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Champions of energy transition see it happening relatively quickly, emphasizing the advances that are being made in technologies, policy, and projects. While fossil fuel incumbents see a long, gradual process of energy transition, assuring us that demand for their products will remain strong for decades to come. So who’s right? Is energy transition going to be rapid, or gradual?

A new paper co-authored by Carbon Tracker, Bloomberg New Energy Finance, and the Rocky Mountain Institute contrasts these narratives and scenarios, and identifies some key distinguishing characteristics that can help us understand where they differ, as well as clarifying their underlying assumptions and perspectives, using those insights to inform our outlooks. In this episode, one of the authors from Carbon Tracker explains the analytical framework applied to these contrasting narratives, and shares his insights about the impact of the energy transition on financial markets, domestic politics and geopolitics, and how incumbents will have to navigate the new reality of climate change.Guest:

Kingsmill Bond is the Energy Strategist for Carbon Tracker, a London-based clean energy think tank. He believes that the energy transition is the most important driver of financial markets and geopolitics in the modern era. Over a 25 year career as an equity analyst and strategist at institutions such as Deutsche Bank, Sberbank and Citibank, he has researched emerging markets, the shale revolution and the impact of US energy independence. At Carbon Tracker, he has written about the impact of the energy transition on financial markets, domestic politics and geopolitics, and authored a series of reports on the myths of the energy transition, looking at the many arguments made by incumbents to deny the reality of change.

On Twitter: @KingsmillBond

On the Web: Kingsmill’s page at Carbon Tracker

Could a Green New Deal Save Civilization?

March 8, 2019

Could a Green New Deal Save Civilization?

To fully and systematically address the climate/energy crisis, the plan will have to be far broader in scope than what is currently being proposed. And while we need to mobilize society as a whole with a World War II-level of effort, the reality is that there’s never been a challenge like this before.

The idea is infectious. Could a big government jobs and spending program succeed in kicking into gear the transition from fossil fuels to renewable energy, and ultimately save us from catastrophic climate change? The energy transition is currently going way too slowly; it needs money and policy support. And many people would need job retraining in order to work in re-engineered, renewable-powered industrial systems. In the 1930s, the New Deal programs of Franklin Roosevelt helped create jobs while also building critical infrastructure, including rural electrification, roads, bridges, and government buildings. Today, as we confront the requirements to produce energy sustainably; to use it differently in transportation, manufacturing, and agriculture; and to reverse the current trend toward increasing economic inequality—in effect, to save and reinvent industrial civilization—the need is arguably much greater.

The public champions of the Green New Deal (GND) in the U.S. include Democratic progressive representatives Alexandria Ocasio-Cortez, Deb Haaland, Rashida Tlaib, Ilhan Omar, and Antonio Delgado. The idea is also supported by writer-activists Naomi Klein and Van Jones; by the Green Parties in the US and Europe; and by the Sierra Club, 350.org, Greenpeace, Friends of the Earth, and the Climate Mobilization. The proposals currently circulating in Washington aim to provide 100 percent renewable energy in 10 to 20 years while supporting job retraining and aiding communities impacted by climate change.

…click on the above link to read the rest of the article…

The Sower’s Strategy: Norway Leads the Way Toward the Energy Transition

February 9, 2019

The Sower’s Strategy: Norway Leads the Way Toward the Energy Transition

This is me, Ugo Bardi, in Oslo, February 2019. Norway is the country with the largest fraction of electric vehicles in the world. The Tesla in the background is not mine.

I gave the name of “The Sower’s Strategy” or “The Sower’s Way” to the idea that we should use our remaining fossil resources to build the renewable energy infrastructure needed to replace them. The calculations by myself, Sgouridis and Csala show that it can be done: after all, this is what our farmer ancestors did when they saved some of the crops of the current harvest as seed for the next harvest.

For some reason, the idea that we should wisely invest the energy we have, while we still have it, seems to be incomprehensible to some people who maintain that fossil fuels are evil (which is true) and that for this reason anything you can make with fossil energy is evil, too, including renewables (which is not true). So, the penetration of the “Sower’s meme” has been modest, up to now. But from a recent trip of mine to Norway, I noted that the Norwegians put this strategy into practice, even though they probably never heard of the name I gave to it!

