Breaking barriers in deployment of renewable energy (2024)

4.1. Social barriers

The transition from conventional resources to renewable energy has encountered public resistance and opposition. This is due to a lack of awareness of the benefits of renewable energy, disruption of seascape, and acquisition of land which could have been used for agriculture, tourism, etc. (Goldsmiths, 2015).

Public awareness and information barriers: Sustainable development stems from the satisfaction of human desires, through socially recognized technological systems and suitable policies and regulatory tools (Paravantis etal., 2014). The main concerns with respect to public understanding are: 1) insufficient information regarding ecological and financial benefits; 2) inadequate awareness of renewable energy technologies (RET); and 3) uncertainties about the financial feasibility of RE installation projects (Nasirov etal., 2015).

Not in my backyard’ (NIMBY) syndrome: According to NIMBY syndrome, people do support renewable energy generally, but not in their own neighbourhood. Renewable power project proposals often face opposition from individual citizens, political leaders, grassroots organizations, national interest groups and, in some cases, even environmental groups (Jianjun and Chen, 2014). Public opposition occurs for a number of reasons, including landscape impact, environmental degradation and lack of consultation concerns among local communities (Nasirov etal., 2015).

Loss of other/alternative income: A major issue with renewable plants (especially solar and wind farms) is the vast area of land required to produce an amount of energy equivalent to that which can be produced from a small coal fire power plant (Chauhan and Saini, 2015).

To make a significant contribution to global energy consumption, there is a need to develop large scale renewable energy plants, but this requires vast areas of countryside. Enormous parts of the countryside, which includes farmland, need to be converted into buildings or roads or any other infrastructure to support a renewable energy power plant. In achieving this, often agriculture, tourism, fishing, etc. can be affected (Nesamalar etal., 2017).

Lack of experienced professionals: Universal transition from fossil fuels to renewable energy sources requires the solid foundation of a skilled labour force. There is huge demand for skilled professionals to design, build, operate and maintain a renewable energy plant.

Incompetent technical professionals and lack of training institutes prevent renewable energy technologies from scaling new heights (Ansari etal., 2016). There is a need to teach renewable energy courses and for proper training to be conducted to develop the skills required to install and operate renewable energy projects. The shortage of trained workforce to design, finance, build, operate and maintain renewable energy projects is considered a major obstacle to the wide penetration of renewable energy (Karakaya and Sriwannawit, 2015).

4.2. Economic barriers

Factors influencing economic and financial barriers are high initial capital, lack of financial institutes, lack of investors, competition from fossil fuels, and fewer subsidies compared to traditional fuel (Raza etal., 2015). These factors have prevented renewable energy from becoming widespread.

Tough competition from fossil fuel: Fossil fuels will remain a dominant player in supplying energy in the future. A report by EIA's International Energy Outlook (2016) suggests that fossil fuels (oil, natural gas and coal) are expected to supply 78 per cent of the global energy used in 2040. Investment in fossil fuels (including supply and power generation) still accounts for 55 per cent of 2016 global energy investment, compared with 16 per cent for renewable energy. Coal is still a dominant fuel source in most counties because of its abundance, which makes it cheap and accessible (Dulal etal., 2013). There have been huge changes in energy since summer 2014. Oil, as measured by the Brent crude contract, which was priced at $115.71/barrel in June 2014, fell to $27.10 on 20 January 2016, a huge drop of 76 per cent. Similarly, the ARA coal contract dropped from $84/tonne in April 2014 to $36.30 in February 2016. There was a huge decline in the price of natural gas, which slid from around $4.50/MMBtu in June 2014 to $1.91 in mid-February 2016. Due to falling prices and fossil fuel still emerging as a cheaper alternative to renewable energy, it is able to offer tough competition to renewable energy projects.

Governmentgrantsand subsidies: The amount of government subsidies provided to conventional energy is much higher than the subsidies awarded to renewable energy. This keeps renewable energy at a disadvantage. The subsidies provided by governments to generate electricity from fossil fuel sources is overshadowing the wide use of low emission technologies. For example, coal companies in Australia and Indonesia still receive government subsidies for mining and exploration (Dulal etal., 2013).

Fewer financing institutions: Renewable energy developers and producers face severe difficulties in securing financing for projects at rates which are as low as are made available for fossil fuel energy projects (Ansari etal., 2016). There are limited financial instruments and organizations for renewable project financing. This reflects that the investments are considered somewhat risky, thus demotivating investors (Ohunakin etal., 2014).

High initial capital cost: Renewable energy projects require high initial capital cost and, because of the lower efficiency of renewable technology, the net pay back period is high, which in turn pushes investors on to the back foot (Ansari etal., 2016). Both the users and the manufacturers may have very low capital and to install a plant they require capital financing. This problem is further highlighted by the strict lending measures that restrict access to financing even when funding is available for traditional energy projects (Suzuki, 2013). High cost of capital, often lack of capital and most important with high payback period projects often becomes un-viable (Painuly. J, 2001).

