China's emissions fall because of declining oil use

 From Gavin Mooney

China’s emissions fell again in Q2, but for the first time it was falling oil use that drove them down.

That matters because until now China’s emissions story has tended to be a coal story.

According to Lauri Myllyvirta’s latest analysis for Carbon Brief, China’s CO₂ emissions fell 1% year-on-year in Q2 2026. When emissions have fallen previously, lower coal consumption was the main driver. This time, it was oil doing the work.

Oil use fell 9% overall and 16% in transport amid the Strait of Hormuz crisis.

But this is also not just a temporary shock. Transport activity was broadly stable or still growing, which means the fall in fuel use was enabled by structural changes already underway.

A few things are happening at once:

✅ EVs are now displacing enough oil to matter at national scale
✅ Existing EVs were used more, with charging volumes up 60% in Q2
✅ Rail, metro systems and electric trucks are reducing demand for petrol and diesel

The less rosy part is coal.

Coal use in the power sector still rose 2.4%, partly because more wind and solar output was curtailed due to grid and market constraints. Recent five-year plan documents include measures to improve clean-power utilisation, but this remains one of the key bottlenecks.

So this is not yet a clean “China’s emissions have peaked” moment.

It is more nuanced than that. China’s emissions have really been on a plateau since early 2024, with small moves up and down.

What is significant is that the pressure is now coming from more than one direction.

Until recently, the key question was whether clean electricity could reduce coal use fast enough to bring emissions down. Now oil demand is starting to pull in the same direction.

If coal and oil eventually start falling together, China’s emissions plateau could become a much clearer decline.

Read the Carbon Brief article here.

Batteries are taking over Australia's evening peak

 From Gavin Mooney

Just one year ago, peaking gas was still doing much of the heavy lifting during Australia's evening peak. Today, that is no longer the case.

The chart below compares average daily dispatch profiles across Australia's main grid (the NEM) in April 2025 and April 2026.

The change in just one year is remarkable.

While peaking gas generation has fallen sharply, battery discharge has surged and is now dominating the evening peak.

This isn't just about more batteries being installed. It's also about batteries performing one of the grid's most valuable jobs: supplying electricity during the high-demand evening period when solar output falls away.

A few things stand out:

✅ Battery discharge in Q1 2026 was around 3x higher than a year earlier
✅ Batteries now set wholesale electricity prices roughly one-third of the time
✅ Wholesale electricity prices were 12% lower in Q1 - largely due to the influx of batteries

Perhaps most strikingly, battery discharge across the NEM has now overtaken peaking gas generation – and it appears on track to overtake mid-merit gas in the next year as well.

This shift is being primarily driven by economics.

Battery costs have fallen dramatically, projects have become larger and the growing spread between low daytime prices and higher evening prices increasingly favours battery storage.

For decades, peaking gas plants were the default solution for the evening peak.

Increasingly, that role is being performed by batteries instead.

Australia now has more battery storage capacity per capita than any other country in the world - more than double the second-ranked country.

Even in absolute terms, only China and the US have more installed battery capacity. That's pretty remarkable for a country of just 27 million people.

The Oz government has a program to subsidise home batteries, and this has helped drive the huge surge in battery installations.  It's also driving down wholesale electricity prices, which of course was the intent.  Australia achieved widespread penetration of household solar by generous subsidies (now mostly wound down) and the same looks set to happen in storage.  Wind + solar + batteries is producing ever cheaper electricity, and this will drive fossil fuels out of the grid.  

Super fast growth in wind and solar

 From Gavin Mooney

Wind and solar generation is scaling faster than any other electricity sources in history.

This chart looks at the time taken for different technologies to grow from 100 TWh to 1,000 TWh of annual electricity generation.

✅ Solar took just 8 years
✅ Wind took 12 years
✅ By comparison, gas took 28 years, coal 32 years and hydro 39 years

Nuclear also reached the milestone in 12 years, but then its growth slowed sooner than wind.

Importantly, this chart is not measuring market share. It is measuring how quickly different technologies scaled once they reached meaningful levels of deployment.

And the story today is also bigger than generation alone.

Batteries are increasingly extending solar generation into the evening peak, while electrification is creating new demand for clean electricity in transport, heating and industry.

Much of this growth is being driven by improving economics, with wind, solar and batteries becoming increasingly competitive across a growing range of applications.

That combination is beginning to reshape energy systems around the world.

Renewables now generate more than one third of global electricity, and wind and solar continue to account for the majority of new power capacity added each year.

The pace of deployment matters because energy transitions are ultimately about scale. And by that measure, wind and solar are growing faster than anything that came before them.