EWG Newsletter - January 2017
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The Irreversible Momentum of Renewables
as Climate Action & Divestment Pressure Rise


Dear Colleagues and Friends,

The production of energy from renewable sources is breaking records all over the globe. In 2016, Costa Rica ran 250 days solely on renewable energy. Over Christmas, wind power generation surged in Scotland and Germany. Solar is set to beat coal as the cheapest energy source. 2017 seems to be firmly on track to become another record-breaking year for renewables. 

Meanwhile, an increasing number of oil and gas companies go out of business and divestment pressure rises. This development is more than needed, considering that 2016 was the third consecutive hottest year on record and Chinese cities bog down in smog. Yet, the economic arguments become ever more compelling and the stakeholders taking action ever more influential. As the outgoing U.S. President put it in his latest Science article, the climate action "momentum is irreversible". 
Energy Watch Group (EWG) is an international network of scientists and parliamentarians. We commission research projects and publish independent studies on global energy developments. Our mission is to provide energy policy - and you via this newsletter - with objective information on global energy developments! 

Global Energy News

The "Irreversible Momentum" of Renewable Energy

In 2016, a number of countries broke records in running solely on renewable energy. Portugal confirmed that it ran four and a half consecutive days in May entirely on electricity from renewable sources: wind, hydro and solar. The UK saw it´s greenest Christmas Day ever, with 40% of electricity generated from renewables. In Germany, the price for electricity even turned negative over Christmas, in part due to surging wind power production. Scotland experienced a similar event, when wind power generation exceeded the country’s energy need for four days in a row towards the end of the year.
These numbers dwarf in comparison with Costa Rica. Renewable sources accounted for 98.2% of the energy production during the entire 2016, while the country did not burn a single fossil fuel for 250 days. Expect more records to come as costs in the renewables supply chain decline to historic lows, making solar power already cheaper than coal in many parts of the world and set to beat coal on a global average within the next 10 years.
Meanwhile, as reservations grow about the future development of renewable energy in the USA due to the President-elect Trump’s latest announcements, the New York Times is optimistic that green energy will continue to thrive. And the outgoing U.S. President Obama makes a strong business case for the energy transition, stating in his Science article that the momentum of clean energy is now irreversible. 

Climate Action Champions and Laggards

Dramatic declines in renewable energy prices continue to shape national policies. China firmly strengthens its role as a global leader in renewable energy and aims to invest $361 billion into the sector by 2020. Another major player, India, adjusted its plans to generate 40% of its energy from renewables in 2030 to 56.5% by 2027. Meanwhile, smaller countries also catch up. Chile’s “El Romero”, South America´s largest solar power plant, will reach full capacity in 2017, powering a quarter of million homes. Kenya is emerging as a regional renewables-superpower, by planning to add 721 MW of geothermal and wind power to the national grid by 2021.
Meanwhile, the developments in the EU are less gratifying. The Brexit-shaken UK needs a clear commitment to renewables and corresponding policies, as it might otherwise face a 95% decline in renewables investments by 2020, according to a study by Green Alliance. Questions about policy support also arise in Germany, where the share of renewables production practically did not increase in 2016. Several EU countries, among others Germany, Ireland, Denmark, dropped significantly in the annual ranking of climate change performance by Germanwatch, as its member states are failing to deliver on their mitigation targets to stay well below the limit of 2°C or even 1.5°C warming agreed upon in Paris in 2015.  

Relative change in net power generation in Germany in 2016 compared to 2015. Source: B. Burger, Fraunhofer ISE. 
Divestment Pressure Rises, as Fossil Fuel Companies Go Insolvent
As the costs of stranded assets are mounting globally, record numbers of oil and gas companies - 16 in the UK alone in 2016 - go out of business. Consequently, important investors continue to exclude unsustainable fuels from their portfolios. Norway´s $870 billion sovereign wealth fund, the worlds biggest of its kind, banned 15 coal companies in December, all of which rely on coal for at least 30% of their activities or revenues. Shell is also facing rising shareholder pressure to protect its business and lower carbon emissions by investing in renewables. Activist shareholder group Follow This will put forward a resolution at this year's annual shareholder meeting requesting Shell to set targets for greenhouse gas emissions reductions.

