With fuel prices at a record high, consumers and businesses worldwide are feeling the impact. The rising cost of gasoline and diesel is creating a domino effect that will trickle down the economy.
Why are Fuel Prices so High?
The surge in fuel prices is largely due to the jump in oil prices. Russia’s invasion of Ukraine and the international sanctions expedited the surge in fuel prices.
During the peak of the pandemic, the demand for fuel dropped so suddenly that production was briefly halted. When the economy reopened and manufacturing continued, the energy market surged in demand.
Most recently, Hurricane Fiona and Hurricane Ian have stirred havoc in Puerto Rico, Nova Scotia and Florida causing more than tens of billions of dollars and a death toll of over 100.
All of these factors are pushing fuel prices higher and expediting the need for renewable alternatives. “By 2026, global renewable electricity capacity is forecast to rise more than 60 percent from 2020 levels to over 4 800 GW – equivalent to the current total global power capacity of fossil fuels and nuclear combined,” states International Energy Agency (IEA) in their Renewables 2021 report.
Conflicts and Inflation Influencing Supply Chains
Russia is the world’s second largest producer of oil and natural gas. Without oil and gas supplies from Russia, global supply chains are finding fuel to be no longer as easily accessible, or no longer financially viable.
Increased diesel prices are causing a ripple effect across the world. In some areas coal is returning as an alternative, competing directly with renewables. Islands that rely on diesel to generate electricity have increased costs that are passed down to consumers. Inflation is surging on food and basic necessities with pricing to historic highs. The ongoing chip shortage is causing technology and auto manufacturers (including EVs) to rethink production strategies.
Renewable Energy as a Fuel Alternative
According to the U.S. Energy Information Administration, in 2019, approximately 63 percent of U.S. electricity was generated from fossil fuels. Battery Energy Storage and renewables now can produce energy at a lower cost than fossil fuels thanks to modern technologies. Commercial and industrial power consumers that rely on fuel to operate can leverage Energy Storage and renewable technology to minimize or completely remove fossil fuel dependency.
As the world shifts toward sustainable energy to combat unstable global oil and gas prices, Energy Storage will play a key part in decarbonization and becoming net-zero in the coming decades. By working with a commercial energy storage provider, businesses and international leaders can avoid the pitfalls that come with the unpredictable costs associated with fossil fuels.
Battery Energy Storage solution provider TROES is already playing a role in the increasing necessity for decarbonization and becoming net-zero in the coming decades.
TROES designed an off-grid battery energy storage system to optimize a farm’s diesel generator to provide immediate support when needed, decreasing maintenance, carbon emissions, and cost.
“Our storage solutions are able to store electricity from renewables, conventional generators, or the grid making energy storage a versatile option to maximize bill savings and offer safety and resilience,” says CEO of TROES Corp. Vienna Zhou. “During the summer, an integrated solar PV combined with an energy storage system will completely reduce our client’s fuel consumption.”
Headline image: Farm utilizing battery energy storage system