Norway, as you surely know, used to be among the largest oil-producing countries in the world, the largest in Europe. The peak was around 2002 and by now production has declined to about half of what it was during the glory days. (data below from Rune Likvern)

The gas production in Norway has not yet peaked but it is plateauing and it is time for the Norwegians to think about a future without oil. So, what did the Norwegian government do? They followed the Sower’s strategy using the revenues from oil sales to build up a more and more energy independent system. (and zero dependence on nuclear energy!)

…click on the above link to read the rest of the article…

Carbon Crossroads: Can Germany Revive Its Stalled Energy Transition?

December 24, 2018

A wind turbine operating next to the Niederaussem coal-fired power plant near Bergheim, Germany. LUKAS SCHULZE/GETTY IMAGES

Carbon Crossroads: Can Germany Revive Its Stalled Energy Transition?

Although Germany has been a global leader in moving to decarbonize its massive economy, the country’s ambitious clean-energy transformation is faltering. Now, a broad spectrum of energy experts are working to revitalize the effort to make Germany nearly carbon-free by mid-century.

Northern Germany, from the Polish borderlands in the east to the Netherlands in the west, is the stronghold of Germany’s muscular onshore wind power industry. This is where the lion’s share of the country’s nearly 30,000 wind turbines are sited, a combined force equal to the power generation of about 10 nuclear reactors. Where Germany’s northernmost tip abuts Denmark, soaring turbines crowd the horizon as far as the eye can see. And many more are coming as Germany strives to go carbon neutral by 2050.

Yet despite their impressive might, the north’s wind parks are a reminder not only of how much has been accomplished in Germany’s Energiewende, or clean energy transition, but also of what remains to be done. Although the country has made a Herculean effort to shift to a clean energy economy — in just the past five years government support and costs to consumers have totaled an estimated 160 billioneuros ($181 billion) — Germany’s greenhouse gas emissions have not declined as rapidly as expected in response to the vigorous expansion of renewable energy, which now generates 40 percent of the country’s electricity. Germany’s politicians are even resigned to falling significantly short of the country’s 2020 goal of reducing emissions by 40 percent below 1990 levels.

Germany’s failings have come as a vexing shock to its environmentally conscious citizenry. While Germans still overwhelmingly back the energy transition — for years polls showed support in excess of 90 percent — about three-quarters say the government is not doing enough to slow global warming.

…click on the above link to read the rest of the article…

Energy Transition Under Fire As Power Bills Soar

December 20, 2018

Energy Transition Under Fire As Power Bills Soar

For a long period of time, the energy transition was primarily a technical topic concerning the transformation of the energy grid. Technological developments and the decreasing costs of renewables have made it a viable alternative to fossil fuels. The integration, however, of these new systems requires considerable investments meaning money that directly or indirectly will be provided by ordinary citizens through taxes or their energy bill.

In most parts of Europe, the energy transition is in full swing for a carbon neutral future. The EU has set itself the goal of fulfilling at least 20 percent of its total energy needs with renewables in 2020. Currently, the percentage of renewables in the overall energy production differs between member states such as 10 percent in Malta and 49 percent in Sweden.

Denmark was one of the first countries in the EU to seriously start planning for the energy transition. Early planning, broad societal support, and political will have fostered a strong domestic energy industry. Danish company Vestas is the largest wind turbine producer in the world with approximately 16 percent of the global market share. The energy transition is not cheap which requires the allocation of precious resources that could be spent otherwise. The rising energy bill, however, threatens to derail the process in several countries.

In recent weeks, France was shaken up by major demonstrations led by the so-called ‘yellow vests’ movement which was triggered by the rising costs of living. The French government intended to raise taxes for transportation fuels in order to discourage car usage and pay for the energy transition. The protests escalated into a nationwide movement that eventually forced the government to backtrack on the intended tax hikes.

