News Article | May 10, 2017
Despite impressive European wind power investment figures in 2016, new investment will slow in 2017 due to policy revisions and continued technology price declines, says WindEurope and Bloomberg New Energy Finance. In a short note on its website, Bloomberg New Energy Finance (BNEF) this week pointed to figures published earlier in the week by the region’s wind energy trade group, WindEurope, that new wind energy projects in 2016 attracted €43 billion ($47 billion) worth of investment, up 22% over the €35 billion of 2015. Specifically, the WindEurope figures showed that new asset financing for wind power projects reached €27.6 billion in 2016 with a record breaking €18.2 billion in offshore wind, while onshore wind investments dropped by 5%, the first decrease for the sector in five years. However, according to both WindEurope and Bloomberg New Energy Finance, investment levels are likely to slow in 2017. One of the primary reasons for this investment slowdown, according to WindEurope, is the inflation of investment levels over the past two years as projects hurried to reach a developmental-stage wherein they qualified for government subsidies, before governments transitioned to auction-based remuneration mechanisms. With these transitions already in effect in major markets like Germany and France, WindEurope predicts that there will be a lull before the results of these auctions lead to final new investment decisions. “Wind was the largest recipient of power sector investments in 2016,” said Giles Dickson, Chief Executive Officer of WindEurope. “The competitiveness of our industry and reduced risk perceptions have brought in major financial players who are looking to diversify their portfolios. Cost reductions across the industry’s value chain mean investors can finance more generation capacity for less money.” Bloomberg New Energy Finance echoed these sentiments, highlighting the historic results of Germany’s most recent auction, the recently-opened tender for UK offshore wind, and future auctions in the Netherlands, France, and Spain. However, it is also important to note that another reason wind power investments are declining is simply because less money is needed to achieve the same results. “Nowadays, you need less investments to get a similar level of capacity,” Joel Meggelaars, a WindEurope spokesman, in an email to BNEF. “And the high levels of investment in recent years were a result of projects being squeezed through the gate before countries moved away from feed-in-tariffs.” WindEurope nevertheless raised the specter of geographical inequality when it comes to just how widespread the European wind energy revolution has become. “What is worrying is the uneven growth geographically. 80% of new investments came from four countries alone, the UK, Germany, Belgium, and Norway,” explained Giles Dickson. “14 EU Member States did not announce any new wind energy investments in 2016. Many countries struggle to manage the transition to auctions. Only 7 EU Member States have clear policies for renewables beyond 2020 – the unclear policy outlook in the rest makes investors and project developers go elsewhere. The National Energy & Climate Action Plans required under the Clean Energy Package (by 1 January 2019) will be crucial to sustain investments.” Check out our new 93-page EV report. Join us for an upcoming Cleantech Revolution Tour conference! Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech daily newsletter or weekly newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.
News Article | May 11, 2017
2017 could be a big year for the development of microgrids in remote and non-electrified regions and countries, with storage companies and technology behemoths leading the way on installing and investing in storage microgrids and solar for regional and island countries and communities. A new report published by Bloomberg New Energy Finance (BNEF) earlier this month highlighted the growing trend currently in play in the microgrid sector — specifically the combination of solar with storage microgrids. According to Bloomberg’s 2Q 2017 Frontier Power Market Outlook, “Market fundamentals and other developments in 1Q tended to support the economics of small-scale clean energy systems.” Specifically, several large emerging countries reliant upon diesel generators encountered increased diesel prices, and policy developments in India are believed to be further increasing the value of solar with storage microgrids. As a result, BNEF concludes that developing countries are now responsible for purchasing the majority of solar PV exports from China. Chinese PV equipment exported to Asia, Latin America and Africa (% of total exports) The deployment of island microgrid systems has also increased pace, with energy storage companies such as Tesla, Fluidic Energy, and Electro Power Systems continuing to deploy significant capacity in the first quarter. Specifically, Tesla’s island microgrids represent 36% of the company’s total power storage capacity deployed to date. In fact, numerous new project announcements have been made over the past six months, while several existing projects integrated new sources of energy generation and storage. Numerous commitments were made by outside parties — such as the International Renewable Energy Agency, the Abu Dhabi Fund for Development, Schneider and Engie, and Microsoft and Facebook — have contributed to accelerating the development and deployment of microgrids across the Asia Pacific region. Further west, the evolution of distributed energy in India has been given a boost by two separate shifts — the recently announced 2017-18 budget, and a decisive win by the ruling Bhartiya Janta Party (BJP) in parliamentary elections in Uttar Pradesh, the country’s most populous but also one of its poorest states. According to Bloomberg, both of these developments have the opportunity to boost policy support for India’s off-grid and rooftop energy market and improve the reliability of the country’s power supply. Check out our new 93-page EV report. Join us for an upcoming Cleantech Revolution Tour conference! Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech daily newsletter or weekly newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.
