Bulgaria is facing some serious challenges: smog, regions that rely completely on coal for jobs, and serious energy poverty. Genady Kondarev takes a look at why it’s so hard for the country to break free of fossil fuels.
Bulgaria is the poorest member of the rich men’s club – a role that became somehow comfortable and self-perpetuating over the last decades. The usual excuse for why renewables and energy efficiency are not possible in the country is the lack of wealth to cover for the initial investment cost. This excuse has kept the energy system frozen in a stage more suitable for the 1970’s than 2018.
The energy system has been on brink of bankruptcy for years. But that hasn’t stopped the government from generously spending billions of euros they do not have on energy adventures, such as keeping inefficient coal jobs, mines and capacities, and paying Russia for the ordered but failed Belene nuclear power plant project.
The energy mix of the country is roughly 40% coal, 35% nuclear, 19% renewables and some co-generation from district heating companies and industrial plant surpluses.
The new Regulation for EU Electricity Market Design will impose stricter emissions limits, sending the country into a panic over how to keep its coal power plants running. Bulgaria is gearing up to approve massive derogations: this is a special situation in which a member state chooses not to enforce EU law due to its internal circumstances (typically a state of emergency).
Recently, the state announced they are buying the carbon allowances for the biggest state-owned lignite power plant Maritsa East 2. The government claims that it is a fair and desperately needed deal to save the industry’s biggest power plant. However, this would not be in line with the EU long-term climate strategy and possibly would also infringe EU state aid guidelines. In a nutshell: Bulgarian Energy Holding is covering the necessary GHG allowances of the state owned power plant to the amount of 300 million BGN (150 million Euros). And this is the bill for 2018 only. 2019 comes with even grimmer perspectives as the price of carbon on the markets is projected to rise even further.
The existence of old polluting power plants is justified with energy poverty and inadequate social measures. Subsidies in cash are provided to over 200 000 households every single heating season to provide for the energy needed to heat the homes of the energy-poor. But these subsidies are used only for the purchase of low quality coal, wood, and inefficient electric heating. These payments are perpetuating the poverty and further aggravate the air pollution in towns as there is no incentive for the households to change their fuel base and heating.
The last census in the country showed that almost 60% of Bulgarian households rely on coal and raw wood for their heating. 40% of the households use electric heating, with an EU average of just 11%. This highlights the systemic deficiencies that have not been tackled for decades. Coal and raw wood are not subject to any safety standards, meaning that it is often of very poor quality and emits sulphur and fine particles which can be deadly. Households that heat with electricity are often very inefficient. The government portrays heating as a zero-sum game: they must keep the price of electricity cheap or people will be forced to move to primitive stoves and burn trash. They do not speak of a third way – energy efficiency in houses and energy efficient heating.
The over-reliance on electricity brings another problem. Although Bulgaria is a southern country, the annual temperature differences are significant. A few weeks of severe winter forces the state to provide capacity payments. These are coming at the expense of all customers and pour into the pockets of power plant operators with dubious reputations. In previous years some of those power plants failed to provide energy when needed because of technical disruptions. Although the consumers paid, they did not get the service they paid for.
Further down the production chain of electricity, things do not look better. The grid system is in a poor state leading to huge losses when energy is transported. The country burns tens of millions of tons of the poorest quality lignite annually. The monstrous Maritsa East Mines are designed to swallow 240 sq km of the most fertile land in the country. The expansion of the operations will lead to the resettlement of two villages in the next years. The mines employ over 7000 workers and produce annually 30 million tons of coal which feeds the four power plants in the complex. That is just over 4 tons of lignite per capita if you divide it to the population of Bulgaria – an invented index that aims to show the significant footprint. No wonder that the per capita ecological footprint of the country is very high for its relatively low GDP.
Maritsa East Energy Complex has led to the mono-sectoral economic development of its entire region: everything relies on coal. The complex is so big that is has become self-encapsulated. People live and work in that regional social and economic bubble and claim to believe that coal will provide for them and their families forever. Speaking of a possible end of coal is heretical there. And so to date there are no specific national or local programs for transition of the coal-dependent regions.
In 2019 Bulgaria, like every other EU member state, will have to finalize its energy and climate plan until 2030. As EU climate ambition has been raised, the logical move for Bulgaria would be to close down soon the most polluting power plants and plan to gradually phase out all coal industry in the next decade or so. This will free a lot of public resources and incentivize investments in energy efficiency, as well as provide incentives for small scale renewables that have been suppressed as a result of heavy bureaucracy requirements. Finally, it will bring predictability, a clear focus and long-term perspective for the investors.
Genady Kondarev is an economist and environmentalist and working with Za Zemiata (Friends Of The Earth Bulgaria). He has devoted his career to promoting clean energy development in the region. Over the years he has worked on projects implementing renewable energy and energy efficiency to advocacy for low carbon development. He has been monitoring the energy sector in Bulgaria for over 12 years, and is currently focusing on problems in its coal industry, promoting a coal phaseout.
Marco te Brömmelstroet, Associate Professor in Urban Planning at University of Amsterdam and head of the Urban Cycling Institute, visited Berkeley with a delegation of grad students studying transportation systems. Known as “The Cycling Professor,” he sat down to talk about how the Netherlands became the bicycling capital of the world and how other communities can (or can’t) follow suit. Ben Paulos asks for details.