…click on the above link to read the rest of the article…

How to save the world from climate catastrophe – the IRENA study

November 21, 2018

How to save the world from climate catastrophe – the IRENA study

IRENA, the International Renewable Agency, has just published a study showing how the world can meet the not-to-exceed-2°C emissions goal set by the Paris Agreement. It’s not a 100% renewables study – it still includes a little oil, gas and nuclear – but it concludes, unsurprisingly, that a massive expansion of renewable energy in all sectors will be needed between now and 2050, along with major improvements in energy efficiency, to keep the Earth within its allowable carbon budget. The study provides information on the changes that will be needed to meet this goal but provides no specifics on how they are to be met. It estimates the costs of the changes at $120 trillion (~$4 trillion/year from now to 2050, or about 5% of total world GDP) but provides no specifics on where the money is to come from. It is nevertheless confident that this massive outlay will be “dwarfed by the benefits”.

The IRENA report contains 73 pages, only 10 of which (Analysis and Insights in Key Sectors, pp. 31-40) deal with the specifics of the changes that are needed to achieve IRENA’s proposed “energy transition”. But no information is provided on how these changes are to be achieved and whether they will work if they are. Simulation models, such as those used in the Jacobson, Lappeenranta and Blakers studies, are normally used to perform this task, but IRENA seems to have by-passed this step. It has simply estimated how much renewable energy and improved energy efficiency is needed to meet the 2°C emissions goal, and the costs thereof, and it presents these estimates as achievable solutions rather than targets.

IRENA considers two scenarios. The base year for both is 2015.

…click on the above link to read the rest of the article…

IEA: Clean energy transition makes reforms ‘inescapable’ for oil states

November 2, 2018

IEA: Clean energy transition makes reforms ‘inescapable’ for oil states

A changing energy system is posing “critical questions” for many of the world’s largest oil and gas producing countries, the International Energy Agency (IEA) says.

The rise of shale gas and oil in the US, global improvements in energy efficiency, and the response to climate change are leading to “sustained pressure” on countries that rely heavily on hydrocarbon revenues, it says.

In a new report, the IEA explores what these changing dynamics mean for six major oil-producing states and the consequences of a global push to meet climate change goals.

Oil producers

The report focuses on “producer economies”: large oil and gas producers which rely on hydrocarbon exports for a large portion of their national budgets.

Many of these countries are shown (in purple) in the chart, below. The report narrows in on six of these – Iraq, Nigeria, Russia, Saudi Arabia, United Arab Emirates (UAE) and Venezuela – chosen for their range of circumstances.

Oil and gas exports as a share of total exports (x-axis) and oil and gas revenue as a share of fiscal revenue (y-axis) in selected countries in 2017. Source: IEA Outlook for Producer Economies 2018

In these six countries, between 40% and 90% of government revenues come from oil and gas income. These earnings make up a similar share of the countries’ total exports.

This somewhat precarious position has been exposed by low oil prices since 2014. This has seen many of these countries facing recessions, falling incomes, budgetary deficits and even social unrest.

The “shale revolution” and long-term uncertainty over demand for oil and gas are “intensifying pressures for change” in these countries, the report says. It adds:

…click on the above link to read the rest of the article…

Our Delusional Economy Is Poised To Slam Into The Brick Wall Of Reality

September 29, 2018

dailyhaha

Our Delusional Economy Is Poised To Slam Into The Brick Wall Of Reality

Will you thrive, merely survive, or fail?

While life has always been uncertain, today our choices matter more than ever. The decisions each of us make today will determine if we thrive, merely survive, or fail during the future time of upheaval ahead.

The window of opportunity to change course for humanity is all but closed. There’s simpply no more time to hope that somehow, magically, the world’s entire energy complex will suddently evolve to a bountiful and sustainable new plane — whether by market forces, by maverick billionaires like Elon Musk, or by happy accident.

As we hammer home constantly here at Peak Prosperity, energy is everything. Without it, our society simply can’t function.

And it’s critical to appreciate that it takes an investment of energy to migrate from energy solution to another.

Imagine you heat your house with wood, but want to switch to a forced air gas furnace. Is there energy involved in doing so? You bet there is. Besides the obvious new need for natural gas, there’s a huge amount of embodied energy in the manufacture and installation of your new furnace, all the duct work, and the delivery lines that will bring the gas to the furnace. Further, there will be electricity required to force the air from the furnace, through the ducts, and into your house.

The same is true when making transitions at the national level. What’s involved in the much larger projects of switching industrial agriculture away from the fossil fuel driven process of plowing, planting, fertilizing, irrigating, harvesting, drying or cooling, and then transporting food from the field to your table?

