Fossil fuel energy may have seen a global turning point

Earlier this week, Reuters in the UK posted an article called “Fossil fuels for power at turning point as renewable surged in 2019 – data.” A link to the article is below. A few excerpts from the article are telling:

“The use of fossil fuels such as coal and oil for generating electricity fell in 2019 in the United States, the European Union and India, at the same time overall power output rose, a turning point for the global energy mix. Those countries and regions are three of the top four largest producers of power from fossil fuels. The declines suggest the end of the fossil fuel era could be on the horizon, said Tomas Kaberger, an energy professor at Chalmers University of Technology in Sweden, who provided the power generation data to Reuters.

Kaberger, who is also the chair of the executive board for Japan’s Renewable Energy Institute and a member of the board at Swedish utility Vattenfall AB, provided data covering more than 70% of the world’s power generation that showed for most of 2019 the amount of power sourced from fossil fuels dropped by 156 terawatt hours (TWh) from the year before. That is equal to the entire power output of Argentina in 2018.

The data also indicates that renewable power generation increased at a faster rate than the overall growth in power output for the first time, rising by 297 TWh versus 233 TWh for overall output, Kaberger said.

‘It is economics driving this as low-cost renewable electricity outcompetes against fossil and nuclear power plants,’ said Kaberger.”

The last quote from Kaberger is extremely important. The economics of renewables relative to their fossil fuel counterparts are driving the movement. The argument that renewables cost more is not relevant any more. And, when you factor in the present value of all costs – acquisition, transport, environmental degradation, production, water loss, health, storage, maintenance and litigation – renewables beat the pants off fossil fuel energy.

So, when you hear fossil fuel arguments such as cost, use the above example. When you hear fossil fuel arguments such as jobs, solar and wind energy jobs are growing at double digit rates. The big picture question is if we can use a non-polluting, renewable energy at the same or better cost, and create jobs, is that not the best path forward?

https://uk.reuters.com/article/uk-electricity-fossilfuel-decline/fossil-fuels-for-power-at-turning-point-as-renewables-surged-in-2019-data-idUKKBN20R0I6?feedType=RSS&feedName=worldNews

Coal can’t be made great again says conservative economist

Walter Block is a professor of economics at Loyola University in New Orleans and a Libertarian. He recently penned an op-ed piece in The New York Times called “Coal can’t be made great again.”

Block sets the context for free-market thinking using more basic purchases – shoes, clothes, restaurant meals. This “leave it to the market forces” is a mantra for free-market Republicans. Yet, as Block notes “One would think that Republicans would apply that same logic to our fuel industry.”

He adds while government has a “legitimate role” in ensuring the safety of nuclear and other plants, “it should not favor, or oppose, nuclear power, gas, oil, coal, wind, water, solar, or any other source of energy over any other.”

He also notes a couple of observations of data points which reveal “the market is moving away from coal.” First, he writes “In 2016, American reliance on coal had dipped to 30% of total electric energiy expenditure, from about 50% in 2000. In contrast, natural gas and even wind, solar and water power are becoming less expensive, and will likely take on a greater share of the overall energy industry.”

Second, he notes “For the first time, as predicted by the Institute for Energy Economics and Financial Analytsis, in April, renewables generated more electricity than power plants fueled by what was once called ‘King Coal.'”

It is through these lenses, he views the efforts to subsidize coal use and place tariffs on imported solar panels as a political attempt to “pick winners.” We should not be “propping up coal” at the expense of alternative energy sources.

In my view, we are passed the tipping point on coal. New plants are too costly to build and the present value cost of acquiring, transporting, burning, storing the ash, health and environmental degradation and litigation of coal exceeds other sources. Further, the solar energy jobs are 4x the number of coal jobs. And, wind energy is soaring in growth, especially through the plains states.

This is not a US-centric result. Renewables are growing rapidly abroad with Germany now getting more energy from renewables than coal. China has been heavily investing in solar panels. But, my favorite global example is southern Australia is now solar powered using American Elon Musk’s battery storage and a French company’s installation of solar panels. Three continents came together to forge a renewable future.

While I agree with Block for the most part, government can play a role to help move forward cleaner energy initiatives, at least temporarily. So, the temporary 30% tax credit for solar power installation makes sense, especially when our Department of Defense continues to cite climate change as a significant threat to national security, even under the current president.