News Article | November 16, 2015
The Bill and Melinda Gates Foundation would have had $1.9bn (£1.3bn) more to spend on its lifesaving health projects if it had divested from fossil fuels and instead invested in greener companies, according to a new analysis. The Canadian research company Corporate Knights examined the stock holdings of 14 funds, worth a combined $1tn, and calculated how they would have performed if they had dumped shares in oil, coal and gas companies three years ago. Overall, the funds would have been $23bn better off with fossil fuel divestment. The Wellcome Trust, which is the world’s biggest health charity after the Gates Foundation, would have been $353m better off. The huge Dutch pension fund ABP would have had $9bn in higher returns, while Canada’s CPP would have had $7bn more. “There are billions of dollars potentially being left on the table by these large funds as a result of hanging on to fossil fuel stocks and being underexposed to the $3tn [environmental] sector,” said Toby Heaps, chief executive of Corporate Knights. Separately, a fossil free index from one of the world’s largest providers of financial indexes, MSCI, has just completed its first year with returns 60% greater than its parent index. The Gates Foundation and Wellcome Trust are widely recognised for their important work and have been the focus of a Guardian campaign asking them to divest their large endowments from fossil fuels. Climate change poses the greatest threat to health in the 21st century, according to doctors, and to avoid catastrophic impacts, most known fossil fuel reserves must be kept in the ground. If the world’s governments keep their word and halt global warming, those reserves could become worthless, meaning there are both financial and moral arguments for divestment. Investors managing over $2.6tn of assets have already committed to divestment, including Norway’s sovereign wealth fund, the world’s largest. The Bank of England has also warned of potentially huge losses. “The number one complaint about divestment we’ve heard from fund managers is that it would cost them too much money,” said Jamie Henn, communications director at 350.org, the climate campaign that commissioned the new research. “As it turns out, they are dead wrong. The energy industry of the 21st century is going to look nothing like the fossil fuel industry of the 20th. Institutions that don’t change with the times stand to lose big and, as this new analysis shows, they already are.” 350.org are partners on the Guardian’s Keep it in the Ground campaign. The Corporate Knights research examined how 14 large investment funds would have performed if they had divested from fossil fuels in October 2012. The fossil fuel firms excluded were the top 100 coal companies and top 100 oil and gas companies, ranked by the size of their reserves by Fossil Free Indices, plus utilities generating more than 30% of their power by burning coal, as ranked by South Pole Group. In the analysis, the excluded investments were replaced by increased investments in green companies already held by the funds. Green companies were those getting more than 20% of their revenue from environmental solutions as verified by FTSE Environmental Markets or Bloomberg New Energy Finance, a pool of 1,600 companies with a combined market capitalisation of $3tn. The analysis found the New York City Employee Retirement scheme would have been $1.6bn better off with divestment, as would Australia’s Future Fund. “The period of analysis coincides with a tough market for oil and commodities in general,” said Heaps. “Over the next few years, many oil stocks – if not coal utilities – could jump back, but in the long term, I don’t think a lot of prudent market watchers are betting that the carbon intensive sectors are going to outperform the market in general.” A crunch UN climate summit begins in Paris in two weeks, at which governments are expected to agree a deal to significantly cut future carbon emissions. The Bill and Melinda Gates Foundation Trust does not comment on its investment holdings and decisions. Bill Gates has called fossil fuel divestment a “false solution” and in June announced he would invest $2bn of his own fortune in innovative renewable energy projects over five years. A spokeswoman for the Wellcome Trust said: “The Trust’s long-term investment strategy has led to a total return of over £9bn since September 2008, while returns over both 10 and 20 years up to September 2014 have averaged above 10% per year in nominal terms.” This would allow charitable spending of £1bn a year for the next five years, she said. The director of the Wellcome Trust, Jeremy Farrar, said on Sunday that the impacts of climate change on health “affect us today, never mind affecting our children or our grandchildren. This is not some abstract threat; it is immediate and it is personal.” The MSCI fossil fuel free index replicates its broad All Country World Index (ACWI), but without 124 companies identified as having large reserves of coal, oil and gas. In its first year, to October 2015, the fossil free index produced gross returns of 6.5% compared to 4.1% for the ACWI. The significant outperformance of the fossil free index reflected the troubled year suffered by energy companies, said Tom Kuh, head of ESG indexes for MSCI: “The challenge for investors is to figure out whether what is going on with energy is cyclical or structural.” Kuh noted the upcoming UN climate summit, the coal industry’s troubles of the last five years and recent legal investigations in the US into ExxonMobil and said: “There seems to be more pressure coming from regulators and policymakers on fossil fuel companies because of the role fossil fuels play in climate change.” He said demand for fossil free and low carbon indexes was growing and that the fossil fuel divestment campaign had brought the issue to prominence in the last two years. MSCI will also be providing carbon footprints for all 160,000 of its indexes in 2016. “Carbon is increasingly becoming a factor that investors are looking at in understanding risk in their portfolios,” Kuh said.
News Article | May 17, 2017
Over the past decade, China has been greening its electric power system faster than any other industrial power. But China is also continuing to pump out more greenhouse gases than any other other country. Is its green transformation happening fast enough? Hao Tan and John A. Mathews dig deep into the 2016 data and present an awesome picture of the stunningly large Chinese electric power sector. We have been tracking China’s green shift across the power sector now for several years.1 The 2016 data are now in, released by the China Electricity Council and the National Energy Administration.2 The new data reveal a strong continuation of China’s green shift within the power sector as greening trends at the margin exceed blackening trends. In other words, even as China’s 7 percent annual growth and its growing coal consumption continues to drive the output of the world’s leading producer of greenhouse gases, China’s domestic dependence of power generation on fossil fuels, with their threat of pollution and energy insecurity, is diminishing. The headline results are that in the year 2016, China’s total electric power capacity increased to just over 1.6 trillion watts (1.65 TW), with water, wind and solar sources accounting for 34% — up from 32.5% in 2015. There is a consistent trend here that goes back for more than a decade. Since 2007, China’s dependence on WWS sources has risen from 16% to 25% in 2016 in terms of electric generation, and from 20% to 34% in terms of electric power generating capacity It is difficult to overstate the significance of these trends. They mean that in the largest electric power system in the world, in the country that currently has the highest carbon emissions, there is under way a significant green shift that is comparable to the best in the world. Of particular significance is the fact that this process it is driving down costs of green energy — for China and the world — and becoming the planet’s dominant business for production and export of green technology and green products. Examining the power generation sector, as in previous years we wish to focus on the leading edge (changes in terms of capacity added, electricity generated and investment) as distinct from the system as a whole. In capacity addition and electricity generation, the year 2016 saw it greening faster than it is continuing its black trajectory. The investment in clean energy, however, fell from its level in 2015, due to reasons we will discuss below. In 2016, additional capacity amounted to 125 GW (more than two billion-watt power stations added each week). Of this, thermal sources (mainly coal-burning) added 53 billion watts (53 GW) while WWS renewables sources added 64 GW, well in excess of thermal sources. Of the new capacity added in 2016, WWS sources accounted for 52%, and thermal sources for just 43%. The rest is the addition in nuclear power generation capacity (5%). So while China is still adding a billion-watt power station burning coal each week, it is adding wind turbines and solar farms at an even greater rate. In terms of electricity actually generated, in 2016 China generated 5,990 TWh of electricity (around 6000 TWh or 6 trillion kWh), 5% up on 2015, which is lower than the economic growth in the year (6.7%). In fact, the growth of electric generation has been lower than economic growth in the country since 2014, revealing a new trend that China may start to delink its electricity consumption from economic development. The delinking is partly a result of a change of the economic structure towards an economy more based on service and high-value manufacturing activities, and partly due to growing energy efficiency. Total electricity generated from WWS sources amounted to 1488 TWh (around 1.5 trillion kWh), up 11.4% on the total for 2015. To give a sense of the vast scale of China’s