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Wake up coal: Renewables is now the main game

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It is staggering to observe that even in modern sophisticated economies such as the US, Australia and UK – which are supposed to have modern, sophisticated political systems (no really, don’t laugh) – that the role of renewables in the world’s future energy systems is constantly underplayed.

This has probably got something to do with the way that mainstream media handles the issue. In its pursuit of division, fear and controversy, it’s happy to oblige the tactics of delay and misinformation from the fossil fuel industry, that is seeking to protect and prolong several trillion dollars of investments and revenue streams.

Too often, renewable energy is portrayed as an expensive and unnecessary plaything or indulgence. But the media is not solely to blame. There is a shocking lack of vision at the political level too, with the notable exception of the Greens. Conservative political parties, in Australia in particular, constantly use green energy as a scapegoat for problems elsewhere; often for superfluous and inefficient grid upgrades.

But one thing should be made clear: whichever way you cut the future energy outlook, and whichever way you attack the challenge of climate change and the goal of reducing emissions, two technology solutions dominate all others – energy efficiency and renewable energy.

Even if the pro-nuclear lobbies and those who still hold on to the dream of carbon capture and storage have their way, the investment in those technologies will pale in comparison to that needed for renewables – be it in solar PV or solar thermal with storage, wind energy (onshore and offshore), hydro, biomass, or the emerging technologies such as wave and tidal.

This is true on two counts. Already, solar PV – and the arrival of socket parity in more than 100 countries – is providing an economic rationale for investment in renewables, regardless of climate policies. Utility-scale wind is cheaper than new fossil fuel plants in many countries – particularly in energy starved developing nations in Africa and Asia – and utility-scale solar will follow soon enough. Once climate policy is taken into the equation, the impact is even more dramatic.

This first graph below – taken from the International Energy Agency’s recent “Redrawing the climate energy map” publication – probably best sums up the situation. It is the IEA’s take on where the greatest emissions reductions are going to take place in the energy industry if the world is going to meet its climate goals. This graph illustrates its “delayed” scenario, which takes into account the probability that governments will not ramp up their policy actions by 2014 – as would be prudent – but would delay a few years.

Energy efficiency and renewable energy sources account for well over half of the abatement. Nuclear and CCS – even if they meet the IEA’s optimistic scenarios, which, given the financing problems for nuclear and the technology challenges for CCS, is unlikely – they still account for less than one-quarter of anticipated abatement. If either of those two technologies fall short, then energy efficiency and renewables will have to take up the slack.

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Given this, there are no prizes for guessing where the best returns are going to be made over the next two decades, a key factor that seems to go largely absent when renewables are discussed in the frame of short terms costs and not in the context of long-term opportunities.

This next graph illustrates this point. It’s the difference between policies that have been promised and enacted by leading economies so far (the blue New Policies scenario), and the policies required to meet the climate goals (green). Either way, revenues from renewables outstrip those from new nuclear and fossil fuel plants combined, even if nothing more is done, and are nearly double when the world takes serious action. Could there be any clearer demonstration of where the future is?

Screen Shot 2013-06-19 at 10.21.08 AM

The political debate in Australia around fossil fuels – and by extension renewables – is still based on the assumption that international demand is inexhaustible as the growing middle classes of emerging superpowers such as India and China require more electricity to power their new gadgets and appliances.

But the IEA makes clear that renewables will dominate the world’s new capacity – even out to 2020 – with some $2 trillion likely to be invested in hydro, wind, solar, biomass and other renewables. Australia’s share of that, with current policies such as the 20 per cent renewable energy target (should it be retained) is a modest $20 billion. That does not even meet our pro-rata share on a population basis.

“Despite the insufficiency of global action to date, limiting the global temperature rise to 2 °C remains technically feasible, though it is extremely challenging,” the IEA says.

“To achieve our 450 Scenario, which is consistent with a 50% chance of keeping to 2 °C, the growth in global energy-related CO2 emissions needs to halt and start to reverse within the current decade. Clear political resolution, backed by suitable policies and financial frameworks, is needed to facilitate the necessary investment in low-carbon energy supply and in energy efficiency.” Can’t be any clearer than that.

Still, the fossil fuel industry, and particularly the Australian Coal Association, has its head stuck firmly in the ground. Its CEO Nikki Williams is insisting that there is no such thing as “unburnable carbon”, and that all carbon can, and should be burned.

