NOTE: Images in this archived article have been removed.
Wind turbines image via greenenergyfutures/flickr. Creative Commons 2.0 license.
Three things you shouldn’t miss this week
- Chart: Increasingly competitive renewables
- Article: Power from fossil fuel drops to 35-year low in Germany – In 2014, German coal power production fell considerably year over year – and to the lowest level since 2011.
- Article: At least one major oil company will turn its back on fossil fuels – Former industry adviser, warns over plunging commodity prices and soaring costs of risky energy projects.
Ever since oil and gas prices started to plunge, speculation that cheaper fossil fuels would mean a serious setback for renewables has been rife. Considering the latest data, however, it seems renewables are still going strong and it is the fossil fuel industry that is running into both short and long-term difficulties.
Investment in clean energy worldwide jumped by 16% in 2014 to £310 billion, just 2% shy of the all-time high in 2011, as Bloomberg New Energy Finance reports. Against the backdrop of a slowing world economy, this is certainly impressive. Falling costs make renewables increasingly competitive, as our chart of the week from the International Renewable Energy Agency (IRENA) illustrates. The best onshore wind projects now match or even undercut electricity generated from fossil fuels (even without subsidy) and cost of utility scale solar power has halved since 2010.
While renewables are on the up, fossil fuels have increasingly come under pressure. In the short term, the oil price slide has forced companies to slash their exploration and production spending, shedding staff and cancelling projects as they become unprofitable. The long term may look bleak, too. Following the recent report by University College London confirming the majority of known fossil fuel reserves will need to stay in the ground to remain within 2C of warming (see Energy round-up: unburnable oil), pressure from the divestment movement is mounting.
Its growing influence could be far more damaging to traditional energy firms’ business models than unstable oil prices. Already a coalition of 150 major investors have filed a resolution requiring BP and Shell to disclose their value at risk to climate change, while fund manager AXA IM acknowledged the reputational risk associated with investing in fossil fuels.
It hasn’t been a good week for British shale gas either. No sooner had Cuadrilla received permission from the Environment Agency to resume drilling activities in Lancashire than a Lancashire County Council report recommended against granting planning permission for two sites. What’s more, challenges to the government’s controversial infrastructure bill will mean that Scotland will be excluded from new rules to allow fracking firms automatic access under people’s homes and drilling firms will also be legally bound to reveal information on chemicals used for fracking. Expect many more local battles to be fought.
The economic case for renewables remains strong, as does the environmental. Oil price turmoil shouldn’t be allowed to overshadow the bigger issues at stake – new analysis confirmed this week that 2014 was globally the hottest year on record.
Related Reports and Commentary
Renewable Power Generation Costs in 2014 – International Renewable Energy Agency (IRENA)
Our Renewable Future – Richard Heinberg, Post Carbon Institute
Invisible Energy: Hidden Benefits of the Demand Side – Association for Decentralized Energy
How energy conversion drives economic growth far from the equilibrium of neoclassical economics – New Journal of Physics
The impact of wind energy on UK energy dependence and resilience – Cambridge Econometrics for RenewableUK
