Monday, January 4, 2016

2015 Was a Transformational Year for Energy

Buoyed by global and domestic climate policy shifts in the US and around the world 2015 was a revolutionary year for energy. Although oil prices dipped to below $40 a barrel in 2015, renewables are also getting cheaper. Green energy like wind and solar are rapidly approaching grid parity. As Jim Marston pointed out in an EDF post, "historians just might look back at 2015 as the year everything changed for clean energy."

Energy is at the center of global efforts to combat global warming and a number of articles have touted 2015 as a landmark year for climate action. In a Climate Progress article Joe Romm said, "it seems clear that 2014-2015 marks an inflection point in the CO2 emissions trend line." New York Magazine called 2015, "the year humans got serious about climate change."

The COP21 agreement signed by 195 nations is the crowning clean energy achievement of 2015. The Washington Post called the Paris deal, "the single most transformative energy development of 2015."

EDF President Fred Krupp said the COP21 agreement, "sends a powerful, immediate signal to global markets that the clean energy future is open for business.”

COP21 refocused concerns about stranded assets as the end of fossil fuels is within sight.

The Paris deal signed at the end of last year will spur unprecedented growth in renewable energy. In 2015 a number of studies showed that it is possible for the world to be run on 100 percent renewable energy. International Energy Agency forecasts that renewables will be energy’s single biggest growth sector out to 2020 with a total of 700 gigawatts of total added capacity by 2020.

Even before COP21 we were seeing strong evidence showing that we are moving away from fossil fuels and towards renewable energy.

The Keep it in the Ground campaign gained more support in 2015. Now that we have signed a deal at COP21 most of the worlds fossil fuel reserves must be considered unburnable if we are to keep global temperatures  within the 1.5 to 2 C upper threshold limits.

Stephen Harper's fossil fuel obsessed government has been replaced by a much more environmentally conscious Liberal government of Justin Trudeau. This new government's climate promises include renewables which bodes well for clean energy efforts in Canada. 

The Keystone XL pipeline was rejected by President Obama and other Canadian pipelines may soon follow suit.

In 2015 a number of renewable energy milestones were surpassed in Germany, Denmark and the US. New US energy efficiency standards will also have an impact on energy consumption

While US coal-fired power plants were shut down at a record rate in 2015 (14.4 gigawatts), record amounts of new solar energy capacity were being installed (7.4 gigawatts). In 2015 it was reported that two times as many Americans are now employed in the solar power industry as in coal mining.

Congress recently extended the federal tax incentives for renewables and this will continue to drive the growth of US renewables. By 2020 we could see 100 cumulative gigawatts of solar installations in the US. Wind energy surpassed 70 gigawatts of installed last year and is currently supplying about five percent of total US electricity demand. Driven by government support and price declines associated with economies of scale wind will likely supply 20 percent of US electricity demand by 2030.

The final version of the Clean Power Plan was released in 2015 and hundreds of companies and investors showed their support.

The US is not the only place where coal is being phased out. In the UK all coal power stations are slated to be closed by 2025. As explained by the International Energy Agency (IEA) the situation is destined to get worse for coal with predictions of considerably lower demand in places like the US, EU and China.

In Africa 2015 saw plans to install 300 gigawatts of clean energy by 2030, which is nearly double the total energy capacity installed on the entire continent. India has set plans for 175 gigawatts of renewable energy by 2022.

In 2015 the world began to embrace in earnest the concept of decoupling economic growth from emissions. In 2015 we saw a decrease in global emissions which suggest that we can reduce greenhouse gases and tackle climate change. The fact that emissions appear to have plateaued is a hopeful sign. The viability of decoupling was corroborated by some new reports last year.

In addition to governments, investors are also accepting that inevitable death of fossil fuels and the powerful growth potential of renewable energy.

Reports from Citibank and LSE made a strong case for climate action including minimizing fossil fuel use and ramping up renewables. The Citibank report says that transitioning to a clean energy save an estimated $1.8 trillion by 2040.

A UNEP report titled Global Trends in Renewable Energy Investment 2015, indicates that green energy investments were up 17 percent to $270 Billion in 2014.

There are a number of good reasons why high profile corporations made pledges to go 100 percent renewable in 2015.  In the US 81 companies signed the White House’s American Business Act on Climate Pledge which includes investments in renwable energy. Reports from Morgan Stanly and Market Mogul strongly support clean energy investments.

In 2015 clean energy also becomes a moral issue led by the 2015 encyclical, Laudato Si’ of Pope Francis
Support for green building retrofits and utilities use of data are other powerful trends that helped to foster greater energy efficiency.

Together these and other factors make 2015 the year that the world finally embarked on a radical program to transform the way we produce energy. 

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