It’s a premise based on the hope that CCS will deliver, and deliver on time. Curiously, the coal industry has done precious little to fund the research, but it still hangs on its promise. Williams’ hopes are based on a business-as-usual scenario – or, at best, the New Policies scenario. But as the IEA points out in the graph below, even with CCS – the total market for coal-fired power stations is going to fall dramatically in the coming decades. Unless, of course, we just ignore the climate.

As said James Leaton, research director rom the Carbon Tracker Report which has been pushing the concept of unburnable carbon to the financial community, pointing out its risks: “The denial of the potential for unburnable carbon is exactly what will create a carbon bubble, wasted capital, and stranded assets – the coal industry needs to accept the need to change our energy mix and address air quality and climate change now.”

 Screen Shot 2013-06-19 at 9.42.29 AM

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  • Michel Syna Rahme

    Sharp as ever Giles!

    Which leaves me wondering about Paul’s reasoning and his ‘White Knight’! Many assumptions in that article that could be described as extraordinary. A Turnbull romp? Has he changed his spots? Quite bizarre that an executive director of Greenpeace is cheer leading in such a manner!

    • Louise

      Money

      • Michel Syna Rahme

        Your reply to Sid I agree with, and I also see where Sid is coming from. I assume he is referring to conventional natural gas only, and there is a substantial probability that conventional natural gas may be needed as a bridge to the necessary percentage of renewables that is required for sustainability – but hopefully less so than more so.

  • Sid Abma

    Natural gas and Renewable’s together can make such a Hugh Difference.
    Everybody knows the performance of Wind and Solar, but they do not realize that natural gas with the technology of Condensing Flue Gas Heat Recovery will make a natural gas power plant operate also with near Zero Thermal Energy being put into the atmosphere, and Near Zero CO2 Emissions being put into the atmosphere.
    Power plants with No Chimneys.
    This is 20th Century. There are industries that can use and benefit from the recovered heat – from the Power Plants Waste Exhaust.
    The CO2 can be Recovered ~ No CO2 being pumped into the atmosphere.

    Natural gas has one advantage over solar and wind. We can “create WATER” out of this combusted exhaust, and this distilled Water is so usable.

    Natural Gas and Renewable’s are so compatable. They provide the Electricity that our countries cannot operate without, but these energies can so compliment each other in the issue of Climate Change.

    • Louise

      Sid, natural gas synthesized from Power to Gas or Biomass is a viable long term solution for filling in the gaps between wind and solar.

      Gas extracted from the ground such as coal seem gas is not viable long term as it is not an infinite resource nor is it environmentally safe.

      The power of the future is electricity.

      Fossils are not needed and you can synthesize from gas (as in Power to Gas) all the products that can be synthesized from fossil fuels, 6000 products.

      The only ones who still promote fossil fuels are those people who profit financially from fossil fuels.

      Now, you might say that I am promoting renewable energies because I profit from renewables?

      I am not working in the energy field, I am a Customs Broker, I profit from processing documentation, what the product is, is irrelevant for me to make a profit. Therefore, there is no financial reason for me to oppose fossil fuels. I believe that the year 2016 is the year were renewables will take of in a major way.

      The first mobile phones were the size of a shoe box and I said I will never run around with a shoe box to make telephone calls and I didn’t.
      Mobile phones have changed and today I have one and most Australian’s have one as well.

      There are technologies coming to market in the next 2 to 3 years that will make renewables cheaper and more convienent to own.

      By 2025 several of the traditional regional electricity monopolies will no longer be around, they will not have survived the transformation form grid dependent buildings to electricity self-sufficient buildings. In other words they will run out of customers.

    • Louise
    • Louise
    • Louise

      In my opinion any gas that is currently in the ground should stay in the ground.

      The only gas I am in favour of is gas that is manufactured carbon neutrally such as Power-to-Gas from excess electricity and gas created in Bio-Gas plants and only when it is made from waste materials.

      I oppose the use of any material that could be used for human or animal consumption. Energy should not compete with food/feed stock.

      The sensible thing to do is to move processes to electricity and reduce fossil fuel consumption and syntactically manufactured gas should only be used where electricity can not be used or where it makes sense to use gas.

      There are two scenarios where using syntactically manufactured gas make sense.

      1) Energy storage
      2) Substitute gas out of the ground, with syntactically manufactured gas to produce products that today still require fossil fuels such as different types of plastics, lubricants, petrol et cetera, there are around 6000 products that are made form fossil fuels but could be made form syntactically manufactured gas.