What’s so special about cycling in The Netherlands?
As a Dutchman you are not aware of cycling. It is like an American is not aware of cars. It’s just something that is around and you use, and it’s nothing special. It’s like drinking water from a tap. Cycling is just ingrained in society.
On a very personal level, as an 8 year old in the Netherlands you are able to cycle to school in a safe way. No parents need to bring you. This has a tremendous effect on the feeling of autonomy of young children, which could explain why Dutch children are among the happiest in the world. If you have to be transported in the back of the car to every activity you want to do, you are not getting a nice quality of life or sense of control.
On a societal level, cycling has a reciprocal relationship with egalitarianism. Dutch society is quite flat. Even the king or ministers know that it works in their favor to show they are normal. On various targeted occasions they use the bicycle to show that. If they need some attention they ride their bicycles to work, in their suit, but they make sure there is a photograph.
This is called by sociologists “conspicuous non-consumption.” In the Netherlands we don’t show off by consumption but by non-consumption. The king would be on a rickety bicycle, never on a very fancy bicycle. And one made in the Netherlands.
You can also look at it the other way around – If you bike around the city every morning you see and acknowledge other people, and negotiate with all these people. In that process you meet your social environment – famous people, tourists, poor people, all layers of society.
In an Uber, it’s safe, but it makes you isolated, in a bubble going through the city.
You can see it here on campus where students walk around chatting, meeting others with… how do you call that, serendipity? You see someone you weren’t expecting. You meet and greet and hug. That happens a lot on the streets of Amsterdam. As a social scientist that’s what makes cycling very interesting, and a topic I will keep on researching.
What are you working on now?
For many years we had a lot of funding going into research on sustainable mobility, so all the universities were researching it. But none of them mentioned cycling whatsoever.
Suddenly this wave came where the Dutch became more aware of what was happening, and wanted better policy, so they were looking for research on it. There were no researchers interested in cycling, just this crazy guy in Amsterdam (me) who had a bicycle shop. I was a PhD candidate and then assistant professor. I became the go-to guy.
Now four or five years later we have 40 PhD students in the Netherlands in different universities and domains, studying cycling.
The real innovation in thinking is seeing bicycles and trains, or a bicycle fast transit system, as one mode, not separate modes, not a feeder system.
For example, from my university in central Amsterdam I can choose between 200 different trains within a 20 minute bike ride, in all directions and speeds. A car would be a hassle for me now. I have one transit card, I have exact online information, I know which stations have good coffee.
This system has been growing for 15 years but there has been no policy attention. Train policy ends at the door of the station.
People are looking at this in the Netherlands now and getting goosebumps. They are looking at the system, like whoa! Look what we did!
We have 600,000 passengers coming [to the trains] by bike and so major bike parking issues. But some say “look at all the parked bikes at the station, what a problem.” That’s not a problem – just a symptom of something that is hugely successful, despite the fact that we didn’t plan for it. It’s our luxury problem.
So we are working on connecting a bike rental system to the trains and just trying to build more bike capacity at stations, because we are a bit embarrassed. Dutch policymakers don’t like it. It’s a mess. But it’s a beautiful problem to have.
And now you are exporting this knowledge to the world?
We have 150 delegations annually coming to Amsterdam to learn about cycling. The Netherlands is famous for water policy consulting, so we send experts to New Orleans after the hurricane, or protect coastlines in New York. Maybe we should do the same around cycling urbanism.
But cycling itself is not so interesting. You put Ford GoBikes here and then you have bikes. But it’s the entire system and the culture around it, and what it means for city life.
In the Netherlands, 80 percent of the population lives within biking distance from a train station, and has an average of 3.4 stations nearby. We have this hugely flexible system that completely wipes out the car. It has speed, flexibility, built in exercise and sociability, you can go everywhere and get a bike on the other side. That system can work in many places around the world.
But how do you get there from here?
It’s a long term process. In 1992, we had a referendum in Amsterdam to make the entire city car free, which we lost by a few votes. But since then, without talking about it too much, the policy has become to phase out the car.
Now, 25 years later, you see the results. In 1992, the majority of trips in Amsterdam were by cars. Now, they are almost completely gone. The bicycle is around 50 or 60 percent. It wasn’t due to a big claim or policy, just a very gradual change. And it wasn’t a transport policy against cars, but to make the streets more livable.
How do you overcome resistance, since you need to displace cars if you want to use the space for bicycle infrastructure?
True, people see it as their right to park their car in a public space. But we tend to use the wrong language. We say “making it car-free” or removing cars. Instead you can say we are “making it child friendly” and creating more space to be outside.
In the Netherlands, when you say making it car-free, people see it as the exact same street but without cars, and they are against that. But you should show that you can do something different with the street that improves the quality for everyone living there.
Now, if your children want to play somewhere you have to walk them to the playground. Why not switch that logic and put your cars at the playground and put the playground in the street?
But some American cities are just so far away from that model, with so little density.
In some places in the US, I’m willing to give it up and say that European solutions will not work. I can’t see it happening. In these places we need a mind like Elon Musk. I never understood where he came from until I biked along the Tesla factory in Fremont. If this is your living environment then self-driving cars make sense here.
It’s the least worst thing you can do, to get people into electric, self-driving, safe cars. But I’m still not satisfied, because it still means a very poor social fabric, people not meeting each other, people not getting physical activity. There are all these elements that are not solved.
