Tag Archives: Wall Street Journal

How far have we really gotten with alternative energy?

At-a-Glance: 

Electricity generation from coal, oil and natural gas represented 60% of all power generated world-wide this year, down from 67% in 2010, according to data and consulting firm IHS Markit. That is likely to drop to 42% to 48% by 2030, depending on how aggressively countries move toward renewables. Each of the alternative fuels has its own potential, and its own obstacles. Here’s a closer look at current status and outlook for five types of carbon-free energy that could play a bigger role in the future. To learn more, read “How Far Have We Really Gotten With Alternative Energy?” Reading this article may require a subscription from the media outlet.

Key Takeaways:

  • The Energy Department says the U.S. now gets just 3% of its power from solar sources. 
    • Globally, just 4% percent of power generation this year is from solar, up from 1.4% five years ago, according to IHS Markit. 
    • Global installations will likely increase 20% this year to 175 gigawatts, according to IHS Markit. 
    • That’s about enough to power roughly 35 million U.S. households for a year.
  • About 10% of global commercial electricity production came from nuclear power in 2020, well below the high point in the mid-1990s of 17.5%, according to the latest World Nuclear Industry Status Report.
  • Wind provides about 7% of the world’s electricity, a share projected to at least double by 2030, according to IHS Markit. 
    • Installations last year reached a record 93 gigawatts, up 53% from 2019, according to the Global Wind Energy Council industry group.
  • Geothermal plants provide less than 1% of the world’s electricity, but drilling has been on the rise for the past six years. 
    • An estimated 180 wells are being drilled each year for power generation, and that number is expected to rise to 500 by 2025.
  • The International Energy Agency says hydrogen currently supplies less than 1% of the world’s energy, and adds that only 1% of that amount is low-carbon, or green, hydrogen. 
    • The Hydrogen Council trade group forecasts that hydrogen could supply 20% of the world’s energy by 2050.

Path to 100% Perspective:

Natural gas is a necessary factor in the transition towards cutting carbon emissions. Yet to achieve a net-zero goal, it is crucial for coal and oil fired plants to diminish entirely if we have any chance of reaching the proposed targets. Natural gas can be used to reduce carbon emission and aid in the transition to implementing alternative fuels once available, and economically priced. The urgency of the climate crisis demands that the power sector pioneers the rapid decarbonization of economies worldwide. The technology needed to reach net zero already exists, however, planning and investment are needed to accelerate the energy transition. Critically, it’s not just economics that’s driving the energy transition. Today’s global targets for 2030 are nowhere near enough to meet the Paris targets, as the United Nations (UN) has made clear. Globally, emissions must be cut in half over the next decade. It is the job of every power company to now put strategies and capital in place to navigate to net zero and to embed flexibility at the heart of grids to unlock 100% renewable energy systems. To achieve this, utilities must commit to front-loading their efforts and investment strategies. 

 

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Oil Giants Turn to Startups for Low-Carbon Energy ideas

At-a-Glance:

Some of the world’s biggest oil companies are turning to startups to help plot their future.

Energy giants including BP PLC and Royal Dutch Shell PLC are bolstering their venture capital arms—increasing budgets, hiring more staff and doing more deals—seeking out new low-carbon technologies to help future-proof their profits. The moves come as several big oil companies work to reduce their dependence on fossil fuels and expand their low-carbon activities, partly in response to growing pressure from investors and governments to cut emissions. To learn more, read, “Oil Giants Turn to Startups for Low-Carbon Energy ideas.” Reading this article may require a subscription from the media outlet.

Key Takeaways:

  • BP, Shell, and French peer TotalEnergies SE are now among the most active clean-tech investors, according to data provider PitchBook, with activity ramping up amid the shift to technologies like electric vehicles and solar and wind power.
  • BP now expects to spend up to $200 million a year, double what it has spent in previous years.
    • BP’s investments this year have included geothermal startup Eavor Technologies Inc.—where it was part of a $40 million funding round alongside Chevron Corp. —and autonomous vehicle software company Oxbotica Ltd.
  • Shell declined to disclose its venture capital budget but said the number of annual investments it makes had doubled since 2017 to around 20 to 25 deals a year, typically between $2 million and $5 million in size.
    • This year, Shell’s investments included charging technology, hydrogen-electric planes, and a logistics company that aims to prevent trucks running without goods—all of which could ultimately reduce demand for oil.

