Despite Low Oil Prices, Renewable Power Gaining Traction, Energy Agencies Report — But Not Yet Fast Enough for the Climate

Sharon Kelly is an attorney and freelance writer based in Philadelphia. She has reported for The New York Times, The Nation, National Wildlife, Earth Island Journal, and a variety of other publications. Originally published at Desmogblog.

The shift away from coal and towards renewable sources of energy is slowly beginning to gain traction, two recently-released reports from American and global energy agencies show.

The biggest story is in the case of renewables,” International Energy Agency executive director, Fatih Birol, told the Guardian as this year’s World Energy Outlook was released. “It is no longer a niche. Renewable energy has become a mainstream fuel, as of now.”

Almost half of the new power generation added in 2014 came from wind, solar, wave or tidal energy, the report found, and renewables now represent the world’s second largest source of electricity after coal. Coal, whose share of the world’s energy mix has been rising since 2000, has peaked, the agency indicated, predicting that within two decades, renewable energy sources will replace coal as the backbone of the world’s electricity source.

Domestically, the growth of renewable energy has been especially pronounced in Texas and other states long famous for their drilling and mining histories, data released by the U.S.-based Energy Information Administration shows.

Texas has become the largest wind-power supplier in the country, helping to slash as much carbon from the state’s emissions in 2013 as both Vermont and New Hampshire combined produced that year, if Texas had gotten that power through burning an equal mix of coal and natural gas instead of wind.

Still, the transition away from fossil fuels is coming too slowly to prevent catastrophic climate change, the IEA warned.

“There are unmistakeable signs that the much-needed global energy transition is underway,” the agency wrote in its report, “but not yet at a pace that leads to a lasting reversal of the trend of rising CO2 emissions.”

For the world to have a shot at keeping emissions below the 2 degree of warming threshold, the agency identified five key steps: the least-efficient coal plants must be banned, many fossil fuel subsidies must be ended, infrastructure like buildings and transportation need efficiency improvements, investment in renewable power must rise from $270 billion in 2014 to $400 billion by 2030, and methane leaks from oil and gas companies must be slashed.

The good news? Those measures could be taken at “no net economic cost,” the agency concluded.

All told, this year, renewable energy sources represented over 17 percent of the U.S. electrical generating capacity — an unprecedentedly high number, but still far less than fossil fuels.

Remaining dependent on fossil fuels brings economic as well as environmental risks. The IEA warned that while oil prices remain low currently, the cost of a barrel is expected to roughly double over time, and that in some situations, the world’s oil industry would be vulnerable to shocks that cause oil prices to spike.

But many policy makers have yet to absorb this message. Despite concerns about the environmental and economic prospects for fossil fuels, the oil, gas, and coal industries continue to benefit from roughly four times the amount of government subsidies as the renewable energy sector, the IEA said.

“[W]e estimate this global subsidy bill [for fossil fuel consumption] at around $490 billion in 2014, although it would have been around $610 billion without reforms enacted since 2009,” the agency wrote. “Subsidies to aid the deployment of renewable energy technologies in the power sector were $112 billion in 2014 (plus $23 billion for biofuels).”

Not Just CO2

While energy agencies are primarily focused on carbon emissions, evidence is growing that methane leaks from oil and gas drilling, fracking, pipelines, and other infrastructure pose a grave climate threat that the U.S. government has underestimated.

“Because of the increase in shale gas development over recent years, the total greenhouse gas emissions from fossil fuel use in the USA rose between 2009 and 2013, despite the decrease in carbon dioxide emissions,” Prof. Robert Howarth, a scientist whose pioneering work on methane emissions suggests that burning natural gas — which the IEA predicts will be the only fossil fuel to gain market share — may be even worse for the climate than burning coal, wrote in a peer-reviewed paper published in the journal Energy and Emission Control Technologies. 

Methane, especially from shale gas sites, is leaking from the gas industry at a far higher rate than previously believed, Howarth said, writing that while the Environmental Protection Agency estimates that leak rates are just 1.8 percent, those conclusions are based in part on flawed data collection.

