Trump's "energy dominance"? How we laughed.

Chart from Assaad Razzouk

 From This is not Cool

America’s “Energy Dominance” being pwned by China in the fastest growing and most important markets, the developing world.

The Deputy Prime Minister of Ethiopia, in the video below [here], remarked, “..those that love their children, plant trees.”
The jaded cynical, fossil fueled wise guys currently running Washington are not capable of comprehending the aspirations of the great majority of humanity, who don’t care to live under the thumb of Exxon and the Epstein Class.

Bloomberg:

n 2024, the Ethiopian government banned the import of fossil fuel-powered vehicles and slashed tariffs on their electric equivalents. It was a policy driven less by the country’s climate ambitions and more by fiscal pressures. For years, subsidizing gasoline for consumers has been a major drag on Ethiopia’s budget, costing the state billions of dollars over the past decade. The country defaulted on its sovereign bonds in 2023 after rising interest rates drove up the costs of servicing its debts, and it received a $3.4 billion bailoutfrom the International Monetary Fund the following year. 

In the two years since the ban on internal combustion engine vehicles, EV adoption has grown from less than 1% to nearly 6% of all of the vehicles on the road in the country — according to the government’s own figures — some way above the global average of 4%.

“The Ethiopia story is fascinating,” said Colin McKerracher, head of clean transport at BloombergNEF. “What you’re seeing in places that don’t make a lot of vehicles of any type, they’re saying: ‘Well, look, if I’m going to import the cars anyway, then I’d rather import less oil. We may as well import the one that cleans up local air quality and is cheaper to buy.’”

For decades, Ethiopia’s high import tariffs on vehicles put new car ownership out of the reach of most of the country’s population. Per capita gross domestic product is only about $1,000, and even by the standards of low-income countries, it has among the lowest car ownership rates. At 13 vehicles per 1,000 people, it’s a fraction of the African average of 73. With few cars manufactured in the country, the vast majority are imported, and most are bought used. 

The government’s import policy has upended the market. In parallel, tariffs for EVs were dropped to 15% for completed cars, 5% for parts and semi-assembled vehicles, and zero for “fully knocked down” — vehicles shipped in parts and assembled locally. That has made new EVs cost-competitive with old gasoline cars.

At one of Hallel Cars’ showrooms in central Addis Ababa, a Seagull hatchback made by the Chinese carmaker BYD sells for 3.6 million Ethiopian birr ($23,000), while a BYD subcompact SUV Yuan Up costs 4.9 million Ethiopian birr. Before the import ban, a secondhand compact Suzuki Dzire gasoline sedan cost more than 4.2 million birr.

“The majority of our customers are those making the switch from fuel cars to EVs,” said Moges Negash, Hallel Cars’ sales and marketing manager.

Hallel sells Toyota, Honda and Citroën EVs too, but models from BYD — which last year surpassed Tesla as the world’s biggest seller of EVs — dominate its showroom. Other dealerships around the city sell Chang’an vehicles, as well as those from Volkswagen and the Vietnamese manufacturer VinFast.

Although the price tag is still relatively high for a country where incomes are low, middle class consumers find it easier to get credit to buy new EVs than they did for secondhand gas-powered ones, which banks often wouldn’t lend against.

“Banks are reluctant to provide consumer credit for purchase of vehicles that have an uncertain fate,” said Abdulmenan Mohammed, a financial analyst based in London who covers Ethiopian banks. “EVs are a new technology and increasingly being used in the country, so it’s a better opportunity for banks to provide credit.”

For the government, the growth in EV sales is a vindication of its import policy, which in turn has been made possible by its investments in electricity infrastructure. The Grand Ethiopian Renaissance dam, completed in 2025 at a cost of $5 billion, produces 5,150 megawatts of power. Combined with other generating assets, including wind farms and solar, the country has excess generation capacity, which it sells to neighboring Kenya, Tanzania and Djibouti. 

The price of delivering power to Ethiopian customers is about $0.10 per kWh, which is about half that of neighboring countries, and considerably less than the US average of $0.18 per kWh. Many Ethiopian consumers pay significantly less than that, due to consumption-based subsidies on electricity.

This is now a path open to most countries without a car industry.  Solar panels are cheap as.  Batteries are plunging in costs.  You could run your vehicle fleet on the power of the sun.  Ban the import of petrol and diesel vehicles, encourage the roll-out of household and utility-scale batteries and storage, and end the import of expensive ICEVs and oil.  Clean your air, cut your balance of payments crisis, get cheap transport, and stop global heating.  What's not to like? 

