The Rise Of Renewables Is A Reason To Be Hopeful In 2024

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Canary Media is focused on renewables and the clean energy revolution — little things like converting homes from furnaces to heat pumps, and big things like powering industries with renewable energy. It says the “transition away from fossil fuels is a messy, frustrating and frequently uncertain story. Sometimes it seems like major change is just around the corner; other days it feels like we’re moving in the wrong direction. But despite the ups and downs, one thing is clear: The energy transition is happening. Everywhere you look, and with increasing velocity, genuine progress is being made toward a carbon-free world.”

Solar And Storage Make The World A Brighter Place

Recently, it asked six of its regular contributors to talk about something that gives then hope for 2024. Eric Wesoff pointed out that BloombergNEF’s now forecasts 413 gigawatts of solar power capacity will be installed worldwide in 2023. That’s up from 260 gigawatts in 2022, an increase that is being driven to a great extent by greater manufacturing capacity in China.

It’s a pace that will quickly add up to several terawatts of solar being installed around the globe by 2030, along with several terawatts’ worth of manufacturing capacity. These are mind boggling numbers that are coming true today. And it’s a good thing. While there’s a lot of chatter at global gatherings about goals like tripling nuclear power and scaling up direct air capture, solar is turning out to be the real workhorse of the energy transition.

It will be solar that helps move the globe away from coal, solar that powers the electrolyzers for green hydrogen and the electric-arc furnaces for steelmaking, and solar that allows the grid to expand fast enough to accommodate the electrification of everything, from vehicles to home heating. Solar is quietly eating the world. This is what an energy transition looks like.

Energy storage is an essential piece of the renewables puzzle. Without it, intermittency makes renewables a marginal player. With it, renewables can reliably replace thermal generation whether powered by coal, methane, or nuclear. Juilan Spector nominates it as his number one reason to be hopeful about the future.

“In California, grid battery capacity jumped tenfold in the last three years and now amounts to 7.6% of the system’s nameplate capacity. Texas battery installations grew even faster during that time, showing the tool’s competitiveness in a bare-knuckled capitalist marketplace without juicy state incentives,” he says.

During the hottest summer on record, it was electricity stored in batteries that kept air conditioners working all across America. Even places that don’t yet have access to energy storage can benefit, Spector says. “The scale and experience associated with grid scale storage pushes down costs for everyone else and proves that a reliable, renewables-heavy grid is within reach today.”

Renewables, Heat Pumps, And The Media

Maine is proving that heat pumps can replace boilers and furnaces even in cold climates. Thanks in part to that real world experience, heat pumps are outselling gas furnaces in America. As of September, half of all U.S. states have committed to quadrupling the pace of deployment to install 20 million heat pumps by 2030. If successful, that will move the US much closer to reaching its goal of decarbonize home heating by 2050. “If the heat pump love continues, gas heating could swiftly become so last era,” says Alison Takemura.

Maria Virginia Olano nominated new media outlets that focus on climate issues. 2023 saw the debut of such outlets as Latitude Media and Heatmap. Then there is Drilled and Cipher also made Olano’s hit parade. “Some older publications like Grist, Inside Climate News, and Floodlight continued to do stellar work. Emily Atkin’s crucial Heated newsletter and David Roberts’ Volts podcast kept focusing on under-reported topics and highlighting important voices. Good reporting is essential to making a just, swift energy transition happen, and I am excited to see this growing group of publications (and Canary Media!) continue to raise the bar for what climate and clean energy journalism can do.”

That’s a list of resources custom made for CleanTechnica readers.

Shipping And Economics

Maria Gallucci writes that significant progress toward lowering emissions from shipping took a big step forward in 2023, thanks to major companies like Maersk committing to new propulsion technologies.

Maersk launched the world’s first container ship powered by “green” methanol and the industry has ordered 125 new methanol powered container ships. Last month, Maersk signed the industry’s first large scale supply agreement for green methanol with Goldwind, the Chinese wind turbine maker, to provide enough fuel annually for 12 of Maersk’s ocean going container ships. CleanTechhica’s own Michael Barnard has reviewed the Maersk proposal and is skeptical that it will provide the benefits the company expects.