The true methane leak rate, Howarth concluded after reviewing the available research, may in fact be more than 10 times that rate — 12 percent.

There are some signs that energy experts worldwide are increasingly taking note of the hazards of methane leaks.

“Emissions of methane, a powerful greenhouse gas, along the supply chain will dent the environmental credentials of gas if there is no concerted policy action to tackle these leaks,” the IEA noted in its report, though it also labeled the fuel “a good fit for a gradually decarbonising energy system.”

But the carbon emissions from burning natural gas are significant as well. In 2013, the U.S. produced roughly 2.17 billion tons of carbon from burning oil and 1.7 billion tons from burning coal — and another 1.4 billion tons came from burning natural gas, the EIA reported, making natural gas responsible for 26.7 percent of America’s CO2 pollution.

A Shift to Pure Renewables?

The Obama administration has made its support for an “all of the above” energy strategy that envisions increasing reliance on natural gas in the short term as a “bridge” to the eventual shift to renewable energy.

But even without subsidies, there are already some markets where renewable energy remains competitive against fossil fuels, even as oil and gas prices have nose-dived this year.

In Houston, TX a newly built solar plant is expected to provide electricity for an average of 4.8 cents per kilowatt hour for 20 years.  That’s roughly half a cent more than Houston’s fossil-fuel based power plants in today’s over-supplied market — but two cents per hour cheaper than the 5-year average cost of conventional fuels, highlighting the unpredictability of the market for those fuels.

And wind power in that state has become so abundant that the New York Times is reporting it is literally too cheap to meter at night.

Meanwhile, keeping oil and gas flowing is expected to become increasingly costly. The IEA estimates that “just to compensate for declining production at existing fields and to keep future output flat at today’s levels,” the oil industry will require $630 billion in investments.

And building new pipelines to deliver oil and gas from areas like shale drilling regions adds to the expected costs.

Keeping these project costs under control (contrary to numerous recent examples of overruns) will be vital to the future competitive positioning of gas,” the IEA said.

Crunching numbers like these has some environmentalists targeting a near-term transition away from all fossil fuels, not just oil and coal.

The impossible is becoming possible. The global breakthrough of renewable energy has happened much faster than anticipated,” Emily Rochon, global energy strategist at Greenpeace International, told EcoWatch. “We believe that with the right level of policy support, the world can deliver 100 percent renewable energy for all by 2050.”

Photo Credit: Arial view of a solar farm under construction in the UK, via Shutterstock

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. jfleni

    The (GOP) AG of Florida, one of the potentially best states for solar energy, is fiercely resisting the movement (constitutional amendment) toward solar, while grovelling shamelessly to a power utility three states away!

    Texas looks wise and intelligent compared to Dogpatch-Tallahassee!

    You can’t make this stuff up!

    1. Steven

      Maybe not as crazy as in Florida but this crap is going on nation if not world-wide. In the great state of Arizona, known for its sunshine and the wisdom of its politicians, the state’s electric utilities are doing everything they can to lock the state into a centralized generation, fossil fuels based future. In my city Tucson Electric Power (TEP) has spent $600 million on new natural gas powered generators and transmission lines to carry the power to town. (Arizona’s utilities refuse to disclose how much they have invested in politicians.) It steadfastly refuses to take the lead in doing what is necessary to convert to renewable energy; in its own words it doesn’t want to be a ‘beta tester’.

      Utilities are sort of like the DoD. Operating on ‘cost-plus’ contracts, they have absolutely no incentive for minimizing those costs. They have every incentive for insuring it is CEOs and stockholders rather than their customers who benefit from any investment in energy generation, even when those customers are willing to accept a much lower ROI. This game of economic rent-seeking, as Michael Hudson, notes is as old as the hills.
      At least since 1913, the US Federal Reserve has waged a vigorous full employment campaign – full employment for MONEY.

      Some utilities apparently are reading the writing on the wall and beginning to incorporate storage in their grids. That storage could be used for both renewable energy and off-peak production from cheaper to operate base-load generators as well as making their grids more robust.