      • Bob_Wallace

        I put natural gas in the same category as chemo therapy for cancer. Nasty, nasty, nasty but somewhat necessary at this stage in the game.

        If methane is used (with very minimal leaking) then it produces about 50% as much CO2 as coal. (Correct me if I’m wrong.)

        Here’ s the choice. Burn coal. (Die of cancer.)

        Or burn some natural gas. (Undergo chemo and increase your chance of survival.)

        If we burned 100% NG rather than 100% coal (and leaked no methane) we would be 50% better than we are now. That wouldn’t “cure” us, but it would let us survive longer.

        But here’s where we can really make some gains. Take 100 units of coal-electricity. Replace 20 units with solar. Replace 50 units with wind. And since NG is dispatchable we can use it for fill-in, the other 30 units.

        Do that and we would go from 100% CO2 production to 15% CO2 production. That would be an immense improvement.

        Then, as time goes on, we will figure out better storage solutions and we can fade out the NG. Perhaps hanging on to the plants for deep, deep backup and hopefully using them less than 1% of the time.

        • Bob Wallace

          The Need For Nuclear Power in Georgia

          Testimony before the Georgia Public Service Commission December 18, 2012

          James H. Rust

          The
          Georgia Public Service Commission is charged with regulating
          electricity supply to Georgia’s citizens. Part of that mission is safe,
          reliable, and economical supply of electricity. To the great fortune
          of Georgian’s, this mission has been admirably accomplished for many
          decades. There has never been a shortage of electricity where citizen’s
          worried about supply and subjected to blackouts or rolling brownouts as
          experienced by Northeastern states or other states like Texas and
          California. The Energy Information Administration’s latest price data
          shows the residential rate for Georgia customers September 2012-YTD is
          11.19 cents per kilowatt-hour versus the national average of 11.91 cents
          per kilowatt-hour-a 6.4 percent reduction. This in spite of the fact
          Georgia has no coal, oil, natural gas or Columbia or Colorado Rivers as
          domestic energy resources. It is easy to have cheap electricity with
          power plants on mine-mouths, natural gas fields, or Hoover Dams. Much
          of Georgia’s energy for electricity production has to be transported
          over 1000 miles.

          Georgia’s success may be attributed to its
          system of electing members of the Public Service Commission which make
          them more responsive to ratepayer’s welfare. Those who suggest changing
          this system do so at their peril. Adjusted for inflation, the cost of
          electricity today is as cheap as it has ever been.

          Electricity in
          Georgia is supplied in approximate equal amounts by coal and natural
          gas and the remainder twenty five percent by four nuclear power plants.
          Two new 1100 Megawatt nuclear power plants are under construction which
          will increase Georgia’s capacity to generate nuclear electricity by
          more than 50 percent. Once the new nuclear units are in operation,
          Georgia could have nuclear power supply all its electricity in early
          mornings of mid-spring or mid-fall.

          There are complaints about
          using nuclear power from both economic and societal issues. These
          complaints are overshadowed when considering the increased reliability
          of electric power supply provided by these new units. Nuclear power can
          provide about one-third of Georgia’s electricity demand. The plants
          operate more than 90 percent of the time and refueling may take place at
          intervals as long as 18 months.

          Due to EPA and other
          governmental regulations, Georgia is gradually shifting electricity
          supply from coal to natural gas. Coal-fired plants can store ninety-day
          supplies of coal on the plant site; while the low density of natural
          gas as a fuel makes it impractical for storage of long term supplies.
          Those with long memories may remember John L. Lewis who frequently
          called miners out on strike which threatened electricity supply. Thus
          we have large coal piles as protection against supply disruptions.
          Natural gas supplies are disrupted by extreme weather events as shown by
          hurricane Katrina in 2005. The Georgia Public Service Commission’s
          support of present, and the two additional, nuclear power plants
          provides security against catastrophic loss of electricity supply and
          Georgia’s citizens should appreciate this concern.

          A factor not
          mentioned in support of nuclear power is its influence on domestic
          reserves of coal and natural gas. One of the new 1100 Megawatt nuclear
          power plants would consume over its 60-year lifetime as a fossil-fueled
          plant 230 million tons of coal or 5 trillion cubic feet of natural gas.
          This is equal to 23 percent of our annual use of either coal or natural
          gas. Nuclear power plants extend the life of our fossil fuel reserves
          far out into the future and reduce future price increases. Georgia’s
          six nuclear power plants would save more than one year’s use of natural
          gas or coal.