If you do have a car industry, banning ICEV imports would still help you.  And maybe, as EV sales explode, you'll encourage your own car industry to switch to producing EVs.  Globally, land transport is responsible for ~20% of emissions.

Meanwhile, the US has embraced last-century technology.

Coal power must end

 From EMBER

Coal power must end to keep global heating below 1.5C. Coal-fired power accounts for 1/5 of global greenhouse gas emissions, making it the biggest emitter

 

Climate

Burning coal for power emits more carbon dioxide than any other source.

Health

Coal is the deadliest source of power due to pollution and accidents.

Environment

Coal has damaging impacts on water, land, air and wildlife.

Economy

Renewables are now cheaper than new coal, and becoming so for existing coal.

We need to build no new coal power stations anywhere in the world.  Developing countries which are still planning/building new coal power stations need to be persuaded to stop by a combination of diplomatic pressure and subsidies for solar plus storage.  In developed countries, the coal fleet is old, and will be closed down over the next 20 years as the cost of renewables continues to decline while the costs of repair keep on rising.  In developing countries, the coal fleet is much younger, but the same cost dynamics apply here too.  What will happen is that older/dirtier coal power stations will be closed down, and if no new coal power stations are built, the share of electricity generated from coal will fall fast, though prolly not as fast as the 1.5 degree pathway requires.  That will require an active program of decommissioning coal power stations, such as the one the EU has now adopted.  

The IEA's coal phase out

 A key to cutting emissions is to stop burning coal.  Just doing that will cut global emissions by 30%. 

From EMBER

As envisioned in the IEA roadmap, achieving net-zero energy emissions globally will be led by a clean electricity revolution, due primarily to the relatively high level of technology readiness of the electricity industry and the growing attractiveness of electricity as an option for decarbonising other sectors, either directly or indirectly.

Some key milestones for this revolution, as set out in the IEA roadmap, include: no new unabated coal plants approved for development after 2021; global phase-out of subcritical coal power plants by 2030; and achieving 100% clean electricity in advanced economies by 2035 and globally by 2040. 

To achieve the above-noted milestones requires, according to IEA, a massive step-up of global wind and solar additions to over 700 GW per year over the next 30 years, from its current levels (about 250 GW in 2020). Other low-carbon generating technologies, especially hydro, nuclear, and bioenergy, are also expected to experience a rapid expansion, to meet about 12% of the global electricity needs by 2050. Besides, some energy technologies (e.g., hydrogen, and carbon capture, utilisation and storage, CCUS), that are currently in the demonstration or prototype stage, also need to expand rapidly, especially after 2030, to decarbonise the global electricity industry.

To achieve net-zero by 2050, developed countries (OECD in the chart above) will need to phase out all coal and gas by 2035.  Or it will have to abate all carbon emissions using carbon capture and storage (CCS) which is unlikely giving its cost.  Developing countries will need to achieve net-zero electricity by 2040.  It is also vital that no new coal power stations be approved for development, starting from now.

The chart doesn't show battery storage requirements, but by 2030, we will prolly need 4 hours of storage, supplemented by EV batteries and power-to-gas

Another very effective vaccine

This time from Moderna.  

From The Guardian

More than 1 billion people could be immunised against coronavirus by the end of next year with shots from the first two companies to reveal positive results, after the latest vaccine was shown to be nearly 95% effective in trials.

With the US’s top infectious diseases official, Anthony Fauci, hailing “the light at the end of the tunnel”, the US biotech firm Moderna announced impressive results for its mRNA vaccine on Monday, a week after interim results for a Pfizer/BioNTech vaccine showed 90% effectiveness.

The inclusion of high-risk and elderly people in the Moderna trial suggested the vaccine would protect those most vulnerable to the disease, said Peter Openshaw, a professor of experimental medicine at Imperial College London, who described the results as “tremendously exciting”.

Though it is more expensive, Moderna’s vaccine could potentially provide a major advantage over Pfizer’s, which requires ultracold freezing between -70C (-94F) and -80C from production facility to patient.

Moderna said it had improved the shelf life and stability, meaning its vaccine can be stored for six months at -20C for shipping and long-term storage, and at standard refrigeration temperatures of 2C to 8C for 30 days.

