Clean Power

Published on May 1st, 2012 | by Susan Kraemer


Clean Energy Switch to Cost Fossil Industry $4 Trillion by 2020

May 1st, 2012 by  

No wonder the push back against clean energy is so strong. A staggering amount of money is at stake. I had not realized quite how much impact that switching to clean energy will have on the dirty energy industry, currently the richest industry on the planet.

The IEA 2012 report on global progress on cutting greenhouse gases to prevent the worst effects of climate change includes an estimate of the immediate financial costs of investing in newer cleaner forms of energy in various forms.

Over the next eight years, we have to spend money on energy – either way: whether we want to still try for a relatively livable planet or whether we want to roll the dice and let it go to hell after we’re done with it.

If we spend it on clean energy, it will take $5 trillion in U.S. dollars, the IEA calculates. But we would save $4 trillion by not buying dirty energy, in just the next eight years alone.

The report is long, and it has a lot of interesting data which I will cover separately, but this fact really stood out. The calculation of what we will not spend on fossil energy over these next 8 years, if we add clean energy instead, is a stunner.

“Globally, the near-term additional investment cost of achieving these objectives [cutting greenhouse gas emissions] would amount to USD 5 trillion by 2020, but USD 4 trillion will be saved through lower fossil fuel use over this period. The net costs over the next decade are therefore estimated at over USD 1 trillion.”

Put it another way, this sum – $4 trillion – makes it very clear just what the fossil industry has to lose by 2020. It could lose four trillion dollars in eight years, or half a trillion dollars a year. Is it any wonder that millions are being thrown around to protect this industry?



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About the Author

writes at CleanTechnica, CSP-Today and Renewable Energy World.  She has also been published at Wind Energy Update, Solar Plaza, Earthtechling PV-Insider , and GreenProphet, Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times.    Follow Susan on Twitter @dotcommodity.

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  • wattleberry

    Whilst the adoption of consumer level generating capacity is a huge benefit, we have to wonder not only how industry is going to react[pardon the pun] but also governments. The levying of tax on fuel and the profits of the power suppliers has always been a major and particularly convenient way of collecting a large proportion of their revenues and they are going to have some serious head-scratching to do in devising a replacement. As this has never been one of their most obvious activities up to now, unless they change their ways we can surely expect less than enthusiastic support from them as well, other than a lot of hot air.
    Maybe we can harness that?

  • electric38

    Yeah, we have a choice. We could convert the old refineries and coal mines into solar farms, but to see the way these corporate giants have manipulated politics and lawmaking with their earnings… No thank you. Consumer owned solar PV rooftops are the preferred choice. After all the rooftops are there already anyways aren’t they?

  • RenewableDoug

    I was not able to find the IEA report at the link given (

    They seem to have gone through a website re-design and I did find it here:

  • Ross

    That can also be looked at as a massive incentive for traditional utilities and grid operators to adapt or lose even more revenue to decentralised and locally used renewable power.

    • Mostly what they are competing against for now is utility scale wind farms, and there is a huge run up in utility scale solar farms about to come online in the U.S. But there is an enormous change coming – in California with 500 something distributed solar plants over 1 MW now, will have about 17,000 by 2017 (now permitted and in the works) so even the commercial scale (on big box stores etc) distributed is going to really change.

      • As wind has zero fuel cost and is a price taker rather than a price giver, it has the effect of lowering wholesale electricity prices and owners of current generating capacity don’t like that. But that’s what new technology does, it improves on things and there is nothing to stop these companies from investing in wind power. Here in Australia we have energy companies with both fossil fuel plants and wind turbines. In South Australia we got 26% of our electricity from wind last year and while there were costs to integrating this wind energy into the grid, for consumers they were outweighed by the half a cent or more reduction in wholesale electricity prices caused by wind. But these same companies who have invested in wind power have worked to slow the expansion of point of use solar power. They don’t want solar to drop the daytime price of electricity. I’m afraid they don’t really have the consumer’s best interest at heart. But I knew that from when they tried to manipulate the market to temporarily jack the price of electricity up to $10 a kilowatt-hour in Adelaide.

        • Thanks, interesting. And that is amazing: “In South Australia we got 26% of our electricity from wind last year” I had no idea it was so high.

  • Personally that’s not quite the way I would look at it. Energy companies are in the business of providing us with energy. Fossil fuel plants wear out and companies providing dirty power could have said, “Well, times are a changing,” and replaced them with clean capacity and transitioned to being clean energy providers. So it’s not so much that they stand to lose money, it’s more that they’re fighting tooth and nail and dirty lies so as not to have to change how they make money, and unfortunately damaging the world environment as a result.

    • Agreed. There’s nothing stopping them from making energy that leaves a livable planet for the next generations, except reluctance to start over (financially) with non-damaging energy investing. Penny wise, pound foolish.

      • RobS

        I think there is an untapped market for retrofitting fossil fuel plants, for example you could have a solar tower beside an existing coal plant with its coal furnace removed then pump the molten salt into the existing boiler assembly, you can thereby make use of the existing boilers and turbines and keep many of the existing plant staff which would allay much of the criticism of he technology. If you coud offer communities which rely on coal power industry a renewable upgrade of their local plant which emits no pollution without damaging local employment who but the most fringe of anti renewable ideologues would oppose such a plan?

    • dmtk


      They want to stick to the model “WE, and only WE, sell energy to YOU” as long as they can.

      Renewables change the game fundamentally – consumers can make energy and consumers can sell energy. Energy made for self-consumption will eat their profits.

      • Matt

        Well it is a bit of both.
        Most of the big wind frams and utility scale PV are owned by you guested it a large corp. So with clean tech there is a portion which is still own by “utility” companies. As power plants are replaced over the next 10 years, a power company can deciede old dirty way we have always done it or new clean way.

        But when individuals and business make there own, they lower their need to buy from the utilities company.

    • TomSparc

      Yes, the Dirty Energy Corporations could invest and compete in renewables – but that misses some fundamentals.

      Their expertise is in drilling holes in the ground and selling what comes out. The people in the industry only know how to do that – not the high-tech stuff needed to build solar PV and wind turbines.

      Also, the fossil corporations have *massive* capital cost sunk in to a framework totally designed for extracting, processing and transporting fossil fuels. They don’t want to throw that away.

      Also, these fossil corporations are used to working on *massive*, easy profit margins. That’s not what renewables offer – it’s high volume, low profit margins – with you and me enjoying some of those profits when we sell electricity back to the grid.

      The CEOs of these dinosaur corporations have decided the most profitable route for them is to lie and cheat in order to protect the status quo and their multi-trillion dollar industry. They will continue throwing everything they can at undermining the renewable energy revolution.

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