Page 4 - AsiaElec Week 31

AsiaElec COMMENTARY AsiaElec
Renewables unable to
tempt energy establishment
away from fossil fuels
The world is unlikely to meet the Paris goals of a 2 degree rise in temperatures by 2040 as long as fossil fuels offer easier pro ts than renewables, writes Richard Lockhart
GLOBAL
WHAT:
Wood Mackenzie’s Energy Transition 2019 study nd that the energy industry and governments are too resistant to the radical change needed to meet the Paris goals
WHY:
Fossil fuels are too attractive and make pro ts, while green projects are too risky without considerable regulatory and technology changes
WHAT NEXT:
Temperatures are
more likely to rise by 3 degrees, as resource nationalism and protectionist policies hold back the collaboration and partnership called for in Paris
THE world is unlikely to meet the 2 degree tar- get set down by the 2015 Paris Climate Accords, with the energy industry and governments across the globe o ering too much resistance to the wholesale changes needed to meet the UN’s internationally agreed targets.
Wood Mackenzie’s Energy Transition Out- look 2019 makes grim reading for those keen to combat global warming and to boost renew- ables, and warns that a 3 degree rise by 2040 is much more likely as Big Oil drags its feet over climate change.
Three roadblocks
e report identi ed three major roadblocks that had to be overcome, otherwise fossil fuels would still account for 85% of primary energy supply by that date, with renewables accounting for just 24% of electricity.
According to Wood Mackenzie’s president Neal Anderson, the energy mix is not changing fast enough, hampered by regulatory foot-drag- ging, with no carbon price existing in many major consuming countries or market segments.
e technological advances needed for decar- bonisation su er from a lack of global co-ordina- tion of policy and regulations, while fossil fuels still attract high rates of investment because of the pro ts available.
In a swipe at contemporary politics, he blamed the trade war between the US and China
for promoting go-it-alone, protectionist policies that hold back the collaboration and partnership called for in Paris in 2015.
Gloomy questions
e report estimates that global primary energy demand will grow from 13bn tonnes of oil equiv- alent in 2018 to 16.1bn toe in 2040, with hydro- carbons’ share falling from 90% to just 85%.
Anderson asked gloomy questions about the ability of renewables to provide the value and pro ts that oil and gas can o er, despite inno- vations in energy storage and the falling costs of solar and wind.
“We see growth in energy storage to almost
Value creation in
renewables still
doesn’t look as
600 GW. But without long-duration storage, on remunerative as
a much higher scale, high solar and wind yields negative prices and grid shape, design and sta- bility issues.
“Where is value captured in ‘zero carbon’
economies when marginal power prices col-
lapse? Can design change solve this? Possibly.
Beyond capacity markets and auctions, value Outlook 2019 creation in renewables still doesn’t look as remu-
nerative as the best oil & gas developments.”
Findings
e report concluded that fossil fuels’ ability to maintain their grip on energy supply was derived from their being easily available and cheap. Coal, gas and oil are also easy tools for “go-it-alone”
the best oil & gas developments
Wood Mackenzie’s Energy Transition
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w w w . N E W S B A S E . c o m Week 31 06 •August•2019