International Energy Policy Promoting the Use of Renewable Energy

Question: Using the PESTER analytical tool, critically analyse the impact of the Renewable energy policies of any developed economy on any OPEC member states energy policy. Answer: Introduction Renewable energy resources are mainly collected from the resources that are replenished naturally on a human timescale. Renewable energy resources exist over a broad geographical area as compared to the other energy sources. The rapid deployment of the renewable energy results in the considerable energy security as well as mitigation in the climatic change. The increase in the renewable energy legislation is taking place due to the change in the climate and global warming. Energy supply from renewable is an indispensable component of the strategy of every nation. The renewable technologies are suited to rural and remote areas (Ellabban et al. 2014). The Organization of the Petroleum Exporting Countries (OPEC) is an enduring intergovernmental organization. The main objective of OPEC is to organize and unify the petroleum policies among the member states. The focus has been given on the impact of developed country that has evaluated on the oil producing UAE states for the power generation and the effective use of renewable energy policies (Moran 2015). Discussion UAE has become a key player in clean technologies, thus funding large-scale renewable energy projects. The hydrocarbon market in UAE is undergoing the most noticeable change with subsidiary effects for renewable energy. The UAE is one of the largest hydrocarbon reserve holders in the world. The UAE is also the third largest exporter of oil in the world (Jamil et al. 2016). In UAE, the high per capita consumption of oil and gas is mostly due to the low cost of production and the domestic pricing. The UAE also shares a common interest with the UK in the environmental matters. The UK and UAE are also to work together to enhance the future generation. Abu Dhabi is leading the renewable drive with a target to obtain 7 percent of its energy from renewable by the year 2020. Abu Dhabi is also the home to the Global Renewable Energy Agency. UAE has also organized a number of innovative renewable energy projects all through the country. With the help of Masdar, UAE has also become the major investor in the renewable energy projects in the UK (Gov.uk 2015). The UK has been blessed with a wealth of renewable energy resources. The scope of the energy policy includes the distribution and the production of electricity and natural gas. According to the reports, there have been a number of changes to renewable energy policies during the year 2015 and 2016. The UK has a target to source 15 percent of final energy consumption from renewable energy by the year 2020. Under the EU Renewable Energy Directive, the UK exceeded the provisional target of the year 2013/2014 with a 6.3 percent share of renewable. On the other hand, UK will meet the 2020 target as per the European Commission 2015 Renewable Energy Directive report (Batel and Devine Wright 2016). In the UK, almost 25 percent of electricity was generated from renewable. This resulted in the rise of almost 30 percent from 19 percent in the year 2014. The recent significant change in the renewable energy policy instruments in the UK will have an impact on the level of deployment. Renewable Obligation (RO) is the part of the UK renewable energy policy that was announced by the government in the year 2015. However, later it was announced that RO would be closed by the year 2016 for new PV projects of a capacity of five MW. The RO was mainly closed for the onshore installation of wind from the year 2016. However, it was onshore installation of wind was planned in the year 2017 but was commenced by 2016 (Bunn and Yusupov 2015). Contract-for-Difference (CFD) replaced the RO. The first allocation of CFD was initiated in the year 2014 and the results were announced in the year 2015. Although, the second round for the allocation was scheduled for the year 2015 it was cancelled. Later, in the month of November 3 CFD rounds were announced to take place in the year 2020 (Onifade 2016). The small-scale renewable electricity installations were supported by Feed-in tariffs (FITs). According to the reports, in the recent year there has a rapid consumption of solar PV due to attractive support tax. The government became worried about the increasing cost of the scheme. As a result, the government implemented tariff cuts of 65 percent. The first Feed-in tariff is Renewable Heat Incentive (RHI) for renewable heat that was introduced globally in the year 2011. Later, the government declared that the RHI scheme would be extended to the 2021. As a result, the budget needs to be increased to 1.15 billion in the year 2021 (Cherrington et al. 2013). The recent change in the policy was mainly aimed to diminish the expenditure that was generated by the renewable energy support program. The policy changes also aimed at creating a policy framework that allows for a better cost and capacity control. This will in turn help to reduce the electricity bills of the customers (Smeed 2016). The PESTEL Analysis is a framework that is used to monitor the macro-environmental factors that has an impact on the organization. The essay will provide an overview about the impact of the Renewable energy policies of the UK on UAEs energy policy. Political factors are the long-term decline in the oil and gas fortune in the UK has led to the increase in the import of oil and gas. As a result, the UK needs to compete in the world market for its oil and gas requirements. On the other hand, renewable energy has become inexpensively attractive in the oil-rich