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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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