1. Critically examine the framework of the energy policies.
2. Demonstrate the key global challenges and issues facing the world oil and gas industry and the factors affecting the long term prospects Percentage.
The energy that is collected from the resources that are replenished naturally on the human timescale is termed as the renewable energy. The renewable energy provides the energy in four important areas such as the generation of electricity, the heating and cooling of water and air, the energy services in the rural areas and transportation. Most of the renewable energy comes directly as well as indirectly from the sun. Hence, the solar energy is generally used for heating and lighting the buildings as well as for the generation of electricity (Aghaei and Alizadeh 2013)
The organization of the petroleum exporting countries that is OPEC was founded in Baghdad. The organization was mainly formed by signing an agreement with five countries namely The Republic of Iran, Iraq, Kuwait, Venezuela and Saudi Arabia. The renewable energy resources had continued to grow from the year 2014 against the environment that involves the increase in the consumption of the global energy. As per the reports, the organization of the petroleum exporting countries has the largest oil reserve in the world with the rising resource discoveries (Griffin and Teece 2016).
The use of the renewable energy needs to be radically increased in UK. The UK has been blessed with a wealth of energy resources. The UK has a target to source 15 percent of the final consumption of energy from the renewable energy under the EU Renewable Energy Directive (RED) by the year 2020. An interim target of the year 2013/2014 was exceeded by the UK under RED. As per the recent report, a number of noteworthy changes in the renewable energy policy instruments in the UK will have an impact on the exploitation level (Twidell and Weir 2015).
Renewable Heat incentive (RHI)
The first Feed-in-Tariff in the world for renewable heat is the RHI that was introduced in the year 2011. It was announced by the government that the RHI scheme would be extended to 2020/21. As a result, the budget is also likely to increase to £1.15 billion by the year 2020/21. As per the reports, small thermal installations will no longer be entitled under the RHI from the year 2017 (Snape et al. 2015).
Renewable Obligation (RO)
As per the reports, the RO will be closed for new PV projects of 5 MW capacity. The RO scheme will be completely closed for new application by the year 2017 (Bunn and Yusupov 2015).
Contract-for-Difference (CFD)
The Contract-for-Difference is replacing the RO that is the renewable obligation. The first allocation of the CFD took place in the year 2014. In the year 2015, the further round of CFD was announced to take place by 2020 (Onifade 2016).
Feed-in tariffs (FITs)
The small-scale renewable electricity installations are supported by the FITs. This in turn leads to the rapid operation of solar PV due to the attractive support tariffs in the latest years. In the present year, the government implemented a tariff cut of 65 percent as the government became aware about the increasing cost of the scheme. The solar PV installation plummeted by 75 percent in the early 2016 as compared to the year 2015 (Jenner et al. 2013).
Political factors: In terms of the macroeconomic situation, Venezuela is among the most vulnerable producers of renewable energy resources. In spite of that, Venezuela has an unexpected endowment of resource that offers major opportunities to the country. Venezuela is looking to add itself to the renewable energy map.
As per the report, the low cost energy resources are benefited by Venezuela. This will in turn help UK to become beneficial and establish in the energy resource portfolio. The government in Venezuela conducted the political programs to deal with the reduced resources that PDVSA had on hand in order to invest in new sources of production. The government used the revenues to spend on the social programs. The governments in Venezuela also have sent low cost to associates in the region (Pietrosemoli and Monroy 2013).
Economic factors: The demand and supply influences the price of the renewable energy. The demand for fuel is influenced by the variation of the transport activities in Venezuela. With the passing time and investment, Venezuela is becoming a key player in the international energy marketplace. This in turn will lead Venezuela to become the major supplier of energy resources for UK (Scheer 2013).
As per the reports, more than 10 companies in the UK visited Venezuela in order to discover the probable alliances in the Renewable energy resources sector. On the other hand, the economy of Venezuela has become more dependent on the export of oil reserves as the prices collapsed. The Renewable Obligation of the UK will encourage Venezuela in terms of the generation of electricity.
Social factors: Highly expanded large and medium companies in areas characterize the oil and gas industry in UK. However, Venezuela has the largest established reserves of crude oil in the world. The renewable energy policies will prove to be beneficial for both UK and Venezuela. The social factor determines that the need for energy resources in Venezuela is the enviable form of the energy production. Although, Venezuela is rich in the energy resources however, they have little awareness about the sustainability issues (Mansilla 2016).
Technological factors: Venezuela is making the use of the offshore technology to reinforce the relationship with the UK. The relationship will help to provide support for PDVSA’s plan of production. Both the UK and Venezuela had several meetings between them in order to explore the business opportunities and to reinforce the business links. This in turn will help the UK companies to expand into Venezuela. The refining and the retail arm had begun to sell the subsidized heating oil to the disadvantaged communities in the UK. PDVSA will also help the UK to receive the oil reserves at a reasonable price (Cocco and Ernandez 2014).
Environmental factors: As reported, Venezuela has faced large oil pollution. The environment in Venezuela has been affected by the pollution. Importing the renewable sources from UK suits the environment in Venezuela that is based on the Renewable Heat incentive (RHI). The renewable energy project in Venezuela can be described in terms of the potential impact on the environment.
The intensity of the impact of the environment varies depending on the precise technology that is used. The environmental impacts in both the UK and Venezuela are associated with producing power from renewable sources such as geothermal, biomass and hydropower. Venezuela is also known to provide hydropower that accounts for more than 66 percent in the world. As a result, the UK can be benefited from the use of the hydropower.
