Energy Landscape in Midst of Seismic Shifts

June 25, 2015

bloomberg_energy1EcoWatch:

Renewable energy is set to blow past fossil fuels in the next 25 years, attracting nearly two-thirds of the spending on new power plants, according to a new report from Bloomberg New Energy Finance (BNEF). With rapidly decreasing costs, solar will be the top choice for consumers, particularly in developing nations, the report New Energy Outlook 2015 (NEO) projects. Worldwide, it expects solar to draw $3.7 trillion of the $8 trillion invested in clean energy, with only $4.1 billion spent on coal, natural gas and nuclear.

The report outlined what it referred to as “5 seismic shifts” that will transform electricity generation in the next quarter century.

It found:

1. Solar, solar everywhere. The continuing decline in the cost of photovoltaic technology will fuel that $3.7 billion investment surge in both large- and small-scale solar. That growth will be pushed by a 47 percent decrease in the cost of solar thanks to conversion efficiencies, new materials and streamlined production.

2. Power to the people. Of that amount, $2.2 billion will be invested in rooftop solar and other small-scale solar systems, allowing businesses and other users to generate and store their own electricity and giving parts of the developing world access to electricity for the first time.

bloomberg_energy23. Demand undershoots. Energy-efficient technologies in uses such as air conditioning and lighting will help decrease growth in global power demand from 3 percent to 1.8 percent a year.

Underscoring this point, the American Council for an Energy Efficient Economy points out in a new report:

A recent ACEEE report found that if states fully incorporate several energy efficiency policies into their CPP plans (e.g., energy saving targets for utilities, building codes and CHP), energy efficiency could reduce electricity consumption by about 25% relative to 2012 electricity sales, or about 22% relative to projected 2030 sales. That’s more than ten times what EIA found.

Why the big difference?

There appear to be two major factors accounting for the difference between the EIA and ACEEE analyses. First, EIA only considers a subset of available energy efficiency actions. It just considers utility programs affecting buildings, and only looks at some specific efficiency measures incorporated into its models, such as more efficient lighting, water heating, refrigeration and heating and cooling systems. Increasingly, energy efficiency programs are looking beyond simple equipment upgrades, but these efforts are not captured in the EIA models (see ACEEE’s 2013 report on next generation programs). Furthermore, EIA looked only at technologies widely available today and did not consider the evolution of new technologies in the future.

Second, EIA did not count existing utility energy efficiency program efforts to the extent they are already incorporated into their reference case forecast. The reference case forecast incorporates historical trends, which, in their CPP report, EIA estimates to be savings of 0.5% of utility sales each year. Over EIA’s ten-year analysis period, this means about 5% savings that EIA has in their 2030 baseline and not in their CPP case. Thus the difference between the EIA and ACEEE analyses is more like a factor of three: ACEEE’s 22% savings vs. EIA’s approximately 7% savings (1.8% plus 5%).

Back to Ecowatch:

bloomberg_energy3

4. Gas flares only briefly. Natural gas will not transition the world from coal, and coal-to-gas will be primarily a U.S phenomenon due to the explosion of fracking, but developing nations will combine coal and renewable energy.

bloomberg_energy4

5. Climate peril. Despite the increased investment in renewables, climate change will remain a threat, as enough older fossil-fuel power plants remain online and new coal-fired plants in developing nations cause carbon emissions to rise through 2029 and remain 14 percent above 2014 levels in 2040.

Takeaway. We are still in trouble, despite the rapid uptake of renewable energy.
It is, however, important to bear in mind the dismal performance of most predictions of the growth in renewable energy, and the dampening of demand by more efficiency.

pruss_slide2

Don’t believe the numbers on how many coal projects will be completed in coming years – those predictions will need to be continuously downgraded.

One Response to “Energy Landscape in Midst of Seismic Shifts”

  1. dumboldguy Says:

    Not a single response to this post? Strange. And there was a similar one a little while before this one that also got no comments.

    Perhaps we are all getting tired of looking at graphs that show some “positive” trends but are really just projections by axe-grinding “economists” and “financial analysts” (those same idiots that didn’t see the dot.com bust and the 2008 meltdown coming). 2040 is 25 years out, and anyone who thinks that an analysis of the data around 2015 can be projected that far into the future is dreaming—there are even contradictions within this post—the graphs don’t agree with each other and this statement contradicts the visuals.

    “Despite the increased investment in renewables, climate change will remain a threat, as enough older fossil-fuel power plants remain online and new coal-fired plants in developing nations cause carbon emissions to rise through 2029 and remain 14 percent above 2014 levels in 2040”. If they meant to say “14 percent above 2014 levels IN DEVELOPING NATIONS ONLY”, they should have said so.

    Peter says “Don’t believe the numbers on how many coal projects will be completed in coming years – those predictions will need to be continuously downgraded.” What crystal ball did that come from? Let’s hope it’s true, but it’s not something I would say without the hindsight of the next five years.


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: