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Major Utility Companies Lag Switching to Clean Energy
By Jo Harper
Only 10% of global energy utility companies are expanding their renewable energy capacity at a faster rate than their gas or coal-fired capacity. That is the main finding of a study by Galina Alova from the Smith School of Enterprise and the Environment at the University of Oxford.
The study, published in research journal Nature Energy, found that of the 3,000 utilities studied most remain predominantly invested in fossil fuels. And of those prioritizing renewable energy growth, 60% had not halted expansion of their fossil fuel portfolios.
The companies with the slowest transition tended to be larger and from outside Europe, Alova told DW. "The renewables-prioritizing cohort of utilities that I identified comprises companies that are overall larger and own a larger market share in the countries where they operate, compared to the other companies," she said. "The key issue is that the majority of these companies continue in parallel to expand their fossil fuel-based capacity, although they do so at a slower rate."
Her research highlights a gap between what is needed to tackle the climate crisis and "the actions being taken by the utility sector," she added. These companies face the risk of carbon lock-in, given that a third of their fossil fuel capacity has been added in the last 10 years, so is here to stay for decades. "Unless it is retired early, it will render significant shares of their portfolios stranded," Alova said.
"Although there have been a few high-profile examples of individual electric utilities investing in renewables, this study shows that overall, the sector is making the transition to clean energy slowly or not at all," she said.
Alova believes inertia in the electricity industry is one key reason for the slow transition.
The Matter of Gas
The report found that 10% of utilities favored growth in gas-fired power plants, dominated by the US utilities exploiting the country's shale gas reserves, followed by Russia and Germany.
"Renewables and natural gas often go hand in hand," Alova said, adding that companies often choose both in parallel. "So, it might be just in media reports we are getting this image of investing in renewables, but less coverage on continued investment in gas."
It might also be the case that gas is viewed as a transition fuel, relatively less carbon emitting and providing load-balancing services to intermittent renewables generation, Alova said.
Dave Jones, senior electricity analyst for independent climate think tank Ember, agrees with Alova that utilities have hindered the transition by "misunderstanding the future of gas." Utilities have a mindset to build big centralized power plants, replacing a coal power plant with a gas power plant, he said. "Fortunately, most of the gas hype across the world is now dying down, as wind and solar now provide cheaper options for generating electricity," Jones said.
Green Movement Taking Place
Over a fifth of Europe's energy was generated by solar panels and wind turbines in the first half of 2020, according to a report by Ember. Denmark came out on top, generating 64% of its energy from these renewable sources, followed by Ireland (49%) and Germany (42%).
In Ember's half-year review released in July, renewables exceeded fossil fuel generation for the first time ever, producing 40% of the EU's power, with fossil fuels contributing 34%. However, globally only a tenth of all energy was generated by these sources during the first half of 2020.
Last year saw the use of coal to generate electricity around the world fall by a record 3%. In part due to COVID-19, coal generation in the first half of 2020 again broke records with a drop of 8.3%. In the EU, the drop was higher, as coal energy generation fell by nearly a third.
With many projects delayed by the pandemic, the global capacity to produce electricity from renewable sources is predicted to drop by up to 13% overall this year according to the International Energy Agency.
Slowly Getting There?
Utilities have been slow to understand how quickly wind and solar would drop in price, and also how quickly governments would want to move away from coal. "Many utilities have been caught off guard by the speed of the transition, and have suffered financially ever since," said Jones.
The world this year has generated one-tenth of its electricity from wind and solar, double from the 5% in 2015, and that increase has led to a fall in market share of coal generation, Jones added.
Valentina Kretzschmar from consultancy Wood Mackenzie says BP's recently announced strategy has created a new industry benchmark. BP plans to increase investment in its low-emission businesses, including renewable energy, by tenfold in the next decade to $5 billion (€4.5 billion) a year, while cutting back oil and gas production by 40%.
In July, Royal Dutch Shell won a deal to build a wind farm off the coast of the Netherlands, while France's Total has agreed to make several large investments in solar power in Spain and a wind farm off Scotland. Total also bought an electric and natural gas utility in Spain. Shell has said it will delay offshore oil fields in the Gulf of Mexico and in the North Sea.
US giants like Exxon Mobil and Chevron, however, have been slower than their European counterparts to commit to climate goals.
"I have seen a substantial shift between companies in the fossil fuel clusters toward renewables," Alova said. "This signals that the companies that have been growing fossil fuel portfolios in the earlier time periods might be switching to renewables more recently."
Reposted with permission from Deutsche Welle.
EcoWatch Daily Newsletter
By Victoria Masterson
Using one of the world's problems to solve another is the philosophy behind a Norwegian start-up's mission to develop affordable housing from 100% recycled plastic.
