Rise of Decentralized Renewable Energy Is Happening Faster Than Anticipated
Excerpted from Nafeez Mosaddeq Ahmed:
(go to the original for all the supporting links)
“As Nelder writes in his latest column, we find ourselves at a potentially exciting crossroads: the literal death throes of the fossil fuel industry, amidst the inexorable, sporadic rise of a new renewable energy system. Renewable sceptics are simply wrong, obsessed with the slow, centralised economic dynamics of fossil fuels rather than understanding the unique, distributed dynamics of the new.
In Nelder’s words:
- “Underlying the abundance hype over tight oil, tar sands and other ‘unconventional’ sources of liquid fuel has been a dirty little secret: They’re expensive. The soaring cost of producing oil has far outpaced the rise in oil prices as the world has relied on these marginal sources to keep production growing since conventional oil production peaked in 2005… The toxic combination of rising production costs, the rapid decline rates of the wells, diminishing prospects for drilling new wells, and a drilling program so out of control that it caused a glut and destroyed profitability, have finally taken their toll.”
And it’s not just the oil companies enduring “major write-downs against reserves” (Nelder points to… Chesapeake Energy, Encana, Apache, Anadarko Petroleum, BP, and BHP Billiton). Coal-fired power capacity will be slashed by 60 gigawatts (GW) by 2016, “more than double” 2012 predictions, while last year nuclear plants were being retired at an “unprecedented rate” with “more on the way” – largely due to issues with “profitability.”
The core driver behind this fossil fuel death-spiral is:
- “… competition from lower-cost wind, solar, and natural gas generators, and by rising operational and maintenance costs. As more renewable power is added to the grid, the economics continue to worsen for utilities clinging to old fossil-fuel generating assets.”
In Germany, for instance, where 25% of the grid is powered by decentralised renewables (over 50% of which is owned by citizens), the three largest utilities, E.ON, RWE, and EnBW “are struggling with what the CEO of RWE called ‘the worst structural crisis in the history of energy supply.’”
As Nelder explains, the one-way shift to solar and storage systems constitutes a “real, near and present” threat to centralised utilities:
- “Falling consumption and growing renewable power have cut the wholesale price of electricity by 60 percent since 2008, making it unprofitable to continue operating coal, gas and oil-fired plants. Renewable energy now supplies 23 percent of global electricity generation, according to the National Renewable Energy Laboratory, with capacity having doubled from 2000 to 2012. If that growth rate continues, it could become the dominant source of electricity by the next decade.”
A new report by Colorado’s Rocky Mountain Institute suggests that if renewables continue to be adopted this aggressively, “off-grid systems” will prove “cheaper than all utility-sold electricity in the region just a decade out from today.” A Deutsch Bank report late last year confirmed much the same, predicting that solar and renewables are “just at the beginning of the grid parity era.”
The rise of the new clean, decentralised energy system is happening faster than anyone anticipated, and in spite of huge government subsidies for the old fossil fuel industry. But it is merely one step on the ladder to a new post-carbon paradigm.
As energy is the underpinning of a society, the unravelling of the fossil fuel system signifies the demise of the old paradigm. By the end of this century, one way or another, this paradigm will be obsolete. It’s up to us what will take its place – and as the death-spiral of the old paradigm accelerates, so do the opportunities to explore viable alternatives.” (http://www.resilience.org/stories/2014-03-19/the-global-transition-tipping-point-has-arrived-vive-la-r-volution)