| EWG Newsletter - May
2017 |
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New Oil Low | Stress
Test for Coal |
Big Business Backs
Decarbonization
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Dear Colleagues
and Friends,
"Renewables come one
way or another. Over the past few
years, they have become economically viable
despite low oil prices,"
says Energy Watch Group
President Hans-Josef Fell in his recent Joule interview. "If
you leave the process to
itself, it may take another 30 years. That is
too late for our planet. If we actively promote
them, we will prevent stock exchange crashes,
wars and natural
disasters." Indeed, renewables have
become unstoppable and disrupt entire
industries, says FT in their very
impressive dossier. Hopes of successfully
combatting climate change are dramatically
improving. There are a lot of good signs of
that: new oil discoveries have reached another
historic low in 2016, large
investors increasingly recognize the
financial risks of climate change, big business
backs decarbonization. You will find
this news as well as studies on 100%
renewables and news from the global divestment
movement in our May
newsletter. | |
Energy Watch
Group (EWG)
is an international netw ork
of scientists and parliamentarians. We
commission research projects and publish
independent studies on global energy
developments. Our mission is to provide energy
policy - and you via this newsletter - with
objective information on global energy
developments! | |
New Oil Discoveries On
New Low
Global oil discoveries
fell to a historic low of 2.4 billion barrels in
2016, compared with an average of 9 billion
barrels per year over the past 15 years,
according to the International Energy
Agency (IEA). The IEA expects a further
drop in investments and in new discoveries and
names two reasons for the trend: low oil prices
and fewer oil projects. As the oil industry is
shrinking, hopes of combating climate change are
improving, writes Climate News Network.
Yet, the IEA apparently
does not want to admit that the heyday of big
oil is over, EWG President Hans-Josef
Fell says. In 2016, new oil
projects, which received a final investment
decision, totaled just 4.7 billion barrels - down by almost a
third from 2015 and the lowest since the 1940s.
This amount does not even cover the global
demand for two months. Although a fast
transition towards renewables becomes
increasingly unstoppable (see the FT's dossier
The Big Green Bang), the
IEA keeps calling for new
investments in oil, deemed to become stranded
assets.
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Climate Change Is
Killing Investments In Big Oil and
Gas
For the first time a
majority of large global investors
has recognized the financial risks of
climate change, the Asset Owner Disclosure
Project (AODP) shows. 60% of 500
world’s biggest asset owners, ranked in the
AODP fifth global index
report, are now taking some action on
climate change. But John Hewson of AODP
warns there is still an ‘enormous resistance’ to
managing climate risks
properly.
Meanwhile, Moody’s Investors Service research
paper warns of significant credit risks
for the oil and gas industry from ‘carbon
transition’. Lower demand for oil and gas due to
climate change policies, changing consumer
preferences and disruptive technology would
potentially lead to stranded assets, Moody’s
warns. This insight comes at an important
time, writes President of Long
Haul Capital Group Patrick Doherty. The
Divest-Invest movement has already pledged for
divestment $3.5 trillion and the Moody’s report
may accelerate a shift further. The Sunrise
Project by Profund found out
that 11 out of 15 major European insurance
groups are already highly involved in the fossil
fuel underwriting sector. Meanwhile, the Norwegian
pension fund Storebrand has launched a
new €1.1 billion fossil free fund and the state
of Berlin has introduced a new
ethical and ecological index
fund. | |
A Stress Test for Coal
Industry and Subsidies in
Europe
The 10 European
countries responsible for 84% of the continent’s
energy-related emissions provide €6.3 billion in
subsidies to coal each year, despite the Paris
Agreement targets and promises to transition to
clean energy, a new report by the
Overseas Development Institute (ODI) reveals.
Former pioneer of the energy transition Germany provides the
highest amount of average annual subsidies (€3.2
billion), despite its pledge to end subsidies to
hard coal mining by 2018, followed by Poland
with €920 million. Only a small fraction (14%)
of those subsidies is used to support workers
and communities to transition away from coal
mining.
 Meanwhile,
redirecting fossil fuel subsidies to clean
energy projects could yield major savings for
climate vulnerable countries while slashing
greenhouse gas emissions, a new report from the Nordic
Council of Ministers found. Subsidies to fossil
fuels are more than enough to fund “the global
energy access gap, double renewable energy and
energy efficiency rates by 2030”, the leading
author of the report Laura Merril said.
 Despite well-known
negative impact of coal-fired power plants on
health and environment, the Eastern European
countries, along with Germany voted with ‘no’ to prevent
costly air quality upgrades or closure as a
result of new EU emission limits.
Meanwhile, Climate Analytics has developed
two science-based
scenarios for coal phase-out in the
European Union and its member states until 2030,
in line with the Paris
Agreement. | |
Big Business
Backs
Decarbonization
A group of leaders from
diverse sectors - the Energy Transitions
Commission - in their new report conclude that halving
of global carbon emissions by 2040 is possible
if governments, investors and businesses start
to act now. Since the target is too low to reach
the Paris Agreement targets, the EWG would not
have covered this news, if not for one real
novelty: numerous business leaders including General
Electric, HSBC, BHP
Billiton and Royal Dutch
Shell have backed the
proposed plan, which includes the use of the
word ‘decarbonization’ multiple times and calls
for electricity production almost entirely from
renewable source by the
2030s.As Trump has not decided
yet, if the US will pull out of the Paris
Agreement, a coalition of 217 large
investors with more than $15
trillion in assets have sent an open letter calling on the G7
governments to tackle climate change. As big
business increasingly backs the transition
towards renewable energy, it is now politicians’
turn. To facilitate the political process, the
100% Renewables Campaign has developed
an interactive toolbox on necessary
steps, guiding principles and tools for
stakeholders worldwide to implement 100%
renewable
energy strategies. | |
Success Stories
Paving Way To 100% Renewable
Energy
The Azraq refugee camp
in the desert region of northern Jordan has
become the first 100% renewable energy camp.
