Renewables poised to surge after Paris Agreement
Historically, the transition from one energy system to another, as from wood to coal or coal to oil, has proven an enormously complicated process, requiring decades to complete. In similar fashion, it will undoubtedly be many years before renewable forms of energy — wind, solar, tidal, geothermal, and others still in development — replace fossil fuels as the world’s leading energy providers. Nonetheless, 2015 can be viewed as the year in which the epochal transition from one set of fuels to another took off, with renewables making such significant strides that, for the first time in centuries, the beginning of the end of the fossil fuel era has come into sight.
This shift will take place no matter how well or poorly the deal just achieved at the U.N. climate summit in Paris is carried out. Although a robust commitment by participating nations to curb future carbon emissions will certainly help speed the transition, the necessary preconditions — political will, investment capital, and technological momentum — are already in place to drive the renewable revolution forward. Lending a hand to this transformation will be a sharp and continuing reduction in the cost of renewable energy, making it increasingly competitive with fossil fuels. According to the Paris-based International Energy Agency (IEA), between now and 2040 global investments in renewable power capacity will total $7 trillion, accounting for 60 percent of all power plant investment.
Fossil fuels will not, of course, disappear during this period. Too much existing infrastructure — refineries, distribution networks, transportation systems, power plants, and the like — are dependent on oil, coal, and natural gas, which means, unfortunately, that these fuels will continue to play a prominent role for decades. But the primary thrust of new policies, new investment, and new technology will be in the advancement of renewables.
Two events on the periphery of the Paris climate summit were especially noteworthy in terms of the renewable revolution: the announcement of an International Solar Alliance by India and France, and the launching of the Breakthrough Energy Coalition by Bill Gates of Microsoft, Jeff Bezos of Amazon, and a host of other billionaires.
As described by Indian Prime Minister Narendra Modi, the International Solar Alliance is meant to mobilize private and public funds for the development and installation of affordable solar systems on a global scale, especially in developing countries. “We intend making joint efforts through innovative policies, projects, programs, capacity-building measures, and financial instruments to mobilize more than 1,000 billion U.S. dollars of investments that are needed by 2030 for the massive deployment of affordable solar energy,” Modi and French President François Hollande indicated in a joint statement on Nov. 30.
According to its sponsors, the aim of this program is to pool financing from both public and private sources in order to bring down the costs of solar systems even further and speed their utilization, especially in poor tropical countries. “The vast majority of humans are blessed with sunlight throughout the year,” Modi explained. “We want to bring solar energy into their lives.”
To get the alliance off the ground, the Indian government will commit some $30 billion for the establishment of the alliance’s headquarters in New Delhi. Modi has also pledged to increase solar power generation in India by 2,500 percent over the next seven years, expanding output from 4 to 100 gigawatts — thereby creating a vast new market for solar technology and devices. “This day is the sunrise of new hope, not just for clean energy, but for villages and homes still in darkness,” he said in Paris, adding that the solar alliance would create “unlimited economic opportunities” for green energy entrepreneurs.
The Breakthrough Energy Coalition, reportedly the brainchild of Bill Gates, will seek to channel private and public funds into the development of advanced green-energy technologies to speed the transition from fossil fuels to renewables. “Technology will help solve our energy issues,” the project’s website states. “Scientists, engineers, and entrepreneurs can invent and scale the innovative technologies that will limit the impact of climate change while providing affordable and reliable energy to everyone.”
As Gates imagines it, the new venture will seek to bundle funds from wealthy investors in order to move innovative energy breakthroughs from the laboratory — where they often languish — to full-scale development and production. “Experience indicates that even the most promising ideas face daunting commercialization challenges and a nearly impassable Valley of Death between promising concept and viable product,” the project notes. “This collective failure can be addressed, in part, by a dramatically scaled-up public research pipeline, linked to a different kind of private investor with a long-term commitment to new technologies who is willing to put truly patient flexible risk capital to work.”
Joining Gates and Bezos in this venture are a host of super-rich investors, including Jack Ma, founder and executive chair of Alibaba, the Chinese internet giant; Mark Zuckerberg, the founder and chair of Facebook; George Soros, chair of Soros Fund Management; and Ratan Tata, chair emeritus of India’s giant Tata Sons conglomerate. While seeking to speed the progress of green technology, these investors also see a huge potential for future profits in this field and, as the venture claims, “will certainly be motivated partly by the possibility of making big returns over the long-term, but also by the criticality of an energy transition.”
