Small wins in climate effort overshadowed by deeper shortcomings
By Mark Swift
According to analysis from the climate think-tank Ember, renewable energy sources — such as wind, solar, hydro, and bioenergy — just overtook fossil fuels in power generation for the first time ever. While this was lauded as a symbolic milestone for the European clean energy mission, the energy transition to net-zero carbon emissions is a little more complicated.
The first six months of 2020 saw a 25 percent drop in carbon emissions in the European Union. Renewables accounted for 40 percent of EU power generation, outstripping fossil fuels which contributed only 34 percent.
This has been viewed as an inevitable shift by industry experts since wind and solar overtook coal in total European energy contributions in 2017. They did the same thing just last year in the United States.
Evidence suggests that the coronavirus outbreak has accelerated the transition to renewable energy, according to Dave Jones, a senior electricity analyst at Ember. Less economic activity has reduced how much carbon emissions are being produced. He expects the downward trend to continue.
“Every year more renewables are coming online. This is not a one off — it’s not going to switch back,” he said.
Wind and solar energy have increased but not enough to remain on target, Jones said. To reduce emissions by 55% before 2030 – up from 40% under present targets – the EU would need “to deploy two to three times more wind per year in the 2020s than it has over the last decade,” Jones added.
The global coronavirus pandemic has had significant consequences for power demand, with traditional energy heavyweights suffering unprecedented blows to their profits due to the slowdown in economic output.
Equally, changing sentiments in financial markets have brought far greater weight to ecological considerations in investment decision-making. This has led to a trend of funds divesting from assets deemed environmentally harmful.
The coronavirus situation has also led to less profitable traditional energy stocks. For example, in April the oil and gas multinational Shell reduced its dividend pay-outs to shareholders for the first time since 1945 due to poor performance, casting doubt on perennially rock-solid shares.
Plans could make transition difficult for certain members
The energy changeover could be complicated when oil and gas giants can no longer leverage themselves in the search for infrastructure overhauls and research efforts as a result of their own money woes. This could be even more profound at the state level.
Analysis of the details in a report on sustainability transition has indicated that the additional cost of CO2 created by EU proposed legislation could increase national energy costs for Poland by 40%. This would reduce significantly the amount of available funding for transforming energy infrastructure, contributing to a braking effect for the collective EU energy mission.
The total investment needs in Poland’s power generation alone to reach carbon neutrality could be as high as €200bn, according to statements made by member of the European Parliament, Anna Zalewska, of Poland’s Law and Justice party, a member group of the conservative Eurosceptic European Conservatives and Reformists Party.
Changes proposed to the European Climate Law target for 2030 could “create approximately €30 bn of additional operating costs for Poland’s energy sector on top of the investment needs,” she said.
Requests made for Poland to cut its use of coal more aggressively are also not realistic enough, Zalewska said.
Commission report suggests more needs to be done
A report from the EU Commission indicates that commitments made to climate protection legislation are not being met at the member state level. The effect, it states, is that had the coronavirus pandemic not occurred “it is unlikely that the EU would have met its 2020 target.”
The authors of the report echo other analysts, arguing that when energy demand recovers after the coronavirus crisis — unless more is done at the top — success in meeting carbon reduction targets looks to be in doubt.
Globally, increased isolationism has the potential to effect ecological commitments as well, as nations look for innovative ways to ensure their energy security. The pivot away from globalism could accelerate green energy development as a result of this and trends towards reductions in international trade and global supply chain models.
At the same time, other nations lacking green energy resources, or the finances needed to develop them, might further entrench themselves in fossil fuels as they race to keep up with the pace of their economically more developed neighbours.