Weekly Update

Energy Shift: Reasons for Optimism and Pessimism

Posted onAuthorPeter Koning

Preview Text: Plus: headlines from the last 3 weeks; Peter’s take on the the climate change accountability challenge

Hi Everyone,

I came across plenty of ‘taking stock’, ‘2018 look-backs’ and ‘what to expect for 2019’ type articles over the last 3 weeks. I will offer one headline article to read this week – reasons for optimism and pessimism. See below.

My last post from 2018 generated some constructive feedback for me. I very much welcomed that! I offer some reflections on what is emerging for me as a multi-dimensional climate change accountability challenge.

Feel free to send me stories you think might be worth sharing here. As always, do send comments.

Given the longer post this week, plus to catch you up on 3 weeks of news, I offer just the headlines from some stories I found interesting. Rather than me pick through them, I’ll leave that to you.

Thanks,
Peter

Reasons for Optimism and Pessimism (read this one for sure)

his article was forwarded on to me from a colleague and regular reader of Energy Shift and I highly encourage you to read it through. He said “I found this to be an extremely insightful article that paints both the a pessimistic and optimistic portrait of the future with respect to climate change using some very compelling and rational logic…in both cases.  But closes in a way that makes one wish to stay engaged and never give up…”. I agree.

My take: for those in the oil and gas industry, it ought to generate some unease about the uncertainties of future demand. I find people are watching the progress of individual technologies, which is great. However, what really interests me is when these technologies are being bundled together in ways that compliment each other and create new synergies – with the combination more powerful than the sum of individual parts. A couple examples for you to consider:

  • Solar + energy storage + smart inverters + cool software (aka blockchain) + demand response + Energy Efficiency = virtual power plants, distributed generation, peer-to-peer energy trading, peak shaving, etc.
  • EVs (cars, bikes, scooters) in fleets + ride hailing apps + urban densification + millennial attitude shifts = radical shift in car ownership and mobility (to this latter one, you could even add in Amazon/online shopping + autonomous electric delivery vehicles = taking vehicle miles traveled off the road)
  • What else am I missing? If you’ve seen others, let me know.

The case for “conditional optimism” on climate change
Limiting the damage requires rapid, radical change — but such changes have happened before.
David Roberts – Vox

Peter’s emerging take on the climate change accountability challenge

In my last post of 2018, a big part of it was pointing the finger at myself. Holding up the mirror, for all my interest in the energy transition, there is plenty of behaviors and habits that are not helping reduce emissions. In fairness, I was asking us all to do some self reflection. Yet using the hypocrisy angle is not helpful. In the email exchanges that followed, what emerged for me is at least 3 dimensions to the accountability challenge, as follows:

Consumers:

  • Generally, show an unwillingness to pay for carbon costs and very rarely reward governments who price carbon.
  • Love the higher standard of living that comes from affordable energy
  • While they may associate extreme weather events with climate change, very rarely do they take personal accountability in any way by changing their behaviour (or who they vote for)
  • Want utilities to provide them with more renewable energy, yet don’t want to pay extra.
  • The buy-use-toss model is extremely engrained, making it difficult for any company wanting to shift to a circular model to make a good business case for changing to a lease/rent model needed for the circular economy to work

Governments

  • They know what is needed and want to do the right thing, but often struggle structuring policies in a way that is supported by voters.
  • Push-back on carbon pricing can been seen in many jurisdictions: France’s yellow vest movement, opposition to Canada’s national carbon tax, plus examples in the US, like Washington state voting against.
  • Often price carbon very low as a start, hoping to ratchet up the price over time – yet these levels are not seen as credible, with experts or consumers.

Private Sector (associated with the energy system – utilities, oil & gas)

  • Are driven by shareholders to deliver the highest return. Oil and gas companies generally would rather not dilute their high returns on oil and gas with lower returns on renewables. Only the big integrated companies (e.g. with gas stations) in Europe are motivated to protect market share associated with electrification of transport.
  • Upstream oil and gas producers are being prodded (through the financial sector – investors, banks, insurers, ratings agencies) to disclose more and prove good governance on climate risk management. Yet this excludes the ~80% of life-cycle emissions at the consumer.
  • Utilities are generally motivated to maintain status quo where they are rewarded with traditional rate-base systems. As such, they have difficulty rationalizing spending money on demand response programs or helping to set up distributed generation. So it is left to governments to enact policies that enable regulators to alter the reward structure and provide the right incentives to shift how the market behaves. This usually means government subsidies or letting utilities charge higher rates – both can be unpopular with voters/rate payers.