I’m becoming very aware of my naiveté. By traveling abroad, I can see how the bicycle is a very specific and simple way to solve many complex problems.
To tell that story, we’ve made a documentary, called Why We Cycle, that is now traveling the world. It’s a documentary about my daily life, so I look at it as nothing special to see here, but we found that there is a lot to see.
In its report, Renewable Energy Outlook: Egypt, the International Renewable Energy Agency (IRENA) envisages a scenario in which solar becomes the second largest energy source in the country, after gas. If current plans and RE strategies are maintained, however, just 9 GW will be installed by 2030, compared 44 GW. The agency recommends a series of actions to achieve a 2030 renewable energy target of 52%. Emiliano Bellini explains how.
Egypt has the potential to reach 44 GW of installed solar PV power by 2030, according IRENA, which has outlined how the Northern African country could develop its renewable energy strategy, in a new report, “Renewable Energy Outlook: Egypt.
Here, the agency provides two different scenarios suggesting how the country’s energy system could evolve over the next two decades: (i) a Reference case, with a baseline scenario based on current plans and policies; and (ii) a REmap case, based on an assessment of the accelerated potential of renewable energy in Egypt. Under the latter, it urges the government to periodically re-evaluate longer-term energy goals, to reflect the changing market dynamics.
Under the first scenario, the country’s total installed capacity is expected to grow by around 250% to 117 GW, with the majority of growth coming from coal, natural gas, wind and solar PV. Of this capacity, just 9 GW will be represented by solar power generators, however, while coal and gas will have each a share of 20 GW. Wind will occupy the third position, with 18 GW.
If achieved, these targets would enable Egypt to cover around 25% of its power consumption with renewables, which would in turn, also be able to account for 11% of total primary energy consumption.
This growth is expected to be determined by a GDP increase of 119% by 2030, which would also result in energy demand rising by 117%, from 62 Million Tonnes of Oil Equivalent (Mtoe) in 2014, to 133 Mtoe by 2030.
Under the second, and more optimistic, scenario, renewables could cover around 52% of total power demand and 22% of total primary consumption by 2030, thus doubling both percentages under the first scenario. Furthermore, according to these forecasts, solar would become the country’s largest power sources after gas, with 44 GW of installed capacity.
Meanwhile, wind and CSP would become the third and fourth sources of power, with around 21 GW and 8 GW, respectively. Non-renewable electricity sources – mainly gas and coal power plants – would reach an installed power of 61 MW, while total installed power would equal 137 MW – 20 GW more than in the Reference case.
In order to make the second scenario possible, IRENA has recommended a series of actions to “reflect the growing cost advantages and other benefits of renewables.” Among the listed measures there are, among others: constant updates of Egypt’s energy strategy; improving regulatory frameworks; clarifying institutional roles and responsibilities for wind and solar development; bundling renewable energy projects to strengthen risk mitigation and ensure financial viability; conducting comprehensive measurement campaigns for solar and wind potential; and developing plans for local renewable energy manufacturing capabilities.
Egypt is currently deploying solar through the Benban PV complex under an expired FIT scheme, which is expected to see the grid-connection of all of its 1.8 GW capacity by the end of June 2019. In addition to this, the country is also supporting rooftop PV through net metering and more large-scale solar through two new tenders.
Emiliano Bellini is a journalist for pv magazine since March 2017. He has been reporting on solar and renewable energy since 2009. In its previous experience as a journalist, Emiliano has written about EdTech and new language technologies.
This article has been republished from pv Magazine.
While it was once mocked for being about as smart as “farming pineapples in Alaska,” German solar has taken a bite out of traditional energy. With 1.5 million installations nationwide, solar and storage are further impacting traditional generators, says Lee Michael Buchsbaum.
For the first time in five years, in 2018 Germany is on track to reach its annual expansion goal of 2.5 GW. With the goal in sight, German solar industry lobby group BSW Solar subsequently called on the government to reconsider its current unpopular 52 GW cap on support, which at current rates could be reached by 2020.
And expansion rates could be boosted even further once the removal of import tariffs translates into a further drop in panel prices. At the end of October, Germany’s cumulative installed PV capacity since the adoption of the nation’s renewable energy law (EEG) had reached 45.3 GW.
Indeed, according to new figures, Germany added 182 MW of new PV capacity in October, the vast majority of which was small and medium-sized PV rooftops. The new totals are slightly less than September’s total of almost 200 MW.
Reflective of both its growing popularity and decreasing generation costs, earlier this year Germany’s Federal Network Agency (Bundesnetzagentur) held a second joint tender for large-scale solar PV and on-shore wind. As in the first auction of the same kind held in April, only bids for solar projects were awarded a contract. Combined, the Bundesnetzagentur selected 36 PV projects with a combined capacity of 201 MW.
The auction’s final average price was €0.0527/kWh, which is significantly up from €0.0467/kWh registered in the April auction. Bids ranged from €0.0465/kWh to €0.0579/kWh. Overall, 10 projects totaling 65 MW were awarded in the German eastern region of Brandenburg.
German developer Enerparc, meanwhile, won eight projects. Reflective of increased solar energy conversion and falling generation costs, “the joint tender process looks like an additional invitation to tender for solar projects,” it added.