While vast in their ambitions, these two schemes are not without their critics. Some environmentalists worry, for example, that Modi’s enthusiasm for the International Solar Alliance might actually be a public relations device aimed at deflecting criticism from his plans for increasing India’s reliance on coal to generate electricity. A report by Climate Action Tracker, an environmental watchdog group, noted, for instance, that “the absolute growth in [India’s] coal-powered electric generating capacity would be significantly larger than the absolute increase in renewable/non-fossil generation capacity” in that country between 2013 and 2030. “Ultimately, this would lead to a greater lock-in of carbon-intensive power infrastructure in India than appears necessary.”
The Gates initiative has come under criticism for favoring still-experimental “breakthrough” technologies over further improvements in here-and-now devices such as solar panels and wind turbines. For example, Joe Romm, a climate expert and former acting assistant secretary of energy, recently wrote at the website Climate Progress that “Gates has generally downplayed the amazing advances we’ve had in the keystone clean technologies,” such as wind and solar, while “investing in new nuclear power, geo-engineering technologies, and off-the-wall stuff.”
Despite such criticisms, the far-reaching implications and symbolic importance of these initiatives shouldn’t be dismissed. By funneling billions — and in the end undoubtedly trillions — of dollars into the development and deployment of green technologies, these politicians and plutocrats are ensuring that the shift from fossil fuels to renewables will gain further momentum with each passing year until it becomes unstoppable.
The developing world goes green
In another sign of this epochal shift, ever more countries in the developing world — including some oil-producing ones — are embracing renewables as their preferred energy sources. According to the IEA, the newly industrialized countries, spearheaded by China and India, will spend $2.7 trillion on renewable-based power plants between 2015 and 2040, far more than the older industrialized nations.
This embrace of renewables by the developing world is especially significant given the way the major oil and gas companies — led by ExxonMobil and BP — have long argued that cheap fossil fuels provide these countries with the smoothest path to rapid economic development. Exxon CEO Rex Tillerson has even claimed that there is a “humanitarian imperative” to providing the developing world with cheap fossil fuels in order to save “millions and millions of lives.”
In accordance with this self-serving rhetoric, Exxon, BP, Royal Dutch Shell, and other energy giants have been madly expanding their oil and gas distribution networks in Asia, Africa, and other developing areas.
Increasingly, however, the targets of this push are rejecting fossil fuels in favor of renewables. Morocco, for example, has pledged to obtain 42 percent of its electricity from renewables by 2020, far more than planned by the members of the European Union. Later this month, the country will commence operations at the Ouarzazate solar thermal plant, a mammoth facility capable of supplying electricity to 1 million homes by relying on an array of revolving parabolic mirrors covering some 6,000 acres. These will concentrate the power of sunlight and use it to produce steam for electricity-generating turbines.
Elsewhere in Africa, authorities in Rwanda have commissioned a vast solar array at Agahozo-Shalom Youth Village, about 40 miles east of Kigali, the capital. Consisting of 28,360 computer-controlled solar panels, the array can generate 8.5 megawatts of electricity, or about 6 percent of Rwanda’s capacity. Spread over an undulating hill, the panels are laid out in the shape of the African continent and are meant to be symbolic of solar energy’s importance to that energy-starved continent. “We have plenty of sun,” said Twaha Twagirimana, the plant supervisor. “Some are living in remote areas where there is no energy. Solar will be the way forward for African countries.”
Even more significant, a number of major oil-producing countries have begun championing renewables, too. On Nov. 28, for example, Sheikh Mohammed bin Rashid, vice president and ruler of Dubai, launched the Dubai Clean Energy Strategy 2050, which aims to make the emirate a global center of green energy. According to present plans, 25 percent of Dubai’s energy will come from clean energy sources by 2030 and 75 percent by 2050. As part of this drive, solar panels will be made mandatory for all rooftops by 2030. “Our goal is to become the city with the smallest carbon footprint in the world by 2050,” Sheikh Mohammed said when announcing the initiative.
As part of its green energy drive, Dubai is constructing the Mohammed bin Rashid Al Maktoum Solar Park, intended to be the world’s largest solar facility. When completed, around 2030, the giant complex will produce some 5,000 megawatts of energy — about eight times as much as the Ouarzazate solar plant.