Moderna said it could potentially manufacture 1bn doses by the end of 2021, adding to a further 1.3bn from Pfizer/BioNTech in the same timeframe. Both vaccines require two doses and are due to be assessed by regulators in coming weeks.

virys without risking a surge in the death rate,

The whole population doesn't need to be vaccinated.  Even if just 60% are vaccinated, it would dramatically reduce the infection rate, because the virus would find it harder to jump from an infected person to multiple others.  More than that: if high-risk categories can be stopped from catching covid, the low-risk population groups, such as children can be allowed to catch the virus without risking a surge in the death rate.  Both these vaccines will be given to health-care workers, the elderly, and people with compromised immune systems first, and then as more doses become available, progressively to people with lower risk.

Europe and the US are imposing new lockdowns, but these should be the last, as supplies of the vaccines increase.  In fact, a combination of lockdown and the vaccines would cause infection rates to plunge.  Australia and New Zealand have shown how effective lockdowns can be in reducing infection rates to zero.   If we can add vaccinations to the panoply of anti-virus tools, we will make covid something we'll be able to live with.  We'll have to have annual "top-ups" to maintain our immunity, but we'll be able to live with that,  Poor countries will need help from developed countries to vaccinate enough of their population to reduce the infection rate, R,  far enough below 1 for the disease to die out globally.  I hope that that will happen.

Emissions flat in 2019

From the IEA:

Global energy-related CO2 emissions flattened in 2019 at around 33 gigatonnes (Gt), following two years of increases. This resulted mainly from a sharp decline in CO2 emissions from the power sector in advanced economies, thanks to the expanding role of renewable sources (mainly wind and solar PV), fuel switching from coal to natural gas, and higher nuclear power output.

Global CO2 emissions from coal use declined by almost 200 million tonnes (Mt), or 1.3%, from 2018 levels, offsetting increases in emissions from oil and natural gas. Advanced economies saw their emissions decline by over 370 Mt (or 3.2%), with the power sector responsible for 85% of the drop. Milder weather in many large economies compared with 2018 had an important effect on the trends, reducing emissions by around 150 Mt. Weaker global economic growth also played a role, moderating the increase in emissions in major emerging economies such as India.

Emissions trends for 2019 suggest clean energy transitions are underway, led by the power sector. Global power sector emissions declined by some 170 Mt, or 1.2%, with the biggest falls taking place in advanced economies where CO2 emissions are now at levels not seen since the late 1980s (when electricity demand was one-third lower).

Economic growth in advanced economies averaged 1.7% in 2019, but total energy-related CO2 emissions fell by 3.2%. The power sector led the decline and now accounts for 36% of energy-related emissions across advanced economies, down from a high of 42% in 2012. The average CO2 emissions intensity of electricity generation declined by nearly 6.5% in 2019, a rate three times faster than the average over the past decade. In absolute terms, an average emissions intensity of 340 grams of CO2 per kilowatt hour in 2019 is lower than all but the most efficient gas-fired power plants.

Generation from coal-fired plants in advanced economies declined by nearly 15% as a result of continued growth of renewables, coal-to-gas fuel switching, a rise in nuclear power and weaker electricity demand. The growth of renewables in electricity generation in advanced economies delivered 130 Mt of CO2 emissions savings in 2019. Wind accounted for the biggest share of the increase, with output expanding 12% from 2018 levels. Solar PV saw the fastest growth amongst renewable sources, helping to push renewables’ share of total electricity generation close to 28%. Coal-to-gas fuel switching for power generation avoided 100 Mt of CO2 in advanced economies and was particularly strong in the United States due to record low natural gas prices. Higher nuclear power generation in advanced economies, particularly in Japan and Korea, avoided over 50 Mt of CO2.

The United States saw the largest decline in energy-related CO2 emissions in 2019 on a country basis – a fall of 140 Mt, or 2.9%, to 4.8 Gt. US emissions are now down almost 1 Gt from their peak in the year 2000, the largest absolute decline by any country over that period. A 15% reduction in the use of coal for power generation underpinned the decline in overall US emissions in 2019. Coal-fired power plants faced even stronger competition from natural gas-fired generation, with benchmark gas prices an average of 45% lower than 2018 levels. As a result, gas increased its share in electricity generation to a record high of 37%. Overall electricity demand declined because demand for air-conditioning and heating was lower as a result of milder summer and winter weather.

