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Are We Reaching a Milestone in Clean Energy?

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This article feels rather overly optimistic to me, but I thought it was worth noting it’s argument that we are turning an important corner in the transition to clean energy.

But the intervening two days drive home the likelihood of success in Paris. Even with Europe clean energy investment lagging with its overall economy, on-shore wind now provides the cheapest electrons available in both Britain and Germany.

Europe’s slump is partly driven by a transition pains moving from high cost mechanisms like feed-in-tariffs more efficient tools like reverse auctions.

And the massive European investments from 2010-2013 shaved off the lucrative peak demand loads which made solar panels so lucrative. But having done so, Europe is teed up for the world’s next big task. Even at today’s investment levels, by 2040 a huge fraction of global power will come from variable renewables (wind and solar): Germany 77 percent, China 37 percent, Mexico 32 percent, India 32 percent. (The U.S., BNEF projects, lags at 24 percent because of cheap gas. I think America will in fact catch up).

But this vast influx of clean electrons creates a new investment need: storage and connected transmission to stabilize power supplies and integrate zero cost but variable supply electrons—Europe now becomes the test bed for this phase of the clean energy transition.

Elsewhere clean energy marches on. While the details matter, wind and solar will become cheaper than new build coal and gas everywhere. Michael Liebrich in his keynote flashes a telling quote from Bill Koch: “The coal business in the U.S has kind of died, so we’re out of the coal business,” and points out that compared to 2013, 2015 investment in coal has dropped a stunning 75 percent.

These two forces—clean energy’s growing affordability edge, and the bottom up pressure on national governments from cities and the business community—means that fossil fuel interests could longer prevent climate progress simply by leveraging their sheer size to freeze nation state’s from accelerating the shift to the future. Stephen Harper’s government in Canada refused to embrace climate progress, but Canada’s cities—Vancouver, Toronto, Montreal, Edmonton—are racing forward, as are its major provinces—Quebec, Ontario, British Columbia and—very soon, my intelligence suggests, even Alberta. (Now Harper is gone).

Set against these two positive drivers a highly resistant, incumbent fossil fuel complex remains determined to hold on to its market share as long as it can. Coal and Oil have withdrawn from their untenable “never” position. Their next battle ground lies in “when.” The G20 commitment this spring was to decarbonize by “the need of the century.” Climate science has a different calendar—fossils must essentially be gone by 2050. That extra 50 years is, to coal and oil, worth fighting for—and natural gas is oil’s alternative of choice. Their secret weapon? Ever lower prices. Liebrich points out that while the pace of technological progress for wind and solar has been dramatic, so too has been improvements in shale drilling for oil and natural gas.

I think this underestimates the ability to dirty energy to rebound from recent retreats and assumes the best of all possible outcomes for clean energy around the world. Still, I may be too pessimistic. Maybe we are turning a corner. But when a lot of that depends on whether Democrats or Republicans win in 2016, at least for the coal example, I’m not hailing a permanent revolution in our energy sourcing.

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  • CaptainBringdown

    I guess driving off a cliff is turning a corner in a sense.

  • NonyNony

    And assuming the best case for clean energy – that’s a whole lot of jobs in resource extraction that are lost in the switch. Is anyone thinking about the impacts of that aspect of the switch to clean energy?

    (I could see all of the gains in clean energy getting reversed just due to angry jobless people pushing back politically. Or violently depending on which part of the world you’re in.)

    • FMguru

      Something like 90% of all coal jobs in the USA have disappeared over the last 30 years (first a victim of increasingly automation, then the ongoing collapse of demand as energy production shifts to fracked gas and renewables) and there was very little unrest. Green energy creates jobs, too – someone has to build, install, and maintain those panels and turbines.

      Oil still has a lot of value, for things like plastics and fertilizer and specialized fuel (electric passenger jets are a long ways off, for instance) so there will still be demand for the stuff for a long time – it’ll just decline over time.

      Cheap solar and wind should enable all kinds of interesting economic activity. Cheap electricity + desalination plants = plenty of drinking water. Cheap electricity + water = an infinitely reusable source of hydrogen for fuel. Cheap electricity + plasma arc furnaces = an end to toxic waste storage. And so on.

