2022: The Year the Transition Kicked Into Gear

December 28, 2022

The Bumpy Ride begins in earnest.

Leah Stokes in the New York Times:

For almost half a century, the world has talked about quitting its addiction to fossil fuels. Yet, year after year, we remain stuck with the same old dirty energy system.

The consequences of that delay are now upon us, with the climate crisis breaching our front door. Extreme rainfall in Pakistan affected more than 33 million people this year, with some communities converted into lakes. In Florida, Hurricane Ian caused more than $50 billion in insured damage, making it the second-most-expensive hurricane in the country’s history. In the western United States, drought left the nation’s two largest reservoirs nearly three-quarters empty.

But when we look back a decade from now, we may find that 2022 was an inflection point. New policies in the United States and Europe and elections in Australia and Brazil are creating momentum for the shift toward clean energy. If moving away from dirty energy is like rerouting a giant ship, then this could be the year when world leaders started to turn the tanker around.

An energy transition sounds smooth and orderly. But in a year with a brutal war that turned global energy markets upside down, we learned that’s not the way this kind of change will happen. It’s going to be a bumpy ride — an energy disruption.

If we look at the periods when the energy system shifted dramatically, whether in 1979 or 2022, there’s a clear pattern: crisis. When energy supply grows scarce and fossil fuel prices shoot through the roof, governments act.

The responses might be Band-Aids — bringing down prices in the short term but doing little to change dependence on dirty energy. Or they could be like major surgery — fundamentally altering energy infrastructure. It’s the latter changes that really count, because they’re harder to reverse.

After more than three decades of largely failed efforts, the U.S. Congress passed a series of climate bills aimed squarely at infrastructure. The biggest one, the Inflation Reduction Act, is projected to invest around $370 billion in clean industries. Much of the funding will flow through unlimited tax credits to households for everything from electric vehicles to solar panels to heat pumps that run on electricity rather than gas.

Below, YouTube Electric Viking doesn’t always get the details right but I love his enthusiasm.

Initially, it seemed this package would fail to make it over the finish line. The bill died and was reincarnated again and again. Ultimately, high energy prices created the conditions for action. By one estimate, fossil fuel price increases drove 41 percent of inflation in the United States.

The law will also be hard to roll back, even if Republicans get a chance in the future, because it’s creating well-paying jobs in America. Private companies have invested north of $100 billion in electric vehicles, charging infrastructure and solar. Many new jobs will be in Republican states and districts. At a BMW event in October, Senator Lindsey Graham of South Carolina said his state “is going to become the Detroit of batteries.”

America’s new energy laws are far from perfect. They include investments in fossil fuel infrastructure, like gas-powered buses. And so far, many electric utilities have resisted updating their plans to build clean energy faster. Congress had proposed incentives for them to do this as part of the climate package, but Senator Joe Manchin of West Virginia refused to let that provision move forward.

Yet overall these new laws will set the United States on a permanent course away from fossil fuels — even if the journey has ups and downs.

This year will also likely be a turning point for Europe. The energy crisis, driven by Vladimir Putin’s unprovoked invasion of Ukraine, has all but cut off Europe from its largest source of fossil gas. In response, prices have surged; in August, gas in the European Union cost a whopping 12 times as much as at the start of 2021.

The explosion of the Nord Stream gas pipelines in September — widely believed to be an act of sabotage — that damaged a key link between Russia and Europe will only accelerate these trends, and it’s unclear if the pipelines can be repaired. Most likely, the damage will permanently reduce Europe’s access to fossil fuels.

Given these disruptions, Europe has accelerated its plans to move toward clean energy. In November, the European Union decided to speed up permitting and installation for renewable energy projects by setting maximum timelines for equipment such as solar panels and heat pumps. E.U. negotiators also recently completed a deal to cut carbon pollution faster this decade.

In October and November, gas usage in Europe was roughly a quarter below its five-year average for the same period. Part of this reduction is from people changing their behavior to save energy, a trend that could be temporary. But in the first half of 2022, Poland, the Netherlands, Italy and Austria saw massive growth in sales of heat pumps. The buildings that now have heat pumps are unlikely to ever return to burning gas, even if the geopolitical situation shifts.

As the world manufactures more solar panels, electric vehicles and heat pumps, it will also learn how to make them more cheaply. That innovation cannot easily be undone. As clean technology falls in price, more consumers and businesses around the world will choose it rather than fossil fuels. Think about how widely cellphones were adopted over landlines after they were more affordable.

Center for Research on Energy and Clean Air:

This November saw the lowest values for the month in the EU in at least 30 years for

  • total CO2 emissions
  • gas consumption
  • power sector CO2 emissions
  • power generation from fossil fuels

These findings are based on CREA’s near-real-time tracking of EU CO2 emissions. 

There were widespread expectations that the fossil fuel crisis would lead to an increase in the EU’s emissions. This was based on a misunderstanding: the EU was increasing fossil fuel imports from around the world, but the reason was not an increase in consumption. Rather, EU utilities were scrambling to replace the lost supply from Russia, as the country cut off gas exports to the EU and the EU in turn banned coal imports from Russia. In addition, weak nuclear and hydropower output were leading to increased demand for coal and gas in early 2022.

The reduction in emissions is caused by the impact on high prices on demand, combined with increases in wind and solar power output. Hydropower output has recovered from the collapse that it experienced over the summer, but the French nuclear power operator EdF has not been able to meet its targets for reactor restarts, resulting in record-low nuclear output, again, in November.

In the power sector, both coal and gas-fired power dropped year-on-year in November. Coal gained share within thermal power generation, as the fall in gas-fired power generation was approximately four times as large as the fall in coal-fired generation.

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