Solar Created More Jobs in 2016 Than Oil, Gas and Coal Combined
Carbon Tracker Initiative’s Luke Sussams says the dropping costs of renewable energy could see global demand for oil and coal peak by 2020
KIM BROWN: Welcome to The Real News Network in Baltimore. I’m Kim Brown.
For the first time, wind power capacity has just overtaken coal to become the EU’s second-largest form of power, according to new industry numbers. And nearly 90% of new power added to European electricity grids in 2016, came from renewable energy sources. As well, the rate of U.S. solar job growth has been 50% this last year, as reported by the U.S. Department of Energy, creating more jobs than the oil, gas, and coal industries put together.
Additionally, the falling costs of electric vehicles, and solar technology, could halt growth in global demand for oil and coal from 2020. A recent report co-authored by the Grantham Institute at Imperial College of London, and the Carbon Tracker Initiative, found, challenging the wisdom of backing fossil fuel expansion.
With us to discuss if the future is indeed electric, we are joined by Luke Sussams. He is a senior researcher at the Carbon Tracker Initiative, which is a not-for-profit think tank in London, looking at how to align the global capital markets, with a 2-degree Celsius, or less than, climate outcome. He is also the lead author of the recent report, “Expect the Unexpected”, which was produced with the Grantham Institute at Imperial College, in London.
Luke, we appreciate you joining us here on The Real News.
LUKE SUSSAMS: It’s a pleasure to be here. Thanks for having me.
KIM BROWN: First, let’s talk about wind overtaking coal power in Europe, in 2016. Is this an historic outcome, and where are most of these wind turbines located, and who supported these endeavors?
LUKE SUSSAMS: It’s a really exciting time for renewable energy as a whole in the EU. It’s definitely a significant moment in time, but it’s just one marker of many which are to come. The costs of wind power in the region are falling, the same is happening for solar PV in the EU. And so, actually, it’s our contention that actually renewable energy will continue to grow in the EU and globally. Because the report that we produced with the Grantham Institute at Imperial College, actually shows solar PV, and wind power, really spreading quite fast across the world, now that costs have come down to the degree that they have.
KIM BROWN: SO, let’s turn to the subject of your report. Because you say, with the dropping of costs of renewable energy, global demand for oil and coal could halt from 2020. But yet in the U.S., with the new administration that we have here, we see a real, or re-entrenchment, with bolstering the fossil infrastructure. So, talk about the concept of, “stranded assets” that your organization, Carbon Tracker, really put on the map.
LUKE SUSSAMS: Yeah, exactly. We coined the term, “stranded assets” to mean those fossil fuel assets, whether or not they’re power plants, or they’re refineries, or they’re pipelines. Those that really aren’t necessary anymore, in the world that we are undergoing, in a low carbon transition.
Now, a lot of what Mr. Trump is saying doesn’t really make a lot of economic sense. For example, he’s vowed to bring back the coal industry in the U.S. When actually the reason for its collapse was that natural gas and renewable energies simply out competed coal. They became cheaper, and the preferred source of power.
Now, Trump has also approved a couple of pipelines. He’s approved the Keystone XL pipeline. He’s approved also the Dakota Access Pipeline. But what he hasn’t really thought through, is that actually this will bring more oil to the market, which is already over-supplied. And our report actually goes on to talk about how EVs, and their growth in the future, could serve to reduce demand even more for that product. So, the imbalance in the market will just cause the price to potentially collapse.
KIM BROWN: Luke, could it get to the point in the future where certain economies would boom, due to investments and support for renewable energy, as we’re seeing the Chinese government do, and those left behind will be forced to follow suit, due to market forces?
LUKE SUSSAMS: I think that’s certainly the case. China is really setting out its tools to become the leader in low-carbon technologies in the future. It’s already the production center for solar PV, and it had this ripple effect, to cause the whole technology to be cheaper around the world. Now, they’re also planning on doing exactly the same thing with electric vehicles.
Again, we anticipate that this ripple effect could occur where electric vehicles, as a result, become so much cheaper around the world, because China is planning on building a hell of a lot of these things. So, they’re certainly looking to lead in this regard, but I think the rest of the world will actually follow suit.
KIM BROWN: So, discuss the models that you used for your study. Was there a pathway that described a complete transition to renewable energy, for example?