Some 20.000 Syrian refugees have now access to
electricity, thanks to a solar power plant,
built by the U.N.’s refugee agency UNHCR and the IKEA Foundation.
The solar farm construction provided jobs to 50
camp refugees and is expected to reduce carbon
emissions by 2,370 tons per year.
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Electric Cars On
The Way To Become Mainstream In The
EU
After meager growth of
the EV market in 2016, electric car sales are
suddenly taking off in Europe. In
the first quarter of 2017, sales of
battery-powered cars have increased from 16.505
to 24.592 in the EU, a jump of 49%, compared to
last years, according to the European Automobile Manufacturers’
Association. These are still significantly
less than in the US, where about 40.700 units
were sold in the same period. The largest share
of battery-powered cars is still being sold in
France (7.400 sold units, up 23%), with Germany
slowly catching up (5.000 sold units, up 117%).
Whereas more and more car manufacturers,
e.g. China’s Beijing WKW Automotive
Parts Co., invest in invention of new
models, European countries focus
on building fast-charging infrastructure,
according to the Bloomberg New Energy
Finance. | |
Recap: Global
Divestment Mobilisation Week
2017
From May 5 – 13, the ‘Global Divestment
Mobilisation’ campaign by 350.org and Fossil
Free has encouraged people around the world
to call on their institutions and governments to
divest from fossil fuels. Get inspired
by over 260 events in 45
countries and join the ever growing
movement! Meanwhile, the German federal
state of Bremen, the city of Göttingen und UK top fund manager have
also committed to divest their shares from the
fossil fuel industry. For more news and useful
resources on the divestment movement, check
out our news
ticker. | |
Role of Solar PV
Electricity in
Europe
Solar PV is poised to
become the cheapest electricity source in most
European countries during the coming years and
is already competitive in several market
segments. In their new technical report of the
European Technology & Innovation Platform
— Photovoltaics (ETIP-PV) the lead authors,
including Christian Breyer, co-chairman of
the EWG Scientific Board and Professor for
Solar Economy at the Lappeenranta University of
Technology in Finland, examine the true
competitiveness of solar PV electricity in key
European countries for prosumers. As the costs
for solar modules keep dropping, true grid
parity in the rooftop segment will likely be
reached within the next five years without any
subsidies in countries like Finland and
Sweden. | |
100% Renewable
Energy In The Southeast Asia And The
Pacific
 Another study by Christian Breyer
and his team covers a cost optimal 100 %
renewable energy based system for Southeast Asia
and the Pacific Rim region for the year
2030. According to the study
results, a 100 % renewable energy
system could become economically and technically
feasible and more cost competitive than an
alternative based on nuclear sources and fossil
carbon capture &
storage. | |
A Roadmap For
Rapid
Decarbonization
As inconsistencies
between science-based targets and national
commitments on climate change remain alarming,
climate scientists under the lead of Johan
Rockström propose an interesting solution
for rapid decarbonization in their latest paper
for Science. They suggest to introduce
a ‘carbon law’, which would aim
to halve anthropogenic CO2 emissions every
decade in order to achieve net-zero emissions
around mid-century, a roadmap necessary to limit
global warming well below 2°C consistent with
the Paris Agreement.  | |
NGOs Call On
IPCC To Reconsider Authors Of Its Special
Report
Over 100 civil society
organizations, including the Energy Watch Group,
have called on the Intergovernmental Panel on
Climate Change (IPCC) to reconsider their
decision to include senior employees of two
major oil companies ExxonMobil and Saudi Aramco
as co-authors of the IPCC’s Special
Report on the impacts of global warming of 1.5°C
above pre-industrial levels and related global
greenhouse gas emission pathways, in the context
of strengthening the global response to the
threat of climate change, sustainable
development and efforts to eradicate
poverty. ExxonMobil and Saudi Aramco are
the second- and third-largest corporate emitters
of greenhouse gases worldwide. The signatories
of the open letter directed to
the IPCC Chair and Bureau Members requested
“the IPCC to reconsider the selection of
authors, both for this and all upcoming reports,
to ensure that no conflict of interest exists,
and that multiple disciplines, regions and
viewpoints are
included“. | |
EWG in the
Media
The Fall of
Solarworld and Solar Industry in
Germany
Last week, SolarWorld -
Germany’s solar industry pioneer and parent of
the largest U.S. crystalline-silicon solar
manufacturer, had to file for bankruptcy due to the competition
from the Chinese
cheap exports. SolarWorld’s head Asbeck
should have campaigned more for the political
support to the solar industry instead of
focusing on the fight against Chinese
dumping, EWG President Hans-Josef
Fell told the German daily Tagesspiegel. In his opinion, duty
customs against foreign dumping and as result
decline in solar PV installations have
contributed to the downfall of the European
domestic solar PV market. A full statement by
Fell on the SolarWorld’s demise (in German) can
be found here.
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German
Government Keeps Slowing Down The Energy
Transition
 As investments in
renewable energy in China, Africa and South
America are booming, the former frontrunner
Germany is consistently slowing down its
Energiewende. In his latest interview EWG
President Hans-Josef Fell says the German
Federal Government is capping the installation
of new renewable capacities through tenders to
protect fossil fuel energy companies. As a
result, community based energy projects with
their small or medium sized projects cannot
compete with the big companies
anymore. | | | | |
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