Energy-related CO2 emissions in the European Union, including the United Kingdom, dropped by 160 Mt, or 5%, to reach 2.9 Gt. The power sector drove the trend, with a decline of 120 Mt of CO2, or 12%, resulting from increasing renewables and switching from coal to gas. Output from the European Union’s coal-fired power plants dropped by more than 25% in 2019, while gas-fired generation increased by close to 15% to overtake coal for the first time.

Germany spearheaded the decline in emissions in the European Union. Its emissions fell by 8% to 620 Mt of CO2, a level not seen since the 1950s, when the German economy was around 10 times smaller. The country’s coal-fired power fleet saw a drop in output of more than 25% year on year as electricity demand declined and generation from renewables, especially wind (+11%), increased. With a share of over 40%, renewables for the very first time generated more electricity in 2019 than Germany’s coal-fired power stations.

The United Kingdom continued its strong progress with decarbonisation as output from coal-fired power plants fell to only 2% of total electricity generation. Rapid expansion of output from offshore wind, as additional projects came online in the North Sea, was a driving factor behind this decline. Renewables provided about 40% of electricity supply in the United Kingdom, with gas supplying a similar amount. The share of renewables became even higher in the later part of the year, with wind, solar PV and other sources generating more electricity than all fossil fuels combined during the third quarter.

Emissions outside advanced economies grew by close to 400 Mt in 2019, with almost 80% of the increase coming from Asia. In this region, coal demand continued to expand, accounting for over 50% of energy use, and is responsible for around 10 Gt of emissions. In China, emissions rose but were tempered by slower economic growth and higher output from low-carbon sources of electricity. Renewables continued to expand in China, and 2019 was also the first full year of operation for seven large-scale nuclear reactors in the country.

Emissions growth in India was moderate in 2019, with CO2 emissions from the power sector declining slightly as electricity demand was broadly stable and strong renewables growth prompted coal-fired electricity generation to fall for the first time since 1973. Continued growth in fossil-fuel demand in other sectors of the Indian economy, notably transport, offset the decline in the power sector. Emissions grew strongly in Southeast Asia, lifted by robust coal demand.

It's clear that the energy transition in developed countries has started.   The growth in renewable generation is now enough to cut emissions from electricity.  If, for example, renewables make up 40% of generation, a 10% rise in renewables output will more than offset the rise in electricity demand.  And this is where most developed countries now sit.  Over the next few years, the rise in sales of cars with an electric engine will start eating into emissions from transport.  So emissions in developed countries should start to fall by respectable amounts, though still not fast enough.

The problem is China and SE Asia.  And here, the issue is diplomatic as much as economic.  Yes, the costs of renewables are falling, to the extent that renewables are as cheap as or cheaper than coal.  But costs are also affected by things like getting permits, policy uncertainty (which raises loan costs and required rates of return) and government support for fossil fuels, especially via subsidies.  It is critical that no more coal power stations be built, yet in SE Asia and China they still are.  This has to stop.  Somehow these countries must be persuaded to stop building coal power stations.  Because it's not enough for emissions to stabilise to stop global temperatures from rising.  They must fall to zero, as soon as possible.

Solar takes off in Zimbabwe

Harare, Zimbabwe

Most of Africa, which is currently underdeveloped partly because it hasn't extensive electric grids, nevertheless has superb solar resources.  Solar is now cheaper than any other generation source across the continent.  What's stopped the rollout of solar in the past has been a combination of ignorance and finance.  Most people simply didn't know that solar is the cheapest source of electricity.   But even if they did, all of solar's costs are upfront.  Poor countries struggle to find the capital to invest in solar. 

From PV Magazine:

The World Bank is helping the Zimbabwean government introduce a competitive program for procuring large scale PV power projects under the recently completed National Renewable Energy Policy.

The multilateral lender has opened a tender on the AfricanPower Platform to seek experts to advise the government on a procurement program, with an emphasis on generation asset planning. “The scope of work includes: grid flexibility analysis; demand and generation forecasts; committed generation; and domestic resources assessment,” the document states.

Zimbabwean energy analyst Masthela Koko said integrated electricity planning has always been lacking in his country. “With this development, government is sending a clear signal that it takes electricity security seriously and this security of electricity supply must come at a cost and pace that the people of Zimbabwe can afford,” Koko told pv magazine. “The involvement of [the] World Bank is extremely positive. I see this development as the beginning of big solar projects in Zimbabwe.”

The consultant said 39 solar power projects with a total generation capacity of 1,050 MW have secured government approval in Zimbabwe.