      Distributed renewable energy and rooftop solar are more than doable. With a 12 year old heat pump in a house constructed when energy conservation was the last thing on builders’ minds, a GM Volt I drive about 6000 miles a year and using 12 year PV technology, I have for the several years been producing in excess of 1000 kilowatt hours (kWh) of electricity a year which TEP purchases at the generous rate of $0.028 a kWh. (To be fair I obtained my systems from TEP at a discount rate under their now discontinued SunShare program.) Next month when it turns colder here in Tucson I will be BUYING electricity at the soon to be increased rate of $0.12 a kWh. But TEP is telling the public people like me are costing them money.

      End of rant. In summary, the conversion to renewable energy CAN be done. All people need to do is stand up for their own self-interest.

      1. different clue

        How many residential end-users would have to strangle-down their own individual use of fossil-derived energy to deny the fossil-based utilities a big enough revenue stream that the fossil-based utilities are driven partway out of bussiness . . . and forced to close/de-commission/shut-down their fossil burning plants in plain sight? And by how much would those end-users have to strangle-down their fossil-based energy use?

        Could a big enough diffuse enough “kill the enemy” movement of end-user conservation get big enough to actually force the Class Enemy Fossil Utilities part way out of bussiness?

        1. Salamander

          Not so long as they’ve captured municipal and state governments. Or rather, they are municipal and state governments. It’s a measure of how schlerotic and pro-forma our democracy has grown that we think of utilities as we would a private corporation. They’re not supposed to make a profit, by definition. We own them, and if we want them to roll over and die, they should do so without a whimper. But they are a source of revenue for said governments… Just look at the sundry taxes on you utility bill.

          Want to make a difference? Go off grid, entirely. I can’t wait to see block and neighborhoods banding together to build mini grids fed by home-based renewables. Think of the legal fireworks…

      2. optimader

        Utilities are sort of like the DoD. Operating on ‘cost-plus’ contracts, they have absolutely no incentive for minimizing those costs
        Same as the Railroads which are the historical posterchild for an industry inhibiting innovation all the way back to Teddy Roosevelt who dragged the US RRs into installing air brakes and modern couplings! It used to be a bloodbath for RR workers with mortality rates that rivaled coalmining

        No different now

  2. dodahman

    In Euro land, I think they count wood pellets as renewable. A large plant in North Carolina supplies a bunch. I wonder if the pellet costs are down as well…or what this means for them.

  3. Paul P

    This is good news and bad news. The automobile industry should stop producing cars with an internal combustion engine and be required to produce electric cars. Subsidies for an immediate transition should be given to the automobiles industry and purchaser. Solar panels need to be installed on all buildings. Again subsidies. Energy conservation on the local, regional, national, and international level done immediately. A trillion dollars in alternative energy research made available to all without patent restrictions on use. And, so on. I can’t wait for the proposals and commitments of this sort to come out of Paris discussions this December.

  4. Gio Bruno

    The true methane leak rate, Howarth concluded after reviewing the available research, may in fact be more than 10 times that rate — 12 percent.

    This is a generally good article about renewable energy. However, descriptions like the above block quote are not helpful. (Climate change deniers love to see these types of errors; so they can claim the whole article is flawed.)

    Simple math shows that 10 times 1.8% is 18%, which is much greater than 12%. The EPA error is a squishy 6.66 times the alternately reported Howarth methane leak rate. Still significant, and easily rounded as a 7 times discrepancy.

  5. jgordon

    This still ignores the fact that renewable power is incompatible with the grid model, and that will not change. Renewable power generation and storage has to take place on or near location for it to be long term viable, and there does not seem to be a lot of inclination among policy makers to encourage that kind of transition. Everyone wants to focus on the (wrong) utility model.

    Also, as far as climate change goes everyone also seems to be assuming that the only limit on the amount of carbon we put into the atmosphere is the limit we put on ourselves. Not only is that a pretty arrogant assumption, it’s also wrong. There is a finite amount of carbon stored in the earth, and the portion we have access to is just about used up. That is why the producers are going to the arctic–one of the most inhospitable and unpleasant places on earth for humans–trying to get fuel at a price where they can make a profit, failing, and then returning home whereupon they cut capex spending and increase dividends instead–cashing out. That fact should be included in every climate change model, but for some bizarre reason it is always ignored.