Despite the fact that Germany receives comparatively little sunshine, it has become a surprising global leader in solar power. Led by energy enthusiasts, early adopters drove not just the installation of panels, but the manufacture of them as well. Production really took off after 2008 and for a brief period Germany became the world’s largest manufacturer. Financial support under Germany’s Renewable Energy Act (EEG) allowed generation capacity to grow more than sixfold in only five years and firmly established the technology as a main pillar of the Energiewende.
Nevertheless in 2012, Jürgen Grossmann, then CEO of energy company RWE AG, Germany and Europe’s worst polluter, claimed that supporting solar power in Germany was as smart as “farming pineapples in Alaska.” Five years later, the nation ranked first globally in solar power capacity installed per capita.
Though the nation’s solar manufacturing sector has dramatically shrunk and state-mandated support rates have dropped, an upswing in new industrial installations, the rising availability of home power storage appliances, a growing awareness of the need for clean energy, and other factors has propelled increasing deployment.
Reflective of this, as of December 2018, Germany’s home-mounted battery plus PV firm, Sonnen GmbH, has received prequalification from transmission system operator, TenneT to participate in Germany’s primary control energy market. While it is currently allowed to deliver 1 MW, the next goal is to supply 100 MW as the energy balancing concept is worked out.
Nationwide, Sonnen has sold around 30,000 battery storage systems. While its customers typically consume 70 percent of the power they produce themselves, the batteries help them store power for later use, release it to the public grid, or share it with other Sonnen community members in an online Network.
Sonnen and its partners will combine its nationwide network of residential battery systems into a large virtual storage unit that will, among other services, help compensate for fluctuations in the power grid.
Jean-Baptiste Cornefert, head of Sonnen’s eServices retail unit, told Reuters that the company will now begin bidding in the nation’s primary balancing power auctions by pooling the power generation and storage of its thousands of small customers. “For the first time, a big network of home storage systems becomes a protagonist in the energy market,” Cornefert said. This will place Sonnen directly in competition with 25 German power firms, including fossil fuel dependent RWE and Uniper.
The new conditions that shape Germany’s solar power market also warrant new policy approaches that take into account falling prices for private investors and systemic changes brought by expanding storage capacities, say observers like Volker Quaschning, a researcher at the Berlin University of Applied Sciences. “There needs to be some sort of a new ‘masterplan’ for the Energiewende.”
Though solar power provided less than seven percent of total power consumption in 2017, it has already significantly impacted the power system structure. The rapid increase in capacity has made available huge quantities of electricity in the middle of the day, when both sunshine intensity and power demand usually are highest –profoundly effecting the balance of amount of supply and upsetting longstanding business models.
At peak output times, up to 40 percent of the Germany power mix can come from solar panels.
According to the Freiburg-based research institute Fraunhofer ISE, the output profile of solar arrays and the usual pattern of power demand match so well that older coal plants, which are too inflexible to respond to short-term fluctuations, have become economically unviable. In fact coal plants may no longer operate at a profit at all once solar capacity has reached a certain threshold, solar energy researcher Quaschning says.
So RWE, to borrow from the film “Good Will Hunting,” how do you like those pineapples?
Climate change is becoming increasingly apparent. In 2018, the whole world struggled with droughts, floods and other disasters. Germany also had to contend with systemic distortions, says Paul Hockenos.
Climate change’s new abnormal means reinventing just about everything. Two hotties: agriculture and cargo transport in a warmer world.
2018 was not the first year that the effects of climate change made their presence felt on the continent; scientists have tracked and documented Europe’s gradually warmer summers and outbursts of extreme weather for two decades. But it was definitely the year that Europeans – and Germans above all – experienced it first hand so directly, with repercussions for lifestyle, the food chain, wildlife, and commerce. The upshot is just sinking in: climate change is no longer abstract – and we have to change with it.
The summer of 2018 may or may not have been the hottest on record (some meteorologists claim that July/August 2003 were hotter) but the year is definitely the driest since record-keeping began, particularly in Germany, with drought conditions lasting from April well into November. Rivers dried up, lakes shrank, asphalt roads heaved, forests burned, fish populations died from lack of oxygen in their water, elderly people collapsed, and exhausted livestock was slaughtered before it perished. Next year may not be as brutal, but these blistering summers will happen ever more frequently, say climate researchers.
I caught a glimpse of its destructive force when cycling in the Brandenburg countryside north of Berlin. Even in July, with the worst of the heat wave still to come, the crops languished: half of the sunflowers were torched brown, the others drooping over, heads craned desperately away from the sun. The corn’s growth was stunted, erosion was devouring the parched soil.
Thus far in 2018, Berlin and Brandenburg has experienced about a third of 2017’s rainfall per square meter (300 vs. 854 liter), which will probably be less than 1911’s all-time low of 382 liters. In Lower Saxony, Baden Württemberg, Saxony, and parts of Bavaria, it was even grimmer: large swathes of territory fell into the category of außergewöhnliche Dürre (exceptional drought). Across Germany, it was a disaster for farmers: the potato harvest dropped by 18%, grains yield was down 25%, corn by 47%, and rapeseed by 36%. In some locations, harvests were 50% to 70% less than normal – and in other places nothing was harvested at all.
As of November, 3,700 farms applied for drought aid from government funds, which the federal agricultural ministry stocked up to €340 million. The farmers hope to recover a fraction of their losses – which, though legitimate, is no answer to the problem. Yet, pathetically, it’s the only one the relevant ministry in Berlin has.