renewables generation, this sum of 1488 TWh is comparable to the total electricity generated by Germany, France and the UK combined.3 Looking at the margin, i.e. at the additional electricity generated in 2016, there was more additional electricity generated from WWS sources (152 TWh) compared with that in 2015, than from thermal sources (102 TWh). China invested US$ 132 billion (885 billion yuan) in new power supply systems in the year 2016, with power generating facilities accounting for US$51 billion (343 billion yuan) and investment in the grid for US$81 billion (543 billion yuan). Within the category of power generating facilities, thermal sources accounted for US$18 billion (RMB 117 billion yuan) of new investment, with hydropower and wind power accounting for US$22 billion (61 billion yuan) and US$13 billion (90 billion yuan) respectively, plus US$7.6 billion (51 billion yuan) of investment in nuclear power. Even without accounting for investment in solar power, the data for which are currently not available, the investment in power generation facilities based on renewable sources (water and wind) far exceeded that on thermal power generation facilities (151 billion yuan vs 117 billion yuan). The bottom line: we see that once again, in 2016 the increases in capacity, in electricity generated and in investment all showed green sources outranking black, thermal sources at the margin – where the electric power system is changing. g. Even as China continues to expand its consumption of energy based on black thermal sources (although in a diminishing rate), its green consumption is growing even more rapidly. But the great question remains: is the greening proceeding fast enough? China’s black electrical system remains a potent source of carbon emissions even as it greens at the margin. And the immediate pollution costs continue to mount. Our analysis aims to elucidate the rate and direction of China’s greening – but it cannot undo the damage already inflicted and the further damage that is likely to ensue as thermal power continues to be generated. Although China is greening its power system at a rate that is unprecedented for industrial countries, it could doubtless further accelerate the process with more concentrated policy and market guidance. As before, we check the data on power generation showing results for 2016 as published by China Electricity Council. The data revealing trends in electric generating capacity, in actual electric energy generated and in investment, are summarized in Table 1. First, in terms of electric power generating capacity, we note that China’s is now by far the largest electric generation system on the planet. It had grown to a capacity of 1.5 trillion watts in 2015 – as compared to 1.17 trillion watts in the US in the same year, and lower levels for EU countries and Japan. The total capacity in 2016 reached 1.6 trillion watts, with year on year growth of 8% — meaning that currently China’s capacity additions still outpace the country’s overall economic growth rate. However, much of the additional capacity is owing to the completion of previously initiated projects in the pipeline. As the investment data indicate, the capacity addition is likely to moderate in the next years, partly due to the change in the Chinese economic structure towards less energy-intensive, more value added economic activities, and also the effect of improvements in energy efficiency. It is China’s overall rate of renewable energy-based electricity generating capacity additions that is so striking. In Figure 1 we show that China increased its generating capacity from water, wind and sun from 20% in 2007 to 35.5% in 2016 – or a 14.5% increase in a decade. The chart shows very clearly the direction in which China’s power generation system is headed. The individual items for water, wind and sun capacity additions in 2016 (and over the decade to 2016) also need to be noted. The addition of 17 GW of wind power capacity was large, as is the cumulative total of 150 GW – although not as large as capacity additions in 2015 (about 35 GW), and not as large as claimed by the Global Wind Energy Council (GWEC). In fact the GWEC claims that China’s wind power capacity additions in 2016 were 23 GW, bringing global installed capacity to 487 GW (nearly half a terawatt). GWEC claims that China added 23.3 GW in 2016 and reached a cumulative total of 169 GW – but the more cautious figure put out by the NEA and CEC in Jan 2017 is likely to be more accurate.4 In any case, the target for wind power capacity to be reached by 2020 as issued in late 2016 by the 13th FYP for energy, at 210 GW or more, seems a safely conservative target and one likely to be exceeded, given that China had already reached a total of around 150 GW by 2016. The buildout of China’s wind power capacity continues to be impressive, as revealed by the growth over the past decade (Fig 2) The capacity of solar power added in 2016 was truly impressive, notching up a gain of 34 GW for 2016, more than doubling the addition in 2015 (16 GW), and reaching a cumulative total of 77.4 GW. (According to GlobalData the world’s cumulative solar PV capacity reached 271.4 GW in 2016, with China accounting for 19.7%.5) The expansion of solar-based electricity is highly significant, especially given there was little solar power generating capacity in the country before 2010. The 13th Five Year Plan for energy in China foresees only a modest 2020 target for solar power of 110 GW – a target that is widely viewed as very likely to be exceeded since it implies less than a further doubling between now and 2020. China’s wind and solar power companies continued to perform very well in international competition in 2016. China has 7 out of the world’s top 8 solar PV companies; and has 4 out of the top 10 onshore wind turbine manufacturers in 2016, according to the latest data from GlobalData (for solar PV companies) and BNEF (for wind manufacturers) respectively. All the top eight solar PV companies are based in East Asia; while most of the top 10 wind manufacturers are European and Chinese firms. Table 2 The top solar PV companies6 and the top onshore wind manufacturers in the world7 As for hydropower, this continues to be the dominant non-thermal source of power in China, aided by gigantic installations like the Three Gorges Dam system, some of which have been criticized for their adverse impacts on riparian ecosystems and local communities. But China is approaching the limits to its hydro power additions, with the year 2016 seeing only 12 GW added, bringing the installed capacity to 332 GW. The 13th FYP for energy foresees a target for hydro capacity in China of 340 GW by 2020 – a target that appears to be realistic, and also reflects the fact that China is approaching its limits of damming rivers to exploit their hydro capacity. (But note that hydro engineering is now a Chinese speciality, and it can be expected that Chinese hydro companies are bidding strongly for hydro projects around the world.)8 China is the world’s largest generator of electric energy. The total generated in 2016 was 5990TWh (or billion kWh), up 295 TWh over the energy generated in 2015. The additional electricity generated was only 5.0% higher than the amount generated in 2015 – a strong indicator that China is indeed decoupling its power production from economic growth. It is of course disappointing that China actually added some coal-burning power capacity in 2016 and generated more thermal electric energy than in the year 2015 – a point we shall return to below. Over the period between 2010 and 2016, however, the total electric power generation grew decisively faster than the thermal electric power generation, with the former increasing by 70% while the latter by 48%. In terms of the total electric power system, China is still much more ‘black’ than green. In 2016 its WWS sources accounted for 25% of total electric energy generated, while thermal sources accounted for 4288 TWh, or 71.6% of China’s total electricity generated. The rate of decline of thermal sources is nevertheless impressive – falling from 82.4% of electricity generated in 2008 to 71.6% in 2016 – an 11% drop in 10 years.9 While the share of fossil fuel-based electric power generation is not declining as fast as the decline in its share in generating capacity (which reached as low as 62.5% of total installed capacity in 2016 and is on target to reach 50% green capacity by the late 2020s) due to the relatively lower capacity factors of renewable energy technologies, the former is still on target to reach a tipping point of thermal electric energy falling below 50% in the early 2030’s. However, curtailment continues to be a major challenge to further expansion of WWS-based electricity generation.10 According to the data from NEA, the total curtailment in wind power generation in 2016 amounted to almost 50 TWh, increasing from 34 TWh in 2015, although the situation improved in the second half of 2016 over that in the first half of the year. The curtailment issue in the solar power sector was also concerning. The curtailment rate in five provinces in China, where about 40% of the country’s total solar PV capacity is located, reached 20%, with 7 TWh of power generation being curtailed. China is taking three main measures in response to the challenge, which have implications for investment in the power sector over the next few years.11 Those include: first, orderly development of renewable-based electricity generating capacity, especially in areas where curtailment is particularly severe; second, investment in long distance transmission capacity of the grid and development of micro gird access; and third, construction of pumped storage stations to improve the grid’s energy storage capacity. On the other hand, the Chinese government has also recently taken dramatic measures to correct the surge of construction of coal-fired power stations in the previous year.12 As per the NEA’s