At each stage there’s an enormous amount of energy infrastructure that needs to be rebuilt and reconfigured to run on “something else.” Let’s examine the current dream that we’ll switchover to powering all of our farming needs with electricity.

…click on the above link to read the rest of the article…

Have investors lost interest in “clean energy”?

August 16, 2018

Have investors lost interest in “clean energy”?

Before 2011 global investment in clean energy (wind, solar, biomass, biofuels etc.) grew rapidly. Then in and around 2011 many governments abandoned renewables subsidies in favor of capacity auctions, and growth in global clean energy investment ceased. Investment in North and South America has not increased since 2007 and in Asia it has not increased since 2015. Clean energy investment in Europe has been declining steadily since 2011, and investment in the UK and Germany is now approaching zero. The current level of investment (~$300 billion a year) is also too low to support a global transition to renewable electricity and to meet global emissions targets. The indications are that it will reach adequate levels only if lavish government subsidies are reinstated. The global renewable electricity transition may fail simply because of a lack of funding.

A year ago, using data from Bloomberg New Energy Finance (BNEF), I put up a post discussing global “clean energy” investment between 1Q 2005 and 2Q 2017. BNEF has now published a new report adding a year of data through 2Q 2018 along with some more detailed graphics. This post reproduces some of the more interesting ones, with an emphasis on Europe.

First we will deal with the question of the inadequacy of clean energy funding. According to the BP Statistical Review global electricity demand in 2017 was 621 TWh higher than in 2016, an increase of 2.5%. Table 1 shows how this added demand was filled:

*Wind, solar, geothermal, biomass, waste, biofuels etc.

To decarbonize the world’s electricity sector and to meet emissions targets enough renewable generation must be added each year a) to cover increased global demand and b) to replace a significant amount of fossil fuel generation. Table 1, however, shows that the 307 TWh of renewable generation added in 2017 was enough to fill only about half of the increase in global demand.

…click on the above link to read the rest of the article…

The Myth Of An Imminent Energy Transition

May 18, 2018

The Myth Of An Imminent Energy Transition

100 million. It’s a number that drowns comprehension; it’s more jelly beans than can fit in an average-sized swimming pool.

Within a year, world oil consumption will top 100 million barrels of oil per day. Over the same time period, close to 100 million new piston-firing vehicles will be bought by petroleum-thirsty customers.

I hate to say it, but any notion of imminent “energy transition” or “decarbonization” is folly.

In fact, the percentage of fossil fuels in the world’s energy mix—coal, oil and natural gas—is still lingering well above 80 percent, a figure that has changed little in 30 years. That remains so, despite being challenged by serious environmental policies, financial pressures, viable alternative systems, public awareness and social activism.

It’s true that wind and solar are being deployed quickly, at an exponential rate in fact. But impressive as it all is, renewable energy installations are far too slow to catch the still-hardy appetite for fossil fuel consumption. Such energy obesity is not virtuous, but it’s a fact needing acknowledgement in a world of over seven billion people, each of whom are wanting for more light, heat, mobility and a panoply of mostly useless gadgetry.

Oil and gas are growing especially fast. Recently published data reminds us that we’re consuming hydrocarbons faster than ever, at robust rates on a global absolute basis (see Figure 1). Market share for oil and gas is holding steady at just under 60 percent. Related: Is Russia About To Abandon The OPEC Deal?

(Click to enlarge)

The resilience of fossil fuels is sobering, even after massive capital assault.

Over the past decade, the world has spent US$ 3.0 trillion on renewable energy, according to the International Energy Agency (Figure 2). For that expenditure, the clean cadre has taken a couple of points of share away from coal, the black stuff that seems to have nine lives (Figure 3).

…click on the above link to read the rest of the article…

Speeding Down a Dead End Road

March 20, 2018

Speeding Down a Dead End Road

Since the birth of car culture more than a century ago, lavish consumption of energy has not been a bug but a feature. That’s now a feature we can ill afford, as we attempt the difficult and urgent task of transition to renewable energies.

