CleanTechnica is the #1 cleantech-focused
website
 in the world.


Clean Power Screen-Shot-2013-06-19-at-9.33.35-AM

Published on June 24th, 2013 | by Giles Parkinson

31

Coal Industry Must Wake Up – Renewables Are The Future



This article first appeared on RenewEconomy

It is staggering to observe that even in modern sophisticated economies such as the US, Australia and UK – which are supposed to have modern, sophisticated political systems (no really, don’t laugh) – that the role of renewables in the world’s future energy systems is constantly underplayed.

This has probably got something to do with the way that mainstream media handles the issue. In its pursuit of division, fear and controversy, it’s happy to oblige the tactics of delay and misinformation from the fossil fuel industry, that is seeking to protect and prolong several trillion dollars of investments and revenue streams.

Too often, renewable energy is portrayed as an expensive and unnecessary plaything or indulgence. But the media is not solely to blame. There is a shocking lack of vision at the political level too, with the notable exception of the Greens. Conservative political parties, in Australia in particular, constantly use green energy as a scapegoat for problems elsewhere; often for superfluous and inefficient grid upgrades.

But one thing should be made clear: whichever way you cut the future energy outlook, and whichever way you attack the challenge of climate change and the goal of reducing emissions, two technology solutions dominate all others – energy efficiency and renewable energy.

Even if the pro-nuclear lobbies and those who still hold on to the dream of carbon capture and storage have their way, the investment in those technologies will pale in comparison to that needed for renewables – be it in solar PV or solar thermal with storage, wind energy (onshore and offshore), hydro, biomass, or the emerging technologies such as wave and tidal.

This is true on two counts. Already, solar PV – and the arrival of socket parity in more than 100 countries – is providing an economic rationale for investment in renewables, regardless of climate policies. Utility-scale wind is cheaper than new fossil fuel plants in many countries – particularly in energy starved developing nations in Africa and Asia – and utility-scale solar will follow soon enough. Once climate policy is taken into the equation, the impact is even more dramatic.

This first graph below – taken from the International Energy Agency’s recent “Redrawing the climate energy map” publication – probably best sums up the situation. It is the IEA’s take on where the greatest emissions reductions are going to take place in the energy industry if the world is going to meet its climate goals. This graph illustrates its “delayed” scenario, which takes into account the probability that governments will not ramp up their policy actions by 2014 – as would be prudent – but would delay a few years.

Energy efficiency and renewable energy sources account for well over half of the abatement. Nuclear and CCS – even if they meet the IEA’s optimistic scenarios, which, given the financing problems for nuclear and the technology challenges for CCS, is unlikely – they still account for less than one-quarter of anticipated abatement. If either of those two technologies fall short, then energy efficiency and renewables will have to take up the slack.

Screen-Shot-2013-06-19-at-9.33.35-AM

Given this, there are no prizes for guessing where the best returns are going to be made over the next two decades, a key factor that seems to go largely absent when renewables are discussed in the frame of short terms costs and not in the context of long-term opportunities.

This next graph illustrates this point. It’s the difference between policies that have been promised and enacted by leading economies so far (the blue New Policies scenario), and the policies required to meet the climate goals (green). Either way, revenues from renewables outstrip those from new nuclear and fossil fuel plants combined, even if nothing more is done, and are nearly double when the world takes serious action. Could there be any clearer demonstration of where the future is?

Screen-Shot-2013-06-19-at-10.21.08-AM

The political debate in Australia around fossil fuels – and by extension renewables – is still based on the assumption that international demand is inexhaustible as the growing middle classes of emerging superpowers such as India and China require more electricity to power their new gadgets and appliances.

But the IEA makes clear that renewables will dominate the world’s new capacity – even out to 2020 – with some $2 trillion likely to be invested in hydro, wind, solar, biomass and other renewables. Australia’s share of that, with current policies such as the 20 per cent renewable energy target (should it be retained) is a modest $20 billion. That does not even meet our pro-rata share on a population basis.

“Despite the insufficiency of global action to date, limiting the global temperature rise to 2 °C remains technically feasible, though it is extremely challenging,” the IEA says.

“To achieve our 450 Scenario, which is consistent with a 50% chance of keeping to 2 °C, the growth in global energy-related CO2 emissions needs to halt and start to reverse within the current decade. Clear political resolution, backed by suitable policies and financial frameworks, is needed to facilitate the necessary investment in low-carbon energy supply and in energy efficiency.” Can’t be any clearer than that.