          Due to concerns about carbon dioxide from burning
          fossil fuels causing catastrophic global warming, arguments are made to
          use solar energy as the future source of electricity for Georgia.
          Catastrophic events caused by carbon dioxide are not taking place as
          witnessed by global temperatures not rising the past 16 years while
          atmospheric carbon dioxide increased 30 parts per million. The argument
          global warming caused Arctic sea ice to fall to its smallest amount
          since 1979 is put to rest because a hurricane in the Arctic Ocean early
          August tore up the sea ice and propelled it down to regions of warmer
          water for faster melting. From its minimum amount September 16, Arctic
          sea ice has been restored by 3.1 million square miles as of December
          10–a record recovery rate.

          Georgia’s Public Service Commission
          should examine all sources of electricity generation and solar energy is
          within their purview. Georgia has about two-thirds the prospect for
          generating electricity compared to desert areas of California, Nevada,
          and Arizona. California has mandated 33 percent of its electricity must
          come from renewable energy sources like solar and wind by 2020. This
          mandate is nowhere close to being met and the latest residential
          electricity rate for California is 13.94 cents per kilowatt-hour and
          rising-49 percent higher than Georgia. As California electricity rates
          spiral out of control, the motto of the state may be, “Will the last
          person leaving California blow out the candle.”

          Georgia should
          resist any attempt to mandate electricity production by any form.
          Mandates in other states have caused increased electricity rates.
          Governments are not noted for making wise economic decisions.

  • Louise

    Power to Gas

    E.ON injects hydrogen fuel into Germany natural gas grid
    E.ON completes successful hydrogen fuel demonstration
    “E.ON, the world’s largest investor owned electric utility based in Europe, has completed a new power-to-gas demonstration in Falkenhagen, Germany. The demonstration was meant to show that hydrogen fuel could be injected into the existing natural gas grid of the German state. This demonstration is part of an overarching project that is represented by a power-to-gas facility. At this facility, hydrogen fuel is produced in order to be fed into the Falkenhagen natural gas infrastructure.”
    http://www.hydrogenfuelnews.com/e-on-injects-hydrogen-fuel-into-germany-natural-gas-grid/8512222/

    The german government is subsidising pilot and demonstration projects ranging in capacity from small 6 kW to large 20 MW power-to-gas plants to be build before or by the end of 2015.

    Fuel Cells that can process gas or hydrogen are also subsidised.
    http://www.powertogas.info/power-to-gas/pilotprojekte.html

    Fossil fuel proponents always doubt that any alternatives to fossil fuel could ever be forthcoming, or if they did, it would be by the middle or the end of this century.

    I am not sure, if the fossil fuel industry, will still be around by the middle or the end of this century. Perhaps in a museum?

  • Bob_Wallace

    “Utility-scale wind is cheaper than new fossil fuel plants in many countries – particularly in energy starved developing nations in Africa and Asia – and utility-scale solar will follow soon enough.”

    I suspect utility-scale solar has arrived. The city of Palo Alto, California recently signed a 30 year power purchase agreement for solar at $0.069/kWh. That price is lowered by the 30% investment tax credit given by the federal government. Tease out the federal subsidy and solar is being sold for about 10 cents.

    Apparently there is no inflation clause in the 30 year agreement, so in 2043 the city will be paying nothing more than what they are paying today. And after inflation that 10 cents will be worth a lot less than it is now.

    At 3% inflation today’s 10 cents will be worth only 4 cents in 30 years.

    This is the second ~10 cent PPA we’ve seen recently. Another was in New Mexico with First Solar.

    New coal plants can’t be built and produce electricity for 10 cents.

    • Bob Wallace

      I believe Palo Alto has a solar Feed-In-Tariff program, so the price is probably a bit above 10 cents. Still a better option than coal for a CA town.

      • Bob_Wallace

        Folks, this is my self-admitted stalker and impersonator. Note the lack of the underline between the two names.

        He used to post on CleanTechnia under the name “George Stephens” before the administration kicked him off for violating community settings. I’m one of the mods on that site.

        He then began stalking me from site to site using the Disqus ‘follow’ feature and registered a new account on Discus using this close variation on my name. On multiple sites he has admitted to his deception and stalking.

        Just so you know, he’s a pro-nuclear right winger who will post a few credible statements but embed some really misleading garbage.

        George is a world-class jerk and his dishonesty is demonstrated for all to see.

        • Bob Wallace

          I have no affiliation with any right-winged political groups and share no ideologies with them.

