A brand new research of three,000 energy corporations throughout the globe has discovered that solely a handful have been slicing their fossil gas capability over the past twenty years.
A lot of the brand new renewable capability being constructed all over the world is being offset by new coal and fuel capability, leaving the worldwide era combine kind of the way it was in 2000.
Even these utilities and unbiased energy producers (IPPs) prioritizing renewables are including additional pure fuel and coal capability, typically. Many corporations face the prospect of fuel era belongings being stranded until carbon seize and storage expertise turns into widespread quickly, in accordance with analysis by Oxford College’s Smith College of Enterprise and the Surroundings and printed in Nature Power on Monday.
The analysis used machine studying to search for developments within the portfolios of corporations between 2000-2018. It recognized 4 clusters that the businesses, massive and small, fell into. Knowledge was supplied by S&P.
Round 75 p.c of the businesses assessed have been ‘passive’, with no substantial change of their power combine. Solely 10 p.c prioritized renewables. Inside that 10 p.c, many continued to additionally add new coal and fuel capability. The remaining 15 p.c prioritized both coal or pure fuel.
“This analysis highlights a worrying hole between what is required to cease international warming, and what actions are being taken by the utility sector,” mentioned Galina Alova, research writer and researcher at Smith College of Enterprise and the Surroundings, in a press release. “Though there have been just a few high-profile examples of particular person electrical utilities investing in renewables, this research reveals that general, the sector is making the transition to scrub power slowly or under no circumstances.”
Talking to GTM, Alova mentioned the outcomes amongst these pushing renewables hardest have been counterintuitive.
“Though corporations may be rising renewables at a quicker charge than fuel or coal, the bulk are nonetheless rising these fossil fuels, predominantly fuel, as effectively,” she mentioned.
That sprint for fuel will increase the chance of belongings being stranded within the occasion of decarbonization being pressed alongside by governments and regulators.
“An enormous chunk of their portfolios would possibly develop into out of date,” warns Alova. “What I am additionally discovering is that fairly a major share of the fossil fuel-based capability has been added within the final 10 years…They’re locking themselves into this mannequin for twenty years. They’re going to need to retire [plants] early or make use of the carbon seize and storage options at a lot larger scale and is now occurring.”
Whereas many fuel additions are touted as a bridge gas towards extra renewables, Alova mentioned the scale of the worldwide fuel fleet far exceeds what is required to stability renewable-based grids.
As of 2018, IPPs owned three-quarters of the world’s non-hydro renewable capability and utilities simply 19 p.c.
What comes subsequent for utilities in transition
In fact, many corporations within the energy sector have solely not too long ago set out on the decarbonization pathway; a research trying on the 2000-2018 interval may be anticipated to overlook a few of that. Nonetheless, Alova additionally break up the 18 year-period into three blocks of six years. Worryingly, even the newest of these three durations doesn’t present a considerable swap to renewables in comparison with the interval earlier than.
Many utilities which have made main decarbonization commitments have little to indicate for it at present, and on an industry-wide foundation, the shift towards renewables is barely discernible, the analysis finds.
Even break up into three six-year durations, there’s nonetheless no proof of a shift to renewables. (Credit score: Nature Power/Galina Alova)
Since 2018, when the dataset used within the research ends, a number of main European utilities have revealed plans to double-down on renewables, together with Iberdrola and EDF. A rising variety of U.S. utilities have set net-zero carbon targets for mid-century, together with Duke Power and Southern Firm. However whether or not — and the way rapidly — they may wean themselves off fuel stays an open query.
Even utilities with aggressive renewables packages nonetheless have massive portfolios of fossil gas belongings. German utility RWE now has 9 gigawatts of put in wind and photo voltaic capability and a improvement pipeline of 24.7 gigawatts, and a said purpose to develop into a “globally main firm” in renewables.
However RWE nonetheless has 14 gigawatts of fuel capability and one other 14 gigawatts coal capability, dwarfing its present renewables base. The coal capability might be phased out by 2038 on the newest beneath Germany’s coal exit plans however RWE has no specific plans for ditching its fuel crops.
European utilities are additional alongside of their transition than these in Asia. Two-thirds of the businesses prioritizing renewables have been in Europe and North America. However even in these areas, Alova warns that many corporations are nonetheless within the very early phases of their transition.
“Sure, renewables capability is rising because of utilities, and particularly to IPPs, however utilities are additionally including extra fossil fuels. That is the important thing challenge right here — that is why it is gradual,” she mentioned.