Evidence that an accelerating shift to renewables is already underway can also be found in recent studies of the global energy industry, most notably in the IEA’s just-released annual assessment of industry trends, World Energy Outlook 2015. “There are unmistakable signs that the much needed global energy transition is under way,” the report noted, with “60 cents of every dollar invested in new power plants to 2040 [to be] spent on renewable energy technologies.”
The growing importance of renewables, the IEA noted, is especially evident in the case of electricity generation. As more countries follow the growth patterns seen in China and South Korea, electricity is expected to provide an ever-increasing share of world energy requirements. Global electricity use, the report says, will grow by 46 percent between 2013 and 2040; all other forms of energy use, by only 24 percent. As a result, the share of total world energy provided by electricity will rise from 38 percent to 42 percent.
This shift is significant because renewables will provide a greater share of the energy used to generate electricity. Whereas they contributed only 12 percent of energy to power generation in 2013, the IEA reports, they are expected to supply 24 percent in 2040; meanwhile, the shares provided by coal and natural gas will grow by far smaller percentages, and that by oil will actually shrink. While coal and gas are still likely to dominate the power sector in 2040, the trend lines suggest that they will lose ever more ground to renewables as time goes on.
Contributing to the growing reliance on renewables, the IEA finds, is a continuing drop in the cost of deploying these technologies. Once considered pricey compared to fossil fuels, renewables are beginning to win out on cost alone. In 2014, the agency noted, “about three-quarters of global renewables-based [power] generation was competitive with electricity from other types of power plants without subsidies,” with large hydropower facilities contributing much of this share.
Certainly, renewables continue to benefit from subsidies of various sorts. In 2014, the IEA reports, governments provided some $112 billion to underwrite renewable power generation. While this may seem like a significant amount, it is only about a quarter of the $490 billion in subsidies governments offered globally to the fossil fuel industry. If those outsized subsidies were eliminated and a price imposed on the consumption of carbon, as proposed in many of the schemes to be introduced in the wake of the Paris climate summit, renewables would become instantly competitive without subsidies.
Go green, young man and young woman
All this is not to say that the world will be a green-energy paradise in 2030 or 2040. Far from it. Barring the unexpected, fossil fuels will continue to rule in many areas, especially transportation, and the resulting carbon emissions will continue to warm the planet disastrously. By then, however, most new investment in the energy field will, at least, be devoted to renewables and in most places globally there will be rules and regulations aimed at facilitating their installation.
As a college professor, I often think about such developments in terms of my students. When they ask me for career advice these days, I urge them to gear their studies toward some field likely to prosper in exactly this future environment: renewable energy systems, green architecture and city planning, alternative transportation and industrial systems, sustainable development, and environmental law, among others. And more and more of my students are, in fact, choosing such paths.
Likewise, if I were a future venture capitalist, I would follow the lead of Gates, Bezos, and the other tycoons in the Breakthrough Energy Coalition by seeking out the most innovative work in the green energy field. It offers as close as you can get to a guarantee against failure. As the consumption of renewable energy explodes, the incentives for power and money-saving technical breakthroughs are only going to grow and the rate of discovery is sure to rise as well, undoubtedly offering enormous payback possibilities for those getting a piece of the action early.
Finally, if I were an aspiring politician, whether in this country or elsewhere, I would be spinning plans for my city, state, or nation to take the lead in the green energy revolution. Once the transition from fossil fuels to renewables gains more momentum, leadership in the development and deployment of green technologies will become a far more popular position, which means it will increase your electability. This proposition is already beginning to be tested. For example, the Labor Party candidate for mayor of London, Sadiq Khan, is now leading the way by building his campaign around a promise to set that city on course to be 100 percent powered by renewables by 2050.
You’re still going to hear a lot about fossil fuels — and for good reason — but make no mistake about it: The future belongs to renewables. Of course, Big Energy, the giant utilities, and the lobbyists and politicians in their pay, including just about the complete climate-change-denying Republican Party, will do everything in their (not insignificant) power to perpetuate the fossil fuel era. In the process, they will cause immeasurable harm to the planet and to us all. They will win some battles. In the process, they will also be committing some of the great crimes of history. But the war they are fighting is a losing one. Inevitably, ever more people — especially the most dynamic and creative of the young — will be hitching their futures to the coming of a genuinely green civilization, ensuring its ultimate triumph.
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