Sustainable Homes<p>UN-Habitat says an <a href="https://unhabitat.org/un-habitat-aims-to-use-plastic-waste-to-support-housing-for-all" target="_blank">estimated 60% of people living in urban areas of Africa are in informal settlements</a>. At the same time, between 1990 and 2017, African countries imported around 230 metric tonnes of plastic, "which mostly ended up in dump sites creating a massive environmental challenge," the agency adds.</p><p>UN-Habitat deputy executive director, Victor Kisob, said the aim of the partnership with Othalo was to "promote adequate, sustainable and affordable housing for all."</p>
Artist's impression of an Othalo community, imagined by architect Julien De Smedt. Othalo<p>Othalo's process involves shredding plastic waste and mixing it with other elements, including non-flammable materials. Components are used to build up to four floors, with a home of 60 square metres using eight tons of recycled plastic. A factory with one production line can produce 2,800 housing units annually.</p><p>Following successful laboratory tests, Othalo's factory in Estonia has started producing components to build three demonstration homes for Kenya's capital, Nairobi; Yaoundé, the capital of Cameroon and Dakar, the capital of Senegal.</p><p>Othalo founder Frank Cato Lahti has been developing and testing the technology since 2016 in partnership with <a href="https://www.sintef.no/en/" target="_blank">SINTEF</a>, a 70-year-old independent research organization in Trondheim, Norway, and experts at Norway's <a href="https://en.uit.no/startsida" target="_blank" rel="noopener noreferrer">University of Tromsø</a>.</p>
Othalo founder Frank Cato Lahti. Othalo<p>Almost <a href="https://www.un.org/development/desa/publications/2018-revision-of-world-urbanization-prospects.html" target="_blank">seven out of every 10 people in the world are expected to live in urban areas by 2050</a>. More than 90% of this growth will take place in Africa, Asia, Latin America, and the Caribbean.</p><p>"In the absence of effective urban planning, the consequences of this rapid urbanization will be dramatic," UN-Habitat warns.</p><p>Lack of proper housing and growth of slums, inadequate and outdated infrastructure, escalating poverty and unemployment, and pollution and health issues, are just some of the effects.</p><p>Mindsets, policies, and approaches towards urbanization need to change for the growth of cities and urban areas to be turned into opportunities that will leave nobody behind, UN-Habitat says.</p>
Pioneers of Change<p>Reimagining cities and communities for greater resilience and sustainability was a key topic at the<a href="https://www.weforum.org/events/pioneers-of-change-summit-2020" target="_blank"> World Economic Forum's Pioneers of Change Summit 2020</a>.</p><p>The digital event brought together innovators and stakeholders from around the world to explore solutions to the challenges facing enterprises, governments and society.</p><p>Opening the summit, <a href="https://www.weforum.org/events/pioneers-of-change-summit-2020/sessions/opening-plenary-8f731cbc65" target="_blank">Stephan Mergenthaler, the Forum's Head of Strategic Intelligence and a member of the Executive Committee</a>, said: "We need to change the way we produce, the way we live and interact in our cities to make this transition to net-zero emissions a reality…</p><p>"And as this year has illustrated so dramatically, we need to make every effort that we keep populations healthy, if we want to avoid jeopardizing all this progress."</p><p><em>Reposted with permission from </em><em><a href="https://www.weforum.org/agenda/2020/11/un-africa-recycled-plastic-housing/" target="_blank">World Economic Forum</a>.</em><a href="https://www.ecowatch.com/r/entryeditor/2649069252#/" target="_self"></a></p>
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John Kerry helped bring the world into the Paris climate agreement and expanded America's reputation as a climate leader. That reputation is now in tatters, and President-elect Joe Biden is asking Kerry to rebuild it again – this time as U.S. climate envoy.
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Creating a Global Sustainable Transition<p>How the world recovers from COVID-19's economic damage could help drive a lasting shift in the global energy mix.</p><p>Nearly one-third of Europe's US$2 trillion economic relief package <a href="https://www.bloomberg.com/news/articles/2020-07-21/eu-approves-biggest-green-stimulus-in-history-with-572-billion-plan" target="_blank" rel="noopener noreferrer">involves investments that are also good for the climate</a>. The European Union is also strengthening its 2030 climate targets, though each country's energy and climate plans will be critical for successfully implementing them. The <a href="https://joebiden.com/clean-energy/" target="_blank" rel="noopener noreferrer">Biden plan</a> – including a $2 trillion commitment to developing sustainable energy and infrastructure – is aligned with a global energy transition, but its implementation is also uncertain.</p><p>Once Biden takes office, Kerry will be joining ongoing <a href="https://www.un.org/en/conferences/energy2021/about#:%7E:text=The%20overarching%20goal%20of%20the,2030%20Agenda%20for%20Sustainable%20Development.&text=Accelerate%20delivery%20of%20United%20Nations,related%20issues%20at%20all%20levels." target="_blank" rel="noopener noreferrer">high-level discussions on the energy transition</a> at the U.N. General Assembly and other gatherings of international leaders. With the U.S. no longer obstructing work on climate issues, the G-7 and G-20 have more potential for progress on energy and climate.</p><p>Lots of technical details still need to be worked out, including international trade frameworks and standards that can help countries lower greenhouse gas emissions enough to keep global warming in check. <a href="https://www.carbonpricingleadership.org/what" target="_blank" rel="noopener noreferrer">Carbon pricing</a> and <a href="https://www.csis.org/analysis/how-can-europe-get-carbon-border-adjustment-right" target="_blank" rel="noopener noreferrer">carbon border adjustment taxes</a>, which create incentive for companies to reduce emissions, may be part of it. A consistent and comprehensive set of national energy transition plans will also be needed.</p><p>The global shift to <a href="https://www.irena.org/publications/2019/Jan/A-New-World-The-Geopolitics-of-the-Energy-Transformation" target="_blank">clean energy will also have geopolitical implications for countries and regions</a>, and this will have a profound impact on wider international relations. Kerry, with his experience as secretary of state in the Obama administration, and Biden's plan to make the climate envoy position part of the National Security Council, may help mend these relations. In doing so, the U.S. may again join the wider community of countries willing to lead.</p>
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As we approach the holidays I, like most people, have been reflecting on everything 2020 has given us (or taken away) while starting to look ahead to 2021.