Environmental Engineering Reference
In-Depth Information
Because many activities in the conventional energy sector, from exploration and mining
to the construction of power plants, are so expensive, only large players tend to survive.
In 2012, six of the world's ten most profitable companies (by revenue) operated in the
influence on governments. A market in which a few large players dominate, in which the
largest players are state-run monopolies, in which governments intervene - diplomatically,
economically, and militarily - to safeguard supply, and in which the largest producers are
The electricity market, by contrast, is much freer. For most of the twentieth century,
electricity was generated and distributed by big utility companies, many of them state
owned. In most cases, customers, whether single households or large companies, held a
directcontractwiththeutility.Beginninginthe1980s,manyelectricity marketsthroughout
the world were liberalized and deregulated. Customers were no longer required to buy
electricity from the company that generated it. This introduced more competition to the
market, bringing down prices and giving consumers a vastly expanded choice. For
example, many domestic power consumers in Europe can buy their electricity from small
suppliers specialising in renewables. The electricity they use in their home is not the same
physical entity that their supplier fed into the grid, yet a series of exchange mechanisms
ensures that there is a direct correspondence between the two (Kopsakangas-Savolainen
and Svento
2012
).
5.3 The Quest for Energy Independence
Winston Churchill not only foresaw the rise of Hitler, he also anticipated the rise of oil.
In 1911, he warned the House of Commons that Britain's future as a world power would
depend on a reliable supply of oil. Just a few years previously, the British navy had
begun switching from coal to kerosene fuelled ships. This allowed for faster and more
powerful vessels, but introduced a new insecurity in terms of supply; instead of Welsh
coal, British sea power now depended on Persian oil. Britain's global hegemony in the
nineteenthcenturywasbuiltoncoal,whiletheriseoftheUnitedStatesandSovietUnionto
superpowerstatusinthetwentiethcenturywaspredicatedonaccesstooil.TheGermanand
Japanese grabs for power in World War II were at least as much about energy resources as
they were about territory. The Nazis understood that without secure oil resources Germany
would not be able to replace Britain as Europe's dominant power. Their failure to capture
the oil fields of the Caucasus signalled the end of the German dream of becoming the
continental superpower.
