Discussion about Renewable Energy consumption and Sustainability

Question: Discuss the literature survey on the renewable energy consumption and sustainability? Answer: Introduction Consumption is the key factor to achieve sustainable development as unsustainable patterns of consumption such as overexploitation of renewable energy resources, and using non-renewable resources are the major reasons for the deterioration on global environment. With the increasing trend in development, the expenditure of energy consumption per capita has increased in the last fifteen years by an average of one-third (Apergis and Payne, 2011). The consumption growth is expected to increase at a fast pace until 2020 at the same growth in GDP rate. Moreover, the advancement in technology has reduced the intensity of energy and material in products considerably. However, these advantages have been outweighed by the increasing volume of goods consumption. This paper draws attention to the individual decisions of consumers on energy demand in context of sustainable development. Literature survey Renewable energy consumption Ayoub and Abdullah (2012) defined sustainable consumption as the goods or services that will address the basic needs of customers minimizing the use of natural resources and toxic materials which in turn reduce the emission of wastes and pollutants to environment and lifecycle so that the needs of future generation are not jeopardised. Sustainable consumption is viewed as the process that involves negotiation and development of consensus. This significant process at some areas is seen to fight with the conventional market operations. Banos et al. (2011) opined that, all actors must be willingly engage in the discourse in order to achieve the new consumption strategies. According to Connolly et al. (2012), sustainable consumption has to be comprehended as a societal field of action, which is further characterized by the three significant interacting areas of action. Individual area of concern- This section is divided into two sub-areas i.e. demand-side area and informal area. Demand side area considers the household consumption activities and professional procurement activities of both the public sector and large scale private industries. The informal area include the private consumers who undertake informal activities i.e. informal work that is unpaid (Eichholtz et al. 2013).Informal activities are not visible on the level of demand and hence not oriented to market. Supply side area of action- This include activities of governmental bodies and companies to offer sustainable services, products and information. Socio-political area of action- This include activities to develop a general framework of governance for both by the governmental bodies, organizations and associations. Their activities consider supply-side, structural and individual area of action. According to GhaffarianHoseini et al. (2013), the above three actions are interrelated to each other. The consumer behaviour rather their consumption activity particularly depends on an appropriate infrastructure (i.e. availability of energy efficient household tools), supply side activities and socio- political measures (emission trading systems or existence of eco-labels). There has been a strong agreement among the experts and claims that awareness among the consumers is not sufficient for the implementation of sustainable consumption behaviour but brings about a significant change economic and social structures. As referred by Graves et al. (2011), the process of consumption is a socially constructed but historically changing mechanism. According to Hashim and Ho (2011), sustainable consumption is an ecological way of purchasing and using goods. The consumption behaviour of individual and society is highly influenced by a number of factors such as system infrastructure, specific lifestyles, routines and habit, and their social environment. Approaches to explain renewable energy consumption According to several Psychologists, energy-related behaviour highly force the role participation, peer networks, social context and macro level factors that contribute to the use of renewable energy resources. There is an ever-increasing debate on social dilemma in relation to consumption of energy and usage of green electricity (Howard et al. 2012). In both the situation, the behaviour of consumers and their cumulative behaviour mainly counts. Meanwhile, the social psychologists are focussed on extending their models beyond the light of conventional individualistic and significantly focus on the framework of holistic socio-ecological factor. According to the Kaygusuz (2012), a famous sociologist, who state that users does not consume energy rather they utilize to raise their family or operate business. Moldan et al. (2012) also opined that, users have little responsibility and engagement in sustainable consumption due to the centralised system of supply. In argument, Moriartyand Honnery (2012) stated that, the irrational behaviour of energy users acts as a barrier to energy efficiency and sustainability. Energy services Paetz et al. (2012) argued that determinants of energy consumption depends extensively on the renewable energy services i.e. whether the service dealing with heating or electricity, lighting or washing. Surveys on energy related preferences primarily refers to the choice between product alternatives i.e. replacement of products with renewable and energy efficient alternatives. Issues related to transport, in particular focus on the choice between transport or vehicles and less sustainable energy alternatives. Panwar et al. (2011) conducted empirical analysis to evaluate the affect of energy label on purchase decisions of automotive customers. The conjoint analysis shows that, the purchase decisions of customers are not influenced by the energy label hence shows they are less prone towards using the renewable energy resources. Empirical study on household appliances A conjoint analysis has been conducted by Richardson (2013), to study the consumer preference on using renewable energy alternatives in replacement to their household products. The study investigate the relative and significant willingness of consumers to pay for energy efficient products built out of renewable energy. Shi and Chew (2012) made an analysis on the impact of environmental certification