Intangible costs: Currently, in almost all countries, the total cost of fuel includes the cost of exploration, production, distribution and usage, but it does not include the cost of the damage it does to the environment and society. Despite severe effects on health and on the atmosphere, the unseen costs (externalities) which are connected with traditional fuels are not included in their price (Arnold, 2015). Understanding these impacts is essential for evaluating the actual cost of utilizing fossil fuels for energy generation.

4.3. Technological barriers

There are a number of legitimate technological barriers to the widespread deployment of renewable energy, including limited availability of infrastructure, inefficient knowledge of operations and maintenance, insufficient research and development initiatives, and technical complexities like energy storage and unavailability of standards (Zhao etal., 2016).

Limited availability of infrastructure and facilities: There is limited availability of advanced technologies required for renewable energy, especially in developing countries, which acts as a factor preventing penetration of renewable energy. Even if this technology is available, the cost of procuring it is very high (Dulal etal., 2013). Since renewable energy power plants are mostly placed in remote locations, they require additional transmission lines to connect to the main grid. Since most of the existing grids are not designed to integrate with renewable energy, these existing grids need to be upgraded or modified (Izadbakhsh etal., 2015). Grid integration is amongst the biggest problems affecting the development of renewable energy projects.

Lack of operation and maintenance culture: Since renewable energy technology is comparatively new and not optimally developed, there is a lack of knowledge about operation and maintenance. Efficiency cannot be achieved if a plant is not optimally operated and if maintenance is not carried out regularly (Sen and Bhattacharyya, 2014). Lack of availability of equipment, components and spare parts will require a substantial increase in the production costs, as these items need to be imported from other countries, therefore being procured at high prices and so increasing the overall cost (Bhandari etal., 2015).

Lack of research and development (R&D) capabilities: Investment in research and development (R&D) is insufficient to make renewable energies commercially competitive with fossil fuel. Both governments and energy firms shy away from spending on R&D as renewable energy is in its development stage and risks related to this technology are high (Cho etal., 2013).

Technology complexities: There are not enough standards, procedures and guidelines in renewable energy technologies in terms of durability, reliability, performance, etc. This prevents renewable energy from achieving large scale commercialization (Nasirov etal., 2015). A major technical issue which renewable energy is facing today is the storage of energy. The supply of sun or wind is not continuous despite their infinite abundance and electricity grids cannot operate unless they are able to balance supply and demand. To resolve these issue, large batteries need to be developed which can compensate for the times when a renewable resource is not available (Weitemeyer etal., 2014).

4.4. Regulatory barriers

Factors like lack of national policies, bureaucratic and administrative hurdles, inadequate incentives, impractical government targets, and lack of standards and certifications have prevented renewable energy from expanding dramatically (Stokes, 2013).

Ineffective policies by government: Strong regulatory policies within the energy industry are not only required for a nation's sustainable development, but also resolve the inconsistency between renewable and non-renewable energy. Lack of effective policies creates confusion among various departments over the implementation of the subsidies. Major issues such as unstable energy policy, insufficient confidence in RET, absence of policies to integrate RET with the global market and inadequately equipped governmental agencies act as barriers to the deployment of renewable energy projects (Zhang etal., 2014).

Inadequate fiscal incentives: There have not been enough measures by governments to remove tax on imports of the equipment and parts required for renewable energy plants. Feed-in tariffs are the measures by which governments aim to subsidize renewable energy sources to make them cost-competitive with fossil fuel-based technologies, but the absence of these adequate financial incentives results in high costs that hinder the industry's development, operation and maintenance, and stagnate the future (Sun and Nie, 2015).

Administrative and bureaucratic complexities: Obstacles arising in the deployment of renewable energy projects are manifold, including (and not limited to) administrative hurdles such as planning delays and restrictions. Lack of coordination between different authorities and long lead times in obtaining authorization unnecessarily increase the timeline for the development phase of the project. Higher costs are also associated with obtaining permission due to lobbying. All these factors prolong the project start-up period and reduce the motivation required to invest in renewable energy ().

Impractical government commitments: There is a gap between the policy targets set by governments and the actual results executed by implementation (Goldsmiths, 2015). There is a lack of understanding of a realistic target and loopholes in the implementation process itself. The responsibility for overcoming these commitment issues lies with governments. Policies should be devised that can offer clear insight into important legislation and regulatory issues so that the industry can be promoted as stable and offering growth. Governments can fix this mismatch by becoming more responsive and reactive.