Notwithstanding all the superlatives lavished on Elon Musk by mass media, one of his great achievements has gone unsung: his ingeniously simple contribution to the Search for ExtraTerrestrial Intelligence (SETI).

I refer, of course, to his donation of a used automobile to the possible inhabitants of outer space. If there is intelligent life out there, they will recognize Musk’s Tesla Roadster as a typically energy-guzzling death trap of the genus known as “car”, and they’ll promptly return it to sender, COD.

Wait a minute, Musk’s Roadster is not a typical car, some might protest – it’s electric! True enough, but the Roadster, like its newer sibling the Model 3, was designed to seamlessly fit into and extend our current car culture. And one of the key features of car culture is that it was structured, from the beginning, to consume energy with careless abandon.

That giddy attitude to energy was understandable in the early days of the age of oil, but it will make our current transition to a clean-energy economy far more difficult if not impossible.

The invention of car culture

Americans did not invent the car, but they quickly came to dominate both car production and car consumption – and more than any other country, they put car culture at the centre of a way of life.

In his excellent book Consuming Power, David E. Nye notes that

“[By 1929] there was roughly one car for every five Americans, and an astonishing 78 percent of the cars in the world were in the United States. In France or Great Britain there was only one car for every 30 people, and in Germany only one for every 102. The automobile had become the central American consumer good and the engine of the American economy, stimulating a wide range of subsidiary industries and suppliers.”^[1]

The pattern continued after World War II. “Americans drove 75 percent of the world’s automobiles in 1950,” Nye says. “Moreover, they wanted big automobiles.”^[2]

…click on the above link to read the rest of the article…

Natural Gas Is Under Attack

March 20, 2018

Natural Gas Is Under Attack

Natural gas has been billed as the key “bridge fuel” that will help the energy transition, replacing coal while buying time for renewable energy to scale up. However, even as gas is triumphing over coal in the U.S., it is increasingly under attack by policymakers.

Gas claims a carbon emissions profile that is half that of coal, and in terms of local pollution – sulfur, mercury and particulates – natural gas is a tremendous upgrade relative to coal. However, even as CO2 emissions are much lower, there are questions over the climate benefits if lower CO2 is offset by higher methane emissions from gas, which typically come from the drilling and extraction of natural gas, and its shipment via pipeline and local distribution lines.

With the coal industry a dead man walking, environmental groups have turned their sights on natural gas as an enemy of the climate. Recently, the efforts have logged some impressive achievements, forcing gas on the back foot in several states.

California’s state Public Utilities Commission recently pressed Pacific Gas & Electric to build new renewable energy and energy storage to replace three gas-fired power plants. The state’s largest utility also said it has no plans to build new gas-fired generation and other gas projects have been put on ice as the state tightens the screws on the gas industry.

This stems from the state’s effort at sourcing a greater portion of its electricity from renewable energy. California has mandated that 50 percent of its electricity to come from renewable energy by 2030. California is leading the clean energy shift in many ways, but it still has a ways to go in order to get there – it only generates about a third of its electricity from clean energy right now. “You’re not going to get anywhere if you are just adding more and more gas,” Robert B. Weisenmiller, chairman of the California Energy Commission, told the Wall Street Journal. “At some point soon we’ll be permitting the last gas plant in California.”

The policy backlash against natural gas in green-tinged California may not be surprising, but the hostile reception to gas is popping up in other, less obvious locations. In an incredibly notable development, last week Arizona regulators dismissed the long-term plans from utilities in the state to build gas and ordered them to consider renewable energy. The regulators also issued a surprise 9-month moratorium on new gas plants larger than 150 megawatts.

…click on the above link to read the rest of the article…

The troubling realities of our energy transition

March 19, 2018

The troubling realities of our energy transition

I recently asked a group gathered to hear me speak what percentage of the world’s energy is provided by these six renewable sources: solar, wind, geothermal, wave, tidal, and ocean energy.

Then came the guesses: To my left, 25 percent; straight ahead, 30 percent; on my right, 20 percent and 15 percent; a pessimist sitting to the far right, 7 percent.

The group was astonished when I related the actual figure: 1.5 percent. The figure comes from the Paris-based International Energy Agency, a consortium of 30 countries that monitors energy developments worldwide. The audience that evening had been under the gravely mistaken impression that human society was much further along in its transition to renewable energy. Even the pessimist in the audience was off by more than a factor of four.