      • We are going to see all kinds of these applications for when renewable energy produces more power than is required. To your list, I’d add freezing CO2 out of the atmosphere and smelting titanium and aluminum.

      • trollhattan

        A reasonable assessment. In the long haul, an industry that practically defines the resource extraction boom-and-bust cycle loses its grip especially on rural areas that suffer the most under its influence. Latest victim: North Dakota.

      • BigHank53

        Two of the hidden costs of coal are (a) coal ash disposal, which is going to bite a lot utilities hard on the ass, and (b) maintenance costs of coal boilers. All those nasty NOx and sulfur compounds react with the inside of the boiler before they get out and screw up the atmosphere. I remember hearing (though I have no idea how accurate this is) that maintenance costs on a gas boiler were 20% of a coal boiler.

        • Rob in CT

          Assuming companies actually pay for coal ash disposal. Some will (fighting it to the extent they can and the cost/benefit works for them). Others will turn out to be bankrupt and the EPA (and/or state equivalents) will have to come in and do it. Eventually. If there’s money in the budget.

          • BigHank53

            No disagreement, though most of the problematic coal ash dumps are owned by public utilities, which have a harder time declaring bankruptcy and leaving the public holding the bag.

            My real point (which I should have been clearer about) is that anyone building a new boiler has a couple compelling reasons not to choose coal. So the coal industry is going to continue to shrivel.

            • FMguru

              We’ve almost certainly seen the last utility-scale coal plant constructed in the US, and the last one in the world will be built before 2030.

              • RobertL

                Here in Queensland, Adani is trying to start its new Carmichael coal mine, which will be twice the size of any coal mine in Australia and one of the biggest in the world.

                It’s currently going through regulatory approvals, with all of the usual protests and court action by environmental groups.

                However, the mine is in big trouble, because nobody will fund it. All of our major banks have publicly stated that it is not commercially viable, and that was last year before coal dropped another 20% in price.

                I’m really hoping that this is a tipping point, where everyone realises that new coal mines are just not possible.

    • I don’t recall the source, but I heard that wind power creates far more jobs/unit of electricity produced than fossil fuels. A google search for a graph gives this result
      graph of jobs per GW hr

      • Rob in CT

        Lots of maintenance required. Particularly offshore wind.

        • joe from Lowell

          Good; we need a demand for workers skilled at working at sea. There are going to be a lot of fishermen who need jobs.

      • BiloSagdiyev

        Alas, to your more corporate Republican (and Dem), they hear DFH’s talking about, “oh! the skilled jobs clean energy can provide!” and they think, “higher costs.”

    • guthrie

      There was a study maybe 12 or 14 years ago that found that green stuff created more jobs than were lost with such switches as you mention. E.g. installing the new stuff.

    • Bill Murray

      also, you’re really switching the extraction from coal and oil to various metals. There are lots of rare earths and silicon and other metals needed for the green power

    • Area Man

      Both the solar and wind industries already employ more people than the coal industry.

  • pigmund

    I am of the belief that you can never fail by going long on pessimism futures when dealing with American political system.

  • The Temporary Name

    very soon, my intelligence suggests, even Alberta.

    Alberta kinda shocked me for its wind farms. I didn’t think it would happen, but I guess there’s money in it.

    • West of the Cascades

      There is, and it sometimes means projects put in places they don’t belong. A federal judge just threw out the permits for a wind project in Nevada because of unacceptable threats to golden eagles and desert tortoises. We need to turn the corner soon to distributed renewable power generation (rooftop solar, community-scale wind projects, e.g. 5 turbines to power a small regional area rather than 500 to ship power across a multi-state area) — otherwise substituting industrial-scale generation and long-distance transmission of renewable power merely replicates two of the three serious environmental impacts of large-scale rural energy generation.

  • Rob in CT

    The growth of renewables has been aided greatly by policy (subsidies) that can be changed. A GOP Congress (let alone WH + Congress) threatens this. Sure, renewables have come down in price such that subsidies are less important than they used to be and that’s great, but I dunno if we will see them take over in the next ~25 years without continued (strengthened, even!) policy support.