There are likely more dimensions to this, like the tech sector, finance sector, etc. So what am I missing? What have I got wrong? Granted, I can be rightly accused of ‘admiring the problem’, though I think it helps to see the many facets so we have the full picture when working solutions.

Yet I believe there to be solutions that can make progress, if we could find more and better ways of working together. One good initiative aiming to share different perspectives, advance real solutions and chart a path for the future: The Energy Futures Lab. Check it out. I’m applying to be a Fellow. Deadline is January 31. Perhaps consider doing the same.

Solar, Energy Storage

  • Solar and batteries are retiring natural gas plants – Quartz
  • Hawaiian Electric Announces ‘Mind-Blowing’ Solar-Plus-Storage Contracts – Greentech Media
  • El Paso Electric Taps 100MW of Storage to Supply West Texas Summer Peaks – Greentech Media
  • Molten salt solar power station largest of its kind – China Daily
  • Canada Battery Maker Says Flow Storage Costs to Tumble by Half – Bloomberg
  • India adds record 1,538MW of rooftop solar in 12 months through September – Institute for Energy Economics & Financial Analysis – IEEFA
  • World’s first wind-solar-battery park [in Australia] – RenewEconomy
  • China is building its first huge battery storage facility [a VPP] – Futurism
  • A pilot project in Oregon involving 270 homes shows how water heaters can store energy, leveraging demand response to shift loads and capture energy from renewables.

Electric Vehicles, Autonomous Vehicles

  • Kroger — Not Uber, Google Or Cruise — May Be On The Leading Edge of Driverless Adoption – Forbes
  • VW is partnering to build out charging infrastructure in China – Bloomberg
  • SK Innovation eyes $10 billion batter bet after major VW order – Bloomberg
  • Daimler Is Selling a Truck That Can Brake, Accelerate and Steer on Its Own – Bloomberg
  • Atlis XT Electric Pickup Truck Revealed: 500-Mile Range, Tows 35,000 – InsideEVs
  • Today, hacks are annoying. In future smart cities, they could kill – Digital Trends
  • Ford to deploy C-V2X tech in all new vehicles in 2022 – Smart Cities Dive
  • California decrees all new buses must be electric or fuel cell by 2029 – The Driven
  • Deloitte: AV investment, development is outpacing consumer demand – Smart Cities Dive
  • Innovative Xpeng G3 Electric SUV Goes On Sale In China – Clean Technica

Wind Power

  • [Alberta focused] The year wind power won the price war; 4 big energy trends from 2018 with Dr. Tim Weis – Green Energy Futures
  • Equinor Acquires 50% Interest In 1,560 Megawatt Polish Offshore Wind Project – Clean Technica
  • Offshore Wind Bonanza Draws Bidding War in Record-Setting Sale – Bloomberg

New Technologies

  • Chevron, Occidental invest in CO2 removal technology [with Canada-based Carbon Engineering] – REUTERS
  • Nuke on a truck: How Westinghouse is shrinking the nuclear power plant – Pittsburgh Post Gazette
  • The technology that could end traffic jams – BBC
  • Stanford’s Ultra-Cheap Batteries Are Ushering in a New Age in Energy – Futurism
  • How New York Is Turning Food Waste Into Compost and Gas – NY Times

Utilities, Oil Companies

  • DP&L envisions smart meters in every home, files $576M grid mod plan – Utility Dive
  • Shell says it wants to double green energy investment – The Guardian
  • Shell quietly enters $125B power market – Gulf Times
  • New York PSC sets state’s energy storage target at 3 GW by 2030 – Utility Dive

Governments, Policy

  • Cap and trade for cars arrives in the US Northeast – Governors’ Biofuel Coalition
  • DC passes ‘most ambitious’ mandate for 100% renewables by 2032 – Utility Dive
  • EU announces deal to cut emissions from new cars by 37.5%, giving a boost to electric cars – Electrek
  • Dutch lawmakers pass ambitious law to reduce emissions – National Post

Trends, Forecasts

  • Trends to Watch in the Energy Transformation of 2019 – Greentech Media
  • 6 trends that will define smart cities in 2019 – Smart Cities Dive
  • The ‘Green New Deal’, carbon pricing and other policies that could shape 2019 – Greenbiz
  • How China’s electric car push is shaking up oil markets – CBC
  • Fossil Fuel Divestment Movement Exceeds $8 Trillion – Clean Technica
  • Israel to Develop 6GW of Solar Capacity Over the Next Decade – Greentech Media