Lack of standards and certifications: Standards and certificates are required to ensure that the equipment and parts manufactured or procured from overseas are in alignment with the standards of the importing company. These certifications make sure that companies are operating the plant in compliance with local law. Absence of such standards creates confusion and energy producers have to face unnecessary difficulties (Emodi etal., 2014).

4.5. Breaking barriers in deployment of renewable energy

Deployment of renewable energy is crucial not only to meet energy demands but also to address concerns about climate change (Byrnes etal., 2013). However, the barriers (social, economic, technological and regulatory) existing in this sector prevents the development and penetration of renewable energy globally.

User-friendly procedures: Bureaucratic procedures in the deployment of renewable energy are considered the biggest hindrance, and this demotivates investors and entrepreneurs from entering and investing in renewable energy. Government policies are not aligned at national and state level, thus failing to attract energy sector investment (Nesamalar etal., 2017). Countries with excessively complicated administrative procedures have less penetration of renewable energy compared to countries with simple and straightforward procedures (Huang etal., 2013).

Higher stakeholder satisfaction: Energy is the backbone of the socioeconomic development of any country (Raza etal., 2015). By utilizing more renewable energy resources, nations can help fulfil energy deficiencies without damaging nature. The repercussions of this change would be the creation of more jobs in the designing, building, operation and maintenance of renewable energy project infrastructures. Higher levels of diffusion will help to achieve economies of scale, and that will bring down the costs and thus the price for the end user. This will improve investors' confidence and will trigger increased investments in renewable energy projects. Higher benefits can be reaped from the availability of green energy as there will not be severe environmental implications, and that can help in maintaining the earth's ecosystem.

Successful research and development (R&D) ventures: In a study conducted by Halabi etal. (2015), it was pointed out that technological advancement to effectively generate, store and distribute renewable energy at lower costs is crucial. However, compared to conventional energy, insufficient R&D initiatives are undertaken. This is due to fact that organizations are unable to earn beneficial returns from R&D, and that makes the future of these initiatives look dull.

Cost savings: The biggest challenge that renewable energy faces is the competition from low cost fossil fuels (El-katiri, 2014). Renewable energy projects require huge land areas to produce the amount of energy which a conventional plant can produce in a small area. Prohibitive costs are involved in establishing and running renewable energy projects, mainly due to the huge financial capital required to acquire a suitable piece of land, the costs associated with lobbying, and power losses due to inefficient energy storage capabilities.

5.1. Data collection

The survey questionnaire (please see the questionnaire) was framed based on independent variables and their sub-variables. The questionnaire, a pretesting of the questionnaire was conducted to ensure that all the questions were relevant and understandable to respondents. Initially, the survey questionnaire was sent out to 33 energy industry experts and their feedbacks were collected. The insights generated from this pilot testing led to further refinement of the questionnaire and a final questionnaire was developed. The final survey form consisted of 26 main questions for both dependent and independent variables and another three questions to understand the demographics of the respondent. Each question consisted of five options (Likert scale) from which the respondent had to select the one which he/she thought suited the best, with ‘1’ as strongly disagree and ‘5’ as strongly agree.

5.2. Profile of respondents

The survey respondents were professionals in the energy industry (manufacturing of rigs, power generation, power distribution, oil and gas, mining and renewable energy). The participants were selected based on their familiarity with and knowledge of renewable energy sources and technology across America, Europe, Asia Pacific, Africa and Australia. The survey questionnaire was sent out to 645 potential respondents, of which only 223 practical survey responses were received. The response rate is calculated to be 34.5 per cent. The demographics of the respondents are provided in Table 1.

5.3. Data analysis

The data collected from the survey questionnaire were analysed using ADANCO 2.0.1 software. ADANCO software is used for this purpose as it is specialised for variance based structural equation modelling. It implements several limited information estimators such as partial least squares path modelling or ordinary least squares regression based on sum scores for testing the hypothesis and analysing research models (Henseler etal., 2014). To verify the correlation and confidence in the hypotheses, ADANCO software works well as it does not enforce normality on the data. Data analysis was conducted by first gauging the modelling of the structural model and then measuring the reliability and validity of the model by estimating model parameters.

5.4. Reliability

Cronbach's alpha value was considered to determine the reliability of the model fit. Alpha values above 0.7 show a satisfactory level of reliability. Jöreskog's Rho value also confirms that the model is consistent and uniform: i.e. composite reliability is within the appropriate range (Marshall, 2014). The figures for each construct are listed in Table 3.

5.5. Convergent validity

Convergent validity can be defined as the degree to which two measures of constructs that theoretically should be related are in fact related (Campbell and Fiske, 1959). The value of average variance extracted is required to be above 0.5 in order to be accepted. The convergent validity is shown in Table2 below. The minimum AVE value obtained is 0.5042, which proves that the validity of this model is acceptable.

