The Federal Energy Regulatory Commission’s Energy Infrastructure Update for April is out, and it shows that all new electricity generation capacity in the US in April came from renewable sources. Think about that. No new coal, no new natural gas, and no new nuclear. FERC defines renewables as biomass, geothermal, hydropower, solar, and wind. Some would quibble with biomass, which often means burning wood pellets, but at least they release carbon dioxide captured by trees recently. Coal, oil, and gas release carbon dioxide sequestered millions of years ago, overloading the carbon cycle and forcing it out of whack.
“Notwithstanding the impacts of the global coronavirus crisis, renewables — especially wind and solar — are continuing on their march to eventual energy dominance,” noted Ken Bossong, Executive Director of the SUN DAY Campaign, as published on Renewables Now. “And as prices for renewably-generated electricity fall ever-lower, that growth trend seems certain to accelerate.”
FERC agrees. It predicts there is a “high probability” that over the next three years, wind power will grow by 26,867 MW and solar by 24,083 MW. By comparison, net growth for natural gas will be only 20,657 MW. It projects coal generation will drop by 16,428 MW over the next 3 years. FERC also reports no new capacity additions by coal, oil, nuclear, or geothermal energy since the beginning of this year.
The mix of all renewables will add more than 53 gigawatts (GW) of net new generating capacity to the nation’s total by April 2023, FERC says. That is nearly 50 times the net new capacity of 1.1 GW projected to be added by natural gas, coal, oil, and nuclear power combined. And yet, FERC has been ratcheting up its renewable energy projections almost on a monthly basis as new data comes available, which suggests its predictions for three years from now may be on the conservative side.
Oil Industry Shedding Jobs
Irish news source RTE reports that BP (aka British Petroleum) is planning to lay off 10,000 white collar workers, many of them at its UK headquarters, as it begins to pivot toward more renewable energy in its portfolio. Bernard Looney became head of BP in February of this year and has embarked on an ambitious campaign to make the company leaner and more nimble to face the challenges of a changing world and changing marketplace. “We will now begin a process that will see close to 10,000 people leaving BP — most by the end of this year,” Looney said in a statement this week.
Faced with a drop in demand for oil as a result of the coronavirus and disruptions in the industry, BP will cut its investments in new exploration and production by 25% to $12 billion this year and says it will find $2.5 billion in cost savings by the end of 2021 through the digitalization and integration of its businesses.
In this latest announcement, Looney said the company is likely to need to cut costs even further. “It was always part of the plan to make BP a leaner, faster-moving and lower-carbon company,” he said, adding that the coronavirus crisis “amplified and accelerated” BP’s transition plans.
Shortly after he became the new head of BP in February, Looney began “reinventing” the company by dismantling the traditional structure dominated by its oil and gas production business and its refining, marketing, and trading division and creating 11 new divisions that better align with his goal of making the company more of a force in renewable energy while reducing its carbon footprint.
BP is far from the only oil company shedding workers. Chevron, the second largest US oil producer, said last month it will cut between up to 15% of its global workforce as part of an ongoing restructuring. Royal Dutch Shell has initiated a voluntary redundancy program, which means employees who retire or leave the company for other reasons will not be replaced.
Ignorance In The Boardroom
A report by Bloomberg finds that a high percentage of the board members at the 20 largest US and European banks have ties to the fossil fuel industry and other large carbon emitters. For instance, Lee Raymond, former CEO of ExxonMobil, has served on the board of JPMorganChase for 30 years. Of 600 current and former board members, Bloomberg found 73 had ties to companies with a history of large carbon emissions while only 4 had associations with companies in the renewable sector.
Why is that important? Because since the Paris Climate Accords were signed in 2015, those 20 banks have provided $1.4 trillion in funding to oil and gas companies and are “the most active financiers” for nonrenewable energy projects, according to Bloomberg. Despite lip service to climate-friendly goals, the banks continue to prop up dying industries instead of funding the renewable energy sector with the same vigor.
Grist reports that activist shareholders who want banks to take more aggressive action on climate change are getting some results. For instance, after shareholders threatened to vote Lee Raymond out as JPMorgan’s lead independent director, the bank said it will replace Raymond by the end of the summer. Dieter Wemmer, one of the few executives Bloomberg identified as having green energy bona fides, says, “It is the right time to focus on a green future.”
That is undoubtedly true. But so long as bank boards are infected with fossil fuel thinking, that future will not arrive nearly soon enough. The problem is the investment community has a herd mentality just like many businesses and financial companies. There is strong bias in favor of continuing to do what has always been done, to not rock the boat, and to shun innovation. Keep those dividends flowing and everything will be fine.
Except it won’t. Not any more. The world of finance is as risk averse as any segment of the business community, which makes it easy for executives who sit on these board to look more to the past than the future. The Earth simply can’t wait several more generations for such attitudes to change.
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