Scotland and America quietly (at least here) show the way on wind energy

In one of the best kept secrets in America, solar and wind energy continue to make huge strides and are on par cost-wise with coal energy production. And, with total cost of environmental, health, acquisition and litigation are factored in, the renewables beat the pants off coal. This is a key reason in Texas, renewable energy is passing coal as the second largest energy source behind natural gas in 2020. And, as oil tycoon T. Boone Pickens said on “60 Minutes” early in the last decade, natural gas will buy us time, but wind energy is the future in the plain states.

The wind also blows in Scotland, especially offshore in the North Sea. Per Wikipedia, “Wind power in Scotland is the fastest-growing renewable energy technology, with 8423 MW of installed wind power capacity as of December 2018. This included 7800 MW from onshore wind in Scotland and 623 MW of offshore wind generators. There is further potential for expansion, especially offshore given the high average wind speeds, and a number of large offshore wind farms are planned.

The Scottish Government has achieved its target of generating 50% of Scotland’s electricity from renewable energy by 2015, and is hoping to achieve 100% by 2020, which was raised from 50% in September 2010. The majority of this is likely to come from wind power. This target will also be met if current trends continue.”

From Offshore Wind Scotland (link below), more update numbers on the offshore wind power notes, “We have 915 MW of operational offshore wind (as compared to the 623 MW in December, 2018 in Wikipedia) including the world’s first floating offshore wind farm, Hywind Scotland, and a further 4.1GW of consented projects in the pipeline. One of the largest offshore wind projects in the world, the 950MW Moray East project, is under construction in the Moray Firth and Kincardine Offshore Wind Farm, which at 50MW is the largest floating wind array in the world, is also under construction 12km off Stonehaven. SSE’s 1075MW Seagreen project in the Firth of Forth will start construction next year with 114 turbines utilising 9.5MW machines from MHI Vestas. Crown Estate Scotland will kick off the next offshore wind leasing round, ScotWind, with projects announced in 2020 and this should see the Scottish market rise to over 10-12GW by 2030.”

I recognize most readers will gloss over the numbers, but suffice it to say, Scotland is recognizing and capturing the power of its location to harness the wind. They set out a long term plan and went about achieving it, even when obstacles got in the way. What got very little play here is a golf course owner who happens to be the US president sued to stop construction of offshore wind mills visible from one of his Scottish courses. His company lost the case and had to pay the Scottish government US$290,000 for its court costs.

But, back in the states, Texas is not the only plain state taking advantage of wind. Iowa gets about 40% of its electricity from wind energy. Per Wikipedia, in 2019, the top five wind energy states are:

Texas (28,843 MW)
Iowa (10,190 MW)
Oklahoma (8,172 MW)
Kansas (6,128 MW)
California (5,973 MW)

California also leads the pack by far on solar energy at 27,900 MW in the first quarter of 2020, with North Carolina (6,400 MW), Arizona (4,700 MW), Florida (4,600 MW) and Texas (4,600 MW) filling the next four slots.

To put the two leaders in perspective, the Texas wind energy and California solar energy megawatts can power close to 8 million homes in each state. It should also be noted that electricity intensive businesses that run data and call centers, like Amazon, Google, Facebook and retailers like Walmart and IKEA are well ahead of others on the push toward renewable energy. Amazon is running TV commercials right now that say Amazon will be 100% renewable energy powered by 2025.

COVID-19 is harmful to people, but also is hurting the fossil fuel businesses. Quite simply, fewer people are traveling and buying petrol. But, the renewable energy business is less impacted as the focus is on homes and businesses. The Paris Climate Change Accord was not the only big deal that occurred in 2015 in Paris. Bill Gates led a group of 26 private investors and the University of California to form The Breakthrough Energy Coalition to invest in technology that will improve renewable energy and lessen our carbon impact on the planet. Gates committed US$2 Billion of his own money.

I mention all of this as this move forward is still underreported and underappreciated, at least here in the states. When I see US politicians funded by fossil fuel companies cry foul over green initiatives, the answer is simple. It is already happening due to market forces and it also happens to be where the job growth is. So, where do you want to invest your money?

https://www.offshorewindscotland.org.uk/

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Corporate shareholders are acting on climate change

While fossil-fuel funded politicians avoid addressing climate change and strip away governance enabling industry polluters, shareholders have been picking up the baton. Last week, Reuters published an article called “Chevron ties executive pay to methane and flaring reduction,” which defines specific gas emissions targets.