directives, a number of coal-fired power generation projects that had been previously approved, including many that were already under construction, were cancelled or suspended in 2016 and early 2017. Meanwhile, according to a media report, only 22 GW of new coal-fired power generating capacity was approved for construction in 2016, including only 6GW in the second half of the year, a significant drop compared with the 142 GW of coal-fired power generating capacity approved for construction in 2015.13 The data on investment in renewable-based electricity generation capacity in 2016 is disappointing. According to the CEC and NEA, investment in hydropower stations and wind power stations dropped by 22% and 25% respectively from the levels of 2015, and investment in thermal power facilities stayed at the same level with respect to the previous year. These developments reflect a more cautious approach taken by investors facing rising demand of electricity in the country due to concerns that power generated by their renewable energy projects would not be able to be sold in the market when completed, but also partly result from the rapidly falling costs of power generation equipment, especially those in the area of renewable energy such as wind turbines and solar PV. A widely quoted source of investment data is the Bloomberg New Energy Finance (BNEF). The BNEF data on investment in clean energy covers a number of sectors, including renewables, low carbon services such as finance, legal and other services and supports for clean energy, and energy efficiency technologies. According to the BNEF, China invested US$88 billion in the broad area of clean energy (including renewables) in total in 2016, a 26% fall compared with the 2015 level of US$119 billion.14 However, renewable energy investment levels in China can be expected to pick up over the next several years if the targets as set out in the Renewable Energy 13th Five Year Plan are to be achieved.15 According to the Plan, total investment of 2.5 trillion yuan ($US375 billion) on renewable energy is required over the period between 2016 and 2020, including 700 billion yuan on wind power, one trillion yuan on solar, 600 billion yuan on hydropower, and the rest for biomass power, biogas, geothermal energy, solar water systems etc. This would translate to about 500 billion yuan (US$75 billion) of investment per year on average. China has been struggling with its coal dependence for many years now, and the year 2016 saw further demonstrations of central planners’ determination to get off coal as principal fuel source. The 13th FYP for energy released at the end of 2016 set an important standard in setting an overall coal consumption cap of 4.2 billion tonnes (reiterating the cap first announced in the 2014-20 Energy Development Strategy Action Plan). As revealed in Fig. 3 China’s coal consumption peaked in 2013 at 4 billion tonnes, and it has been decreasing each year (although at a rate that moderated in 2016 over 2015), while electricity generated from burning coal has flattened out in the last five years. Source of primary data: The data for conventional thermal electricity generation is available from the China Electricity Council (CEC); the data for total coal production is available from the BP Statistical Review (2016) ‘Statistics of World Energy’; the data for coal consumption for thermal power generation is available from the National Bureau of Statistics, China. As shown above in Table 1, the share of fossil fuel-based power plants, predominantly coal fired stations, in China’s generating capacity has been falling by over 10% a decade, to reach 66% by 2015 and just 64% in 2016. The 5YP for energy released by the NEA calls for the share of fossil fuel-based generating capacity in total generating capacity to fall to 61% by 2020, and that of coal to 55% – which assumes that the current rate of reduction of 10% a decade can be maintained (or improved). On top of this consumption limit, the 13th FYP specifies a target for capping thermal power capacity below 1,100 GW (1.1 TW) – not far above the 2016 level of 1,054 GW of thermal capacity. Consistent with this stringent goal, in March 2016 the NEA ordered a halt to construction of new coal-fired power projects in 15 regions where capacity was in surplus. In April the NEA went further and introduced what is known as the ‘traffic lights’ control system based on capacity analysis region by region. In January 2017 the NEA announced that 104 planned or under-construction coal plants were being suspended, amounting to 120 GW of thermal capacity being decommissioned (at least until 2018).16 The London-based Carbon Tracker Initiative released a report in November 2016 stating that as of July 2016 China had 895 GW of operating coal-burning capacity plus another 205 GW of capacity under construction and 405 GW of extra capacity planned – amounting to investment in unneeded coal-burning capacity of more than half a trillion dollars (CTI 2016).17 Thus the suspensions announced by NEA in January, amounting to 120 GW of capacity being decommissioned, go some way to relieving the situation described by CTI.18 According to China’s 13th FYP for energy, released in October 2016, the share of coal in primary energy consumption is envisaged to fall from its current level of 64% to 58% by 2020, while the share of non-fossil fuel in primary energy shall be at least 15%. Its level currently stands at 13%, which is lower than the level of Germany (about 20% in 2015) but comparable to the level of the US (14% in 2015). The result in 2016 is that China is the world’s largest builder of renewable energy systems by far. Again there are three aspects to the comparative analysis of the scale of China’s domestic energy system compared with that of other leading industrial countries – in terms of WWS capacity, in terms of electricity generated from renewable sources, and in terms of investment. Taking generating capacity first, China is a clear world leader compared with other leading industrial powers, as shown in Fig. 4. China is likewise the world’s leading generator of WWS (green) electricity. As a point of comparison, the US generated just over 4,100 TWh of electricity in 2016, of which fossil fuel-based electricity accounted for 65%, nuclear power accounted for 20% and renewables including hydro accounted for 15%, according to the Energy Information Administration. The WWS-based electricity generation in the US amounted to 512 TWh in 2016, which is about one third of the WWS-based electricity generation in China (1488 TWh). On the financial front, China has again outperformed the rest of the world in terms of investment in clean energy. According to BNEF, of a total investment in clean energy in 2016 of US$287.5, China was stated to account for $87.8 billion (30.6%) while the EU accounted for $70.9 billion and Japan for just $22.8 billion. The London-based consulting firm E3G surprised the world with a chart showing China pulling ahead of the EU in clean energy investment in the decade up to 2015.20There will be great interest in any update that E3G may care to publish in 2017. Alongside China’s emergence internationally as a renewables superpower, the fear remains that China’s globalization is driving further expansion of its coal and fossil fuel activities. The issue was put starkly in an article in ClimateHome: ‘China cuts coal at home, grows coal abroad’.21 Is this really happening? The argument is that Chinese companies and banks continue to drive global coal expansion, with state-owned companies, backed by state loans, building coal-fired power plants across the world. Now there is no doubt that much of China’s internationalization strategy, particularly the infrastructure connectivity projects involved in One Belt One Road, involve further expansion of fossil fuels. There are pipelines, coal-loading facilities, and new coal-burning power plants. It would be surprising if these items were absent from any list of Chinese investments abroad. But the point is surely that these ‘black’ investments, like those involved in China’s domestic activities, are increasingly matched by green investments abroad. The China-backed Asian Infrastructure Investment Bank (AIIB) has been created to drive the financing of many of these projects, and it explicitly describes itself as a green bank, with green projects like the world’s largest solar farm being built in Pakistan with Chinese financing as clear evidence of this trend. India tends to be cited widely as the site of China’s “next” coal boom – yet it is worth noting that India is desperately seeking to build its green capacity, through the National Solar and Wind Power programs, while actually shutting down coal-fired plants.22 In the year 2016 the Indian Energy Ministry announced plans to cancel four proposed coal-fired power plants, having a combined capacity of 16 GW, while the draft National Electricity Plan released at the end of the year concludes that beyond already partially completed plants, India needs no further coal-fired power plants.23 At the same time that India’s dependence on coal is seen as diminishing, its reliance on solar and wind is rising. In the first week of February 2017 the state of Madhya Pradesh staged a public auction for bids to build solar arrays in the Rewa Solar Park, with the winning bid coming in at Rupees 3.59-3.64/kWh (US$53/MWh) – competitive with the best in the world and one that was 25% lower than bids lodged a year earlier.24 India is greening its black electric power system in emulation of what China has done a decade earlier. These developments in the greening of India’s electric power sector are not only of enormous benefit to India, such plans also cast China’s prospects for exporting coal-fired plants to India in a fresh light. 19 The chart for China is based on the 2016 data released by the CEC and NEA; the charts for other countries are based on the 2015 data, available from REN21 (2016)’s report.