Indeed, farmers and experts say that the impact of this year’s extended drought (September and October were dry as a bone) will have serious implications, including for the very near future. Farmers say that there’s no moisture in the soil down to 1.8 meters, and that every square meter of dehydrated soil needs hundreds of liters of water, which will affect what they plant next year – unless a very wet winter replenishes the scorched earth. The water content in the ground soil is too low for autumn plantings, such as rapeseed, which means we already know there’ll be a shortage in rapeseed next year. The price of livestock feed is much higher than usual in autumn and farmers say their feed stocks are lower than ever, which will also push up meat and dairy prices.
The farmers, though, aren’t the only ones who suffered – and now have to think differently about how they will survive in a changed environment. Germany’s rivers dropped so low that commercial shipping along the Rhine, for example, was significantly inhibited; many ships could only carry only 40% of their usual cargos on Germany’s most important commercial waterway. On parts of the Elbe, there was no ship traffic at all. Sandbars never seen before emerged in many places, sometimes revealing undetonated bombs and grenades that had been submerged since Word War II. Gas stations closed their doors because the tankers couldn’t deliver, fuel prices shot up.
Since Germany uses water freight for 80% of its commodity transportation, the biggest cargo clients, including giants such as the chemical conglomerate BASF, are now rethinking their transportation options. Thyssenkrupp, ArcelorMittal and BASF all had to scale down production because of the reduced possibilities for cargo, reported Reuters. The utility RWE ramped down its hydroelectric plant’s electricity generation because of the depleted rivers.
The fact that the farmers and the shippers and industry and the tourists will have to alter their behavior to accommodate a climate-changed environment seems to be setting in (some critics say that German farmers could have, and should have, rethought their crop selection before worse came to worst. The writing had been on the wall since 2003.) The warmer, drier weather implies farmers shifting from water-intensive crops to ones that require less and thrive in warmer regions, such as apples, grapes and plums. These crops actually experienced bumper harvests in 2018. New strategies are under discussion within the German Farmers’ Association for shifting to other produce, keeping soil moist, and halting erosion.
As for cargo, environmentalists have long advocated shifting as much load transport as possible to the more potentially more climate-friendly rail transport — which already runs, in part, on renewable energy. The biggest obstacle to trains carrying more freight, though, is not demand but rather supply: a result of bad management, rail cargo in Germany hasn’t been able to capitalize on the calamity. Nevertheless, BASF is one company is just one company in the process of moving its cargo to trains because of the new undependability of the waterways.
But there’s another catch, too. The steel track rails themselves are affected by such extreme heat. At the heat’s peak, the steel rails expanded and buckled causing Deutsche Bahn to postpone and cancel traffic on certain lines. Rail companies are thus investing in technology that endow the tracks with flexibility to expand without seizing up and cracking.
The take-aways from Europe’s disastrous annus of 2018:
- Climate change is altering our environs and our lives much more quickly and profoundly than we anticipated only recently;
- We’re way behind in formulating climate adaption measures for Europe. Proactive strategies are the order of the day, and not just for agriculture and cargo transportation. This is a huge opportunity for innovation, both in policy terms and for the private sector, and a window to reshape economy and society for the better, sustainably;
- Over the next 25 years, the higher temperatures and the transition to renewable energies will change just about everything in our world. We, and our political elites, have to organize and manage this transition as much to our advantage (or as little to our detriment) as possible – exactly what didn’t happen with globalization.
The 24th Climate Change Conference of Parties (COP24) was meant as a time for countries to review and fix the measures of the Paris Agreement. To have any chance to stay below 1.5 ° C and avoid the worst impacts of climate change, countries must commit to drastic greenhouse gas cuts by 2020. Max Proaño takes a look at goals from Brazil, Mexico, Argentina and Costa Rica.
Energy and climate change in Latin America
Although Latin American and the Caribbean region have contributed relatively little over the years to greenhouse gas emissions, they are highly vulnerable to the effects of climate change. Latin America and the Caribbean only produce 5% of global emissions of greenhouse gases – yet its contribution to global figures is increasing due to the industry and transport sectors.
Multiple studies have shown that over half of the region’s population lives in places with high or extreme climate vulnerability risks. These risks include damage to infrastructure, changes in crop and harvest cycles, and human losses caused by natural disasters.
In Latin America and the Caribbean, the main source of emissions is the energy sector (including electricity and heating, manufacturing and construction, and transport), which accounts for 42% of the region’s total emissions. The energy sector is especially vulnerable to climate change, because its hydropower depends on precipitation.
The transportation sector is currently responsible for more than one-third of the carbon dioxide (CO2) emissions in Latin America, and is the fastest growing sector. The International Energy Agency projects that worldwide CO2 emissions from vehicles will increase by a factor of 2.4 (or 140%) from about 4.6 gigatons in 2000 to 11.2 in 2050. For this reason, urban transport represents a key sector for long-run greenhouse gas mitigation efforts.
Nationally Determined Contributions for Latin American countries
China remains the largest emitter of CO2 worldwide, followed by the US. The Latin American country with the most emissions, Brazil, is the 15th in the world (emitting 486,229 kilotons of CO2 annually), followed by Mexico with 472,017.
