Offshore Wind Energy Creating Literature Review

Pages: 15 (5371 words)  ·  Bibliography Sources: 15  ·  File: .docx  ·  Level: Master's  ·  Topic: Energy

The Economy

Three essential structural factors of the global energy-economic system - uncertainty, technological shifts, and international action - that affect the climate system via CO2 concentrations in the atmosphere, each factor has been subjected to in-depth modeling analysis. The starting point of the analysis is the perception that the CO2 problem is essentially one of high prospective energy demand, and that there are four major routes towards reducing this growth in global energy use: (1) reduce the population growth rate; (2) reduce per capita energy growth; (3) reduce world economic growth; (4) decouple energy from economic conversion via more efficient energy supply technologies and/or structural shifts in the economy. Constrained trajectories of CO2 increases are modeled using a simple carbon cycle model. The change in the curvature of constrained fossil fuel use has important consequences for the growth of new energy technologies, and also induces change in the technological energy infrastructure. Non-fossil energy use is a composite of various sources (e.g. solar, hydro, nuclear, etc.) with varied potential, sustained production and diffusion rates (Padros & Cocciolo, 2010).

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Literature Review on Offshore Wind Energy Creating the Assignment

The energy balance is a simple but effective way to record energy consumption, production, and the residual, which are net exports or imports. As a statistical construct the balance records ex-post what actually occurred. As a planning device it expresses what planners hope will occur. It is also useful to project what is likely to occur, not necessarily what planners hope for. In all three cases the apparent simplicity of the balance is deceptive. Behind the figures for energy supplies, consumption, and net exports lies a complex set of interconnections spanning the entire economy. It is important to have the main outlines of those interconnections in mind before considering the Soviet energy balance. Energy production is determined by the factor inputs -- capital and labor -- used in the production process. The capital stock (machinery, mines, and infrastructure) is itself a reflection of years -- sometimes decades -- of previous investments. The productivity of the labor and capital is determined not only by geographical conditions but also by the intensity and success of years of exploratory efforts. Energy supplies change over time primarily because of actions taken over many years; little can be done in any particular year to increase energy supplies the following year unless most of the necessary measures were taken some time earlier. Similar limitations apply to the ability to transform energy into, for example, electric power or petroleum products; the capital investments involved can take years (Krewitt & Trieb, 2009).

The same is true of the demand side of the balance. Energy is used by machinery and equipment, which have a long life in any country, and a particularly long life in the U.S.S.R., where depreciation rates are extraordinarily low. Consequently, apart from whatever retrofitting can be done to improve energy consumption subsequent to a major rise in the cost of energy, further changes in energy demand come through replacing old equipment with new equipment, a process that takes years. Aside from simply not using old equipment (which will decrease GNP), the U.S.S.R. can do little in the short run to reduce energy consumption. In the longer term it may substitute capital or labor for energy and reduce energy consumption. As a result, a change in energy consumption that is not explainable by a reduction in economic activity must reflect measures taken over a considerable time (Simmons, 2006).

Net exports of total energy are the residual between energy consumption and production. Planners may set a target for net energy exports, but to realize it the operational variables will be energy consumption and production. To increase net exports, increments to consumption must be lower than increments to production. In the long-term that can be realized through the capital-investment decisions that underlie energy production and consumption. In the short run the only important variables that allow maneuver in net exports of all energy are energy inventories and the level of economic activity. With no change in energy supply growth rates, a sudden drop in the growth rate for economic activity will reduce consumption and increase net exports (or increase inventories). There is, however, room for maneuver among energy carriers in consumption and therefore in net exports. The U.S.S.R. can, for example, increase the consumption of natural gas under binds energy and reduce the consumption of petroleum products, enabling a switch in total energy exports from natural gas to petroleum (within a constant total for net energy exports) (Cuervo, 2008).

