The Green Energy and Climate Watch List for 2016 (Part I)

Facebooktwittergoogle_pluslinkedinmailFacebooktwittergoogle_pluslinkedinmail

With 2015 in the books and 2016 just beginning it’s a good time to take a look at what to expect in community and renewable energy and the fight against climate change. We’ve highlighted some of the trends to look out for in 2016:

Coal’s steady decline…

One of the points of discussion at the Paris Climate meeting which concluded on December 12 was how to reduce the world’s reliance on the most polluting fossil fuel – coal. The UK entered the summit having pledged to close its coal-fired generator plants earlier than promised (partially enabled by a misguided new commitment to nuclear energy) and one of the takeaways from the contributions to the deal by the world’s two largest polluters –China and the US– was that they will design and implement policies to reduce coal usage for energy production over the next few years. Meanwhile, the EU has already been taking steps in this direction in line with its own climate directives. While this is good news, it doesn’t mean that coal fired plants are going to be replaced by solar and wind farms. Natural gas prices plummeted in 2015 and are predicted to continue to drop (as are oil prices) and this drop has made it possible to replace coal-produced electricity with natural gas. Natural gas burning electrical plants are cleaner than coal, but that only means they are less bad for the environment and for climate change, not actually good.

…with one (perhaps massive) caveat

However, even with the United States, China and the EU committing to reduce their coal use it is possible that we still see a net rise over the next few years, primarily because India plans to develop its electrical grid with coal-powered plants, and its energy needs are colossal. There is some hope the Paris agreement curbs India’s plans to go all out on coal and instead opts for a more environmentally friendly mix of coal and renewables, but the lack of hard caps on emissions and the essentially voluntary nature of the deal leaves this up to the goodwill of the Indian government. PM Narendra Modi is a big fan of solar energy, having overseen the construction of the 600MW Charanka solar park during his time as Chief Minister of Gujarat, and he has committed to producing 100 Gigawatts of solar energy by 2022, but at the same time India is also looking to build 455 new coal-burning plants to make use of the country’s abundant reserves. If India follows through on these plans any gains produced by a decrease in coal use elsewhere will be offset and likely reversed. As much as this may seem selfish, India has a legitimate case to make: 300 million of its citizens have little or no access to electricity, and it has contributed very little to GHG emissions that have produced the climate crisis. While western nations that industrialized long ago were able to use as much coal as they wanted, India is now unfairly being asked to pick up the tab and make the same sacrifices as other nations while having more pressing development needs and also having contributed less than them to our current predicament.

Economic growth without emissions growth?

If the figures from the last three years are reliable and indicative of a wider trend, we may have reached the point at which we can finally break the link between economic and emissions growth. In contrast to the trend of the past 12-or-so years, in which emissions grew at a rate of approximately 3.8% per year, since 2013 they have risen by less than 2% on average, with a Stanford-produced study going as far as saying that we may see actually see a drop in emissions for the year 2015. Overall, this is part of wider trend of emission growth slowdown that is being driven by the US, China and EU moving away from coal as we outlined above, the increased adoption of renewable energy worldwide thanks to solar and wind becoming price more price competitive with fossil fuels, and increases in energy efficiency. Why this is relevant is that over the past few years we have seen steady global GDP growth, and up until now it was believed that GDP and emissions growth were inextricably linked. What this slowdown shows is that it is possible to have economic growth on a global scale without matching growth in fossil fuel usage, and as renewable energy adoption continues this decoupling may go even further.

Unfortunately, not everything is good news. Even though we have seen an emissions slowdown many scientists expect GHG emissions to rise again in 2016, and perhaps even accelerate as many developing nations speed up their industrialization processes powered primarily by coal.

However, even if this trend is reversed and emissions do grow again over the next few years, we will still know that it is possible to have economic growth without emissions growth and we will have a blueprint for how to make it a reality.

On the home front: Community Energy finds its footing amid uncertainty

2015 was a mixed bag for Community Energy. On the one hand the volume of community-owned energy resources grew rapidly all over the UK, with record fund raising drives and millions of pounds invested into dozens of megawatts of new, renewable, community electricity. On the other, the Cameron government completely pulled the plug on renewable subsidies, slashing the Feed-In-Tariff by 87% and eliminating tax credits under EIS and SEIS (Enterprise and Seed Enterprise Investment Schemes) as well as eliminating the planned shift to SITR (Social Investment Tax Relief).

The result of this assault on key subsidies has and will affect the viability of many smaller projects because it eliminates many of the incentives to invest in community energy, but it won’t necessarily signify the death of the sector itself. Returns and profits will get smaller, the margin for error will decrease, but even without FiT support the dropping prices of PV panel production and installation will allow new solar farms to continue to be built. While many of the smaller community organizations that didn’t earn FiT pre-accreditation before the end of the subsidy scheme will have a harder time raising capital to build solar farms, this situation of hardship will likely push many organizations towards consolidation into larger groups, offering the possibility of pooling resources to maximize the effectiveness of their efforts – much like schools of fish finding strength in numbers. This will put us in an interesting position when it comes to one of the main reasons of being of community energy, developing distributed and locally-owned power generating resources, as consolidation into larger groups runs contrary to that goal. However, if this is the price of keeping community energy alive in England until we can enjoy more favorable regulatory winds it is probably worth paying.