Legal factors: The structure of the national energy that mostly outlines the issues related to price and the demand are dealt by the legal factors. In this case, the Feed-in tariffs renewable energy are best suited policies due to the open market structure. More than 15 percent of the requirements of the energy resources in the UK are met with the help of Venezuela. Venezuela has been manufacturing oil for nearly a century under the OPEC founder member. There has also been a shift in the oil policy that is strictly followed by Venezuela as per the OPEC production quotas (Colgan 2014).
Venezuela was established as a socialist management model that grants the state the monopoly of generation under the Electricity Law. In the year 2013, Venezuela tried to establish the law by starting a procedure to use alternative energy resources. A draft plan for the long term development of the renewable energy was developed. The development of the renewable energy will in turn help the UK. In the year 2011, the law of rational and the efficient use of energy specifies that the ministries responsible of housing and energy will equally promote the use of the renewable energy for the use of thermal (Schmid et al. 2016).
The Energy Industries Council or EIC has formed a partnership between the UK Embassy Caracas and Venezuela to organize the renewable energy sources. As a result, the delegates will get the opportunity to be present at the group meetings which are organized with the major domestic players. Venezuela has the largest renewable energy resources in the world. The country also has the plan to develop the strategic reserves of oil and gas by making a huge investment. In the year 2011, Development Plan for the National Electric System from the year 2013-2019 was initiated by Venezuela. This will lead to the development of the renewable energy resources as a long-term (from the year 2014-2033) as well as the medium-term (from the year 2013-2019) goal (Podobnik 2015).
The development plan sets a target of 613 MW out of which 500MW will be from wind power. In the year 2001, the law of electricity led to the generation of electricity by the self-governing producers. According to this law, Venezuela needs to consider the competence and the use of the renewable energy in the stipulation of electric service. In the year 2011, the development plan for the electric system was developed for the year 2019. It aims to astonish the communities farther than 70 km from the grid with the renewable energy.
The renewable energy policy also includes the sowing light that was initiated in the year 2005. The aim of the sowing light is to provide energy and water services in the distant areas with the help of the solar PV as well as the hybrid systems. With the help of the program, ten network renewable energy services have been established (Al-Saggaf 2015).
Conclusion
It has been concluded that Venezuela has been manufacturing oil for nearly a century under the OPEC founder member. Venezuela has an unexpected endowment of resource that offers chief opportunities to the country. According to the report, Venezuela was established as a socialist management model that grants the state the monopoly of generation under the Electricity Law.
The renewable energy project in Venezuela can be described in terms of the probable impact on the environment. Under the renewable energy policies in the UK, a number of remarkable changes in the renewable energy policy instruments in the UK will have an impact on the exploitation level. Venezuela also tried to establish the law by starting a procedure to use alternative energy resources in the year 2013.
References
Aghaei, J. and Alizadeh, M.I., 2013. Demand response in smart electricity grids equipped with renewable energy sources: A review. Renewable and Sustainable Energy Reviews, 18, pp.64-72.
Al-Saggaf, H.A., 2015, December. Renewable energy and grid integration. In2015 Saudi Arabia Smart Grid (SASG) (pp. 1-8). IEEE.
Bunn, D. and Yusupov, T., 2015. The progressive inefficiency of replacing renewable obligation certificates with contracts-for-differences in the UK electricity market. Energy Policy, 82, pp.298-309.
Cocco, M.J. and Ernandez, J.E., 2014, September. Reservoir Characterization of Junín Area, Orinoco Oil Belt Region, Venezuela. In SPE Heavy and Extra Heavy Oil Conference: Latin America. Society of Petroleum Engineers.
Colgan, J.D., 2014. The emperor has no clothes: The limits of OPEC in the global oil market. International Organization, 68(03), pp.599-632.
Griffin, J.M. and Teece, D.J., 2016. OPEC behaviour and world oil prices. Routledge.
Jenner, S., Groba, F. and Indvik, J., 2013. Assessing the strength and effectiveness of renewable electricity feed-in tariffs in European Union countries. Energy Policy, 52, pp.385-401.
Mansilla, D., 2016. Venezuela and the International Crisis. In Latin America after the Financial Crisis (pp. 193-227). Palgrave Macmillan US.
Onifade, T.T., 2016. Hybrid renewable energy support policy in the power sector: The contracts for difference and capacity market case study. Energy Policy, 95, pp.390-401.
Pietrosemoli, L. and Monroy, C.R., 2013. The impact of sustainable construction and knowledge management on sustainability goals. A review of the Venezuelan renewable energy sector. Renewable and Sustainable Energy Reviews, 27, pp.683-691.
Podobnik, B., 2015. Global energy inequalities: exploring the long-term implications. journal of world-systems research, 8(2), pp.252-274.
Scheer, H., 2013. The solar economy: Renewable energy for a sustainable global future. Routledge.
Schmid, W., Martin, A. and Palacios, J.M., 2016, June. Comprehensive Approach of Reservoir Characterization has Allowed Successful Stimulation of Sandstone Formations in Bachaquero Field-Lake Maracaibo, Venezuela. In SPE Trinidad and Tobago Section Energy Resources Conference. Society of Petroleum Engineers.
Snape, J.R., Boait, P.J. and Rylatt, R.M., 2015. Will domestic consumers take up the renewable heat incentive? An analysis of the barriers to heat pump adoption using agent-based modelling. Energy Policy, 85, pp.32-38.
Twidell, J. and Weir, T., 2015. Renewable energy resources. Routledge.
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