Cross posted from Scaling Green
1. Pope Francis’ encyclical “on care for our common home.” As we wrote on June 25: “the Encyclical released last week by Pope Francis helps bring values and science into agreement, offering ‘moral guidance rooted in an ‘integral ecology’ based on fundamental Catholic teaching about care for all creation.’ As part of that care for creation, Pope Francis makes it clear that global warming and other serious environmental problems are ‘aggravated by a model of development based on the intensive use of fossil fuels, which is at the heart of the worldwide energy system.’ The answer, in Pope Francis’ eyes, is clearly “an urgent need to develop policies so that, in the next few years, the emission of carbon dioxide and other highly polluting gases can be drastically reduced, for example, substituting for fossil fuels and developing sources of renewable energy. ‘That’s what’s so encouraging about the Pope’s Encyclical – it’s a big step forward in the values conversation around the most important issue of our time,’ said Mike Casey, president of Tigercomm, a marketing communications firm that serves the cleantech space.”
2. The Paris Climate Summit: As The Guardian wrote on December 12, this agreement could signal the beginning of the end of the fossil fuel era, “with massive consequences for industry, global security, financial markets and public health.” Quoted in that story, Unilever’s chief executive, Paul Polman, said that the impact of the Paris climate agreement “will be felt in banks, stock exchanges, boardrooms and research centres as the world absorbs the fact that it is embarking on an unprecedented project to decarbonise the global economy.” Or, as President Obama put it, the world succeeded in reaching “an enduring agreement that reduces global carbon pollution and sets the world on a course to a low-carbon future.” Let’s hope he’s right.
3. The Clean Power Plan (CPP) moves ahead. As Tigercomm President Mike Casey wrote on August 3: “the CPP will make a big – a really big – contribution to moving the U.S. economy onto clean energy footing.” In doing so, it will create jobs, cut electricity bills, reduce pollution, and “[b]egin the process of kicking the fossil fuel sectors off the decades of preferential treatment that politicians have showered on them despite being mature, highly profitable businesses.” Also check out the interesting discussion on this issue by The Energy Gang, which argued that the CPP was “the biggest thing that happened for the U.S. on [energy] policy” in 2015.
4. Extension of U.S. tax credits for wind and solar power. As the year drew to a close, the U.S. Congress somewhat unexpectedly gave solar and wind power a big boost, extending key tax credits for both clean enegy sources. How much impact could this have? As BloombergBusiness reported: “The extension will add an extra 20 gigawatts of solar power—more than every panel ever installed in the U.S. prior to 2015, according to Bloomberg New Energy Finance (BNEF). The U.S. was already one of the world’s biggest clean-energy investors. This deal is like adding another America of solar power into the mix. The wind credit will contribute another 19 gigawatts over five years. Combined, the extensions will spur more than $73 billion of investment and supply enough electricity to power 8 million U.S. homes, according to BNEF. ‘This is massive,’ said Ethan Zindler, head of U.S. policy analysis at BNEF. In the short term, the deal will speed up the shift from fossil fuels more than the global climate deal struck this month in Paris and more than Barack Obama’s Clean Power Plan that regulates coal plants, Zindler said.” A great way to end 2015 if you’re in the wind or solar sectors, no question about it.
5. Wind and solar prices keep falling: According to the latest ‘levelized cost of energy” (LCOE) report by Lazard, the LCOE of wind power is now 61% lower than it was in 2009, and continuing to fall. As for utility-scale solar power, its LCOE is down 82% since 2009, and dropping fast. More anecdotally, Greentech Media reported on December 16 that “[y]ear-over-year, overall solar PV system pricing has fallen by 2 percent to 18 percent, depending on the market segment, with the largest declines in ground-mount PV systems.” Even better, as Stephen Lacey of Greentech Media wrote in June: “the average cost of developing wind projects will fall by 32 percent and the cost of solar PV projects will fall by 48 percent by 2040. Within a decade, wind will become ‘the least-cost option almost universally.’ And by 2030, solar will become the cheapest resource.” In other words, if you’re a fossil fuel company or investor, the message is clear: be afraid, be very afraid — of clean energy, that is.
6. Wind industry surpasses 70 GW in the U.S. According to the American Wind Energy Association (AWEA), “American wind power just passed the 70 gigawatt (GW) mark, meaning enough wind turbine capacity is now installed to supply over 19 million typical American homes with low-cost electricity.” AWEA adds that this record capacity is busy churning out clean, inexhaustible wind power: “Wind energy production also blew away records across the U.S. last month, as grid operators in Texas and the Midwest reported output peak records in November.” Great stuff, especially given that there’s really no end in sight to this spectacular growth trend.
7. Major corporations go all-in on clean energy. Given the plummeting costs of clean energy, businesses increasingly are realizing that it isn’t just a good thing from an environmental perspective to switch to wind and solar, but also from a purely economic point of view. No wonder that in October, the White House announced that 81 companies had signed onto the American Business Act on Climate Pledge. According to the White House press release, ” These 81 companies have operations in all 50 states, employ over 9 million people, represent more than $3 trillion in annual revenue, and have a combined market capitalization of over $5 trillion.” Meanwhile, as Ceres points out, in early 2016, “hundreds of financial leaders from around the world will gather at the United Nations to discuss the impacts of COP21 and the types of capital flows necessary and increasingly available to meet global climate and investment goals.” In short, the business case for clean energy is a powerful one, and businesses increasingly are acting accordingly.