“The maritime industry still faces a litany of thorny and expensive challenges when it comes to decarbonization. But the progress made in 2023, even if incremental, still suggests that sailing cleaner cargo ships is not just possible — it’s already starting to happen,” Gallucci says.

Canary Media’s Jeff St. John is excited about how the world of finance is beginning to bend toward renewables. “The core technologies for the first phase of the energy transition — solar, wind, batteries and heat pumps — are getting so affordable that demand for them will soon outweigh the institutional inertia that stands in their way,” he says.

Solar and wind power are now by far the cheapest source of new electricity generation, both globally and in the U.S., and those trends are set to continue. Lithium-ion battery prices have fallen to record lows again after a brief Covid-induced uptick, meaning it’s more affordable than ever to store wind and solar power for hours at a time. That same trend is also driving down the cost of electric vehicles, which can already out-compete gas cars on a lifetime basis in most parts of the country. And heat pumps, which are less expensive than ever thanks to federal tax credits, continue to demonstrate that they’re far more efficient at heating (and cooling) than conventional methods — even in the cold.

“Together, these technologies alone are enough to get us far along the decarbonization pathways for electricity generation, transportation and buildings. The victories — for the climate, for consumers and for the companies that can capitalize on these technological realities  — are there for the taking,” St. John writes.

The Bursting Of The Carbon Bubble

While preparing this article, I chanced upon a consulting company by the name of DR Dahlmeier Financial Risk Management, located in Switzerland. It prides itself on analysis that avoids the group think that pervades the industry. On its website, it quotes Elon Musk, who said, ” If a trend becomes obvious, you’re too late!” It has a number of forecasts that readers may find quite startling.

1. 2027 – almost all new cars will be battery-electric.
2. 2030 – renewable energies (RE) will cover electricity needs globally.
3. 2036/2040 – global energy needs will fundamentally be covered by renewable energy.

Suffice to say, all of those predictions are far more optimistic than the “conventional wisdom” from other consultancies. But what really got my attention is found on rhe Risk Management page of its website.

“The bursting of the carbon bubble will destroy values ​​on a scale that will dwarf the financial crisis. Fossil energies will become dramatically less important over the next 15 years. This will lead to a significant loss in the value of fossil energy assets. Fossil assets will become stranded to a significant extent. But it will not be the economic loss of unexploited natural resources that will be decisive, especially since this loss cannot be easily quantified. Rather, it will be the loss of value of financial assets and investments in the fossil energy sector (power plants, petrochemical industry plants, etc.).

“The impact on the global economy may be more severe than that of the financial crisis, it depends on the speed at which the change occurs. The Bank for International Settlement felt compelled to warn against this development, although it is precisely this warning that can reinforce the trend. The BIS is aware of this situation.

“The warning about the carbon bubble bursting has been around for a long time (see Mark Carney, the former central bank governor of the Bank of England, Carbon Tracker) and the bubble hasn’t really gotten smaller since then. The Corona crisis and its effects are currently blocking our view of the risks of fossil energies. However, upon closer inspection there are important indications, for example the S&P Global Oil Index has shown surprisingly weak development compared to the overall market and has been doing so for a decade.

“The risk is particularly high for financial institutions. Due to their leverage function, the development can hit the financial institutions like under a magnifying glass (emphasis added).

“The source of risk in the financial sector is, of all things, the risk models currently used. They are not suitable for recognizing this trend in fossil fuels. More generally, the risk models used are fundamentally not designed to take new or even exponential trends into account. The relevant risk models are backward-looking, they use historical time series for known parameters and not emerging trends. In order to overcome the vulnerability, a completely new approach to modeling is required. To take new developments and fundamental trends into account in risk determination, new models that include scenario simulations and stress tests should be used.

“The question arises, particularly for developers of rating systems and rating agencies, as to how the challenges of the carbon bubble and asset stranding risk can be taken into account. The integration of these aspects into an overall concept is one of the central challenges.”

Those projections are disturbing if your portfolio is invested in fossil fuel stocks but ultimately hopeful if you are primarily concerned with a sustainable Earth rather than the next quarterly earnings report. In these turbulent times, we take our reasons for hope where we find them.