Net-Zero Targets Face Reality Check

Yves here. This post on the likely viability of net-zero goals adds to the accumulating evidence that mere subsidies and other incentives are not sufficient in our market-based system to make the so-called energy transition happen quickly enough to prevent seriously bad climate change outcomes. But note that the threat of more dirigiste measures has resulted in enough resistance by key groups as to block their implementation too:

We had a recent, albeit less dramatic, instance of failure of official will in the US. Recall the rash of stories some months ago about the health dangers of gas stoves, with some US jurisdictions requiring their phaseout? This came up with such suddenness and force as to seem not at all organic. Detailed Federal regs were in the works. There were secondary efforts to depict a gas stove phase-out as a climate change plus, but that case was weak.

Did you notice that that campaign died? It seems likely that the reason was that no one bothered to consider the impact on restaurants, where there is also way more exposure than in a home setting. There are many dishes that can’t be prepared quickly or well on other than gas heat. Going off gas would decimate the restaurant biz. And so the campaign has been largely cashiered.

This reinforces the point we made in a post yesterday: that Green New Deal and other advocates of saving the planet have not given sufficient thought to how people get by now. Many of these changes threaten livelihoods. Handwaves about coming new green energy jobs doesn’t cut it when you have bills to pay. These activists have not been honest with themselves, let alone affected groups, about the magnitude of changes needed. If they were, they would conclude that radical conservation may be less disruptive than their planned teardown and rebuild to preserve most of our current lifestyles.

However, Satyajit Das in his Energy Destinies series pointed out that (ex severe economic contractions) modern economies keep consuming more and more power, as the post below confirms. So how ex rationing via very high prices or even power interruptions do we get there?

By Irina Slav, a writer for with over a decade of experience writing on the oil and gas industry. Originally published at OilPrice

  • Already in 2021, the assumptions in the IEA’s net-zero 2050 report were looking unrealistic to many.
  • Factors such as inflation and borrowing costs, as well as technological challenges and competition, asserted themselves as valid for even the wind and solar industries.
  • The IEA also projected in its latest report that demand for oil and gas will peak before 2030—when demand has been breaking record after record.

Back in 2021, the International Energy Agency published what it called a landmark report titled “Net Zero by 2050: A Roadmap for the Global Energy Sector”. The report made quite a splash, not least because of the assumptions it involved about oil, gas, and coal use.

Many companies, however, especially in the financial services world, took the report at face value and made it a basis, or at least a reference point, for their net-zero plans. Now, they have to revise these. Because it turned out the IEA’s assumptions were quite far-fetched. And they weren’t the only ones.

Bloomberg reported this week that banks are among those busy adjusting their net-zero plans, which were based on assumption-rich forecasts such as the IEA’s original net-zero roadmap. And with good reason. That roadmap included statements such as an end to “investment in new fossil fuel supply projects, and no further final investment decisions for new unabated coal plants.”

Several months after the publication of the roadmap, the IEA was calling on the oil and gas industry to invest more in oil supply because a shortage was looming. And that was before the war in Ukraine even started, offering transition advocates a much-needed reality check and reasserting the primary importance of energy security.

“We can’t stay in the 2021 view of the world,” Celine Herweijer, HSBC chief sustainability officer, told Bloomberg. “We can’t choose a pathway that is several years out of date and just stick to it. We will need to keep looking at how the net zero-aligned scenarios are evolving.”

Indeed, HSBC’s chief sustainability officer is right. Just last year, the IEA was forced by energy realities to publish an update of its net-zero roadmap where coal and oil demand were revised significantly—upwards.

Even so, the IEA also projected in its latest report that demand for oil and gas will peak before 2030—when demand has been breaking record after record, contrary to the IEA’s and others’ regular forecasts of demand and supply trends. It’s not only oil demand, either. Coal demand is rising, driven by China and India. The latter recently said it would slash transition funding for state oil firms and double down on coal generation capacity.

Oddly enough, Germany is building new gas-power plants. The poster child of the transition, the country with some of the highest capacity of both wind and solar power that has recently boasted about breaking records in output, is building gas power plants. The motivation for that is to “guarantee electricity supply security as the share of intermittent renewable energy increases and coal is phased out,” per Clean Energy Wire.

Yet coal was phased in last year, rather than out after the ruling coalition in Germany closed the country’s last three remaining nuclear power plants—despite half of Germans being against it. Neither the IEA nor anyone else could have predicted that, perhaps. Yet it happened, along with other seemingly unpredictable things, such as the slowdown in EV demand in key markets. It happened right when sales were starting to take off, too.

