Is the Energy Transition to blame for high energy prices?

We reviewed the challenges of the Energy Transition in prior posts. There is no doubt that managing the Energy Transition will be a challenge for organizations. Communities, affordable housing providers, businesses and homeowners faced rapidly rising energy prices in 2022. Heating bills are up 28%, gasoline is up 33% and electricity is up 8%. If the transition is a challenge, then why not go back to the status quo, increase the production and consumption of fossil fuels? Are policy and politics to blame?

The world is not going to cut off the use fossil fuels anytime soon. They are the dominant source of energy on the planet, they are critical to long distance transportation and they provide efficient, cost effective heating. However, fossil fuels no longer hold a monopoly on energy investment.

• Electric Vehicles outperform gas driven cars on the total cost of ownership (Consumer Reports Electric Vehicle Ownership Costs).

• The cost of wind generated electricity is on par with natural gas (Alberta Electric Systems Operator, 2021 long term outlook).

• The cost of solar has dropped by 90% from 10 years ago (University of Calgary 2021)

Electrification and renewable energy have serious momentum. That momentum will draw investors away from fossil fuels at a rate that politics and policy can not. Unfortunately for consumers, the competition for investment may lead to volatile prices as renewable capacity is built and oil and gas investment declines.

Our advice to organizations facing this Transition. Don’t worry about where your energy comes from. Use your energy wisely. Saving Energy is your best investment!