The article penned by Jennifer Hiller notes that it is not just executives with incentive plan targets to reduce emissions. 45,000 employees also have incentive plan emission targets. In other words, their pay is tied to combatting climate change. The intermediate goal is to reduce gas emissions by 25% by 2023.

While Chevron is the first to tie incentives to reducing gas emissions, in the month before the current US President announced our pullout of the Paris Climate Change Accord, three energy companies -ExxonMobil, PP&L and Occidental Petroleum – announced shareholder votes requiring management to report on efforts to address climate change. The Exxon-Mobil vote is telling in that they face a shareholder lawsuit and one by the New York Attorney General, Barbara Underwood, for misrepresenting the impact of climate change on their business to investors.

Per The Guardian, the NYAG lawsuit notes Exxon’s “longstanding fraudulent scheme” to downplay the impact of climate change including under-representing the “proxy costs” of fossil-fuel extraction. This lawsuit follows a three-year investigation and uses Exxon’s own research and scientists’ speeches against them. Before they took a “global warming is a hoax” public relations stance around the turn of the century. Exxon was active in climate change research. Even Shell produced a video in the 1990s that was made for educational purposes about the dangers of climate change.

But, it does not stop there. Well before fossil-fuel company shareholders made these impositions on management, more forward thinking companies like Amazon, Facebook, Google, IKEA and Walmart have invested in renewable energy like wind and solar energy. IKEA and Walmart are using their expansive store rooftops to place solar panels, while the three technology companies have used all of the above renewable energy strategies to power their  data centers. In my state of NC, these companies have helped propel the state forward as a top four solar energy state.

Let me close with my favorite Super Bowl commercial of last week, Budweiser produced a commercial that noted their beer is now being produced by wind energy. Seeing the Clydesdales meander down a road surrounded by windmills was a beautiful sight. It showed this is not a future goal – it is here. And, just to show it is making a difference, over 1/3 of Iowa’s electricity is produced by wind energy and Germany just announced renewable energy now exceeds coal energy as the biggest electricity source and they plan to be 100% renewable energy powered by 2038, twenty years from now.

Walmart and Mars

What does this title mean, you ask? Walmart and Mars are two global companies moving the ball forward to combat climate change. Mind you, it is not just altruism driving these efforts, it is creating a sustainable, more predictable and better cost model. And, companies care about cost.

On PBS Newshour yesterday, an update on an earlier story was provided.  Walmart has a goal of being 100% renewable energy powered which they established a decade ago under CEO Scott Lee. They started simply, retraining their truck drivers on better ways to shift gears and drive to save fuel costs and actually measure fuel efficiency in truck driver performance.

Walmart also is converting their 12,000 stores to renewable energy. The PBS Newhour update noted that almost 500 stores in the US have been converted to solar power. Now, 28% of their US energy needs comes from solar energy. Retail stores have a lot of roof space, so companies like Walmart and IKEA have growing numbers of solar powered stores. They are also asking their suppliers to be better environmental stewards.

Mars is known for its candy, the biggest seller being M&Ms. Their goal is to make decisions that are “good for the environment and good for Mars,” They are using combinations of solar and wind energy to power their manufacturing plants. They just rolled out a new wind farm in Texas, a state that produces more wind energy than any other. Mars has noted their costs are lower with the renewable energy.

Fortunately, Walmart and Mars are not alone. Google, Facebook and Amazon are driving forces behind renewable energy given their significant data and distribution center power needs. Their centers in North Carolina are a reason NC ranks so highly on solar energy lists.

Yet, we should not lose sight that the cost of renewable energy has decreased so greatly, the decision is not just environmental, it is economic. Paula Diparno of CDP said on PBS Newshour that addressing climate change is “no longer a punishment, it is an opportunity.”

That is a huge shift in mindset. She added that there are three stakeholders for companies – customers, shareholders and management. Customers are noticing, shareholders are becoming more insistent and management better be paying attention. To this end, Blackrock, a major institutional investor, is requiring its companies to define what they are doing about renewable energy and climate change.

To this end, because of Blackrock’s efforts, Exxon Mobil’s shareholders voted last year to require management to do more and report back on addressing climate change. Ironically, this vote was the day before the current US President announced that he was withdrawing from the Paris Climate Change Accord. That contrast speaks volumes.