News Article | May 15, 2017
Abigail Ross Hopper, CEO of the Solar Energy Industries Association, did not mince words on a call with reporters today about Suniva's pending solar trade case. The petition Suniva filed with the U.S. International Trade Commission last month "poses an existential threat to the broad solar industry and its 260,000 American jobs," she said. "I want to be clear as we go forward...that SEIA is going to lead the fight on this petition every step of the way," said Hopper. Upon recently declaring bankruptcy, Suniva asked the International Trade Commission (ITC) to impose duties of 40 cents per watt on imported cells and set a floor price of 78 cents per watt on modules. The Georgia-based solar panel manufacturer filed under Section 201 of the 1974 Trade Act, which is an obscure part of U.S. trade law that could allow the president to implement tariffs, minimum prices or quotas on solar products from anywhere in the world if the ITC finds "serious injury." The Suniva case -- which the ITC is currently deciding whether or not to take up -- is different from previous trade cases brought by the U.S.-based manufacturer SolarWorld, said Hopper. First, because it covers every single country in the world, and not just China and Taiwan, as in the SolarWorld circumstance. Second, this type of filing does not relate to any wrongdoing on any country’s part. The Suniva case is not about foreign dumping of solar products; it's about one company claiming that it's unable to compete, she said. These elements, taken together, make Suniva's complaint of “a much different caliber and threat level” than previous cases. One company is requesting trade protection for a sub-sector of the solar industry, specifically solar cell production, Hopper continued. This comes despite the fact that other manufacturers and other areas of the solar sector within the U.S. are adding jobs. Those other segments could face a serious blow if the ITC takes up Suniva's petition. Numerous research firms, including Goldman Sachs and Bloomberg New Energy Finance, have determined that the price of solar panels in the U.S. could double and if Suniva's proposed import duties are approved. (GTM Research analysts will also be delving into the issue at this week's Solar Summit.) “If that happens, demand for solar panels will likely drop as solar will become less competitive with other electricity sources and project costs will rise," Hopper said. "That means fewer projects will be built in the U.S. both on rooftops and utility-scale, and jobs across the U.S. will dry up.” “Solar may also appear less attractive to financial firms, due to this type of significant policy risk," she added. On Friday, SEIA wrote a letter to the Secretary of the ITC, registering the group's opposition to the import relief requested by Suniva. The letter argues that the company is not "representative" of the domestic crystalline silicon photovoltaic (CSPV) cells and modules industry, and, therefore, "does not have standing to bring this action." Whether or not Suniva is found to be representative of the entire industry will play a key role in whether the ITC decides to consider the petition. According to Hopper, the fact that Suniva has a Chinese majority owner is not relevant to the case. Rather, the ITC's determination will primarily focus on market share, which is where SEIA believes Suniva comes up short. "They're not representative of the domestic industry as they have defined it," she said. The ITC's ruling on the "representative" question will determine whether or not the government body initiates a full investigation. SEIA's letter goes on to note that the relief sought by Suniva would be extremely damaging, and would undercut, not promote, effective action to address the underlying issue of global excess CSPV cell/module manufacturing capacity. Building trade barriers through tariffs and minimum prices will not bring back domestic manufacturing. Instead, "allies in the effort to align global capacity with global demand will be distracted by the felt need to oppose a U.S. safeguard action that negatively affects them," the letter states. "The best way to deal with oversupply is to let the market act," said Hopper. "The market will act by prices changing and demand increasing.” First Solar, the largest U.S.-based solar panel manufacturer and a SEIA board member, has seen its profits suffer in recent quarters due to an oversupply of solar modules. As a domestic panel maker, First Solar stands to benefit if Suniva wins its trade case. Hopper said that the SEIA board voted "overwhelmingly" in favor of opposing the new duties, indicating there was not unanimous approval. She would not disclose how First Solar voted. She did underscore that SEIA is working with U.S.-based manufacturers to find "creative" ways to shore up that segment of the industry. Possible solutions include R&D advancements and loans programs, or other actions the Department of Energy could take to support domestic panel makers, Hopper said. Meanwhile, tariffs on panels from China and Taiwan remain in place to address unfair trade practices previously identified in the SolarWorld dispute. The ITC will soon announce whether or not it will consider Suniva's request. If it does, the commission will have four months to decide if there's "injury." If injury is found, the ITC will have another two months to suggest a remedy to the president. President Trump will have additional two months to determine what the remedy might be -- he can either accept the commission's proposal, alter it, or determine the proposal is not appropriate. It's possible that the Trump administration, which has made reviving the U.S. manufacturing sector a top priority, could side with Suniva for political reasons. Because it has also expressed support for the fossil fuel industry and baseload power, some believe the administration could use the solar trade case as a way to make renewables less competitive with traditional resources. However, President Trump has also emphasized his interest in creating jobs. And from that perspective, the trade case is a disaster, said Hopper. SEIA's role is to "help this new administration understand that there are these 260,000 domestic jobs at risk, and that the benefits of being able to grab a headline and say, 'We’ve imposed tariffs,' will be vastly outweighed by the competing headline that you have just put hundreds and thousands of workers out of a job.” SEIA is also actively ginning up support from members of Congress and from like-minded organizations, while formulating legal arguments against the petition. At the same time, the industry group is taking a leadership role in addressing federal tax reform and how that could affect solar companies. It's also involved in Energy Secretary Rick Perry's baseload energy study and is participating in state-level debates on net metering and renewable portfolio standards. Hopper invited more stakeholders to help SEIA fight these battles, and to put a face on what the 260,000-strong solar workforce actually looks like. That number "can be easier to ignore if you don’t see the faces and names and stories of the solar workers we’re talking about," she said.