“To date, [the] Zimbabwe energy regulator has cancelled seven licences of the independent power producers who failed to kick-start their projects as agreed,” said Koko, citing a government plan to review licensed projects that was announced in July. The government at the time stated: “Everything has to be very legal. Licensees must be given the right to explain themselves around the issue of non-performance.” However, it added: “We cannot hang onto people that keep licenses for speculative purposes.”

The Infrastructure Development Bank of Zimbabwe in September issued a request for proposal seeking partners for the construction of seven solar parks with a total generation capacity of 235 MW plus two mini-hydro power plants. That came after minister of energy and power development Fortune Chasi had announced plans in July to move forward a 100 MW tendered PV project whose realization has been delayed for years.

The nation is in desperate need of power generation capacity and solar offers a cheap, scalable solution. Zimbabwe had only 11 MW of installed solar capacity at the end of December 2018, according to the International Renewable Energy Agency.

Record low solar

From PV magazine:

The Qatar General Electricity and Water Corp (Kahramaa) has revealed the 800 MW solar tender concluded last week delivered a final price of QAR0.0571/kWh ($0.016/kWh) – the lowest winning bid ever registered in an auction for large scale renewable energy. [$0.016/kWh = $16/MWh.  For comparison, new coal costs $66-$152/MWh]

The utility said the winning consortium, formed by French oil giant Total and Japanese conglomerate Marubeni Corp, had initially submitted a bid of QAR0.0636/kWh.

“Kahramaa has signed the power purchase agreement (PPA) with the project company, with an aim to achieve financial close of the project in May 2020,” said the utility. “Kahramaa is pleased to note that based on current financial market indices, the equivalent LEC [levelized energy cost] is QAR0.0571/kWh ($0.01567/kWh), which is one of the world’s lowest for projects of this type.”

If the utility’s five-decimal-point calculation is correct, the bid beats the previous world record of €0.0147/kWh ($0.016) submitted by French developer Akuo Energy for 150 MW of solar generation capacity in Portugal’s first PV auction. Saudi energy giant ACWA Power bid $0.0169/kWh in the tender for the fifth phase of the huge Mohammed bin Rashid Al Maktoum Solar Park in Dubai.

We're getting used to new lows for solar power.  And we expect cheap solar in desert regions.  Yet solar should be cheap in most low latitude locations.  It's a nice irony that technology now favours developing countries in Africa and South America.

Solar panels by donkey

Try bringing a coal power station in a boat or on a donkey! 

Add a small li-ion battery, a mobile phone chargepoint and an LED light and places which have never had electricity will now have it--at a fraction of the cost of conventional electricity generators and the grid.

(Hat tip to Professor Ray Wills)

Corruption

Click to enlarge
Source: Visual Capitalist

Pakistan dumps coal for wind and solar

Kaghan valley in NE Pakistan
(I thought y'all are maybe a bit sick of pictures of wind turbines.
P.S. stunning, but prolly not safe to visit.) 

From IEEFA:

When a giant infrastructure project in an emerging country doesn’t make sense these days, you can usually count on China’s Belt and Road to be on hand with a bailout check. For the global coal industry, that prospect has been one of the last great hopes for demand growth. Chinese policy banks have committed some $45 billion to coal projects overseas since 2000, according to a Boston University database.

That pattern may be starting to crack. Pakistan, which has been working on an aggressive expansion of new coal power plants under the Belt and Road’s China-Pakistan Economic Corridor, is getting cold feet. The country’s planning minister has told Beijing that it’s not interested in developing the Rahim Yar Khan plant, a potential 1.32 gigawatt project that would probably have left the country’s grid well over capacity.

While the big beasts of potential coal development are China and India, smaller second-ranked markets such as Pakistan are likely the tougher nuts to crack to wean the world from its most polluting fossil fuel.

Whereas new wind and solar is already cheaper than coal in those two countries – one reason project cancellations there are only likely to increase – that’s often not the case in smaller emerging markets, where the plug-and-play availability of thermal plants plus the existence of overseas developers seeking to build them can still look tempting. As my colleague Liam Denning wrote last year, coal is like junk food: ubiquitous, full of calories and (at least at the building stage) cheap.