          I just wanted to point out that you neglected to consider the Palo Alto FiT in your consideration of subsidy for the project. That is all.

          • Bob_Wallace

            Here’s a bit of George (the BW impostor) Stephens’ record. Just so you know who you are dealing with…

            George Stevens • 9 months ago

            I would vote for a black conservative (Alan Keyes supporter) over a white liberal everytime.

            George Stevens • 9 months ago

            actually the vast majority of GWBush’s tenure resulted in one of the most prosperous economic times this country has seen. It wasn’t until the end that things got bad and both parties were responsible for the laxed system that caused the collapse.

            George Stevens • 9 months ago

            No, this is a falsehood. Yea there are a lot of crazies on the right, but mostly its good everday middle-class people that believe in small and localized government, free markets, and personal accountability that call themselves conservatives. Most of us aren’t racist or rich.

            (Most of “us”. Got it.)

            George Stevens • 9 months ago

            (In his support of Romney for President)

            He’s gna cut taxes across the board ya’ll. stop making stuff up. Obama is funded by the wealthy and large corporations just as much as Mitt. This is the libs biggest argument and it is a total falsehood

          • Bob Wallace

            Good for George Stevens,
            But my name is Bob Wallace

          • Louise

            Have you ever considered to differentiate yourself?
            That way you would be able to express your uniqueness more conspicuously?

            If we all were to use the same screen name, it would make it a bit confusing following the discussion, wouldn’t you agree?

          • Bob Wallace

            Yes, that is true, I guess I could create a new name. I just haven’t gotten around to it.

          • RobS

            The ONLY reason for you to not openly mention the fact that you are not the same person as the OP on the slight chance you do both just happen to be called Bob Wallace is because you are being deliberately deceptive. So either its a huge coincidence and you are being deliberately deceptive, or you are just being blatantly deliberately deceptive.

          • Bob Wallace

            It is a coincidence, My name is Bob Wallace. The differentiator is _.

            I don’t think Bob_ is popular enough to impersonate. It is difficult to impersonate someone who isn’t generally recognized.

          • RobS

            Bob is a frequent and highly respected player on a number of renewable energy sites, by coming to these sites and actively misleading you my good sir are a charlatan and liar.

          • Bob Wallace

            How am I misleading anybody?

            Lively discourse is the lifeblood of any healthy democracy and engaging in robust debates about our stories on these sites should be encouraged. Bob_Wallace banned me from cleantechnica for simply disagreeing with him and nothing more. That is not the action of someone who commands respect.

            Bob_ claimed the author of this Harvard opinion piece “has his head up his a$$”
            http://www.seas.harvard.edu/news/2013/02/rethinking-wind-power

            He also disagreed with me on the documented price for which China was constructing new AP1000 reactors.

            There was no substantiated reason for Bob_ to ban me just as there is no substantiated reason for me to change my username from my given birth name.

            Please, let’s avoid personal attacks and keep your comments respectful and relevant.

    • Brian Donovan

      One or both of you are the Cleantechnica stalker and petty tyrant.

    • Brian Donovan

      Good grief, Bob, not only are you a supercilious boor, you reply to your own comments.

      You give renewable energy a bad name.

  • Brian Donovan

    Bob Wallace dominates Cleantechnica as a petty tyrant.

    If Bob says it, don’t believe it. Go on CleanTechnica and disagree with him and he will ban you.

    Search Bob Wallace Stalker CleanTechnica and he comes up multiple times.

    He’s lying when he says it’s not him.

    Solar and wind are less than 6 cent per KWH.

    Remove all the gov breaks and solar, wind and wastes are by far the cheapest energy.

    The govt, DOE figure are part of the Obama pro nuclear, pro fracking agenda. You believe the gov? I bet not. So why do you believe the old Atomic Energy Commissions, which is now the DOE, and sill 90% nuclear related actives and personal. Chu is a nuclear engineer. Nuclear could not operate one second without gov/taxpayer protection from liability. Without subsidies breaks and protection, electricity prices would
    be: rooftop solar Power: 3-6 cents/KWH
    Wind Power: 6-7 cents/kWh
    Nuclear Power: 11-20+ cents/kWh
    Coal Power: 9-32+ cents/kWh
    http://cleantechnica.com/2011/06/20/wind-power-subsidies-dont-compare-to-fossil-fuel-nuclear-subsidies/#ABfIXAl3UjBqeQOP.99
    http://www.greentechmedia.com/articles/read/the-real-deal-on-u.s.-subsidies

    Solar last 100 years and never melts down.