    1. Steven

      I don’t often find myself playing the role of an optimist (or whatever) but…

      “This still ignores the fact that renewable power is incompatible with the grid model, and that will not change.”

      Tesla PowerWalls notwithstanding, I respectfully disagree. Right now grid-based storage is much cheaper. And if both water and compressed gas-based pumped storage technology are more vigorously developed – and maybe even if it isn’t – a revised grid model where power isn’t transported 700 miles to the end-user is likely to remain viable for a long time. I don’t know exactly where the cutoff point is but one of the laws of economics that hasn’t turned into complete crap is economies of scale.

      As for your ‘peak oil’ argument, I suspect there is still far more carbon salted away than is good for us or the planet, especially if we are willing to poison our aquifers to get it. And be a little gentler to those oil company CEO’s. The name of the game everywhere these days is ‘asset stripping’ and cashing out.

      1. jgordon

        Renewables not being able to power the grid doesn’t have to do with price. It’s just a simple matter of physics that any electric grid can not support more than about 20% renewable energy being fed into it. There are theories and proposed (that is, nonexistent) technologies that could be added to grids to deal with that–although creating those technologies and then spending the trillions of dollars required to upgrade the grid is never going to happen in reality.

        As for peak oil–it should be called “peak cheap oil” instead. There is plenty of oil in the ground; it just that at this point we’d spend more energy bringing it up than we would get from burning it. These guys wouldn’t normally be going to the Arctic, fracking, and trying to boil sand in Canada for oil. They’re doing that because there’s nothing left. They’re scraping he bottom of the barrel, and they’ve already invested trillion in capex to scrape that bottom. They are only giving up when the math tells them that there is no point to it anymore.

        1. rusti

          It’s just a simple matter of physics that any electric grid can not support more than about 20% renewable energy being fed into it.

          What law of physics are you citing here, exactly? If I have a solar panel, a charge controller, a battery and a motor, don’t I have a 100% renewable electric grid?

          1. optimader

            The subject of intermittency is I believe what jgordon is attempting to refer to.

            Not a law of physics, more an artifact of grid scale: Law of Large Numbers

            It is an engineering challenge not a “Law of Physics” dead end.

            search “Supergrid”

            What is out there to be reconciled is how actual service life vs assumed service life in the investment model for solar, wind, tidal etc. renewable schemes match up over time.

            1. jgordon

              I was referring to the fact that our current electrical infrastructure does not have the physical properties required to support renewable energy, nor will it absent trillions of dollars in investments–which would be better spent elsewhere anyway.

        2. Steven

          It’s just a simple matter of physics that any electric grid can not support more than about 20% renewable energy being fed into it.

          I’ve never heard that one before. While I realize the danger of using the pronouncements of politicians as proof of anything, I believe there are a number of states which already have renewable energy targets well north of 20%. California, for example, is shooting for 50% by 2030. There are a number of countries that have renewable energy targets above 20%.

          As for

          There are theories and proposed (that is, nonexistent) technologies

          pumped storage using water has been in use almost since the inception of modern electrical grids, the first being 1890 in Italy I believe. There are at least two water-based pumped storage facilities in Arizona. Batteries are hardly “nonexistent technologies”. Getting their cost down so utilities can make money using them for storage may still require some work. But as they say with the lotteries “you can’t win if you don’t play”.

          There is a list of potential pumped storage sites somewhere on the Net. I have no idea how many of them have actually been developed. But if our utility can transmit power generated 700 miles away, I suspect they could run power lines to potential sites if they had to go that far. And then there are flow batteries.

          Sorry. Count me skeptical of your grasp of physics on this one.

          1. jgordon

            Well I’m no stranger to hopium and wishful thinking; it’s new to me that someone is confusing that for skepticism though.

