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Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. But I can't by law give you advice, and I do make mistakes. Remember: the unexpected sometimes happens. Oddly enough, the expected does too, but all too often it takes longer than you thought it would, or on the other hand happens more quickly than you expected. The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.

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Friday, April 14, 2017

Not fast enough

In 2016, 55.3% of new electricity generating capacity came from renewables, excluding large hydro, and 59% if you include large hydro.  That sounds really good.  The share of renewables in new generating capacity has gone from 20% in 2007 to 55% now, and that is definitely progress.

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But the percentage of actual electricity generated rose by only 1% in 2016.  That's partly because renewables have lower capacity factors (25%-30%) than fossil fuels (60% to 70%).  And with global growth in electricity demand at around 3% per annum these days (though it will accelerate as EV sales take off), that 1/3 of incremental demand growth.

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Since big hydro and renewables provide about 25% of electricity generated globally, at this glacial pace it will take 75 years before 100% of our electricity comes from renewable sources.  And that isn't fast enough.  We need to double the annual rise in the percentage generated from renewables to 2% per annum, which would mean we'd reach a 100% green grid by 2050.  And we need to stop building new coal power stations.  Europe has promised to stop doing this by 2020; India will build none for at least the next ten years, which in effect means never, because renewables will be even cheaper then; China has cancelled 104 planned and partly built coal power stations; the USA will never build another coal power stations again.  So there is hope.  Some.

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