News Article | May 17, 2017
A legal ruling in Scotland has given second life to as much as 2.3 gigawatts worth of offshore wind farms that had previously been halted due to concerns over their impact on migratory seabirds. Back in July a judge in the Outer Court of Session in Scotland revoked consent for four separate wind farms — the 600-megawatt (MW) Inch Cape Offshore wind farm, the 450 MW Neart Na Gaoithe offshore wind farm, and the 525 MW (each) Seagreen Alpha and Bravo projects — due to the potential danger to certain species of migratory seabird living in the Special Protection Areas. However, this week, the Inner House at the Court of Session in Edinburgh, Scotland, overturned the July revocation. Lord Carloway, the Lord President of the Court of Session, penned an Opinion of the Court which dispatched the original judge’s findings, saying that the judge “strayed well beyond the limits of testing the legality of the process and has turned himself into the decision-maker following what appears to have been treated as an appeal against the respondents’ decisions on the facts.” Further, the judge appears to have acted “almost as if he were the reporter at such an inquiry… For this reason alone, his decision on this ground cannot be sustained.” The decision now opens the way for developers Mainstream Renewable Power (Neart na Gaoithe), Red Rock Power (Inch Cape), and joint partners SSE and Fluor (Seagreen Alpha and Bravo) to proceed with their respective developments. According to Bloomberg New Energy Finance, the projects could pave the way for up to £10 billion in investments to develop up to 2.3 GW of offshore wind capacity. Unsurprisingly, the move was welcomed by all developers involved. “We welcome the ruling of the Inner House of the Court of Session in favour of Scottish Ministers, overturning last year’s decision by Lord Stewart,” said David Sweenie, Mainstream Renewable Power’s Offshore Manager for Scotland. “This £2 billion project is capable of supplying all the homes in a city the size of Edinburgh with clean energy. It will create over 500 jobs during construction and over 100 permanent jobs once operational. More than £540 million will be directly invested in Scotland during the construction phase and a further £610 million during the operational phase.” “Red Rock Power welcome the court’s ruling which supports the continued development of a £2 billion investment in Scotland’s energy infrastructure,” added a spokesman for the Project Owner Red Rock Power Ltd. “Red Rock Power also acknowledges the important and continued role that RSPB has in protecting our internationally important wildlife. We will therefore continue to work collaboratively with the RSPB and all stakeholders to refine the project design to ensure that the project can be delivered whilst minimising environmental impacts.” Check out our new 93-page EV report. Join us for an upcoming Cleantech Revolution Tour conference! Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech daily newsletter or weekly newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.
News Article | May 18, 2017
Have you heard the line recently that grid-based battery storage is “coming”, but is not quite “commercial”, but might be in a few years time, or even a decade or two? It’s a common misconception. But if you wondered about the overwhelming response to the recent tenders by South Australia and Victoria for the country’s largest battery storage installations, here’s why: The technology is already in the money. That, at least, is the estimate of Bloomberg New Energy Finance analyst Kobad Bhavnagri, who says that battery storage is not just in the money, it is a long way into the money in states like South Australia, already with a high level of wind and solar and volatile wholesale electricity prices. “We’ve seen the price of battery packs as fallen by 75 per cent by 2010, and our calculations show that will fall by a further 75 per cent by 2030,” due to technology innovation and manufacturing scale, Bhavnagri said. That means that large-scale battery storage is already viable in large parts of Australia. In South Australia, it is offering internal rates of return of around 30 per cent (even without new market rules that will further encourage them), and in Queensland they are also profitable due to that state’s price volatility. NSW and Victoria will follow soon enough. “That is a great story for integrating renewables,” Bhavnagri said. (And we should also point that this value stack for storage does not include network benefits, where battery storage is already seen to reduce cost of upgrades of poles and wires by around 30 per cent). So, what does this mean for the grid? The CSIRO and the Energy Networks Australia gave some insight into this in their report last week, in which they outlined their pathway to a zero emissions grid based around solar, wind and storage, and why it would be much cheaper, cleaner, smarter and more reliable than the current iteration. AGL Energy gave its own version of the future this week in a presentation to a Macquarie Group conference. As we reported earlier, the company once known as Australian Gas Light no longer sees gas as a transition fuel. AGL says the economics of gas-fired generation don’t stack up, because wind and solar and storage are cheaper, and major gas producer Santos this week gave us an insight into why gas has little credibility on the environment front. In his presentation, AGL chief financial officer Brett Redman provided this graph illustrating what has been presume to happen on the left – renewables with gas filling in the gaps – and what will happen with storage. “Fairly quickly, a drive to more renewable energy becomes a conversation about how to time-shift energy using storage,” Redman says. “And once we have the storage capacity to get us to 50 per cent (renewable energy), we will have the technology to go to 100 per cent (renewable energy). “It is just a question of cost and the rate of adoption.” Redman even invited his audience to imagine a 100 per cent renewable energy scenario in the year 2050, just a year or so after AGL closes its last brown coal generator, Loy Yang A. (AGL is working on the assumption that its generator is the last one standing, but the reality is – and it knows this – that Loy Yang A will close well before then). “What we’re starting to think more and more about is, what does such a world look like,” Redman said. Using this table above, Redman suggested that around 200 terawatt hours of renewable energy would be needed for 100 per cent renewables scenario in 2050, which would require around 90GW of renewable generation – around 75GW more than what we have now. And by his calculations, that would require some 350GWh of battery storage. The sums he cited are huge – $150 billion of new wind and solar and $100 billion of battery storage. There would be so many batteries that they would fill some 350,000 44-foot storage containers, and if laid end to end would stretch from Sydney to Perth with plenty to spare. Now, it’s important to note that this is for illustration purposes only. It’s not going to work out like that for a bunch of reasons. Firstly, as Redman admits, the renewables cost estimate is based on today’s prices (of around $2m per MW installed), and these costs will continue to fall dramatically. The second issue is that we may not need that much large-scale wind and solar because we are likely to get a lot more “behind the meter” solar on the rooftops of homes and businesses, paid for by consumers who can save on their bills, as well as a lot of “distributed” storage. Indeed, AGL’s calculations assume only 15GW of rooftop solar by 2050, whereas CSIRO and ENA predict 80GW, providing nearly half of all energy demand. The answer will surely be somewhere in between. The other issue is that we may not need that much storage, let alone battery storage. Demand is likely to shift to meet supply, as new AEMO chief Audrey Zibelman and others have predicted. And while batteries might be good for short-term storage, BNEF’s Bhavnagri notes that it is not so cheap for longer time periods, and so that service will likely come from providers such as pumped hydro, solar thermal, or even hydrogen or ammonia storage for longer time frames. Still, this marks a major turning point in the thinking about the future. Hitherto, the major players were debunking renewables and essentially “talking their book,” which were full of fossil fuels. The stunning cost falls in solar in particular and storage – and the fact that they are now demonstrably and significantly cheaper than new coal and gas – has put the writing on the wall. Now we have the network owners and the major generators and retailers working out how to adapt their business to the inevitable – a switch to 100 per cent renewable energy. It used to be only the environmental NGOs and the think tanks that talked about this – now it is the mainstream energy industry. “The introduction of big storage fundamentally changes the market for electricity and enables the transition to big renewables,” Redman says, adding that the closure of coal will be matched by the building of storable renewable energy. “The bow wave of that change will be all about the cost of storage,” he said. And we can bet it will happen much faster than he is saying. Check out our new 93-page EV report. Join us for an upcoming Cleantech Revolution Tour conference! Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech daily newsletter or weekly newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.