    • tribble

      US solar installations have been growing at a tremendous rate for the past decade plus. The current projections predict a pause in the growth rate or a slight reduction in the rate of installations for 2-3 years following the end of the investment tax credit, and then a return to growing rates of installation after that. This comes in part from the expectation that prices will continue to drop to the point that the energy is cost-competitive without the tax credit by 2018-2019 or so. After all, the US is just one, albeit large, part of the global solar market. There’s sufficient demand world-wide to continue the industry growth that is driving down prices even if the US slows down for a few years.

      I’m less familiar with the projections for wind, but I would be surprised if the prediction is hugely different.

      • FMguru

        It’s not quite Moore’s Law, but the year-after-year price drops and efficiency gains in solar and wind (and increasingly volume/scale discounts) are nearly as impressive. Renewables are already competitive with fossils fuels in a lot of places (even without taking the much smaller externalities into consideration), and they’re only going to get cheaper and cheaper from here.

        • RobertL

          And the next step will be homeowners adding battery storage to their solar setups, as prices drop.

          I have a vision of Tea party types putting in solar and batteries to go off-grid and stick it to “the man” and hastening the end of fossil fuel industries, while extolling the virtues of oil and gas and railing against climate change deniers.

  • Troll

    Troll comment deleted

  • Bitter Scribe

    IIRC, the reason so much of Germany’s energy comes from renewable resources is that they made a conscious decision to skew their laws and regulations toward solar. This includes mandating that power companies buy back excess electrical power generated through solar.

    Contrast that with the U.S., where some locations actually charge solar users for the privilege of using the electric utilities’ lines (which are, of course, on public easements).

    As long as the dirty energy interests are allowed to corrupt politicians with millions of dollars in “free speech,” nothing will change.

    • BiloSagdiyev

      Yeah, well Germany just did all that because they were tired of living in fear of Putin turning off the pipeline that runs west to them. How wimpy! RealMurkins would invade his country and then have national and energy security!

      Why oh why don’t the Germans invade Russia?

      (Sarcasm.)

  • joe from Lowell

    (The U.S., BNEF projects, lags at 24 percent because of cheap gas. I think America will in fact catch up).

    Gas was cheap when the United States led the world in clean energy investment for three years under the ARRA. It’s politics that will determine American investment levels, not gas prices.

  • j_kay

    Solar’s a polluting lIE, so you can feel perfect about that. Solar’s made with serious chemicals from spewing chip factories, And chip fabs use absurd energy to make each chip.

    Remember, kids, don’t do solar. Home nuclear 0r windmill are the options ;-). Yes, nuclear, because it emits nothing, and is most efficient for fuel, and can be recyclable. Wind is lowest polluting, but gives little energy.

  • “Maybe we are turning a corner. But when a lot of that depends on whether Democrats or Republicans win in 2016…”
    That is an incredibly US-centric take. (What’s the equivalent of the French hexagonal?) Nothing that happens in US politics can stop the energy revolution now. It was just possible for the PP in Spain to kill off solar, because rooftop never got started, but the policy is now fraying, as installation for pure self-consumptiom pays and the government is having to raise fines for lèse-monopole to ridiculous levels. But a U-turn would be too late in the USA or the world as a whole. The combined effect of China, Japan, India, and Germany is enough to keep wind and solar on their learning curve. They are being joined by dozens of other countries, ranging from Brazil to South Africa to Dubai to Honduras.

    The same holds for electric vehicles, which are also supported by the realization of the huge (and local, so politically relevant) health costs. Big Oil has been curiously indifferent to the emerging threat from Tesla, Nissan, GM and BYD. When it wakes up, it will be up not only against a good part of the car industry but also the well-connected electric utilities.

    All a denialist federal government in Washington could do is slow down the revolution, delay the world emissions peak by a few years, and make the country a laughing stock, as Abbott did for Australia. Advert for my fairly optimistic take, with much more data.

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