Path to 100% Perspective:

The strategy by several international oil giants to invest in startups could reveal solutions that could evolve the oil industry into a net-zero resource. Many of these petroleum based businesses are already exploring hydrogen as a possible way to contribute to decarbonization efforts. To connect the dots further, the most economical long-duration storage is formed with green hydrogen-based future fuels, such as hydrogen, ammonia, carbon neutral methanol and methane.These fuels can be used to generate electricity in flexible power plants. Such flexible power plants provide carbon neutral firm, dispatchable capacity to the grid at any time. Flexibility, reliability and resilient grids are required to avoid power disruptions caused by extreme or intermittent weather conditions.

 

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Big Oil Companies Push Hydrogen as Green Alternative, but Obstacles Remain

At-a-Glance:

Big oil companies have long touted hydrogen energy as a way to reduce carbon emissions. Now they are grappling with how to make that a reality. BP, Royal Dutch Shell and TotalEnergies SE are all pursuing multimillion-dollar hydrogen projects, often with government support, as they seek to redefine their future role in a world less reliant on fossil fuels. Hydrogen made using renewable energy can be produced and used without emitting carbon dioxide. The challenge is to make it using renewable power instead and produce it on an industrial scale, in the hope of bringing down costs. To learn more, read “Big Oil Companies Push Hydrogen as Green Alternative, but Obstacles Remain.” Reading these articles may require a subscription from the media outlets.

Key Takeaways:

  • Oil companies are pursuing green hydrogen, which they see as a longer-term goal, while also looking at applying carbon-capture technology to fossil-fuel-based hydrogen production as a way to clean up the gas in the interim.
  • As of the end of June, there were 244 large-scale green hydrogen projects planned, according to the Hydrogen Council, an industry group, up more than 50% since the end of January. It estimates tens of billions of dollars have already been earmarked for hydrogen projects.
  • In the U.S., the Energy Department has said it aims to reduce the cost of green hydrogen by 80% to $1 per kilogram in the next decade, in part by supporting pilot projects.

Path to 100% Perspective:

U.S. renewable energy adoption continues to rise. In 2019, renewable energy sources accounted for 17.5% of total utility-scale electricity generation, with renewable energy generation reaching 720 TWh. However, allocation of current energy stimulus, $100 billion USD, is tied to the fossil fuel sector, which limits the potential for decarbonization. More than 70% of energy stimulus funding in the U.S. is currently allocated to legacy fossil fuels, compared to less than 30% to clean energy. Large oil companies are maximizing government support to make the energy transition, but a larger federal investment in clean energy instead of fossil fuels could accelerate the decarbonization process. 

 

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Oil Majors Look to Fill Businesses’ Growing Appetite for Green Power

At-a-Glance:

Businesses are buying more renewable power, and oil majors want a piece of the action. European oil companies including BP PLC and Royal Dutch Shell PLC are building new wind and solar projects and striking deals to supply electricity to big corporate buyers like Amazon.com Inc. and Microsoft Corp., treading into the domain of traditional power companies. To learn more, read “Oil Majors Look to Fill Businesses’ Growing Appetite for Green Power.” Reading this article may require a subscription from the news outlet.

Key Takeaways:

  • Oil companies say securing long-term deals to supply electricity will provide a new source of income and underpin their expansion into wind and solar power as they seek to reduce their dependence on fossil fuels and prepare for a lower-carbon economy.
  • Corporate power-purchase agreements are an area of focus for BP’s solar-power joint venture Lightsource BP, which this year signed deals to supply Amazon, Verizon Communications Inc. and a unit of insurer Allianz SE.
  • New deals continue to be struck at a rapid pace, rising 75% in the first four months of the year versus the same period a year ago, the BNEF data showed.

Path to 100% Perspective:

Bloomberg New Energy Finance projects that new wind and solar will cost less than existing coal and gas generation in China by 2027, and that new wind and solar will be cheaper than existing goal and gas generation in most of the world by 2030. As wind and solar power become increasingly cost-competitive, investments in traditional, inflexible base load plants such as large coal, nuclear, and gas combined-cycle plants are declining. This signals an end to the era of large, centralized power plants that run on fossil fuels.