Meanwhile, despite massive government support for wind and solar, both sectors are struggling in both Europe and North America. This was not supposed to happen, according to those upbeat transition scenarios that the IEA and other advocates fed the investor world. Indeed, wind and solar capacity were supposed to grow without restraint. Yet it has emerged recently that government support is not enough to ensure this unrestrained growth on its own.

Factors such as inflation and borrowing costs, as well as technological challenges and competition, asserted themselves as valid for even the wind and solar industries—as they are for all other industries. The upbeat forecasts and roadmaps ran headlong into reality. Now it’s time to rush to adjust those net-zero targets that so many companies based on those forecasts.

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  1. JW

    AI enabling control of fusion. Technology plus mass data will finally produce the answer that has been waiting for 50 years. By 2035 it will be on grids everywhere, and we can consign the drive to medieval windmills to a temporary insanity.

      1. IMOR

        Agreed, gravy- but I’d guess neither you nor I would be sorry to see the wind’farms’ / monstrous wind turbines in history’s rearview mirror. Plus, when making predictions ten or more years out, more extreme the more likely to have some accuracy, right? :-)

    1. Joseph Chaisson

      I have been engaged in NGO fusion energy advocacy for nearly a decade and believe it is not yet clear to me that any fusion pathway can create net energy.

      It is also clear that some leading fusion R&D projects have serious technical problems that are not yet well understood and so are not being publicly discussed (insiders have confirmed this). And other practical fusion R&D challenges exist like the need for a (very expensive) public R&D facility to test fusion device materials performance under high neutron flux conditions.

    2. ArvidMartensen

      I think we can put nuclear power, fusion power and renewable power into the basket called “wishful thinking”.

      The wishful thinking basket is managed by those people who own most of the planet, and is brought out periodically at large, well publicised conferences in marble-lined venues, to “set goals”. The attendees get to “network”, “negotiate”, give doorstops and eat very fine dinners and drink very fine wines.

      In fact, this is all just a PR campaign to stymie efforts to interfere with industry, and neuter calls to bring down CO2, so as to preserve ‘shareholder value’.

      If the people who own most of the planet were to tell the truth for once, they would say that that the riff-raff should just get used to a hotter planet, keep consuming, work for pittances and then bug off. But of course they will never say that because this might cause riots and a whole lot of inconvenience.

      The only real solution is that we drastically cut our expectations of what we deserve, start to live a hand-to-mouth life, and conserve energy use for things like medicines, heating.

      No more industrial food production.
      No more freighters grinding between cities.
      No more powered personal vehicles, gas or electric.
      No more internet which consumes more electricity than most developed countries.
      No more fast fashion.
      No more gourmet restaurants. Etc.

      And the question is, would western people rather die than live this way?
      And have we passed the point of this sort of life even being possible? Are we trapped, in other words.

  2. voislav

    What always gets me is how unrealistic people are with regards to technology. Just deploying any sort of technological solution takes 10-20 years, not taking into account development time. You want 50 nuclear plants online by 2040? You got to start funding and building them next year. You want carbon capture? Maybe we’ll have a viable system by 2050. Nuclear fusion? 2080 if we get lucky.

    With Manhattan Project and massive Cold War funding it still took 15 years from the first nuclear reactor to the first commercial nuclear power plant. And no, AI is not going to change that because AI technology we have now and are likely to have for the foreseeable future is not capable of innovation and intelligence, just pattern recognition.

    If anything, all of these will take longer because scientific research and industrial capacity of our society has been diminished over the last 30 years. This is not something that can be rebuilt easily.

    1. The Rev Kev

      You are quite right. These people have no idea of how industry actually works but even worse, no inclination to even learn or see how things are done in the real world. They think that if you throw enough money at a problem, then trained, experienced people & capabilities will magically appear. Reminds me of this German politician who actually left his office to visit where they built artillery shells. What he saw was something that he thought of as WW1 production methods but the guy was confused as he imagined that it was all done by robots and AI, I kid you not.

    2. Revenant

      15 years between first reactor and first power station made me sit up. Surely not!

      Well, only just. The UK brought Calder Hall on line in November 1956, 13y11m after Fermi brought the Chicago Pile to criticality in December 1942.

      So your comment is on the money.

      Calder Hall was approved in 1952 so perhaps just ten years for action rather than completion.