News Article | May 19, 2017
People in developing nations used pay-as-you-go services to purchase more than $41 million in small-scale, off-grid solar products in the latter half of 2016. The number of PAYGO transactions, as they are known, is actually probably far higher, according to the latest semi-annual report from the Global Off-Grid Lighting Association and the World Bank's Lighting Global group. This is the first report where GOGLA has separated out PAYGO from cash payments, which still make up the bulk of purchases. Globally, consumers spent about $114 million in cash on products such as solar lanterns and residential micro-solar systems in the same period. Single lights with a phone charger make up about half of the sales, no matter the payment method. At the global level, about 3.77 million products (including verified and non-quality verified products) were sold in the second half of 2016. Sub-Saharan Africa and South Asia account for approximately 1.87 million units (50 percent) and 1.41 million units (38 percent) sold, respectively. Since sales reporting began in July 2010 through the end of 2016, a cumulative total of 23.72 million quality-verified and 3.48 million non-quality-verified product sales have been reported. The report authors acknowledge the numbers are low all around. GOGLA only includes data from its 55 member companies and products qualified by the Lighting Global platform. The data is self-reported, and some companies do not provide revenue information or complete sales information. If information is missing from sales volumes, it is not included. According to GOGLA and Bloomberg New Energy Finance, the data in the report likely represents about half of all of the sales in off-grid solar products in the markets covered. GOGLA and Lighting Global found that by the end of 2016, more than 85 million people had improved energy access due to these products, which range from about 1 watt to 100 watts. The number of consumers with energy access is actually lower than GOGLA reported previously, but that is due to a change in methodology. The off-grid solar market is a relatively young one, especially for companies that are not entirely reliant on nonprofits and grants, and tracking data on these markets is still somewhat scarce. “The drop in these impact metrics is therefore owed to restructuring our database and not to a decreasing number of products being used actively by households,” explained Dutch consulting company Berenschot, which oversaw the report. “We hope each report will be an improvement on the last in terms of accuracy and quality of data.” The sweet spot for product revenue, no matter the payment method, is 3 watts to 10 watts, with most of the volume sold in East Africa. That wattage includes multiple lights and phone-charging capabilities. These products define Tier 1 energy access for at least one person and up to a household. Within the 3- to 10-watt category, PAYGO sales are 40 percent higher than cash sales. In terms of sheer volume, however, simple solar LED lights of fewer than 3 watts, with or without mobile charging, still dominate sales. Most purchases of unites smaller than 3 watts are in cash, whereas systems larger than 50 watts are, rather unsurprisingly, purchased through PAYGO systems. Although the young market still skews toward small solar LED lanterns that bring homes and small businesses the very lowest level of modern energy access, the impact of the growth of this market in the past few years is extraordinary. GOGLA and Lighting Global estimate the products represented in their report help contribute to the incomes of nearly 2 million people. Households have saved about $200 each, with a 164 percent average increase in available hours of light. As Greentech Media previously reported, one of the most significant outcomes of the proliferation of off-grid solar LEDs is that 20 million dangerous kerosene lanterns are no longer in use. Of course, this is still the tip of the iceberg, with plenty of challenges to scale in the off-grid solar market, not to mention the market for clean cooking options, which solar does not tackle at this point. “With around 1.2 billion people living without access to the grid, spending about USD $27 billion annually on lighting and mobile phone charging,” Koen Peters, executive director of GOGLA, said in the foreword of the report, “the sector still has a lot of work to do.”
News Article | May 24, 2017
This column originally appeared in the WINDPOWER show daily. The U.S. wind industry is proceeding at full steam. After two consecutive years installing more than 8,000 megawatts (MW), wind growth shows no sign of slowing down. The industry just experienced its strongest first quarter since 2009 and the second strongest first quarter ever. At more than 84,000 MW installed, the U.S. has enough capacity to power 25 million American homes. Another 21,000 MW remain in the pipeline, enough to add another Texas to the country’s grid. So it’s not surprising to hear that industry experts are bullish about the next five years. Yesterday, consultants from MAKE, Navigant, Bloomberg New Energy Finance, and IHS Markit gathered to provide their wind energy market forecasts during one of WINDPOWER’s most popular sessions. One thing remained abundantly clear: U.S. wind growth will be robust over the next half decade. While expectations vary to some degree, consultants forecast between 40 and 45 gigawatts (GW) of new wind through 2021. On average this equates to roughly 9 percent annual growth, far faster than the overall U.S. economy. The consultants point to a number of factors driving wind power’s growth. First, the multi-year extension of the production tax credit provides long-desired policy certainty. Second, the industry continues to innovate, integrating new advancements in blade technology, material design, system controls, and other improvements. That drives down wind’s cost, already down over 66 percent since 2009. Experts expect costs to fall further in the years ahead. Third, corporate buyers continue to drive demand for wind power. After comprising 39 percent of the megawatts contracted through power purchase agreements in 2016, corporate buyers continue to contract for wind power in early 2017, with deals from companies like Home Depot and Intuit already inked. Looking at the broader electricity market, continued power plant retirements are expected to boost demand for wind as utilities seek low-cost options to diversify, modernize, and replenish their portfolio. One consultant expects 36 GW of coal to be retired in the next decade. Finally, at the state level renewable portfolio standards will driving wind deployment in certain parts of the country, especially as states consider expanding their programs or adjusting them to encourage offshore wind. Despite the upbeat expectations, the panelists cautioned some barriers could moderate wind’s growth. Historically low natural gas prices and aggressive cost reductions in solar energy will challenge the economic position of wind. Weak load growth across most parts of the country is expected to dampen demand for all power generation technologies as well. Finally, in this bull market for wind it is critical for transmission to keep apace to ensure wind is delivered to market. Regardless, this unprecedented period of American wind power growth should continue.