Still, power generation is more about long-term than short-term costs, and with fuel accounting for about half the price of coal generation, the presence of willing foreign builders can only stave off economic reality for so long. Coal in the Thar region east of Karachi already costs about twice that of equivalent lignite in other markets and the area’s multiple thermal projects may become uncompetitive, Syed Akhtar Ali, a former member of the country’s Planning Commission, wrote in the Express Tribune last year.

That dynamic is accentuated by the speed at which rival sources of energy are dropping in price. Pakistan has a rich endowment of wind and solar resources and has already joined the club of countries where the costs of new renewables are lower than coal. Long-run costs for wind projects are at about half the cost of coal, according to government data cited by the Institute for Energy Economics and Financial Analysis. Given the low penetration of variable renewables and high share of natural gas, solar and wind won’t even need significant storage backup to maintain grid stability.

[Read more here]

If you are not well off, even though an EV might over the long-term be cheaper than an ICEV, you might still buy an ICEV because the up-front cost is less, and you are short of funds.  You know that long term, it makes no sense, but you need a car now, and the fuel payments are postponed into the future.  Sufficient unto the day is the evil thereof. 

If you are a developing country, with limited access to capital, and what there is, is expensive, then the turn-key approach offered by China for building coal power stations is attractive.  Yes, you know that the total cost for the electricity from a coal power station is greater than the cost from wind or solar, bu the up-front cost is less.  (And China will lend you the money to pay for it, anyway.)  Or has been until now.  Just as with EVs, when the sticker price falls to levels comparable with ICEVs, and demand soars, so it is with renewables.  We are now at the point where the operating cost of coal mines is close to or more than the total cost of new renewables (ignoring storage).  And that is the death knell for coal. 

Renewables upstaging fossil fuels

In 2017, for the first time, the increase in renewables capacity in developing countries exceeded new investment in fossil fuels.  Note that 'fossil fuels' includes gas, which complements renewables because it can be easily dialled up or down to compensate for variable renewables supply. 

(Source: Bloomberg)

Developing countries have added more clean power capacity than fossil fuel generation for the first time ever, charging ahead of wealthier nations in the global green energy push, according to Bloomberg NEF.

Wind and solar generation accounted for just over half of the 186 gigawatts of new power capacity in developing nations last year, according to BNEF’s annual Climatescope survey released Tuesday. Not only that, they’ve added more clean energy generation than developed economies, increasing zero-carbon capacity by 114 gigawatts compared with about 63 gigawatts in richer countries.

The findings show a turnaround from a decade ago when the world’s wealthiest nations dominated renewable investment and deployment activities.

“Just a few years ago, some argued that less developed nations could not, or even should not, expand power generation with zero-carbon sources because these were too expensive,” Dario Traum, BNEF Climatescope project manager said in a statement. “Today, these countries are leading the charge when it comes to deployment, investment, policy innovation and cost reductions.”

Emerging markets added the least new coal-fired power generating capacity last year since at least 2006. New coal plants in these countries slumped 38 percent from a year earlier to 48 gigawatts in 2017, which was about half of the peak in 2015, according to BNEF.

[Read more here]

I expect that the collapse in coal will accelerate, because not only are new renewables cheaper than new coal, they are now in many places cheaper than existing coal.  (Also, remember that the capacity factors for renewables are around 30% whereas the capacity factors for coal are higher--though in India and China, where there is overcapacity and coal-generated power is more expensive than wind or solar, not much higher.)

US emissions fall 2.7%

In 2017, total US emissions of greenhouse gases fell 2.7%.   Emissions for power stations fell 4.5%, but this was offset by a rise in emissions from transport.  If this had happened 15 years ago, it wouldn't have been a bad result.  That would have given us 47 years to cut emissions by 90%, and global temperatures would have been 0.3 degrees lower.   But because we have taken so long to get to this point, now we'll have to do better than this.

If emissions continue to fall by 2.7% per annum, total emissions will have fallen by 60% by 2050.  Which isn't enough.  We need a 90% decline by 2050 if we are to avoid catastrophic global warming.  That's a decline of 7% per annum.   If we could cut emissions by 5% per annum, that would mean total emissions will have fallen by 80% by 2050.  Not perfect, but hugely better than BAU (business as usual)

How will that be achieved?  For developed countries, the key from now on, will be the transition of land transport to electric power.  When EV sales reach 100% of total vehicle sales, given that light vehicles have an average life of 11.6 years, emissions from land transport would be falling by 8% per annum.   The combined decline from electricity generation and transport would then be about 7.5% per annum, even if no other sectors reduce their emissions.  So making our transport fleet electric is critical.