How Wind and Solar Power Got the Best of the Pandemic AND Wind, Solar Power Made Strong Gains in 2020, IEA Says

At-a-Glance:

Global recessions, wars, and pandemics have a way of driving down energy demand. Last year, the International Energy Agency (IEA) said the collapse in global primary energy demand brought on by COVID-19 was the biggest drop since the end of World War II, itself the biggest drop since the influenza pandemic after World War I. IEA also reported that renewable power capacity grew at its fastest pace this century in 2020, raising its growth forecast for wind and solar power for this year and next.According to the Paris-based energy watchdog, renewables were the only energy source for which demand increased last year. The addition to the world’s renewable electricity capacity last year was 45% more than in the prior year and the biggest jump since 1999, as wind and solar farms sprang up across the world’s major economies. To learn more, read “How Wind and Solar Power Got the Best of the Pandemic AND Wind, Solar Power Made Strong Gains in 2020, IEA Says.” Reading these articles may require a subscription from the news outlets.

Key Takeaways:

  • Renewable energy installations not only increased during the pandemic, they exceeded even the most bullish of expectations, with wind installations increasing 90% and solar increasing 23%.
  • IEA estimates that in 2022, renewables will account for 90% of new power capacity expansion globally.
  • ​​“Wind and solar power are giving us more reasons to be optimistic about our climate goals as they break record after record,” said IEA Executive Director Fatih Birol, adding that greater use of lower-carbon electricity was needed for the world to achieve its carbon-reduction goals.
  • The European Union plans to spend $1 trillion to reach its goal of net carbon neutrality by 2050.

Path to 100% Perspective:

U.S. renewable energy adoption continues to rise, in 2019, renewable energy sources accounted for 17.5% of total utility-scale electricity generation, with renewable energy generation reaching 720 TWh. More than 70% of energy stimulus funding is currently allocated to legacy fossil fuels, compared to less than 30% to clean energy. However, reallocating $72 billion in energy stimulus funding could achieve:

  • 107 GW of new renewable energy capacity
  • 6.5 % rise in share of renewable electricity generation (from 17.5% to 24% renewable electricity).
  • 544,000 new jobs in renewable energy, 175% more jobs than if the same stimulus was used to revive the legacy energy sector.

The New Green Energy Giants Challenging Exxon and BP

At-a-Glance

A decade ago, NextEra, Iberdrola and Enel were sleepy regional utilities with little name recognition. Now they are fast-growing giants with market values rivaling the likes of oil majors Exxon Mobil Corp. and BP PLC, thanks to their early all-in bets on wind and solar farms. Their early lead in the global transition away from oil has put these companies on track to become the major energy companies of the coming decades—the “green energy majors.” But they now face the threat of increased competition as some of the oil titans that have traditionally dominated the energy industry diversify into wind and solar power. To learn more, read “The New Green Energy Giants Challenging Exxon and BP.” Reading this article could require a subscription.

Key Takeaways

  • NextEra, Enel SpA and Iberdrola SA are Wall Street darlings, after Spain’s Iberdrola and Italy’s Enel became global builders of green energy projects, while NextEra became America’s largest generator of wind and solar power.
  • Enel and Iberdrola have outlined plans to substantially expand their portfolios of renewable-energy projects over the next decade with about $170 billion in collective investments.
  • Florida-based NextEra grew into America’s largest renewable energy producer by keeping debt levels low, capitalizing on federal tax subsidies available to help finance wind and solar projects around the country and reinvesting its profits to expand further. NextEra expects to have invested $60 billion in renewable energy projects between 2019 and 2022.
  • Denmark’s Ørsted A/S, a company formerly known as DONG Energy that focused on oil and gas, has transitioned into a leading player in offshore wind projects.

Path to 100% Perspective

As NextEra became more valuable than Exxon in 2020, it became increasingly clear that the status quo in energy is now in the rearview mirror and the path to 100% is nearly paved. Oil companies are not holding on to the past or unrealistic expectations for the future of energy. Instead, they are joining the race to renewables using their name recognition, influence in the energy sector and budgets to spur more competition to the benefit of those striving for a renewable energy future.

 

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