News Article | May 23, 2017
For policymakers who are interested in job creation, investing in renewable energy is considerably more effective than investing in fossil fuels, writes Allan Hoffman, author of the blog Thoughts of a Lapsed Physicist and formerly with the U.S. Department of Energy. Solar and wind are powerful engines of job creation and economic growth. Job creation is always a safe issue for politicians to address and it played a crucial role in our recent presidential election. Donald Trump achieved his unexpected upset victory over Hillary Clinton by appealing to disaffected workers in normally Democrat-leaning states such as Pennsylvania and Wisconsin. A primary focus of the Trump campaign was jobs in the manufacturing and coal-mining industries, where many workers had been laid off in recent years. Some people have blamed these job losses on Obama Administration policies, including support for solar and wind energy. What are the facts? The fact that renewable energy, mostly in the form of solar and wind energy, is entering the energy mainstream, both in the U.S. and in other countries, is a reality. This is often attributed to their reduced costs and role in reducing carbon emissions. What is often overlooked or given minimal attention is that investment in the manufacture and deployment of these clean energy technologies creates many ‘green jobs’. What data supports this statement? Data for the U.S. was available from the Green Jobs Initiative of the Bureau of Labor Statistics in annual reports for fiscal years 2009, 2010, and 2011. Unfortunately, budget sequestration brought an end to this program in 2013. Today other organizations are filling the gap, e.g. The Solar Foundation’s annual ‘National Solar Jobs Census’, monthly reports from the U.S. Energy Information Administration (EIA), and occasional reports from other non-governmental organizations. On a global basis the International Energy Agency (IEA) has become a source of jobs information, as has the International Renewable Energy Agency (IRENA) through its Renewable Energy and Jobs Annual Reviews. Two highlights of IRENA’s 2016 Review were that (a) global direct and indirect employment in the renewable energy industry had reached 8.1 million in 2015, a 5% increase over 2014, and (b) solar photovoltaics (PV) was the largest renewable energy employer at 2.8 million jobs, an 11% increase over 2014. Solar Foundation data indicated that in 2016 the U.S. solar industry (8,600 companies) employed 260,00 workers. This was an increase of more than 20% for the fourth straight year and more than 178% since 2010. This outpaced the overall 2016 national jobs growth rate of 1.5%. California led U.S. states in solar employment with 100,050 jobs. How do these numbers compare with numbers in the fossil fuel industries? In 2015 workers employed directly in oil and natural gas extraction numbered about 187,000, a decrease of 14,000 from 2014. Indirect related jobs number about 2 million, of which about 40% are at gas stations. Another fossil fuel industry that received considerable attention during the 2016 election was coal mining. It accounted for 68,000 jobs in 2015, continuing its decrease of recent years. Looking ahead, what can we expect? As oil and natural gas prices increase from their recent lows, and fracking is therefore reinvigorated, the number of related extraction jobs should stay approximately level. This should continue as long as no cost penalty is imposed on carbon emissions, and Trump Administration support for maintaining and expanding fossil fuel extraction is strong. Coal is a different story. Long the basis of more than half of U.S. electricity generation, coal’s share of that market is now down to about a third and heading lower. When combusted it is the dirtiest of the fossil fuels, and automation of the coal digging process and competition from fracked and low cost natural gas has signaled the beginning of the end of the coal era and related jobs in the U.S. In addition, utilities are not adding new coal powered systems because their capital and operating costs are higher than for new natural gas, wind and solar power plants (data provided by EIA). What are the prospects for renewable energy and related jobs in the U.S. in the future? As reported by the American Wind Energy Association (AWEA), at the start of 2016 jobs in the U.S. wind industry totaled 88,000, an increase of 20% over 2014. This was made possible by the installation of nearly 9,000 megawatts of new electrical generating capacity across 20 states, an increase of 77% over 2014. Wind accounted for 41% of all newly installed U.S. electrical capacity in 2015, ahead of solar (28.5%) and natural gas (28.1%). This growth will continue both onshore, where essentially all U.S. wind turbines have been installed to date, and offshore as this large resource begins to be tapped. Two recent reports have documented the equally impressive prospects for solar energy’s growth. IRENA’s ‘Letting In the Light: How Solar Photovoltaics Will Revolutionize the Electricity System’ states that “The age of solar energy has arrived. It came faster than anyone predicted and is ushering in a shift in energy ownership.” Bloomberg New Energy Finance reported in a June 2016 report that “..solar and wind technologies will be the cheapest way to produce electricity in most parts of the world in the 2030s..” Already the largest source of renewable energy jobs in the U.S., solar energy will be a major factor in shaping our future energy system and creating new jobs. A recently published book Sun Towards High Noon: Solar Power Transforming Our Energy Future (Pan Stanford Publishing; Peter Varadi editor and contributor) discusses the jobs issue in detail along with other issues, including solar financing, markets, and quality control. What conclusions can be drawn? If a primary national goal is to create jobs in the energy sector, investing in renewable energy is considerably more effective than investing in fossil fuels. Solar and wind are no longer niche businesses, their widespread use addresses global warming and climate change, and their manufacture and deployment are powerful engines of economic growth and job creation. The U.S. Congress must recognize this and put policies in place that accelerate their growth. Other countries recognize this potential and are moving rapidly onto this path, some even faster than the U.S. We must not be left behind as this energy transition unfolds in the next several decades, but we must also not forget the people who will be displaced from their jobs in traditional energy industries. Allan Hoffman is author of the blog Thoughts of a Lapsed Physicist. He is a former Senior Analyst in the Office of Energy Efficiency and Renewable Energy at the U.S. Department of Energy (DOE) and physicist by training. Hoffman is a contributor to a new comprehensive handbook, Sun Towards High Noon, edited by solar pioneer Peter F. Varadi, which details the meteoric expansion of the solar (PV) industry and describes how solar power will change our energy future.