Energy Security and Independence

In this world of ours, you’d be hard-pressed to find a country that is entirely independent when it comes to resources, trade, labour, and even energy. In the case of countries that rely on others to supply them with natural gas, oil or electricity, they are often at the mercy of changes in energy prices and policies that can drastically affect their own. As such, many countries are pursuing avenues in which to decrease their dependence on foreign oil and gas imports through energy reduction, becoming self-sufficient in terms of energy production, and by diversifying their energy generation with more clean and renewable sources. This is something in which all countries must pursue, not just for the sake of economic and political stability, but also for the sake of the planet.

The most recent example of energy dependence backfiring horribly is Ukraine. Russia is the Ukraine’s biggest natural gas supplier by far and has supplied Ukraine with natural gas since the latter’s independence. As a result of the ongoing crisis in Crimea, Russia has threatened to increase Ukraine’s gas prices by 44%. Such an increase could potentially cost Ukraine an additional $2.5 billion (US), which is the main reason why Ukraine is now looking westward to France and Germany to supply its natural gas.

Ukraine imports most of its natural gas from Russia and now finds itself in a very heated political standoff.

According to the US Energy Information Administration, 40% of Ukraine’s energy comes from natural gas and of that natural gas, around 60% was imported from Russia. It’s no wonder then that Ukraine’s energy fate is so closely tied with Russia’s foreign policy. In order to counter this, last August, the Ukrainian government approved an updated energy strategy through to 2030 shifting from natural gas to more nuclear, coal (of which Ukraine has a lot), and more renewable sources. Unfortunately, Crimea was supposed to play a large role in securing Ukraine’s domestic energy production, and with the ongoing crisis, those plans are now in jeopardy.

Island nations are also particularly vulnerable to sudden changes in fuel prices. Many countries in the Caribbean import diesel for electricity so when the price of fuel increases, they have few alternatives but to increase the price of electricity. As such, electricity prices in many Caribbean islands are often more than $0.42/kWh (nearly triple the amount most Europeans and Americans pay). In Anguilla, they pay an astronomically high $0.63/kWh!

Anguilla_2614585b

Anguilla, blessed with beautiful beaches, and incredibly high electricity prices.

Such energy inflexibility is the main reason why the Caribbean region is now getting more than $1 billion in loans to fund renewable energy, particularly wind and solar. Spearheaded by billionaire philanthropist Richard Branson, these loans are to help reduce electricity bills amongst some of the more impoverished people in North America, and at the same time, help the region become more sustainable and less vulnerable to sudden shifts in fuel prices.

Photographer: Robert R Gigliotti

Wind farm at Vader Piet, Aruba. There is a lot of wind power potential in many Caribbean islands.

Some countries (such as Canada) are rather fortunate to have a plethora of natural resources in its own backyard. Other countries, not so much, and there will always be countries that need to rely on neighbours to provide what they cannot create themselves, but even so, that shouldn’t stop countries that have fewer options from exploring potential options.

It is absolutely paramount that countries around the world begin to shift from energy importers to energy producers. And so long as they are relying on non-renewable sources like oil and natural gas, their fate will be tied to fuel prices. The more we rely on finite resources to spur our economic growth, the more vulnerable our economic prosperity becomes. Along with a shift from importer to producer, we must also rely on clean and renewable sources like wind and solar. The sun and wind aren’t subject to market variability, only natural fluctuations, which are much easier to predict. If we start to depend more on dependable resources, energy independence becomes much easier.

It’s tough to be in manufacturing these days

It’s pretty difficult for manufacturers in North America to compete.  This is nothing new to this industry, but it doesn’t make it any easier to manage.  Recently in Ontario we have seen some very high profile manufacturing plants close and move operations to some other jurisdiction.  In both these cases, these jobs stayed within North America, but the plants were closed for the same reason…to reduce costs.

Energent was created when our manufacturing clients wanted to understand their energy use, with the ultimate goal of reducing their energy costs.  Since 2007, we have been working with manufacturing clients to help them achieve these two primary goals:

  1. Better understand where their energy is being spent
  2. How to reduce the cost of energy and maintain production

We receive the most interest from manufacturers when times are tough and they are looking for every possible savings opportunity.  Energy is rarely thought of as a manageable expense, but that is changing every day.

Electricity and Natural Gas are already an important part of most manufacturer’s budget considerations.  Most VP’s of production in manufacturing facilities pay their energy bills without consideration of how to change them.  We often hear

We can’t change production schedules to accommodate energy costs.  How else can we manage this expense?

Energy management comes in all forms, including altering productions schedules when that is feasible.  When it’s not, information on energy’s contribution to each production line highlights where savings can be found.

In a case study on our website showcases how a simple analysis of furnaces in different production lines produced savings in the first year of $240,000!  No change in production, no costly retrofits.  It was found that one furnace was significantly less efficient than the other furnaces, and once the furnace manufacturer repaired the furnace,  their natural gas consumption significantly dropped, with no change in production.

As manufacturers continue to look for innovative and impactful cost reductions, energy can become a manageable expense and a strategic opportunity to increase profits.  We are committed to supporting the manufacturing sector and will do what we can to offer cost-effective solutions that support this important economic engine.

Thanks for reading