United States of Arab. The UK thus needs to maintain a good relationship with UAE to fulfill its energy resources requirements. The supply of the energy resources in the UK can become a political issue in the future. The UAE also has the most ambitious renewable energy program. Hence, the UK can establish the Contract-for-Difference with UAE in order to get low cost benefits of energy resources (Yusuf et al. 2014). The drastic rise in the rate of unemployment in the UK is one of the most important economic factors that led to the decline in the consumption of energy. The energy prices also increased rapidly and as a result, the rate of inflation increased. In UAE, the waste-to-energy conversion has become profitable with natural gas prices above USD 8 per million British thermal units. Hence, the development has provided economic reasons for UAE to accelerate the development of renewable energy. The renewable energy is economically attractive in the UAE. In UAE, the increase in price of the natural gas and the decrease in the cost of renewable energy are the key drivers (Bosmans et al. 2013). The social factor that is militating the development of the renewable energy project is the problem in getting the planning permission. The renewable energy is considered as the solution to the climatic changes in the world. The UK and UAE needs to form an association of the Contract-for-Difference, with the help of which the UK will be able to affect UAE with the renewable resources. The UAE provides a strong support of its commitment in order to deliver the renewable energy and carbon reduction targets. The technological factors deal with the growing demand of the renewable energy that generates a need for the individuals with appropriate skills. The key stakeholders in the oil and the gas industry are the key player that leads to the development of the renewable energy sector. The company in the UK employs the latest technology and the skilled workers that leads to the technological development in the renewable energy resource (Kern et al. 2014). The environmental factor is that the success of the renewable energy is always questioned by its scope. However, UAE seems to be progressive on clean energy. The UAE leaders had announced a partnership with the UK to tackle the energy scarcity in the developing world. The Green code regulations developed by DEWA and Dubai Municipality aims at reducing the electrical energy. A project known as the Wind for Prosperity project will offer a carbon-free electricity. The carbon-free electricity will be mostly provided to the country that mostly uses the expensive diesel generators for power (Rakhshan et al. 2013). The legal factors that affect are the administrative obstacles in the form of protection zone. It is relatively low feed-in-tariffs. In the UK, the energy laws mainly govern the use as well as the taxation of energy. According to the UK renewable energy strategy, the electricity produced in 2015-2016 has been 25 percent, which has been more than its quota. The energy laws mainly includes the legal stipulation for oil, gas etc. The UAE also has some laws that are concerned with the energy mainly oil and gas law. As per the law, all the oil and gas wealth belongs to the government (Devine-Wright 2014). The government is also undertaking the renewable energy projects in UAE in order to free up oil and gas for export. This is also been done to meet the increasing demand of power and water. As per the reports, the UAE is one of the biggest renewable markets in the world. The UAE is also known to have a strong exposure to the unfavorable impact of the anthropogenic climate change. Hence, there is a strong demand for water in UAE. As a result, there will be a demand for electricity that will be mostly generated by the UK. A survey was conducted by electric utility week and it was found that today most of the customers are facing problem due to the high cost of energy (Al-Amir and Abu-Hijleh 2013). Both the UK and UAE had signed a fund mutually of 1 million for the purpose of research into renewable energy policy. The International Renewable Energy Association has established itself as an international base for energy knowledge in the year 2010. International Renewable Energy Association will act as a clearinghouse on the obtainable renewable energy technologies. The renewable policy that could be best suited for the renewable energy policy will be a mix policy system of FITs and Contract-for-Difference (CfD) creating Renewable Heat Incentive (RHI) for the UAE (Tolba 2013). The UAE is also facing the first-ever shortage of low cost gas and consequently, UAE has been able to produce related gas for less than 2/MBtu3. Electricity demand in the UAE displays a robustly seasonal consequence due to the transform in ambient temperature and humidity. The power markets in the UAE are mostly described by the cogeneration for desalination. Conclusion It can be concluded that UAE is the third largest exporter of oil in the world and as a result. The renewable energy policies on present situation will help the UK to achieve its 2030 target and it will also create environment for UAE in power generation for all the member states. In UAE, the rise in price of the natural gas and the decrease in the cost of renewable energy are the major drivers. It has been found that the renewable energy has become inexpensively attractive in the oil-rich United States of Arab. References Al-Amir, J. and Abu-Hijleh, B., 2013. Strategies and policies from promoting the use of renewable energy resource in the UAE.Renewable and Sustainable Energy Reviews,26, pp.660-667. Batel, S. and Devine Wright, P., 2016. 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