Meanwhile, due to a massive fall in prices, uranium is also making headlines as the “world´s worst commodity – radioactive for investor portfolios.” The uranium mines increasingly write large losses and become uneconomic. According to the Japan Times, it will cost $3.2 billion to decommission the Monju nuclear reactor, which has been practically unused since 1995 after a series of problems occurred, including a leak of sodium coolant. 

Better Disclosure of Assets and Ending Fossil Fuel Subsidies Key to Climate Action
To aid divestment efforts, a better information basis is needed. The Guardian urges business to better disclose how their assets are linked to climate change. This is spurred by recommendations from major players, including Bloomberg, Axa and Unilever. At the same time, public subsidies still distort the real value of sectors, which are actively contributing to climate change and undermine climate action by supporting unsustainable business models. The German Environment Agency (UBA) came to a conclusion (in German) that these subsidies, spreading over the energy, transport, housing and agriculture sectors, amount to €50 billion in Germany alone. Thus, a change is needed in private sector as well as in public policies.

Science Update

Study Rejecting Solar PV Efficiency Proved to Have Major Inconsistencies

A team of 22 scientists, among them the Energy Watch Group members Prof. Christian Breyer (Lappeenranta University of Technology) and Prof. Ugo Bardi (University of Florence), analysed a recent controversial paper by Ferroni and Hopkirk , which asserted that the Energy Return on Energy Invested (ERoEI) of photovoltaic (PV) systems is too low to deliver net energy to society. The analysis found major methodological inconsistencies and calculation errors, including double counting, that render its conclusions not scientifically sound. The analysis also shows that Ferroni and Hopkirk used out-dated information and made invalid assumptions on PV specifications and other key parameters. 

Natural Gas Likely to be Responsible for Rising Methane Emissions

The natural gas industry likes to present itself as an indispensible and “green” partner to renewable energy through marketing campaigns and conferences. Yet, the latest scientific evidence casts doubt on the claim that natural gas is less harmful than other fossil fuels. This is due to leakage of the highly potent greenhouse gas methane during the extraction, transport and processing of natural gas. Stefan Schwietzke of the University of Colorado et al. found that the total fossil fuel methane emissions (fossil fuel industry plus natural geological seepage) are 60 to 110% greater than the current estimates. Global overall methane emissions are also rising, according to the Karlsruhe Institute of Technology. It estimates that at least 40% of this increase results from the growing production of oil and natural gas in the northern hemisphere. 

Howarth 2014, "A bridge to nowhere: methane emissions and the greenhouse gas footprint of natural gas" 

New Sustainability Indicator Shows Overall Positive Global Development

Prof. Christian Breyer, co-chairman of the EWG scientific board and professor for Solar Economy at the Lappeenranta University of Technology, and Francisco Javier Farfan Orozco developed a new sustainability indicator to show the global and regional development in the power generation sector. It provides a simple tool for monitoring the past, present and future development of national power systems towards sustainability. According to the study, the development is widely positive, mainly due to strong increased renewable energy capacity installations. It also finds increased coal and gas-fired power plant capacities, though the peak of commissioning of both has passed, and a decline in new commissioned nuclear power plants has started.


EWG News

Energy Watch Group in Edition Le Monde Diplomatique

A reference to the Energy Watch Group analyses of trends in the renewable energy sector as well as a comprehensive article on fracking by co-chairman of the EWG scientific board and senior scientist of the Ludwig-Bölkow-Systemtechnik Werner Zittel may be found in the latest German release of the Edition Le Monde diplomatique, “Warmzeit. Klima, Mensch und Erde” (in German). Other selected media articles about the Energy Watch Group in 2016 may be found here.  
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