Below is a short summary of how Brazil, Mexico Argentina and Costa Rica have committed to reducing their emissions, in Paris Agreement jargon their Nationally Determined Contributions (NDC).
Brazil’s targets have been rated “insufficient” by Climate Action Tracker, meaning that they are consistent with increasing global warming between 2 and 3 degrees. The Brazilian goal is to reduce emissions by 37% by 2025 compared to 2005, and 43% by 2030. Brazil’s main sources of emissions come from the forestry and land use sector: with deforestation reductions since 2005 it has already reached the goal of 37%. Nevertheless, deforestation and resulting emissions have begun increasing again in recent years.
The 2018 elections have moved Brazil further away from increasing its climate action and from fulfilling its commitments under the Paris Agreement. During his campaign, Jair Bolsonaro spoke against climate change and the deforestation of the Amazon.
Mexico proposed to unconditionally reduce combined GHG and black carbon (BC) emissions by 25% below business-as-usual by 2030. Mexico also plans a 40% reduction of GHG and BC emissions by 2030, conditional on certain requirements for global agreement and international support.
Mexico recently reformed its General Climate Change Law to include its Paris Agreement commitments on a sectoral level, as well as its long-term adaptation and mitigation goals, and to establish a national emissions market—which was previously only voluntary. Despite that, Climate Action Tracker also rates the Mexican NDC as “insufficient” and suggests that the country will not meet its emissions reduction targets for 2020 and 2030 and will need to implement additional policies.
The new president of Mexico López Obrador, affirmed that his government would not allow fracking, but in contrast, recently he announced his government plans to reinvest in hydropower and increases oil production by 33% to 2024.
Argentina’s new goals include an unconditional absolute emissions reduction target limiting emissions to a 35% increase compared to 2010 levels (excluding what is sometimes called “LULUCF”: Land Use, Land-Use Change, and Forestry). Argentina has also put forward a conditional target to limit emissions to 369 MtCO2e/a by 2030 including LULUCF (322 MtCO2e excl. LULUCF), which equals an increase of 3% compared to 2010, levels excluding LULUCF).
Argentina’s economic crisis has led to changes in the structure of ministries with the objective to decrease government spending. Included in these changes are departments dealing with climate change. It is unclear whether the structural change will have an impact on climate policy. The Argentinian government promotes renewable energies on the one hand, but at the same time in the last year decided to move forward with the exploitation of oil and natural gas from non-conventional fields, such as Vaca Muerta.
Costa Rica is the only Latin American country with an absolute and unconditional emissions reduction target in its Nationally Determined Contribution (NDC). It aims for a 25% GHG reduction emissions by 2030 compared to 2012, and includes Land Use, Land Use Change, and Forestry (LULUCF). Although Costa Rica will need to implement additional policies to reach its proposed 2030 climate targets, which Climate Action Tracker rate as “2°C compatible.”
As I mentioned above, Latin America and the Caribbean have made a historically small contribution to climate change but they are highly vulnerable to its effects. These and other developing countries will need funding for climate change mitigation and adaption in the coming years.
The next COP25 will take place in Chile, where the main aim will be to thrash out the final elements of the Paris rulebook and begin work on future emissions targets. The most vulnerable countries are demanding stronger efforts from developed countries.
Below is a short summary of how Brazil, Mexico Argentina and Costa Rica have committed to reducing their emissions, in Paris Agreement jargon their Nationally Determined Contributions (NDC).
To help Germany to achieve its 2030 climate targets, Greenpeace Energy has made a unique offer to close several open pit lignite mines and power plants in order to create a space for renewable energy. L. Michael Buchsbaum reveals the details.
In late November, Greenpeace Energy, a German utility with over 130,000 customers and is financially and legally independent of Greenpeace itself, announced they were offering to purchase and gradually take over the lignite open pit mines and power plants of RWE AG in the Rheinische Revier, the lignite mining region west of Cologne, with the intent of shutting them down by 2025.
Combined, these power plants and mines comprise the worst CO2 polluting power sources in Europe. In their place, the clean energy firm would construct a series of wind and solar systems with a total combined output of 8.2 gigawatts on or near the former mining areas.
“What we propose is a huge opportunity for the Rheinische Revier and brings us a big step forward in climate protection,” said Sönke Tangermann, CEO at Greenpeace Energy. “Our concept is financially fair for all sides and designed so that redundancies can be avoided.”
While releasing RWE AG from any long term legal, environmental and financial obligations towards the clean up and rehabilitation of the area, Greenpeace Energy would implement this expansion within the framework of a citizen energy concept, in which citizens can participate privately or indirectly via energy companies. Municipal corporations and private companies would also be able to get financially involved.
In concrete terms, Greenpeace Energy proposes to decommission the Hambach opencast mine and the six oldest and least efficient power plant units by 2020, the nearby Inden mine in 2022 along with six further power plant units, and in 2025 close the Garzweiler Mine along with the last three lignite burning units.
In total, the price amounts to about 384 million euros,” said Fabian Huneke of the Analysis Institute Energy Brainpool, which has calculated the cost-effectiveness of the project. Greenpeace recognizes that initially their plan hangs on the profits that could be realized with the lignite power plants on the electricity market until they, because of rising CO2 prices in the near term, would become unprofitable.