  3. taunger

    It seems that significant U. S. solar and wind limitations could be overcome with enough political will. The two themes I see again and again stymying projects are grid capacity for solar and local opposition to wind. Not to say inflation is not an issue, specifically for offshore wind, but it seems there are viable projects not occurring due to the issues i note, which aremore readily overcome than supply chain problems,

    1. IMOR

      Devil’s advocate: If you’ve got distrbuted small scale solar as a local option, why should your county or community NOT oppose a centralized, environment-scarring solar ‘farm’ and its attendant transmission lines, built so that communities hundreds of miles away don’t need to build their own local solar and distribution nodes or indeed make any changes at all from current habits, usage, and utilty ownership model? And please let’s not compare it to large scale canal/pumping stations, as there isn’t any- and DA would say they’re against any of the major water movement that’s occurred since about 1980, too.

  4. Mikerw0

    Until we come up with a baseload power solution, or politicians will stand behind a big increase in electricity pricing its all blather.

    85% of power generation is baseload and dispatchable, and of that 71% is hydrocarbon. Currently there is no replacement.

    1. heresy101

      It’s coming now. 38% of our portfolio is geothermal baseload power from the Geysers. Now there are a number of companies (some funded by Google) that are using the horizontal drilling techniques of fracking to develop big underground geothermal loops all across the country to provide steam to run steam turbines to generate power.
      Combine geothermal with wind and solar, fossil fuels are dead no matter what Oilprice opines.

      1. PlutoniumKun

        Thats interesting – geothermal has enormous potential (both for power generation and for storage), but I’ve found it hard to find information on projects that don’t have the usual dubious numbers from promoters. If someone can crack the cost aspect, it could be enormous as it can be scaled up far faster than large thermal plants. As you say, drilling technology is key – and its somewhere that the US is still a world leader.

        1. marku52

          It’s more than drilling. The water that comes up is incredibly corrosive. All the installed plant rusts out.

  5. Es s Ce tera

    Had the US not cratered the European economy via Ukraine I wonder where the EU would be with these targets.

  6. caloba

    Advanced pattern-recognition would probably be very helpful in our learning to control plasma in a fusion reactor. But unfortunately you can’t miniaturise fusion to trial solutions and it would be bold to assume that modelling can get you where you need to be. So you have to build huge test facilities (ITER), then spend years trialling it in non-fusion mode – because once it’s powered by fusion everything becomes highly radioactive – and then spend many more years in live fusion-fuelled testing. The chance of any fusion process sending useful power to the grid over the next twenty years is close to zero.

  7. PlutoniumKun

    I find this article very hard to square with what the IEA is actually saying in their most up to date reports. As usual with Oilprice, they take a very selective set of sources for their articles, with their name being suggestive of the bias. The 2023 Outlook report provides a very clear overview of trends in energy use and I’d strongly advise anyone interested in energy to read the entire report (bearing in mind that the IEA has a consistent history of overstating fossil fuel growth and understating renewables growth).

    The reality is that the growth in renewables over the past few years – in particular solar – is staggering – by almost any measure the most dramatic and rapid rise of any power source in human history. Its useful for anyone who thinks otherwise to compare the current rate of roll out with projections of just 10 years ago, or the predictions of David McKay in 2009 with his much quoted ‘Without Hot Air’ book.

    As for the calls for increased oil and gas invention – well, this is standard IEA stuff, and it reflects frustration with the madly cyclical nature of oil and gas exploration (as the smaller sibling of a driller foreman, I grew up watching his regular cycles of unemployment and intense business). In fact, its not oil and gas that is underinvested, but oil, and this is largely a reflection of geological fact – we’ve run out of easy and cheap oil, every remaining reserve is very expensive to access. With gas, there has in fact been an enormous investment in LNG, and as is likely with this, we could well see surpluses over the next few years as the new facilities and terminals come on stream.

    The reality is that coal has peaked – its still growing in some fast growing markets like Indonesia and India, but capacity is being artificially kept high in China (while actual use of coal has levelled off), due to the Chinese wanting sensibly to install surplus generating capacity. Natural gas use still seems set to rise, but oil demand is likely to go off a cliff soon as electricity based transport and domestic heating become far more widespread. The latter is the primary reason the big oil companies are focusing on LNG rather than oil, they see where future demand lies, as much because turbine based gas generation is far better for balancing demand than big thermal plants of whatever fuel source.