            We began experience severe economic dislocations way back in 2005 due to the worsening energy picture. Pump storage, which as you have kindly pointed out is an old, old technology and renewables being fed into the grid at that time would have gone a long way towards ameliorating the subsequent economic crisis–which as only been worsening on a slow downslope since then. Strange that no one has thought to implement this amazing and well-known technology despite the fact that our civilization has a dire existential need to have it in place–years ago not today.

            1. Salamander

              Not strange at all. Simply a conflict of interest. Your logic amounts to saying, “if it were good public policy, it would have been implemented.” Of course… Once again we live in the beet of all possible worlds..

        3. John Zelnicker

          @jgordon – Please explain the physics that prevents the grid from accepting more than 20% of its inputs from renewable sources. I’m not an engineer, but I fail to see what difference it makes which kind of power generation feeds into the grid. Once the electricity is created at the generating facility, what difference does it make if it is created by hydro, solar or wind turbine facilities rather than by coal- or gas-fired facilities? What am I missing?


          1. jgordon

            As someone pointed out above, it has to do with intermittency. About 20% is the absolute upper limit of renewables that can be fed into a grid. Anymore and it’s simply not stable enough to function.

            1. Salamander

              I hate to ask, but do you a conflict of interest you’d like to share? It’s not just that your arguments are dubious… But they seem intentionally vague. What do you mean by “unstable?” I’m an engineer, and I have no idea what you mean in this context. Will it come apart like the Death Star?

              Here. Back in 2013, Gran Canaria’s grid was supported by 54% renewables. You’ll note that these consultants point out a looming problem… And it’s not stability. It’s cost, as in building that infrastructure requires great subsidies. That’s because renewables are still more expensive than hydrocarbons… And that’s because the externalities of pollution aren’t priced in.

              Nope, narry a word about “stability.”

              You don’t work for a utility, do you?


    2. rusti

      This still ignores the fact that renewable power is incompatible with the grid model, and that will not change.

      You could absolutely have an electrical grid on the same order of magnitude of what exists today based on entirely on wind/solar/hydro plus storage and demand response. The larger the area and type of geographical landscapes that are interconnected, the less overbuilding required to compensate for intermittent generation. The complete conversion would be one of the larger undertakings in human history and require developing existing storage technologies that aren’t commercially viable under today’s regulatory framework, but there’s certainly no laws of nature or engineering that prevent it. I’ve linked this before, but MIT’s Future of Solar is a fun look at raw material requirements for the curious mind.

      Whether or not you can mobilize the population to direct enough human creativity and raw materials towards building an energy system that accomplishes essentially the same thing they enjoy now without the long-term-poison is another matter.

    3. different clue

      The portion we have access to is just about used up? No it isn’t. We still have access to enough fossil carbon to warm the global up to heat stroke levels. It would be necessary and good to overtly exterminate the fossil energy industry before that happens. Bunches of coal yet in America/China/India/Australia. Bunches of coal, gas and oil to be found all over the Arctic Ocean once that becomes ice-free. Bunches more to be found all over Greenland, Baffin Island, Ellesmere Island once they become ice-free. Bunches more yet more to be found all over Antarctica once that becomes ice free.

      It is a happy dream to imagine that “runnig out ze inventory” will solve the carbon skydumping problem. It won’t. Where carbon skydumping is concerned, Condition Venus is the only natural limit.

  6. Brooklin Bridge

    If private utility companies simply relocate headquarters to Ireland, they can sue States that allow home generated renewable energy for lost profits. If smart however, they will wait until maximum saturation of roof top panels and wind mills so as not to hurt the profits of companies selling the renewable infrastructure. They can even get in on the game by investing in those companies with free credit from the gouberment, max out profit, and then force the state by “lost profits” penalties to make all those installations illegal. Hahahahaha, win, win, there’s money to be made!

    1. Brooklin Bridge

      It would be helpful to have the TPP or the TPiP passed, but I’m sure they can find a way regardless.

  7. Cassiodorus

    Renewable energy won’t save us from climate change, because it’s intended to be a supplement, and not a replacement, for fossil energy.

    It also won’t save capitalism.

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