Still, the fossil fuel industry, and particularly the Australian Coal Association, has its head stuck firmly in the ground. Its CEO Nikki Williams is insisting that there is no such thing as “unburnable carbon”, and that all carbon can, and should be burned.

It’s a premise based on the hope that CCS will deliver, and deliver on time. Curiously, the coal industry has done precious little to fund the research, but it still hangs on its promise. Williams’ hopes are based on a business-as-usual scenario – or, at best, the New Policies scenario. But as the IEA points out in the graph below, even with CCS – the total market for coal-fired power stations is going to fall dramatically in the coming decades. Unless, of course, we just ignore the climate.

As said James Leaton, research director rom the Carbon Tracker Report which has been pushing the concept of unburnable carbon to the financial community, pointing out its risks: “The denial of the potential for unburnable carbon is exactly what will create a carbon bubble, wasted capital, and stranded assets – the coal industry needs to accept the need to change our energy mix and address air quality and climate change now.”

Screen-Shot-2013-06-19-at-9.42.29-AM

Print Friendly

Tags: , , , , , , ,


About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • Charlie

    I disagree with that view;

    I have installed solar energy on my rooftop, in the last 8 days there is no energy coming from the system, and my wind gauge virtually zero. I’m purely dependent on the fossil fuel for my energy needs from the coal fired power station as I have no energy backup system to supply my energy needs. What you’re proposing is to close down the coal fired generators, I disagree with that, in the last eight days there has been no energy. And I think you’re forgetting the fact that the coal generator gives us the lifestyle to use free coal energy 24 hours a day. Flowing that benefit onto my house through the payment FIT tariff system. Do you want to take the FIT system away?

    Without the system in place where would I get my AC ducted heating energy from?..

    • @supersolarguy

      Sun always comes up! But the wind doesn’t always blow. Pick your renewable system carefully. Not by the salesperson.

    • Bob_Wallace

      Hate to be the bearer of bad news, Charlie, but it sounds like your system is broken.

      It’s been cloudy, solid cover, and rainy here. My system hasn’t been giving me a lot, but I do get some power. If you’re getting zero and it’s been brighter than “dead of night” then you’ve got a problem.

      And I don’t know where you live, but anywhere in the US your grid is supplying you electricity that is not 100% coal produced. Overall coal plays only a 35% role on the US grids.

      And this – ” coal generator gives us the lifestyle to use free coal energy 24 hours a day”. Boy, it that ever a bogus claim. Coal is our #1 most expensive way to put power on the grid. I guess no one has told you that you’re paying a lot of tax money and health insurance premium money to cover the cost of coal pollution, eh?

      You’re way behind the curve, Charlie. Read along and catch up.

      • Charlie

        Expressing the view of the bad weather constantly dark clouds hanging around for the last eight days moving onto the ninth day. If I had installed a wind turbine I would have no energy, either, by Wind gauge reads virtually zero.

        Yes the coal generator gives me the lifestyle under the FIT payments system, without the current coal generator in place, I would not got subsidise for my $25,000 profit so far this year, I’m well aware the coal generators produce CO2 emission but that where my FIT payments are coming from, but where do you think I’m going to get the energy to keep AC ducted heating energy on, from?, If you attained that attitude of closing down the coal generator.

        You can’t just say close down coal generators, I believe your wrong on that. My Neighbour installed two 50 kW wind turbines haven’t been strong enough wind to generate anything significant to even supply his own home last 2 month, turbine blades are standing still, he also is dependent upon the coal generator for energy needs, he also gets the FIT payments from the coal generator, so the coal generators must remain open the to retainer FIT payments maintaining our lifestyle. Otherwise who’s paying?

        • Bob_Wallace

          Charlie, you’re trying to say something significant with only one data point. The world is larger than your yard.

          We know, for example, if we connect a couple of wind farms separated over a couple of hundred miles we get significant wind input 85% of the time. And that happens to be the amount of time a coal plant is on line on average per year.

          We also know that small wind turbines aren’t a great way to generate electricity. One needs to get up high, to about 80 meters to tap into the good stuff.

          Now, you’re rambling on about coal. I suppose you’re here to make some great attempt to defend the coal industry. Otherwise you’d be including our other methods of generating electricity.

          Tell us, where do you live? Where do coal plants send FiT payments to homeowners?