    It is of course, a very complex area, but viewed from the big picture, the world is in a much better place in terms of energy and renewable generation than seemed likely even just 5 years ago, let alone 10-15 years. The problem is not that we aren’t changing to renewables too slow – its occurring as rapidly as anyone could have reasonably anticipated. The problem is that we started this process far too late to protect the climate.

    1. heresy101

      While I can’t find the link, but China is building enough solar in the northwest deserts to power all the residential and transportation electricity usage but not industrial. With rapid adoption of EV cars, buses and high speed rail, they are going to need all this solar electricity.
      Forgot the link on development that is occurring in geothermal electricity.

      1. CA

        June 17, 2023

        China’s largest desert transforms into green development powerhouse for Xinjiang

        URUMQI — Once known as the “sea of death,” the Taklimakan Desert, the world’s second-largest shifting sand desert, has become a driving force for green development in northwest China’s Xinjiang Uygur Autonomous Region.

        In recent years, photovoltaic (PV) stations have been constructed, and large plantations of vegetation such as roses and cistanche have emerged on the outskirts of this vast desert, equivalent in size to Malaysia.

        This transformation has not only attracted tourism but also positioned the desert as a flourishing center of sustainable development.


        Under the sun’s rays, rows of PV panels that generate electricity resemble a shimmering blue ocean.

        Tian Juxiong, head of a power station in Lop County, Hotan Prefecture, regularly inspects these power generation systems and monitors their daily operations on the control center’s screen.

        “The southern part of the Taklimakan Desert benefits from low precipitation and ample sunshine, resulting in up to 1,600 hours of electricity generation each year,” Tian said.

        Operated by the State Power Investment Corporation, this station boasts a total installed capacity of 200 megawatts, producing 360 million kWh of electricity annually.

        The station can meet the residential electricity needs of the 25.9 million residents of Xinjiang for around 10 days. Every year, it saves approximately 110,000 tonnes of standard coal and reduces 330,000 tonnes of carbon dioxide and 1,300 tonnes of nitrogen dioxide.

        The project is also equipped with an energy storage system with a capacity of 80,000 kWh…

      2. Felix_47

        I think the Chinese have like 40 atomic power plants under construction and more coming. Ane my understanding is that natural gas is worse for global warming than oil or even coal. Fracking to get the gas releases a lot of methane. There is a lot of leakage along the way and at the turbine level as well. Methane is said to be 60 times more harmful than CO2. So I do not know what all the hype is about LNG. I wonder how much global warming was caused by the blowing up of the Nordstream pipeline. I had to replace my dryer at great cost with an electric one that is incredibly more expensive which pissed me off since it was just at the time of the Nordstream attack and the hypocrisy got to me.

        1. CA

          December 6, 2023

          World’s first 4G nuclear power plant enters commercial operation in E.China’s Shandong
          By Tao Mingyang

          The Shidaowan Nuclear Power Plant in Rongcheng, East China’s Shandong Province, which uses a high-temperature gas-cooled nuclear reactor (HTGR), entered commercial service on Wednesday following a 168-hour trial, according to the National Energy Administration (NEA)…

      3. PlutoniumKun

        In the usual Chinese manner, they are building everywhere very fast, not just the deserts. They had a lot of problems and waste early on as a lot of solar farms were built in areas with low solar potential (due to peculiarities of the incentive system), but recent improvements in grid capacity has meant solar is growing at a mindblowing rate, and if anything is set to accelerate even further. Chinas grid can take a lot of solar without needing much balance, especially where there is a big hydro contribution, although drier conditions in the Himalaya is a threat to this.

        The big issue with China is addressing power use – they are still very dependent on coal powered district heating systems which are a big coal user – likewise Chinese industry is very coal dependent. Both will require very significant investment for a transition. China is still building a lot of coal capacity but I suspect that a lot of this is intended to provide long term resilience for the grid, not to increase total output. Since China has a very large grid and relatively little natural gas, it makes more sense to build up thermal capacity rather than opt for gas as a ‘balance’ in the mix which is usual in most other countries.

        As China is heading for a massive overcapacity crisis in industry, there will be a huge shakeout soon so it will be hard to predict the long term grid mix or overall energy usage mix in even the medium, let alone long term. Its possible that China could engineer a rapid shift to a more modern electric based industry, but there are huge political obstructions to closing down older industry, especially as this is concentrated in the poorer regions. Given the very slow and quite inept response to the debacle in housing, I wouldn’t be optimistic about their ability to do this in the timescale needed. The usual response from Beijing to any problem is ‘build more!’, which works, up to a point, until it stops working. Then you have a big problem on your hands.