5.6. Discriminant validity

Discriminant validity is used to test if the models or concepts that are not in relation are unrelated. According to Fornell and Larcker's theory (Cable etal., 2014), if the root of the average variance extracted (AVE) of one path is less than the average variance extracted (AVE) of the other path, then it is considered accepted. In Table 3 below, Fornell and Larcker's theory is successfully matched; thus the discriminant validity of this model is satisfactory.

5.7. Structural equation model (SEM)

Structural modelling through bootstrapping is provided in Fig.2. Path analysis is a special case of structural equation modelling and employs a causal modelling approach to explore the correlations within a defined network. This correlation is equated by calculating the sum of the contributions of the paths that connect all the variables. To evaluate the strength of each path, products of the path coefficients along the path are calculated (Schreiber etal., 2015). The R-squared value of our research model is 0.545, which supports the research model.

5.8. Hypothesis testing

ADANCO 2.0.1 is used to conduct hypothesis testing because it uses variance to model structural equations. The bootstrapping option can be selected in the ADANCO software to model unknown population data (Sarstedt etal., 2011). The level of significance is measured by establishing the t-statistic. The outcomes of the hypothesis testing is given in Table 4 below:

7.1. Implications for renewable energy industry

In our research, we have studied the impact of various barriers on the deployment of renewable energy. By breaking research and development-related barriers, organizations will be able to invest greatly in developing advanced technologies that can optimize usage of renewable energy and make renewable energy appear more lucrative. With less polluting and lower tariff energy solutions being made available to local people, and higher profits for manufacturers, this will create an atmosphere where all stakeholders are satisfied. Breaking red tape in government procedures will lead to generating interest among investors in renewable energy projects and, by breaking the barriers to the deployment of renewable energy, a greater number of projects will start up. This will help to achieve economies of scale and will bring down operation and maintenance costs. By supporting further innovative technological advancements, more efficient plants will be developed which may require smaller portions of land. Modern technologies will also make offshore wind/solar farms economically feasible.

Though renewable energy would prevent degradation of the environment, however, a small fraction of the ecosystem will still be affected: for example, in the case of offshore wind farms, underwater marine life might be disturbed.

7.2. Limitations and future research

In this research, we have considered the presence of four barriers as factors preventing the successful deployment of renewable energy globally; however, it is reasonable to expect that not all the barriers will be present in each country and there could be some new barriers that have not yet been conceptualized. Though this research has been conducted to understand the global perception, the data collected constituted only 9.8 per cent from Europe, 6.3 per cent from America, 5.9 per cent from the Middle East and Africa, and five per cent from Australia. The research conducted was mainly based on data collected from the Asia Pacific region. Cultural characteristics of Asians can be considered to be different from those of other countries; hence it is advised to practise caution when generalizing the findings in the context of renewable energy.

Finally, regarding future research, further study is required to understand and compare the impact of barriers to renewable energy in developing and developed countries.

7.3. Conclusion

In the long run, due to increasing awareness of environmental damage, conventional power generation based on exhaustible fuels (oil, coal and gas) is generally considered unsustainable. Alternative energies that have minimal impact on the environment and are inexhaustible, such as renewable energy, can be a solution to the long-fought sustainability problem. However, despite on-going awareness of the manifold advantages of renewable energy, the diffusion of renewable energy is limited globally. This restriction has been attributed to social, economic, technological and regulatory barriers.

This research presents the impact of social, economic, technological and regulatory barriers on the deployment of renewable energy and how these barriers are interrelated. Focusing on factors influencing barriers and the deployment of renewable energy, a research model was developed and tested by analysing the data collected from 223 respondents. Respondents were experienced professionals from the energy industry. The findings show that social barriers have a positive impact while technological and regulatory barriers have a very significant impact on the deployment of renewable energy. However, this research shows that economic barriers do not directly impact the deployment of renewable energy, but are interrelated with social, technological and regulatory barriers, thus indirectly affecting the deployment of renewable energy. The simultaneous increase in energy demand and the negative impact of fossil fuels on the environment underscores the need for energy production from renewable energy sources. Renewable energy sources strike a perfect balance between economic, technical and environmental considerations, and contribute to a more sustainable development that will favour future generations.

Author contribution statement

Seetharaman Conceived and designed the experiments.

Krishna Moorthy: Performed the experiments, Analyzed and interpreted the data, Wrote the paper.

Nitin Patwa: Performed the experiments.

Saravanan: Analyzed and interpreted the data.

Yash Gupta: Contributed reagents, materials, analysis tools or data.

Funding statement

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

Competing interest statement

The authors declare no conflict of interest.

Additional information

No additional information is available for this paper.

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