Loading

Module 1: Energy Economics and Renewable Energy Sources

Notes
Study Reminders
Support
Text Version

Energy Economics and Renewable Energy Sources - Lesson Summary

Set your study reminders

We will email you at these times to remind you to study.
  • Monday

    -

    7am

    +

    Tuesday

    -

    7am

    +

    Wednesday

    -

    7am

    +

    Thursday

    -

    7am

    +

    Friday

    -

    7am

    +

    Saturday

    -

    7am

    +

    Sunday

    -

    7am

    +

The key points from this module are: The McKelvey diagram is the diagram which shows the basics by which we classify the resources. Proven reserves mean the reserves are known quantities and this could be which have been already measured. Whenever we have these estimates, it is given in terms of proven, indicated and inferred. As the technologies change, things which were not economic earlier can become economic. Between reserves, there is this concept of reserves and resources, resources are maybe known occurrences, but they are currently not economic to extract. So, resources are a slightly larger term which has a larger value and resources. There are two kinds of beliefs about resources. One is that if we look at a finite amount of reserves, which is there in the ground and if we look at a finite amount of reserve and we know that we have a particular kind of extraction pattern, we can estimate then how much time that extraction will occur. Geological Survey is the identified accumulation that can be extracted profitably under present economic conditions, that is the result and resources are the reserves, plus all accumulations that may eventually become available. They are maybe today undiscovered but currently not technically or economically viable. Adelman says the total mineral in the earth is an irrelevant non-binding constraint if expected finding minus development costs exceed the expected net revenues investment dries up and the industry disappears. Whatever is left in the ground is an unknown, probably unknowable, but surely unimportant geological fact of no economic interest. In the McKelvey’s paper, he talks about two different models of any resource and you have a close market where initially because of the economies of scale, the prices can go down and then and depletion results in higher prices and as a result of this, the demand rises while prices fall and then as the depletion goes up and then the production rate goes down. In the supply curve approach, we estimate at with different kinds of technologies what kind of reserves are available. So, this is the case for the conventional oil enhance oil recovery, tar sands and others and so on. One can have essentially different elements of it, which relates to price and supply and for each of these when we talk about stocks, we talk about a supply curve at different price levels and the kind of costs which are available. Renewable which means that the rate at which resources are being renewed is much faster than the rate at which we are using them and so for all practical purposes they are inexhaustible and renewable and in such cases, the rules or the way in which we analyse these resources will be different and most of these actually are flow, not stocks. Most of the solar is happening in mostly in the west and the south-east and north-east relatively have less solar radiation, so we have this situation where when we talk about fossil fuels, it was mostly in the east and little bit in the centre most of the solar and the wind is happening more in the west and the south, so there is a sort of regional disparity in terms of the kind of resources which are available.