LUKE SUSSAMS: Yes. We worked with the Grantham Institute at Imperial College, and they have a global energy system model. Now, that models all sectors of energy consumption around the world. Now, we looked at just what happens if solar PV and electric vehicles grow really rapidly. Although we’re actually looking at just these sectors in particular, just the power and the road transport sectors, we actually saw the demand for coal, oil and gas, and subsequent CO2 emissions, were actually curbed really, really significantly.
However, we didn’t actually manage, with, through our modeling, to still achieve a 2 degrees outcome. Which is, as many know, the internationally agreed target for limiting levels of global warming.
So, what this really means, is that although de-carbonization of the power and road transport sectors can get us a really long way towards that target, we also need to decarbonize other sectors, too. Such as heavy industry, or other forms of transport, like aviation or shipping.
KIM BROWN: Both the nuclear energy and carbon capture and sequestration are technologies surrounded by controversy; the latter not yet considered a proven technology. So, were these also part of your modeling towards a carbon-intense future?
LUKE SUSSAMS: Yeah. Our report was really quite damning for the potential of carbon capture and storage. By the time — in our scenarios — by the time the carbon capture and storage actually becomes cost-competitive with alternatives in the power sector, so have so many other technologies. So, we actually see a bit of an uptake for a technology called bio-energy with CCS. Now, that’s a technology that actually takes emissions out of the atmosphere, so it’s a net negative emissions technology.
Now, many people don’t think that’s cost-competitive for a number of decades, but it’s really a damning statement that that becomes more cost-competitive than CCS in our modeling.
Nuclear does quite well in our scenarios because it has such a long lifetime for nuclear plants. That over that lifetime the cost of the technology is actually quite good.
KIM BROWN: Indeed. And renewable energy storage has long been a challenge for a transition away from fossil fuels. For instance, in less sunny climates, or because of the intermittence of the wind, has this issue been solved with new forms of batteries developed by Tesla or others?
LUKE SUSSAMS: Yeah, the data points the companies, as you say, like Tesla or General Motors, or a number of European car manufacturers are coming out with, are incredibly ambitious. They are so far ahead of what forecasting institutions actually thought was possible. So, as you say, that serves to be a real benefit for the power sector going forward, and the potential penetration of renewable energy technologies.
Now, in our scenarios, we actually factor in the costs of required levels of energy storage. And still, renewables are still the far more competitive option in the global power grid, out to 2050.
KIM BROWN: So, are electric cars an existential threat for Big Oil, in your opinion?
LUKE SUSSAMS: They can certainly serve to curb future oil demand. We actually see up to 25 million barrels a day of oil being displaced by EVs by 2050. Now, to put that in context, at the moment, the world consumes around 96 million barrels per day, so it’s more than a quarter of current levels of consumption. That’s a significant amount of demand that potentially oil and gas companies think is going to be there, but actually doesn’t turn out to materialize.
KIM BROWN: And yet the Oil War seems to be ramping up between the U.S. and OPEC. And some would argue that the industry is rebounding with oil, between $50, to $60 a barrel. So, there are now 712 active oil and gas rigs in the United States. Which is 93 rigs above the rig count a year ago, according to Oilprice.com, and services provider Baker Hughes. And construction may begin any day, with the last leg of the controversial Dakota Access Pipeline. And President Trump also issued an Executive Order to build the Keystone XL pipeline. So, could all of these become stranded assets, potentially?
LUKE SUSSAMS: I think that’s certainly a possibility. As I mentioned, if you have simultaneous effects where electric vehicles serve to constrain oil demand growth in the future, and you have, as you mentioned, pipelines such as Keystone Xl and Dakota Access bringing more oil to market, it serves to really accentuate what’s already an oversupplied balance in the oil market.
Now, that will serve to lower oil prices going forward. This is largely what some of the companies themselves are even admitting. BP, in their latest energy outlook, actually said there’s far more oil reserves and resources out there that are possibly going to be needed to 2050. It’s an indication of the oversupply that’s inherent in the oil markets at the moment. Even the IEA just last week, came out and said that they see little reason to believe that oil price will uplift in the near future.
KIM BROWN: Indeed. We have been speaking with Luke Sussams. He is a senior researcher at the Carbon Tracker Initiative, which is a not-for-profit think tank, in London. We’ve been discussing how renewable energy has accounted for more power used by the European Union than fossil fuels, for the first time ever.
Luke, we appreciate you joining us today. Thank you.
LUKE SUSSAMS: Thank you very much. Thanks.
KIM BROWN: And thanks for watching The Real News Network.