“Fossil fuels have, throughout the past century, provided a cheap and pretty reliable source of energy that has fuelled economic growth and provided freedom. Ultimately, the more we pay for our energy, fossil fuel or renewable, the less money we have to spend elsewhere and this will impact economic growth.”
A long way to go
Despite governments' moves towards renewable energy, many countries are still almost wholly dependent on fossil fuels on a day-to-day basis.
This has been proven by events in Ukraine and the recoil of consumers at the price of energy, both oil and gas. In 2020, petrol and diesel vehicles still made up more than 70 per cent of all new car registrations in the UK.
And while this has fallen from 92 per cent in 2018, Baynes says the country still has a long way to go before we reduce our reliance and addiction to fossil fuels: “As a result, fossil fuels will continue to play a significant role in the transition to greener energy, perhaps even more so if prices continue to rise and the demand for potentially cheaper alternatives increases.”
Scott Gallacher, director at Rowley Turton, says: “The convenience and reliability of oil and gas mean that they will remain an important part of our energy policy for some time to come; hopefully with carbon capture technology to offset the negatives.
“However, as alternative energy sources become more and more available, with low marginal costs, the need and desire for oil and gas should decrease.”
While there has been a big shift to transition to renewable energy, the war in Ukraine has set off a rush in Europe to find alternatives to Russian oil and gas, with some calling for an expansion of nuclear power.
Just last week the UK government finally published its energy strategy, which has placed even greater emphasis on nuclear energy, with plans to build up to eight more nuclear reactors as well as to increase the production of wind, hydrogen and solar energy.
Though many shy away from defining nuclear as a 'renewable energy', it is a low-carbon fuel that is significantly cleaner than coal or gas-fired power stations.
It also has the added benefit that it is not reliant on the sun or the wind to provide power when it is needed. Compared to solar, wind and hydro, the physical footprint of nuclear energy is lower and can produce more electricity per square foot than many other clean-air sources.
Conversely, power stations are seen as incredibly costly and slow to build and are potentially hazardous.
Interactive Investor's O'Connor says although it takes years to build reactors, in a grid dominated by renewables, nuclear can help balance out intermittency from other sources of renewable energy where there is not a sufficient mix of sources available to guarantee supply.
