|
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 Crunch: 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.
Best wishes,
Sandra Bernick
Co-editor, Energy
Crunch
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.
Energy Transition
Renewables
Competitive With Fossil Fuels : IRENA - Biomass, hydro, geothermal and
onshore wind are all competitive with or cheaper than coal, oil and gas-fired
power stations.
Invisible
fuel - The biggest innovation in energy is to go without
Germany
wants robust single energy market, at odds with Britain - Europe's energy
union needs to be bolstered by EU laws binding on each nation, Germany has said
in a policy paper that sets it at odds with Britain.
German
Offshore Wind Capacity More than Doubled in 2014 - At the end of 2014, total
installed offshore wind capacity stood at 2.35 gigawatts (GW), compared with 915
megawatts (MW) at the end of 2013.
Global
campaign aims to inspire British cities to choose 100% clean energy - Hope
that example set by Munich, Seattle, Lima and others will prompt pledges to
commit to zero emissions by 2050.
Oil & Gas
Obama
moves to create first methane limits for gas drilling - Environmental
experts say proposal falls short because it leaves out existing sources of
methane pollution.
Russia
to cut EU gas transit via Ukraine - The EU should start building "today" or
Russian gas will go to other markets, Gazprom said.
Oil
industry cuts jobs and exploration budgets in response to falling prices -
Carbon Brief looks at the cuts some of the industry's key players are making in
response to the oil price drop.
IEA
Sees Oil-Price Recovery; Cuts 2015 Non-OPEC Output Estimate - The slow-down
in non-OPEC output will lead to a “rebalancing” of currently over-supplied
global markets in the second half, reviving prices, the agency said.
Age
of $100 oil will return as energy industry cuts too deep - Jobs cuts and
cancelled projects mean that oil prices could bounce back harder and faster than
before.
U.S.
Crude Production Advances Even as Prices Decline -Drillers that unlocked the
shale oil boom in the U.S. are finding it hard to shut off the
nozzle.
China
Makes Most of Oil’s Collapse as Demand Rises to Record - Apparent oil
demand, a measure of consumption, rose to an unprecedented 10.63 million barrels
a day in December.
Poland's
shale gas revolution evaporates in face of environmental protests - Fear and
loathing stalk Poland’s shale fields, where a 400-day site occupation stopped a
Chevron drill earlier this year
Nuclear
Sellafield
nuclear clean-up taken back into state hands - Government strips Nuclear
Management Partners of its contract to manage Sellafield, saying the Cumbrian
site is "too complicated" for private sector management.
Global
nuclear decommissioning cost seen underestimated, may spiral - German
utility E.ON's breakup has led to worries that funds set aside for
decommissioning reactors will not suffice, but globally the cost of unwinding
nuclear is uncertain as estimates range widely.
Dungeness
B nuclear power station given 10-year reprieve - Dungeness B nuclear power
station is to stay open beyond its scheduled closing date of 2018, its owner,
EDF, has announced.
Questions
about UK scrutiny of Chinese nuclear tie-up - The government is refusing to
say whether it has followed its own rules in allowing China's investment in the
new £24bn Hinkley nuclear power plant, citing questions of national
security.
Coal
Tumbling
Russian rouble pulls European coal prices with it - European coal prices
have struggled much more than other global benchmarks this year, catching many
traders by surprise.
UK
Cuadrilla
Lancashire fracking application 'should be refused' - The Lancashire County
Council report follows an application by energy firm Cuadrilla to explore Little
Plumpton and Roseacre Wood for shale gas.
UK's
shale gas revolution falls flat with just 11 new wells planned for 2015 -
Progress on fracking ‘glacially slow’ despite backing from prime minister and
promise of generous tax breaks.
Environment
Agency gives Cuadrilla Resources green light to drill again - The company
admitted its drilling activities probably caused earthquakes near Blackpool last
year.
Companies
will be legally required to reveal chemicals used for fracking -
Infrastructure bill amendments on ground water pollution and ‘well-by-well
disclosure’ accepted, but Labour maintains regulation is still
flawed.
Lancashire
fracking: Jobs claim is over-hyped, Friends of the Earth claims - The number
of jobs that would be generated by the fracking industry in Lancashire has been
"over-hyped", Friends of the Earth (FoE) has claimed.
New
fracking rules will not apply in Scotland, UK government pledges - The
Infrastructure Bill currently going through Westminster is set to allow
underground access in England, Wales and Northern Ireland but not
Scotland.
Wind
power 'adds resilience to UK energy market' - Installing more wind turbines
will make the UK's energy market more resilient to global fossil fuel price
shocks, an independent report has concluded.
Electricity
demand hits highest this winter as wind power slumps to its lowest - Power
demand hit its highest level this winter on Monday, but wind farms met just one
per cent of the UK's needs.
Climate
2014
officially the hottest year on record - Nasa and Noaa scientists report 2014
was 0.07F (0.04C) higher than previous records and the 38th consecutive year of
above-average temperatures
Axa
IM warns that companies linked to fossil fuels risk their reputations -
Climate risk is becoming ‘synonymous with reputation risk’ as a growing fossil
fuel divestment movement gains traction with investors around the
world.
Coalition
of investors to pressure oil firms to go green - An unprecedented coalition
of investors has pledged to put pressure on BP and Shell to become more
environmentally friendly by forcing the UK oil giants to assess, announce and
tackle the dangers they pose to the climate.
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
The Energy Crunch team: Sandra Bernick,
Griffin Carpenter, Stephen Devlin, Simone Osborn, David Strahan
|
|
No comments:
Post a Comment