on customer purchase behaviour considering the case of a wood furniture. The outcome of conjoint analysis shows that environmental certification is viewed as a positive product attribute, however the product preference of typical customers outweigh the importance of environmental certification. Stambouli et al. (2012) presented a frequent argument against the efficiency standard of sustainable products, in which the energy based product that represent maximum choice of customers is prohibited which in turn reduce the customer utility. However, it has been found out that, refrigerators that possess efficiency standards leads to increased utility for the average customers. In argument, Tugcu et al. (2012) states that his study on sustainable consumption claims that, significant impact of incentives on their payment such as loans or rebates can influence the choice of residential customers paying no heed to the level of efficiency in refrigerators. Green electricity The research on green electricity has been conducted by Apergis and Payne (2011) within the BMBF funded projects, on two consumer groups i.e. green electricity and solar thermal. In this particular research, randomly selected pedestrian were asked to about their preferences and motivation of purchasing and using renewable energy resources. It has been noticed that, buyers of green electricity are less sensitive to price in comparison to a group of non-buyers. None of the surveyed groups could estimate the difference accurately on asking them the difference in price between green electricity and conventional electricity. Ayoub and Abdullah (2012) conclude that, there has not been any effective marketing of green electricity with successful presentation of information. For instance, buyers of green electricity overestimate the price to four fold, however, non-buyers assume ten-fold higher price of green electricity on average. In argument, Banos et al. (2011) presents a conjoint analys is drawing attention to the preference of electricity customers. According to his research, customers pay more attention to the criteria of energy mix, location where electricity is produced and cost. On the other hand, specific attributes like the pricing model, supplier of electricity, the duration of contract and eco-certification plays a secondary for majority of private clients. According to his findings, consumers only prefer fixed price for a time of day or seasonal rates and they do not prefer to get locked in lengthy contracts. In addition, Connolly et al. (2012) analyzed the integration of renewable resources, its price, support to conservation programs, outages and customer services. The outcome of study states that, the willingness of customer to pay for reliability is an essential component of rational planning strategy for investment in electricity generation and transportation. It also acts as the key determining factor on optimal pricing schedule of electricity. Eichholtz et al. (2013) extended the conjoint research by Connolly et al. (2012), and based on the previous studies, he analyzed other significant attributes like type and amount of renewable energy, compound with other services, charitable contributions, minimization on voltage fluctuations, billing options, etc. The argument raises on evaluating the outcome that states, customers are highly concerned about the renewable energy offered by the suppliers. According to the estimation, customers are willing to pay on an average of 2.1 cents per KwH for a supplier who make use of 100% hydro energy than for the supplier who uses no renewable sources. Similarly, customers pay 1.48c more for suppliers using 100% wind than the ones with no renewable energy. Studies conducted by Graves et al. (2011), shows that consumers do not justify their decisions of renewable energy consumption by the concern of sustainable environment, even if their consumption pattern decreases the negative impact. In argument, Hashim and Ho (2011) demonstrate that consumers purchase more environmentally sound products. Now against the backdrop of the significant concepts like lifestyles, literature survey reveal indicate that based on the different need areas, the consumer behaviour differentiate significantly. Graves et al (2011) highlight on the fact that, the purchase behaviour of consumer is not predictable between the aspects of green consumption and need areas. As a conclusion, Kaygusuz (2012) state that different products and systems has to be considered separately and findings of one system is not transferred without the difference is perception of consumers. Conclusion The literature survey confirmed the hypothesis stating that transparency respective to the cost of energy utilization is positively correlated with the behaviour of energy saving. This has been shown through the different measures such energy labels and energy bills. Prices of energy plays a significant role and positively correlated with sustainable usage of energy. Higher the price of energy, the household becomes more responsive to the energy saving criteria. The conjoint analysis made by the authors on significant willingness of customers to pay for A-labelled energy efficient products depends on the different degrees of their energy efficiency (Moldan et al. 2012). A study presented in argument focus on the impact of incentive payment method, such as loans or rebates influence the choice of customers on sustainable consumption energy efficient products. Moreover, from the literature review conducted, it is evident that, adoption of sustainable consumption is not possible without altering the framework conditions such as (infrastructure, price, etc). It is essential to analyze the individual consumption behaviour in a given context of regulation and supply factors (Moriarty and Honnery, 2012). However, the literature does not generate any cle ar hypothesis till now. Although, there are certain agreement on the relevance of consumer lifestyle and attitude, but these factors has not yet been represented as the significant determinant of renewable energy consumption and their contribution towards sustainable consumption. Reference List Apergis, N., and Payne, J. E. (2011). The renewable energy consumptiongrowth nexus in Central America.Applied Energy,88(1), 343-347. Ayoub, M., and Abdullah, A. Z. (2012). 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