8. ExxonMobil, other fossil fuel companies, are being investigated for climate science denial. Could the fossil fuel industry be the early 21st century version of Big Tobacco? As 2015 went by, it increasingly looked that way. For instance, Exxon Mobil is now under investigation by New York State’s Attorney General, Eric T. Schneiderman, “to determine whether the company lied to the public about the risks of climate change or to investors about how such risks might hurt the oil business.” Schneidermanalso recently announced that “a first-of-its-kind investigation by his office found that Peabody Energy Corporation (Peabody) – the largest publically traded coal company in the world – violated New York laws prohibiting false and misleading conduct in the company’s statements to the public and investors regarding financial risks associated with climate change and potential regulatory responses.” And U.S. lawmakers recently sent letters to ” the chief executives of six of the country’s largest fossil fuel companies, including ExxonMobil, Chevron and Shell, to answer questions about when the companies first understood that burning fossil fuels drives climate change and whether they became active partners in an effort to downplay the harm that could result.” In short, it’s not a great time to be a fossil fuel company executive.
9. Coal industry in deep trouble. If you’re a coal company executive or shareholder, you can’t be pleased to see stories like US coal sector in ‘structural decline’, financial analysts say, Coal Companies Are Dying While Their Execs Grab More Cash, King Coal, Long Besieged, Is Deposed by the Market or Global Coal Consumption Heads for Biggest Decline in History. Unfortunately for you, there were a lot more stories like these over the past twelve months, with likely many more to come in 2016 and beyond. Stay tuned…and get out of the coal industry while you still can.
10. Battles over net metering, distributed power generation in the U.S. How much should utilities pay people for the solar power they generate on their rooftops? That question continues to be fought over in the U.S. In California, the state Public Utilities Commission in mid-December stated that it intended to help “ensure that Californians will continue to receive the benefits of using clean energy by proposing a successor program to the current Net Energy Metering (NEM) program,” by setting up “a NEM successor program that would continue the existing NEM structure while making some adjustments to align the costs of NEM successor customers more closely with those of non-NEM customers.” Meanwhile, the battle over NEM is raging in Arizona, where the Checks & Balances Project has been doing a superb job fighting back. As the year ends, a major – and unfortunate – development on this front occurred in Nevada, where “The Nevada Public Utility Commission voted unanimously in favor of a new solar tariff structure…that industry groups say will destroy the Nevada solar market, one of the fastest-growing markets in the country.” Undoubtedly, these battles will continue in 2016, so stay tuned; we’ll keep you informed.
11. New York and California: In October, California Gov. Jerry Brown signed legislation under which the state “will need to generate half of its electricity from renewable sources such as solar and wind by 2030,” while it “double[s] energy efficiency in homes, offices and factories.” As for New York, David Roberts of Vox wrote in November that the state “is in the midst of a comprehensive, wildly ambitious plan to reform its energy systems, aiming to make them more resilient, cleaner, and more affordable;” the goal being that by 2030, “the state aims to reduce its carbon emissions by 40 percent (from 1990 levels) and draw 50 percent of its electricity from renewable sources.”
12. India and China: India’s and China’s clean power ambitions keep growing. In June, India announced “approval to ramp up [its] solar power capacity target under the National Solar Mission by five times, to achieve 100 GW by 2022.” Overall, India is now aiming for 350 GW of renewable energy capacity by 2030. On the other hand, India also plans to burn more coal, although the rate of growth could be slower than prior to the Paris climate talks. As for China, it is aiming for more than 230 GW of new wind power capacity by 2024, and for 150 GW of solar power by 2020. Meanwhile, the International Energy Agency believes that the ” golden age of coal in China seems to be over,” with the country “facing peak coal demand for the first time ever as a cooling economy and structural changes in its industry hits consumption.”
13. Oil prices plummet, and with them, tar sands and shale oil, the offshore oil drilling rig count, etc. Oil prices are now near 11-year lows, and that’s having a major impact on the oil industry. For instance, the U.S. oil drilling rig count is now at 700, down 1,140 rigs from last year at the same time. Low oil prices are also hurting Canadian tar sands, with experts wondering whether “the current oil sands model has a future.” And, as The Guardian notes, OPEC is determined “to kill off the threat from the US shale industry” by keeping oil prices low for an extended period of time. Meanwhile, low oil prices have little impact on solar or wind power, given that oil is not commonly used for power generation.
14. Energy storage booms: As Greentech Media puts it, 2015 was “a breakout year for energy storage.” How much of a “breakout?” According to Greentech Media: “U.S. energy storage market grew 185 percent, from $134 million in 2014 to $381 million in 2015. By 2020, it will be a $2 billion market, according to GTM Research.” Also see Utility Dive, which wrote earlier this month that energy storage, due to falling costs and improving technology, is “shaping up to have its strongest year ever in what could be a turning point for the technology and the industry.”
15. Keystone XL deep-sixed. In November, President Obama announced: “Shipping dirtier crude oil into our country would not increase America’s energy security. What has increased America’s energy security is our strategy over the past several years to reduce our reliance on dirty fossil fuels from unstable parts of the world.” Why does this matter? Bill McKibben has a compelling explanation: “I think this a really big moment not just for Keystone, but in a much larger sense. I think the proof of that is, in the wake of this battle over Keystone, every fossil fuel project around the world now is facing the same kind of resistance…As one industry executive said this year, there’s been a Keystone-ization of every other pipeline, coal mine and fracking well, and that’s a very good thing.” Let’s hope.