Fortunately, the steady decline in battery costs will make EVs cost competitive with ICEVs by the mid 2020s.  And falling battery costs will allow renewables to make up 100% of electricity generation.  That is the third tipping point for switching electricity generation to renewables.  The first was where new renewables became cheaper than new coal (5 years ago), the second was where new renewables became cheaper than existing coal (i.e., total cost of renewables was less than the operating cost of coal), which is happening now, and the third is where the cost of storage falls enough for baseload power to be replaced by renewables plus storage, which isn't here yet but will be within the next 5 years.  Cutting emissions from electricity generation is easy (when many still think it is too hard) because we can use cheap wind and solar and gas while we wait for battery prices to plunge.

After cutting emissions from electricity and transport, we would still be left with industry (iron and steel, cement, aluminium and others) as the next big sector to target. 

But there's hope.  Belatedly--and still too slowly--emissions are falling in developed countries.  And even though electricity demand is rising strongly in developing countries, this extra demand is likely to be filled by renewables, while rising transport demand in those countries (cars, 3-wheelers and 2-wheelers) will be satisfied by EVs.

US emissions from transport now exceed emissions from electricity generation

Emissions from developed countries are falling (too slowly), China's emissions have peaked
but emissions in the RotW are still rising.

We start to feel the effects of Fed tightening

Not yet in the USA, but across the developing world, the rise in US interest rates is starting to have a serious negative effect:

Argentina has hiked interest rates to 60% as it takes dramatic steps to restore confidence in its plunging currency,in the latest sign of turmoil among emerging market economies this year.

The Argentine central bank raised the cost of borrowing by 15 percentage points on Thursday in an attempt to shore up the peso, which has plummeted in value. The central bank said it would keep rates unchanged at 60% until at least December.

The peso dropped amid intense trading on foreign exchanges, falling by more than 10%, despite the bank’s rate move, in the most severe drop for the currency since it was floated in 2015. $1 (77p) is now worth about more than 39 pesos, having been worth about 18 pesos at the start of the year.

Paul Greer of the City fund manager Fidelity said countries across emerging markets were being targeted by investors due to their economic problems, including high levels of debt and imports. “There are no easy answers for Argentina to its current woes,” he said.

Elsewhere on Thursday, the Turkish lira fell by more than 4% against the dollar amid increasing concerns over economic crises in developing nations. So far this year the Indian rupee and the South African rand have also come under pressure as concerns grow that the countries will struggle to pay their dollar-denominated debts following a rise in US interest rates. The rand fell a further 3% against the dollar on Thursday.

[Read more here]

Look at the plunge in the Argentinian Peso (note a rise shows more and more national units needed to buy 1 US$, which is to say means a fall in the value of the national currency)  Chart thanks to the people at Trading Economics:



source: tradingeconomics.com

And look at the Turkish Lira:


source: tradingeconomics.com

Note: I think the charts update live, so I'm not sure exactly what picture you will see when you read this post. Prolly worse than the images I'm posting now.  

This is the stuff of deep recessions.  And we're already seeing slowdowns elsewhere, as I talk about here.

I should be able to post or to link to a piece on the US recession in 2019/20 shortly.  But all the evidence from around the world is that growth is slowing and that vulnerable economies are heading into recession already.

Renewables just keep on getting cheaper

(Source; click to enlarge)

In Mexico:

Twice in 2016 Mexico held two renewable power auctions that raised significant investor participation. 

The most recent, in September, saw 23 winning bids out of a pool of 57 to build renewable projects worth $4 billion for 2,871 megawatts of new capacity. More important, the average price at the auctions was US$33.47 per megawatt hour, (MWh) 30 percent less than prices from a previous auction in March. In the September auction, 54 percent of the supply was awarded to solar projects and 43 percent to wind farms. 

The March auction drew 69 prequalified bidders and awarded 18 projects with a total of 1,691 megawatts for solar and 394 for wind. The a average contract price was $47.60/MWh

(Source)

In Chile:

According to media reports, Mainstream Renewable Power Ltd. and Empresa Nacional de Electricidad/Chile SA won more than two-thirds of the electricity supply auction in Chile. 

Meanwhile, Solarpack set a new record-low solar bid at 2.91¢/kWh ($29.1/MWh). That beats the 2.99¢/kWh bid a Masdar Consortium provided for an 800 MW solar power project in Dubai earlier this year. 