        1. Roger Boyd

          China imports about 11 million barrels per day of oil, mostly via sea routes. With the US getting more and more bellicose toward China it has to plan for a possible war and sea blockade. With the extensive electrification of transport (the main user of oil) with high speed rail, local rail, subways, trams, and the increasing fleet of electric cars, buses and trucks, replacing oil demand with increased demand for electricity in the transport sector is a viable counter-balance to the possibility of a blockade. China is also being very aggressive in increasing the efficiency of the internal combustion engine fleet – which serves to reduce oil demand.

          The electrically powered transport infrastructure would be used to full capacity, and probably extra capacity created through more intensive use of vehicles, significantly reducing oil demand. All the extra electricity needed can come from the under-utilized coal power plants. So, those under-utilized coal plants act as a hedge against a sea-based blockade. With its large strategic reserve of oil, China could quite probably defy a sea-based oil blockade for 2 years or more. That period gets longer as new electrified transport capacity is added.

          China is also targeting the “green” sector as a major driver of GDP growth and innovation, which is currently dominated by China.

          China is driving a replacement of coal-fired district heating, and domestic and small-business coal fired furnaces with natural gas – the majority of which comes from overland pipelines and Russian LNG tankers. Also, new coal electricity plants are very efficient and therefore use less coal to produce a given amount of electricity (and emit less greenhouse gases into the atmosphere).

  8. Craig Dempsey

    It sounds like the EU just gave up on reality and told the farmers to go enjoy their delusions a little longer. Reality is coming to settle accounts soon enough. Whether you call it Jackpot, or just collapse, the end is getting closer. Let me put in another plug for Jem Bendell.

  9. marku52

    When I see taxes on private jets or bans on crpyto mining, I will know we are taking climate seriously.

    1. Deniza

      Or when they take into account the carbon burden of bringing 8 million peasants into the the American energy use pattern, building housing for them and giving them cars?

  10. David Mills

    Thorium Molten Salt Reactors are the solution. China has the TMSR-LF1 test reactor going in the Gobi dessert and is proposing to power container ships with them.

    The Collective West has impeded their development with regulatory structures that favour the incumbent nuclear industry players. It is not a technological hurdle, in 1965 ORNL ran the MSR1 test reactor for over 3 years without incident and they had the metalurgy too.

  11. CA

    December 6, 2023

    World’s 1st 4th-generation nuclear power plant goes into commercial operation in China

    BEIJING — The world’s first fourth-generation nuclear power plant, China’s Shidaowan high temperature gas-cooled reactor (HTGR) nuclear power plant, has officially gone into commercial operation, according to the National Energy Administration and China Huaneng Group Wednesday.

    The project, located in Shandong Province and with China owning fully independent intellectual property rights, is jointly developed by China Huaneng Group, Tsinghua University and China National Nuclear Corporation.

    HTGR is an advanced type of reactor that features fourth-generation nuclear power technology, and a key development direction of nuclear power, said Zhang Zuoyi, chief designer of the major program of the HTGR nuclear power station and dean of the nuclear energy and new energy technology institute of Tsinghua University.

    With “safety” as a key characteristic, the reactor can maintain a safe state and steer away from a meltdown or leak of radioactive materials. This capability is maintained even in the event of a complete loss of cooling capacity, without any intervention actions, Zhang added…

  12. Tedder

    None of these half-baked net-zero plans will make a dent in the climate crisis. What is needed is a total revamp—a revolution if you were—of the whole societal structure. Gone is neoliberal finance capitalism, gone is consumerism, gone are vast data networks and AI, gone is industrial agriculture with its innate pollution. If we are lucky, we can preserve some nice ways to get around and some communication and information networks, some great organic farms and gardens, but humanity, especially the collective West, must learn to get by with less, much less. But please remember that most people when they go camping or cruising on a small sailboat and so on recall those adventures as very satisfying and completely fulfilling.

  13. George Prudent

    It is a myth that gas cooking is superior to electric, especially induction stoves. Any perceived benefit of gas is heavily outweighed by the negative health and environmental effects. The American Public Health Association states that gas stoves are a clear danger to health, especially children and older adults, causing/exacerbating asthma and other lung disorders by producing poisonous gases. Methane itself is leaked producing enough GHG to equal that produced by 500,000 cars. They should be prohibited in new construction as some municipalities have done.

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