But, as the renewable costs have become more on par from a production standpoint, they can stand on their own without the tax subsidy. Embracing future technologies that will drive the economy is essential. As an example, yesterday, Toyota announced the movement from 2030 forward to 2025 when 1/2 of their vehicle sales will be electric cars, with batteries being made in China. So, if our leaders look backwards too much, we might get passed by.

 

 

 

 

Kudos to Scotland

Last weekend on PBS Newshour, a two-part series called “Scotland is betting on tidal energy” was presented. Per the series, Scotland “is nearly 70% powered by renewable sources already, with the goal of reaching 100% by 2020, 10 years ahead of schedule.” Let that quote sink in a little – by 2020. Their focus has been on offshore wind energy, but the true wave of the future is tidal energy.

A project in the Pentland Firth is called MeyGen which includes three tidal wave turbines each with three thirty foot blades, the apparatus weighing 150 tons. The turbines provide a very predictable amount of energy powering over 1,000 homes each. “As the tide ebbs and flows, the turbines spin between 7 and 15 times a minute generating power to a wind turbine.”

Tim Cornelius, the CEO of SIMEC Atlantis said the tidal turbines have been expensive at first and have required half the cost to be subsidized by the Scottish government. But, he said the costs are coming down and after one year the cost of production is 50% of the year before. The turbines also build off existing technology used in the oil and gas energy, with cranes, ships and equipment to position a new turbine.

Scotland has been the leading edge implementer of these tidal turbines and others are taking notice. Cornelius says SIMEC plans to deploy 250 additional tidal turbines in the next several years. Other coastal countries are taking notice and creating their own pilots. The US is behind others, but will be investing in a testing facility off the Oregon coast.

As discovered with solar and onshore and offshore wind energy, the production costs decline over time so as to be more on par with fossils fuel production costs. But, in my view, when all costs are factored in – maintenance, litigation, environmental degradation, transportation, water loss and health – renewables are far cheaper than fossil fuel. For example, maintaining coal ash is a cost that never goes away.

While good things are happening with renewables in the US, we can all learn from countries like Scotland. We have a few cities like Burlington, VT, Georgetown, TX and Greensburg, KS which are 100% renewable energy powered. And, while California is a solar power and Texas a wind power champion, we have far more ways to go.

So, kudos to Scotland!

 

A Portugese Energy Company knows about US Growth

An article in Reuters earlier this week noted a Portugese energy company that knows first hand where energy growth is occurring in the United States. It may be surprising to the current White House, but not the market, the growth is not in the coal energy sector.  Per Timothy Gardner’s article “EDP bullish on US renewable power despite Trump’s support for coal” in Reuters, the following quote is compelling.

“‘U.S. renewables represent the growth engine of our company,’ António Mexia, who since 2006 has run the power utility EDP (EDP.LS), one of Portugal’s biggest companies, said in an interview on Tuesday.

U.S. wind and solar power projects represented 65 percent of new investments last year at EDP’s renewables arm EDPR (EDPR.LS), and are expected to continue at that rate in 2018 and in 2019, Mexia said. EDPR operates renewable projects in 11 other countries in Europe and the Americas.”

This is not inconsistent with other measures in America as solar and wind energy growth have risen with the continual fall in pricing. And, it is showing up in recurring double digit job growth in solar and wind energy.

I have cited the significant increase in wind energy across our plains states, but this is following the forecast of oil tycoon T. Boone Pickens, who appeared on “60 Minutes” more than five years ago. He noted that natural gas expansion is a bridge to wind energy. It is just buying us time to get the infrastructure ready and prices to get more effective. It should be noted that several states get over 10% of their electricity from wind energy, with Iowa  at just under 33% leading in percentage of total and Texas at 16% producing the most wind energy due to its size.

In California, North Carolina, Florida and other southern states in the east and west, solar energy is growing significantly. California, by itself, would be one if the most prolific solar countries. And, Tesla is more of a battery storage company than car company. Elon Musk went live with a massive battery storage site to help a French company power southern Australia with solar energy. It truly is a global industry, so seeing a Portugese company invest here in the US is not unusual.

The growth in energy jobs are in renewables. It would be nice if this was more publicly recognized by all of our elected leaders, not just the ones who are not funded by the fossil fuel industry.

Three More Renewable Energy Tidbits

In an effort to highlight continuing good news on the renewable energy front, here are three new stories. First, Google has now invested more than twice the nearest company or organization in renewable energy. Google can claim that they generate enough power through renewable energy to cover 100% of their global electricity needs in data centers and offices. Amazon does a lot as well, but they are in a distant second.