While some criticize Greenpeace’s offer as unrealistic, the alternative—business as usual—includes RWE belching vast quantities of greenhouse gasses into the atompshere while ripping up the rest of the Hambach Forest and several neighboring towns and villages. Afterwards, their 40-year plan includes creating a pair of vast lakes filled with billions of gallons of water piped in from the Rhine River (which will be problematic considering the droughts coming due to climate change). In that context, which plan makes more sense?
To usher in their plan, Greenpeace Energy has established a number of new companies for the upcoming tasks including an operator cooperation implementing the Citizens Energy Concept. This firm will construct the wind power and photovoltaic systems with an output of 3.8 and 4.4 gigawatts, respectively, on all suitable former open-cast mines. The green power plants will generate more than 15 terawatt hours of electricity by 2030–a sizeable amount, but in fairness, only around a quarter of what the Rhenish lignite currently supplies.
Though obviously less than current production, power generation from the lignite plants is already set to decline steadily through the early 2030s, falling below the projected level of the citizen energy plants Greenpeace is planning by 2040.
Construction of the entire replacement renewable system by Greenpeace Energy would cost around seven billion Euros and constitute the largest renewable energy project in Europe.
With so much work to be done, the company would contract all employees leaving the RWE lignite division through an employment company. These workers would then be involved in power plant decommissioning and renaturation of the open pit mines. Other workers would be retrained for new careers in renewable energy and other industries.
The proposed employment company would seek to receive funds to finance the structural change in the region from the public structural fund already being proposed by Germany’s Coal Commission. “The project can act as an initial spark for the transformation of this traditional energy region into an energy transition model region,” said Prof. Dr. med. Bernd Hirschl from the Institute for Ecological Economic Research (IÖW).
Vital to the health of the planet, implementing Greenpeace Energy’s plan would result in roughly half a billion fewer tons of CO2 compared to RWE’s current planning, as calculated by the Forum Ökologische-Soziale Marktwirtschaft (FÖS). This would save social costs resulting from climate damage amounting to around 60 billion euros. As early as 2020, emissions will fall by around 13 million tonnes of CO2. By 2030, 338 million tonnes of CO2 will be saved.
In other words, this plan would help put Germany back on track to meeting its 2030 climate goals—currently very much in danger.
Unsurprisingly RWE rejected the offer almost immediately. “You cannot really take the Greenpeace offer seriously,” RWE said in an emailed statement to the Montel news organzation, arguing the proposal was detrimental to the interest of the firm, as well as regional and federal German authorities, which would be asked to finance part of this deal.
As the take-over plan continues to gain media attention, another arm of Greenpeace in coalition with several farming groups and other organizations, has filed suit against the German government for failing to maintain its obligations and simply “giving up” on trying to achieve cuts in greenhouse gas emissions set out under the country’s own climate target, as well as under European law.
While pledged to take action to slash CO2 emissions by 40% by 2020 compared to 1990 levels, earlier this year the government admitted that it was now expecting to achieve only 32%. This shortfall of 8 percentage points is equivalent to about 100 million tonnes of carbon dioxide—indeed Greenpeace’s plan of shutting down the nation’s filthiest lignite plants could help Germany back towards that initial course.
The Czech government follows the example of the German RWE-Innogy to legitimize the split of CEZ into nuclear and non-nuclear parts. Jan Ondrich takes a look.
In my previous blog I wrote about possible funding for a new nuclear plant in the Czech Republic. One of the possibilities presented by the Czech government draws inspiration from division of German utilities into parts exposed to the carbon risk and carbon-free units.
It seems the government is more inclined to follow the example of RWE-Innogy. The government wishes to offer minority participation of 49% in the new daughter company to investors, and increase its shareholding in the parent company to 100%. The government is considering the following options for the split of the company.
Option One: Nuclear vs other
In the first option the government would control 100% of nuclear assets, including the new nuclear project. The remaining assets, such as thermal generation, hydro, grid, renewables and sales would be put into a special purpose vehicle in which the state would own 51%. Table 1 below summarizes assets owned by the two companies and their respective earnings in comparison with the current status.
If the government chose to split CEZ into nuclear and non-nuclear parts, the minority shareholders may not necessarily be worse off when considering their share of the company’s earnings. Currently the minority shareholders have a claim on 30% of the company’s earnings, that is CZK 16.2 billion (around $7.12 million). After the split their share of the company’s earnings would slightly increase to CZK 17.5 billion ($7.7 million USD).
However, the risk profile of cash-flows would change fundamentally. The non-nuclear company would be more exposed to commodity risk, in particular to carbon prices (which are currently rising atmospherically). The carbon intensity of the non-nuclear part of the company would almost double from its current 0.44 tones per MWh to 0.8 tons per MWh. This would make the non-nuclear company one of the largest emitters of carbon per MWh in Europe, exceeding both RWE and Uniper.
Option Two: Conventional power vs other
The second option presented by the government is for a company (100 percent owned by the state) which would encompass nuclear, conventional and hydro generation. The grid, sales, energy efficiency service company (ESCO) and renewables would be owned by a daughter company in which minority investors would own a 49% share. Table 2 below summarizes key statistics for this option.
In this option minority shareholders would be worse off with respect to their share of earnings, which would decrease to CZK 14.5 billion ($6.4 million USD). However, the overall risk of the company would decline. The company would be exposed to few commodity risks as the vast majority of generation assets would be carbon-free renewables, and more than half of the company’s earnings would come from regulated power distribution business.