I hadn’t included hydroelectricity in my list, I told the group, which would add another 2.5 percent to the renewable energy category. But hydro, I explained, would be growing only very slowly since most of the world’s best dam sites have been taken.

The category “Biofuels and waste,” which makes up 9.7 percent of the world total, includes small slivers of what we Americans call biofuels (ethanol and biodiesel), I said, but mostly represents the deforestation of the planet through the use of wood for daily fuel in many poor countries, hardly a sustainable practice that warrants vast expansion. (This percentage has been roughly the same since 1973 though the absolute consumption has more than doubled as population has climbed sharply.) The burden for renewable energy expansion, I concluded, would therefore remain on the six categories I mentioned at the outset of my presentation.

As if to underline this worrisome state of affairs, the MIT Technology Review just days later published a piece with a rather longish title: “At this rate, it’s going to take nearly 400 years to transform the energy system.”

…click on the above link to read the rest of the article…

Are Germany’s Energy Transition Plans Working?

February 23, 2018

Are Germany’s Energy Transition Plans Working?

Considering the established political imperatives underpinning the German energy transition(Energiewende) and the overall push toward greater use of renewables in the energy mix, let’s look at some of the outcomes of this transition — specifically natural gas imports from Russia and fossil fuel consumption.

A boost in renewables would carry these two ostensible goals, and it’s worthwhile to gauge progress in both areas.

In these scenarios, it’s beneficial to look at the end-use of primary sources of energy, to understand how Germany is ultimately using its energy. So instead of production data, the focus will be on consumption.

For example, as we’ll cover later, Germany produces a lot of renewable energy, but it doesn’t consume all that energy, and therefore will not have any fundamental impact on the consumption mix.

BP’s statistical workbooks (data used in this article is sourced from BP’s 2017 Statistical Workbook unless otherwise noted) provide good time-series data that can be used to understand Germany’s transition in this context.

The following graph draws on BP’s data and furnishes a good look at energy consumption in Germany, going back to 2000.

(Click to enlarge)

In specific areas, Germany has been successful in meeting its objectives, and this appears to be at least partially due to increases in the production and consumption of renewable sources of primary energy.

Since 2000, renewables consumption in Germany, including biomass, solar, and wind (excluding hydroelectricity) has grown over 1,000 percent. This growth represents a substantial increase, bringing consumption from 3.2 Mtoe (14.3 Twh) in 2000 to 37.9 Mtoe (167.4 Twh) in 2016.

There is still quite a discrepancy, however, between Germany’s production of renewable energy, and its consumption…

…click on the above link to read the rest of the article…

Mineral depletion need not be always a problem: the case of aluminum

December 17, 2017

Mineral depletion need not be always a problem: the case of aluminum

In my book “Extracted” (2014) I make the case that mineral depletion is one of the main problems the industrial system faces today. Slowly degrading ore grades make the production of mineral commodities more expensive and this worsens the performance of the whole system. This is especially true for fossil fuels, although in this field it is not customary to speak in terms of “ore grades” but in terms of EROI (energy returned on energy.invested). But the depletion issue for a specific mineral commodity has to be considered in view of the whole production process, not just the extractive phase, and some commodities are much less affected than others. This is the case of aluminum, where the main production cost is not extraction but by far it is electrochemical smelting. There follows that if we can have energy that doesn’t come from depletable resources – that is, renewable energy – we won’t face depletion problems for aluminum for the foreseeable future, quite possibly never if we use care in recycling it. In the following post, Sgouris Sgouridis examines the current situation of aluminum smelting and the perspectives of transitioning the production system to renewable energy. (UB)

Steering the Aluminum Industry in the face of the Energy Transition

By Sgouris Sgouridis

The post below was inspired by my participation at the ARABAL 2017 conference in Muscat, Oman to discuss the options for renewable energy integration in the aluminum industry. It addresses a seeming reluctance I encountered during the discussion to adopt RE with some initial considerations on how the industry can be transformed away from utilizing fossil inputs. It provides an overview of the industry’s products, scale and impacts, before discussing transition opportunities.

…click on the above link to read the rest of the article…

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