    • mds

      Bob is kinder than me. You’re a liar with an agenda. You can’t get zero energy out of a solar system during the day unless you just don’t connect it to anything. You don’t know this because you don’t have a solar system. You don’t like solar or wind and you’re just using grid power. You don’t like your tax dollars going to assist solar or wind. Tough! Suck it up Joe Dinosaur. Solar, Wind and NG have already knocked coal in the USA down from over 50% to 35% of our electrical power. Solar and Wind continue to get cheaper and lower cost storage technologies are coming to the market. You’re going to see your neighbors using a lot more solar and wind as it gets cheaper and cheaper…

      You are probably already using solar and wind from the grid and you don’t know it. You better build your own private coal plant if you want to keep using just coal. The rest of us rational

      Sorry Charlie think up a better story next time.

      • Charlie

        Get off your high horses, you don’t know what you’re talking about, you consider 100watt total output from my grid inverter rooftop solar system for the last nine days energy, you’re right, I can power all my appliances and run the whole neighbourhood with 100 Watts 0.1kw, you numbskull, you implied people don’t know what they’re talking about, now wonder the world’s got energy problems, with numbskulls like you.

        What are you talking about the tax payer’s dollars assisting me paying for the solar system, what you have a magical vacuum cleaner that moves the pitch black clouds along do you?

        My grid inverter doesn’t have a crank handle you know, go back to the dark ages where you belong . The hole you crawled out of.

        • mds

          My apologies. I didn’t realize you were just a nut with poor communication skills. You were the one who said no energy output, not me. Now it’s 100 watts. Did you build your solar system in the rain forest of the Pacific Northwest or Alaska?
          You have solar panels, but you insist continued use of coal is essential because your PV panels don’t work well. Nonsense. Your inverter doesn’t have a crank handle, but clearly it has a crank. Think of a better fabrication Charlie.

          • Bob_Wallace

            I suspect Charlie’s an Australian coal miner.

            It is winter down there, a string of cloudy days is possible. And he’s probably sweating his job.

            He should get out of the hole and get himself trained to install solar and wind. Pass on a better world to the next generation rather than play a part in their suffering.

          • Charlie

            I suspect that Bob is one of those Californian loggers that harvest forests that’s cuts down trees with a chainsaw causing environmental vandalism for future generations, then burns that wood in the fireplace causing the world C02 emission to rise.

            Bob, I can see from the satellite what a tree lumberjack you are.

          • Ronald Brakels

            Eight days of cloud in Australia? I wish! We once had eight days of cloud when I was a kid. We still talk about it.

          • Ann

            stop mislead http://www.bom.gov.au/australia/satellite/?ref=ftr

            Cloud have been across Australia the last 8 day and still is there.

          • Charlie

            Thank you very much for your compliment numbskull, you fix my solar system with crank pot answers.

            News break Solar panel now works in the dark according to numbskull, United States Congress now approves the roll out of Numbskull policy, News break numbskull policy send United States economy to the verge of bankruptcy two weeks later.

            Numbskull I told you didn’t work on cloudy dark days.

  • Steeple

    Some of the comments here are so infantile, and that is one of the reasons why the Green movement is discounted by so many. Western countries in general are not growing their power demand, as their economic growth is weak and demand side savers like LED lighting kick in. The only real power demand growth is in the developing nations, and it’s mainly China and India. So unless you are directly your comments at countries like those, you’re wasting your efforts on a moot point.

    • mds

      OK, so why are solar, wind, and NG increasing their percentage of power delivered to the USA grid, while coal is losing this market share?
      Let me tell you:
      1. Replacement of aging coal and nuke power plants.
      2. Simple change-over due to lower cost of electricity for the grid, now and far more so into the future. (see Bob Wallace’s comment below on cost of electricity from new solar plants)
      …and the cost of solar and wind continues to drop.
      Infantile? Those who live in glass houses…
      You do have one thing right: LED lights and other energy conservation methods are the very lowest cost source of power. First rule of building an alternative energy -> lots of insulation.

      • Steeple

        Nat gas has displaced most of the coal that has gone offline. Aging plants are also going off the grid due to cost or regulatory issues, like the need to install scrubbing. Renewables are getting subsidized, and there is no need to add much capacity as demand is flat to down. Has nothing to do with coal producers “having their heads in the sand”, “the coal industry must go to sleep”, blah blah blah.

        • Bob_Wallace

          You are partially correct. Natural gas capacity has increased as coal output has dropped. However NG has not taken up all the slack. Wind produced 3.5% of US electricity in 2012.

          And you are only temporarily correct. The price of NG is rising and renewable capacity is increasing. The percentage of electricity produced by NG will shift toward renewables as wind and solar become cheaper and gas more expensive.

          With wind becoming cheaper than NG more wind will be installed because it not only saves utilities money now, it locks in those low prices for 25 to 30 years. Possibly more.

