actually is the best, and most sustainable, long term solution for an energy problem.
As always, for all your energy thoughts or news check back with www.energygridiq.com today.
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