Second, Elon Musk’s Tesla Company is primarily a battery company parading as an electric car company. Last week, forty days ahead of schedule, Tesla switched on a 100 MW lithium ion superbattery storage facility in Southern Australia, which will help power 30,000 homes through renewable wind energy provided by French company Neoen. Musk said in the spring if they could not deliver on the promise in 100 days, the batteries and installation would be free.

Third, last week in Miami, the second annual conference on Companies vs. Climate Change was held. Companies like Ford, GM, Walmart, and Mars, e.g. were in attendance. While all regret the President announcing the US pull out of the Paris Climate Change Accord, they are not letting that stop their movement down the path of battling climate change.

It would be nice if the President supported global efforts, but he cannot stop the significant progress that is occurring. And, as one climate scientist has said, Trump did everyone a favor by the announced withdrawal, as it has heightened the urgency and brought even more attention to the problem.

Let’s keep up the momentum.

The Renewable Energy Train continues to board former skeptics

I have written before the renewable energy train has left the station. The current White House incumbent’s position on climate change and promoting more fossil fuel development, can slow the train, but he cannot stop the market forces that are driving it down the track.

A newspaper story reprinted today supports this thesis and illustrates how more unlikely folks are getting on board the train. An editorial from the Fayetteville (NC) Observer entitled “Solar turning a corner in NC?” noted the opening of the largest solar farm east of the Mississippi. But, a new solar farm in NC is not news, as NC trails only California in solar energy.

What I found newsworthy beyond the size is the attendance at the grand opening of at least two Republican politicians – US Representstive Robert Pittenger and State Senator John Szoka. Szoka had spearheaded a renewable energy support bill, which is ironic since he was a previous skeptic. He noted “What changed my opinion is facts. Facilities like this are drawing down the cost of energy.”

But, these folks are not alone. There are groups like Conservatives for Clean Energy that are helping to propel the train. There is the work in several red states that have developed wind energy into a sizable part of their energy portfolio. These plain states like Texas, Iowa, Oklahoma, e.g. are investing heavily in this increasingly cheaper source, with Iowa getting 1/3 of its electricity from wind energy.

I highlight the Conservatives who are jumping on the train, as unfortunately, climate change and renewable energy have been made a political issue. The people who have made it so are the fossil fuel companies who continue to wield their powerful influence to garner more profits. The White House incumbent and his cabinet are perpetuating this influence, but fortunately they are on the wrong side of the tracks and market forces and other political, business and citizen leaders are moving the train forward.

Let’s focus on jobs – promote renewable energy

Nadja Popovich of The New York Times penned a story this week called “Today’s energy jobs are in solar, not coal.” Using 2016 numbers released by the US Department of Energy in January, the following data points are revealed per Popovich:

  • 1.9 million Americans work in the field of power creation (including generation, mining and other fuel extraction activities).
  • More than 373,000 Americans work full or part-time in solar energy, with 260,000 of them spending over 70% of their time on solar projects.
  • Wind energy jobs topped 100,000 for the first time in 2016.
  • The coal industry jobs have fallen to 160,000 Americans nationwide, with only 54,000 in coal mining, a significant reduction which has occurred over time with the advent of natural gas due to fracking and decreasing prices in renewables.
  • It should be noted there are another 2.3 million jobs in energy transmission, storage and distribution, including more than 900,000 gas station workers and related retail jobs.
  • If non-traditional energy workers are added, those installing energy-efficient products, the number swells in total to 6.4 million Americans.

Solar jobs have been growing at an annual double-digit rate for several years and will continue to do so with the falling prices. A report of a couple of years ago, noted that wind energy jobs could grow to 500,000 by 2030, if we invest appropriately. It should be noted that Warren Buffett and oil tycoon T. Boone Pickens are big proponents of wind energy, with the Buffett investing in GE who produces wind turbines and Pickens promoting wind energy in the plain states for several years. Iowa gets over a 1/3 of its electricity and oil-rich Texas gets 11% of its electricity from wind energy, e.g.

So, the next time you discuss the need for moving forward with renewable energy and someone counters your argument with a remark about jobs, please remember these real numbers released by the DOE. The best I can ascertain, is the DOE is not in the business of fake news. And, the final question to ask is where do you think investors are going to place their bets – on a retrenching industry or a growing one?