          With solar now cheaper than gas peaker power utilities will install more solar in order to avoid paying for gas peaker power and to lock in those low prices for 40 or more years.

          Coal, like nuclear, is in deep trouble. Coal must either clean up its emission stream or get shut down. We just can’t afford to foot the medical bill for coal any longer.

          Coal can’t clean up its smokestack emissions and compete. It will lose money at night when wind can price out below it and it can’t make that loss up during peak hours by having expensive gas peakers set high merit order ceilings. Solar has lowered that ceiling.

          The old model no longer works. We’re moving into the 21st Century where having a zero fuel cost makes you a winner.

          All energy is subsidized. Renewables have received only a very small percentage of what fossil fuels have received.

        • mds

          Steeple,

          Bob has already answered well for me.

          You said: “Nat gas has displaced most of the coal that has gone offline.”

          Yes, NG has replaced most of the lost coal power, but it is not alone. Wind has replaced a very significant portion. Demand for electricity is down to a small degree because of end-of-grid solar installations. As Bob points out the price of NG is no longer going down because of the cost of fracking. The cost of wind and solar continue to drop at a surprising rate. The subsidies for wind and solar are helping that happen. The far larger annual dollar amount of subsidies for oil, coal, and NG are not reducing their cost. …and fossil fuel subsidies have been in place for a century. Gee, which do you think is the better deal right now? You should write to your congressional and senate reps right now and ask them to stop the fossil fuel tax breaks and subsidies if you are a true fiscal conservative! Don’t do that if you are just a hypocrite.

          Yes, the coal producers are clueless. Maybe you are one. They are grasping at keeping market share as they lose their economic position going forward. As wind, solar, and energy storage continue to drop in price …that kerosene distribution business might not be as profitable as those Edison electric bulbs …or you can continue to demand that customers buy your kerosene like they did at the turn of the century in Europe. They still lost in the long run. This change to lower and lower cost renewables is happening. Please pull your own head out of the sand, or at least get out of our way! The cost trends here are very clear. You have scales on your eyes if you cannot see this.

          If coal companies understood the change that is happening, then they would be investing in solar and wind, instead of fighting it. A few over-seas oil companies are actually doing this. It is common for large incumbent companies to try and block technical progress and protect their long established empire. This is especially true here, where they think they have us depending on a limited resource so they can crank up the price. Sorry, not gunna happen on my watch.

          Tobacco causes cancer.

          CO2 causes global warming.

          Wind is already competitive with new coal plants for source-of-grid power. …and wind is still getting cheaper.

          Installed Solar PV is already lower than end-of-grid electricity in Australia, Hawaii, some parts of Southern California, and others …and installed Solar PV is still dropping in price. It will be the lowest cost option, with no subsidies, for the whole southern half of the USA before the end of this decade.

          Rationalize this differently if you want, but these are the realities.

          • Bob_Wallace

            “Yes, NG has replaced most of the lost coal power, but it is not alone.”

            Let’s put some numbers to that…

            In 2002 coal produced 50.1% of all US electricity. By the middle of 2012 that number had fallen to 36%, a loss of 14.1%.

            Natural gas increased, during the same period from 17.9% to 31%. An increase of 13.1%.

            Renewables, including hydro, increased from 9% to 13%, a 4% share increase.

            Petroleum dropped from 2.4% to 0.5% during the same time frame.

            Coal and petroleum lost 17% of total production, NG and renewables picked up 17.1% with about 75% of that going to NG. But it was only in 2008 that renewables started to show higher growth rates.

            Renewables are now growing at a higher rate than NG.

  • Pieter Siegers

    I think the coal industry knows very well that things aren’t looking well for them but they have their heads stuck in the ground because they can’t do otherwise. They are being controlled by the 1%. They (the 1%) are not going to change their money making cows. But I still have hope when seeing renewables grow and grow even against the massive fossil fuel power. The problem is that while the fossil fuel industry is digging its own grave, we’re being dragged into it also and therefore we must do anything to avoid that happening.

  • Bob_Wallace

    “Utility-scale wind is cheaper than new fossil fuel plants in many countries – particularly in energy starved developing nations in Africa and Asia – and utility-scale solar will follow soon enough.”

    I suspect utility-scale solar has arrived. The city of Palo Alto, California recently signed a 30 year power purchase agreement for solar at $0.069/kWh. That price is lowered by the 30% investment tax credit given by the federal government. Tease out the federal subsidy and solar is being sold for about 10 cents.

    Apparently there is no inflation clause in the 30 year agreement, so in 2043 the city will be paying nothing more than what they are paying today. And after inflation that 10 cents will be worth a lot less than it is now.

