2015 will pass by soon. While we live our day-to-day lives and careers, it is easy to miss trends that establish themselves in a small number of or even in a single year. Yet, this is happening with energy. Some new “realities” are coming into the marketplace, likely unstoppable by those who prefer the status quo or by industries who resist change. It is likely that next month’s Paris Climate Summit will drive the establishment of these changes, as both developed and developing nations are starting to unify on the need to reduce greenhouse gas (GHG) emissions and encourage more renewable energy.
What a difference in public opinion and the market that has occurred since previous recent climate summits. These influences will likely stay with us in the future.
Global and US use of renewable energy has and will rise significantly.
In just the last few years, solar panel prices have fallen over 80% and, therefore, the overall cost of the energy from solar per kwh has dropped by over half. The market has taken notice, and there have been major private investments in solar, wind, and other renewable sources in the last few years, an over 6-fold increase. Not just on homes, but whole solar and wind power plants. In 2009, the International Energy Agency predicted that solar would produce about 20 gigawatts of power worldwide by 2015. Solar now produces nearly 10 times that amount! Who would have thought that nearly half of the new electricity installed in the US in 2014 would be solar? And look at the massive wind farms being constructed in Texas. In Texas!
Power companies, besides helping states meet renewable power commitments, are also learning that the upfront costs of building solar and wind farms are lower than a new fossil fuel plant, and the source of energy is and should remain free. Companies, such as Apple, are even building their own renewable-powered power plants.
Energy storage will be the ultimate game changer.
Of course, solar and wind have one major drawback, their variability. The sun does not shine at night, when most residential users have their greatest demand for electricity; wind varies from hour to hour and may also be out of synch with demand. What can be done with the excess power a farm may generate while the energy source is plentiful to supply electricity for the times it is not, while demand is high?
The answer is energy storage. Hundreds of millions of dollars are currently being invested in energy storage R&D on a large scale by major firms like GE, Tesla, Lockheed Martin, and others. Energy storage is currently available on a small scale, and it is inevitable that breakthroughs will be achieved on a grander scale allowing solar and wind farms to independently deliver electricity to meet all variable demands throughout a year. Given the cost of renewable energy is now comparable or cheaper than for fossil fuel-powered energy, this would be the breakthrough renewables need to operate competitively without additional fossil fuel-fired plants to balance load and at a lower cost than a fossil fuel only-powered plant.
New energy regulations are coming in the US – and many see additional benefits.
The USEPA recently published the final version of its Clean Power Plan containing GHG emission limits for US power plants that are estimated to cut GHG emissions by over 30% by 2030. This rule will further encourage greater renewable power and conversion to less polluting fossil fuels. Therefore, there will be significant reductions in emissions of other air pollutants, many of them known to be toxic. Public health studies show that this will greatly significantly reduce the incidents of asthma attacks and lung and other cancers, resulting in great economic benefits (people living longer and being more productive and saving governments money in Medicaid and Medicare payments).
While there are interests and certain states fighting the new rule in court, most states and companies appear to be accepting the new rule as here to stay. In fact, many prefer this to the uncertainty of an unregulated world. Governments and business like certainty for planning and financing reasons. States that are embracing renewable energy are benefiting, such as California and Texas. California has a tradition of forward-thinking climate change-based legislation. They will easily manage this and other new rules. And Texans have benefited tremendously from their large amounts of undeveloped land and its high incidence of sun and wind.
The USEPA has also proposed new rules specifically for methane emissions. Methane, the combustible portion of natural gas, is 21 times more potent as a GHG than carbon dioxide. While natural gas is thought of as the “bridge” to renewable power, a fuel source that emits less GHGs when combusted compared to coal or oil, it is recognized that natural gas infrastructure (its mining and capturing and transport thousands of miles) results in leaks of methane into the atmosphere during these stages. And the disproportional climate change effects of methane may make up for the gains of lower carbon dioxide emissions of switching from coal or oil. The USEPA is committed to getting more serious about controls to reduce methane leakage and drive up efficiency.
Major US corporations are coming on board for Climate action.
As discussed in a recent blog (http://www.ccesworld.com/blog/giant-firms-demand-strong-carbon-deal/), a dozen of the largest companies in the world, including some thought to be totally against climate change action, came out publicly in favor of a comprehensive climate change deal in Paris, so that they can smartly plan for the long-term future. In addition, a number of Fortune 100 US firms have issued statements in favor of climate change action. With these gigantic firms in favor of meaningful climate change action, it is likely that their money and weight will influence government and public opinion, too, despite what some current US presidential candidates are saying.
These signs of improved technology, acceptance by the public, favorability of the market, and acceptance of powerful corporate interests demonstrate that Climate action is now her to stay, with tangible benefits for people and businesses in the future. The Paris Climate Summit is likely to be the crown for 2015 as the year that climate change became mainstream and becomes a portent of great changes in energy in our future.
CCES can help your firm prepare for the upcoming climate change realities and obtain the greatest benefits from smart planning as far as energy and sustainability go. We can develop climate change and sustainability plans for you and help you minimize use of energy, water, and other resources. Contact us today at 914-584-6720 or at karell@CCESworld.com.