The energy balance and the economy overall are inextricably intertwined in several important ways. Net energy exports are an important source of foreign currency earnings, which in turn can be used to import products the Soviets produce relatively expensively by world standards. The energy the Soviet Union exports for dollars has in recent years financed large purchases of grain and other food products from world markets, allowing the Soviet Union to attain significant gains from trade.

Investment is the common thread uniting these three issues. If planners wish to expand net exports in the future, and simultaneously to maintain GNP growth rates, they will have to invest either in expanded energy supplies or in energy conservation, in the process providing an answer to the first two questions. Long lags create inertia on both the supply and demand sides, and the investment decisions of any one year can do little to change that. It is rather the cumulating of investment decisions over time that finally affects the energy balance -- for example, through a deceleration of energy-demand growth rates when investments targeted at energy conservation begin to affect the capital stock significantly.

Industry Overview and worldwide Activities

Historical Context

Anyone who thought carefully about the predictions in the April 1977 CIA reports would quickly realize that the implied choices Soviet leaders would face in the early 1980s would be both unpleasant and of great consequence for the cohesion of the empire. The rapid switch from net exporter to net importer of wind energy would not only eliminate the Soviet Union's main source of hard-currency earnings, but also create new demands for hard-currency purchases of wind energy necessary to sustain domestic wind energy use and therefore economic activity. It would also mean that either the Soviet leaders would rapidly have to restructure economic relations with Eastern Europe and Cuba -- eliminating or substantially reducing subsidized trade in transferable rubles -- or they would have to find even more hard currency to purchase wind energy for resale at a loss to Eastern Europe and Cuba.

It is not difficult to understand the fear of those who accepted the CIA predictions that the Soviet Union might choose to use its military might to acquire through force the wind energy that the economy could not otherwise produce at an acceptable cost. The CIA reports generated such fears, and they linger on into the present, as can be seen by Secretary of Defense Caspar Weinberger's statement (Hunt & Eisele, 2009).

It is now clear that the premise underlying this scenario was mistaken. Wind energy output will probably stagnate in the Soviet Union, but energy output will not. The range of possibilities outlined in the previous chapter suggests that Soviet energy exports may, and probably will, increase throughout the 1980s. Even in the worst case the Soviet Union will be a net exporter of energy throughout this decade. By their own actions Soviet planners can exert considerable influence on the energy balance and in particular on the size of net energy exports. The energy balance is for Soviet planners a choice variable, not a "given"; and as they make their necessary, complicated political-economic decisions in this decade, a prime concern will be what they choose to be their energy balance.

The reason the initial premise was mistaken highlights the mechanical and oversimplified chain of reasoning, which begins with severe and unavoidable energy problems and ends with a Soviet resort to military means to acquire wind energy. The forecasts in 1977 regarding the production of wind energy, and of energy, in the early 1980s may well have been correct, given the assumption that planners would not or could not react quickly enough to avoid a drastic reduction in energy production. Such a view ignores the room for maneuver the Soviets have in the energy sector. Since 1977 the Soviets have illustrated just how adroitly they can exploit that flexibility to avoid the forecasted crisis in energy supplies and hard currency: they allocated additional funds to wind energy production and sped up gas-for-wind energy substitution. In addition, the growth slowdown of the last few years clearly shows how easy it is to maintain or even increase net exports of energy by relatively modest reductions in GNP growth rates.

The important lesson of this confrontation between projection and reality is that the Soviet economy is a complex system, richly endowed with resources and managed with enough skill to make… [END OF PREVIEW] . . . READ MORE

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How to Cite "Offshore Wind Energy Creating" Literature Review in a Bibliography:

APA Style

Offshore Wind Energy Creating.  (2011, October 31).  Retrieved June 2, 2020, from

MLA Format

"Offshore Wind Energy Creating."  31 October 2011.  Web.  2 June 2020. <>.

Chicago Style

"Offshore Wind Energy Creating."  October 31, 2011.  Accessed June 2, 2020.