    At 3% inflation today’s 10 cents will be worth only 4 cents in 30 years.

    This is the second ~10 cent PPA we’ve seen recently. Another was in New Mexico with First Solar.

    New coal plants can’t be built and produce electricity for 10 cents.

    (Copied over from the same article on Giles’ site.)

  • JamesWimberley

    “Coal Industry Must Wake Up”? No, the coal industry must quietly go to sleep.

    • Mrsexamme1965

      мy coυѕιɴ ιѕ мαĸιɴɢ $51/нoυr oɴlιɴe. υɴeмployed ғor α coυple oғ yeαrѕ αɴd prevιoυѕ yeαr ѕнe ɢoт α $1З619cнecĸ wιтн oɴlιɴe joв ғor α coυple oғ dαyѕ. ѕee мore αт…­ ­ViewMore——————————————&#46qr&#46net/kkEj

      It’s only when you accept that imminent action is required to halt global warming does that strategy turn out to be a poor one.

  • jburt56

    They are awake just like Sauron from Mordor!!

  • addicted4444

    I think the major issue is that people (especially in the media) don’t understand how disruptive technologies spread. Additionally, clean energy has been plagued with decades of false promises.

    However, we saw this with the iPhone too. When the iPhone came out, even Steve Jobs said he would be happy if the iPhone got 1% of the phone market years later. In reality, the iPhone had an order of magnitude more sales than expected. And when you consider “iPhone like” devices, they form pretty much all smartphone sales (and majority of phone sales in developed countries). The iPhone was disruptive, and it (and devices like it)’s sales reflected this.

    The same thing is happening in the energy industry. Of course, there is a difference in timeframes in that people replace their cell phones every few years, so but electricity generators have longer timeframes for their energy sources. As a result the rate of replacement and change is slower, but it is still equally fast in terms of the lifecycles in the energy industry.

    • Bob_Wallace

      Time frames are long for thermal plants but they have an Achilles heel.

      The are not dispatchable.

      The low price of electricity from coal and nuclear plants requires that they can sell 24/365. Gas plants can shut down when prices drop below operating costs, but thermal plants keep running and build up losses.

      Normally they can make up those losses during peak hours when merit order pricing presents them with some sweet profits. But solar is destroying those lucrative peak demand hours.

      We’ve had four nuclear reactors shut down in the US this year because they could not survive financially. The same has happened to coal plants but I don’t have a count.

      New generation is mostly renewables.

    • mds

      You’ve got it right, imo!

      Many politicians and the much of the media, in the USA and Australia, are doing the bidding of big money. They are bought and paid for. It no longer matters and neither does climate change. We’re now at the tipping point. Solar and Wind are now the cheapest sources of electricity in some areas. Their cost is still falling. They will be the cheapest in many more areas, resulting in a huge market, in the near future. Many politicians who are now against renewables will be claiming they invented them by the end of this decade. Companies who are still selling oil lamps, kerosene lamps, horse buggies etc. (i.e. the coal and oil companies) are going to take a fall. The cost trends are very clear. It is just economics now. Some politicians have figured this out others will be learning that lesson. A politician might as well be apposed to the automobile, airplane, electric lights, computers, cell phones… A position against renewables, against solar and wind in particular, will be just the same.

      • Bob_Wallace

        “Some politicians have figured this out ”

        We saw this last December when Republican governors from red states lobbied Congress for continued federal support for the wind industry.

        Their citizens were making money off wind. It was bringing business and tax revenues to small towns which had been dying. New tax money was flowing into state budgets.

  • Arndt Ritter

    Australia conservative politicians generally don’t accept that global warming is a reality. And if that’s the base position then business as usual seems to be a pretty reasonable course to take. Let other governments subsidise renewable energy in order to drive down prices and then the Australian market will adopt them when the price is low. This requires zero government investment and you end up with increasing adoption of renewables. It’s not like Australia is good at manufacturing things so early adoption doesn’t really gain it an industry, unlike the manufacturing powerhouses of Germany, USA, and China.

    It’s only when you accept that imminent action is required to halt global warming does that strategy turn out to be a poor one.

    • mds

      I disagree. Residential solar is something like 1/3 the cost of their end-of-grid coal generated electricity. The average Australian can save money during the day by switching to solar. Saving money may not be a new industry, but it’s still a benefit!

  • http://www.energyquicksand.com/ Edward Kerr

    If you’re waiting for the coal/energy industry to come around and accept the reality of your assessment, I hope that you aren’t holding your breath!

Back to Top ↑