Mainstream has won rights to supply 3.7 TWh of electricity every year (30% of the auctioned electricity), while Endesa, a subsidiary of Enel, will supply 4.9 TWh (40% of the auctioned electricity). There was a significant correction in tariff in this auction compared to previous one. The average tariff bid in the auction declined 40% to US$47.59 per MWh compared to the previous auction. 

To supply the contracted electricity Mainstream will develop 7 wind energy projects with a total capacity of 985 MW. To achieve this capacity, the company is expected to invest $1.65 billion over the next 5 years. Electricity generated from these projects will be sold at tariffs between $38.8 per MWh and $47.2 per MWh.

(Source)

In Abu Dhabi:

The United Arab Emirates has seen yet another record-breaking solar power tariff bid. Abu Dhabi received the lowest-ever bid for a solar PV project at a shocking 2.42¢/kWh, taking back the title of cheapest solar power project from Chile. 

Abu Dhabi Electricity and Water Authority received a total of 6 bids for the proposed 350 MW solar PV project planned to be built in the town of Swaihan, Abu Dhabi. Out of 6 bids, the lowest ever bid of 2.42¢/kWh has been submitted by the JinkoSolar–Marubeni consortium. The results of the tender are not out yet, as authorities will now evaluate the proposals for technical and economic viability. 

The current bid of 2.42¢/kWh is the lowest so far globally, and by quite a bit — it is shockingly low. This bid is 20% lower than the previous record bid of 2.91¢/kWh submitted at an auction in Chile last month. 

The second-lowest bid in the Abu Dhabi tender was reportedly not much higher, at 2.53¢/kWh, and was submitted by a local firm. These bids also beat the 2.99¢/kWh bid (shocking at the time … and still to some extent) submitted by a Masdar-led consortium for an 800 MW solar PV project in Dubai. 

The Abu Dhabi solar park was initially planned for 350 MW. However, media reports state a possible increase in project size, as bidders were allowed to bid for larger capacities. The final capacity of the solar power park may well increase to 1 GW.

(Source)


Some points:

• These, like South Africa, are mid-ranking developing countries.  Their electricity demand, contrasting with the situation in developed countries, is still growing.
• Solar costs have more than halved in two years.  More than halved.  In two years.
• These prices are already irresistibly cheap.  And they're going to get cheaper.  If electricity demand is expanding, the new generators built are not going to be coal-fired.  They're going to be wind and solar.  In developed countries, it's harder.  Even though renewables are cheaper than new coal, often much cheaper, existing coal power stations look cheap, because they're fully depreciated.  So the switch to renewables is constrained, though it is happening, especially where generation is highly competitive, for example in the USA.  The good news is that most of the coal generating fleet in developed countries is past its design life, and major refurbishment is not worth it.  New capacity (as it already is in the US) will be renewables plus gas, and coal-fired power stations will be progressively retired.
• This means that coal demand has peaked, and that emissions from burning coal have peaked too.  Coal is the biggest contributor to CO2 emissions.  It's very likely that within 20 years there will be no coal-fired power stations.  Anywhere.  And that's without a carbon tax.  Introduce a $30 per tonne carbon tax and coal generators are toast.
• It also means that despite Trump and his gang of climate-denying, oil- and coal-loving cabinet, despite the Republican cognitive dissonance about global warming, the renewables revolution is irreversible.  For a start, it's happening now in developing countries including China, not just rich developed countries.  Second, even in the USA, the switch to renewables is being driven not just by regulation, but by price.  And the states in the "wind corridor" might vote Republican but they're also very fond of their wind turbines and the cheap power they generate.
• These developing countries and the US are installing both wind and solar, even though solar is cheaper, because the two together minimise the storage needed.  For now, the variability of renewables supply will be compensated for by gas.  In future, storage (CSP and batteries) will take the place of gas peaking power plants.  So demand for natural gas prolly hasn't peaked.  Yet.
• The reverse auction (i.e., targeting the lowest not the highest price) is an extremely effective method to slash renewables costs. Are you listening Australia?  Germany?
• I keep on saying this, so I'm beginning to sound like a record (remember them?) with a scratch.  But there are now no technical nor economic reasons  why we cannot aggressively switch electricity generation to renewables.   Global temps are rising by 0.2 deg C per decade.  Even though global CO2 emissions have probably peaked, they're not falling fast enough. We need to stop making excuses, stop listening to the lies of the denialists, and move.