The clean energy transition is gaining momentum, despite global chaos | Whuff News

Investments in wind and solar are set to surpass oil and gas drilling for the first time this year, according to one analyst – a milestone in the global transition to clean energy that comes despite a looming energy crisis and calls to increase fossil fuel production. .

Rystad Energy’s forecast is in line with a separate forecast by DNV GL, another company that tracks energy markets. DNV thinks that the short-term increase in coal in developing countries is out of step with the long-term trend of falling renewables, electrification and rising carbon prices.

These predictions—and others like them—suggest that the clean energy revolution remains strong in the face of headwinds. The International Energy Agency predicts that growth in low-carbon electricity generation this year will lead to a slight decline in fossil fuel production. And the US Energy Information Administration projects that it will generate more energy in the United States this year than coal.

“The turbulence in the energy market does not significantly alter the decarbonization path towards the middle of the century,” said Remi Eriksen, DNV president and CEO, in a statement. “The most powerful engine of the world’s energy transition is the rapidly decreasing costs of solar and wind energy, which will outweigh the short-term shocks to the energy system.”

The growth of renewables is notable in years when energy costs have been put at the forefront of public debate. Electricity prices have risen steadily over the past year due to a combination of supply chain disruptions caused by the pandemic; increased demand; and Russia’s invasion of Ukraine, which has raised global energy markets.

Many countries have responded by increasing fossil fuel production. The United Kingdom lifted the ban on hydraulic fracturing and issued new licenses to drill for oil in the North Sea. Europe is on a liquefied natural gas glut, driving up LNG prices and leading to higher coal burning in Asia. President Joe Biden has failed to urge Saudi Arabia to increase oil production to help lower fuel prices.

But the climate impact so far has been less than feared. While coal production is high in India and other parts of Asia, the ongoing Covid-19 shutdown in China has disrupted greenhouse gas emissions from the world’s top emitter. Carbon Monitor, an academic emissions tracker, estimates that China’s carbon dioxide emissions fell by 2 percent, or 155 million tons, through August.

Emissions in Europe increased by 81 million tons, a 4 percent increase over last year. Power plants accounted for 61 million tonnes of the increase, as the continent grappled with coal amid reduced output from France’s nuclear fleet and weak water production.

However, strong renewable production, along with moderate temperatures and falling gas prices, has taken a further step down on emissions and electricity prices. European electricity prices are down 60-70 percent from their August peak, according to Rystad.

The Oslo, Norway-based company expects this trend to continue. By 2022, capital spending on wind and solar is expected to reach $494 billion, surpassing the $446 billion spent on oil and gas production. That marks the first time that wind and solar spending has surpassed oil and gas drilling. Higher electricity prices will increase the returns of renewable projects. Rystad found that renewable energy projects in a few European countries could pay for themselves within a year at current prices.

“Capital investment in renewables is set to surpass oil and gas for the first time this year as countries scramble for secure and affordable energy. “Investment in renewables can increase going forward as payback periods for renewable projects are shortened to less than a year in some cases,” said Michael Sarich, senior vice president of Rystad Energy.

Globally, the IEA projects that zero-carbon electricity generation will increase 7 percent this year, despite a 3 percent decline in nuclear power. Growth in renewables will push fossil fuel consumption by 1 percent, the IEA estimates. This change will see the release of power in 2022 after setting a record last year.

In the United States, the EIA projects renewables will produce 22 percent of the nation’s energy this year, compared to 38 percent for gas and 20 percent for coal.

Renewables are attractive in countries facing rising costs because wind and solar do not have fuel costs. They are also produced at home. Russia’s invasion of Ukraine is likely to cause Europe to accelerate the transition to renewables, which sees the continent as a source of energy security, wrote DNV analysts in the company’s annual energy outlook.

The picture outside of Europe is less promising for the climate in the short term. The threat of recession and potentially high energy costs will mean some countries will no longer prioritize climate, DNV said.

However, the company has decided that the energy transition will continue.

“The cost of short-term goods is rising and the war in Ukraine will not put the brakes on the main drivers of change such as the falling costs of renovation, the installation of electricity, and the increase in carbon prices,” DNV wrote.

Whether the change will happen fast enough to keep global temperature rises below 2 degrees Celsius is another matter. DNV estimates that global emissions must decrease by 8 percent per year to reach net-zero emissions by 2050. Global 2022 emissions, by contrast, increased by 2 percent in August, according to Carbon Monitor.

The United States is the largest source of rising emissions in absolute terms. America’s CO2 emissions increased by 177 million tons in the first eight months of the year. Lower transport was responsible for 200 million tonnes of additional CO2 emissions, while industrial and residential emissions increased slightly. The increase in those sectors offset the reduction in energy emissions, where CO2 production was down by 67 million tons.

This story also appears in the Energywire.

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