This would probably lead to changes in the shareholding structure of minority investors. Those investors seeking higher returns through exposure to commodity prices may sell out, but on the other hand the company could become attractive to pension fund types of investors seeking stable returns with little exposure to commodity risks.
It appears that the second option would be a better way of dividing CEZ if the government ever decided to push the button and start the process. The new daughter company would own stable, regulated power distribution and mostly renewable and co-generation energy sources with almost no exposure to carbon risks. As a result, the company could attract different class of investors who would not have invested into CEZ previously because of its nuclear and coal assets. Those investors, such as pension funds, have lower risk requirements than investors seeking exposure to power generation assets, which may decrease the overall cost of capital for the company.
To split the company into carbon-intensive and carbon-free parts appears to make sense especially as the cost of carbon has been increasing. In Germany, for example shares of Innogy overperformed those of RWE over the past year (Innogy up by 5.86%, RWE down by 15.03%). Likewise, shares of EON have overperformed those of Uniper, albeit both are down this year (EON down by 8.56%, Uniper down by 10.16%).
2018 saw temperatures, natural disasters and CO2 emissions hit record highs. Meanwhile, our world leaders are procrastinating, says Michał Olszewski.
Each new climate summit is sadder than the last.
The clock is ticking. We are already well aware of what needs to be done to stop climate change. Each passing year brings a mass of evidence of how devastating the effects of global warming will be … sorry, are. This year’s delegates should have observed a minute’s silence for the victims of the fires that devastated California. The state’s years of drought, high temperatures and constantly falling water table led to one of the largest post-war ecological disasters in the United States.
There is a paradox that politicians meeting at successive climate summits are extremely reluctant to mention. On the one hand, our knowledge of climate mechanisms is growing exponentially, and successive IPCC reports clearly show the direction in which we should be heading. On the other hand, global CO2 emissions are growing every year.
The detailed “Global Carbon Project” report leaves not even the slightest illusions on the subject. Since the beginning of the 21st century, emissions have been growing continuously (though at different rates), with a temporary leveling off in 2014–2016. This year and last saw rising emissions again. At the same time, the average temperature is increasing year on year. Warm … getting warmer … hot!
This glaring contradiction is (at least officially) spoken about with extremely reluctance. The reason is simple: politicians and negotiators would then have to admit that these series of meetings are primarily an act of diplomatic procrastination, a delaying tactic. The fear of the economic consequences of firm decisions is greater than the fear of the consequences of global warming. But nobody will just come out and say it. This is why the Chinese – masters of diplomacy – have for years taken all the top prizes in emitting CO2 while at the same time admitting that a global reduction in emissions is needed.
So what is the way out? For as long as I can remember, climate summits end up announcing … the next climate summit, where binding decisions will definitely be made.
This time is no different, with one exception. I am thinking of the speeches by leading Polish politicians who, by all indications, have chosen to abandon the rules of diplomatic games and squarely voiced their frank opinions on the fight against global warming. In his speech, President Andrzej Duda repeatedly avoided the truth, saying, among other things, that there are enough coal resources for Poland for 200 years, that we are an energy-sovereign country, that greenhouse gas emissions in Poland are falling, that burning coal does not stand in opposition to reducing emissions.
I am not going to mention each of these misunderstandings, mistakes and outright untruths. It is clear, however, where they come from. Poland’s position is as follows: we will continue to base our economy on coal and it’s nothing to do with you. Let others take care of climate protection; in Poland, our business is our own. If I were a representative of the drowning state of Kiribati, I would have taken the host’s position as a slap in the face. Probably the only one to go further in denying reality was Trump, who advised the residents of fire-ravaged California to … rake leaves.
I can’t exclude the possibility that Andrzej Duda was saying out loud what many national leaders will only say in the privacy of their offices. For climate negotiations, however, such formulations are devastating, as they show that there are countries that only want to play a blocking role in the negotiations. And what’s more, they are very happy in that role.
So, see you at the next climate summit. The next one is apparently going to be really decisive.
As delegates from around the world met in Katowice, Poland at the COP 24 Climate Summit, it’s clear that renewable energy is getting cheaper and being adopted faster than ever before. However, emissions continue to rise as investors keep pouring money into coal and other fossil fuels. L. Michael Buchsbaum takes a look.OP24: Governments should take immediate action to reduce CO2 emissions while mining coal (Public Domain)
Ahead of the conference, several studies were published that suggested global emissions were still on track to rise for a second year in a row. The Global Carbon Project’s report, titled “Global Energy Growth Is Outpacing Decarbonization,” appeared on Dec. 5 in the peer-reviewed Environmental Research Letters.
More detailed data was published simultaneously in Earth System Science Data. Led by Stanford University scientist Rob Jackson, it estimates that global carbon dioxide emissions, mainly from fossil fuel sources, will reach a record high of just over 37 billion tons in 2018, an increase of 2.7 percent over emissions output in 2017. That compares to 1.6 percent growth a year earlier. Moreover, emissions from non-fossil sources, such as deforestation, are projected to add another 4.5 billion tons of carbon emissions to the 2018 total.
While emissions could have been worse without the increases in renewables, energy demand is still outpacing growth in both renewables and energy efficiency.
Renewables growth strong in 2017, 2018
2017 was characterized by the largest ever increase in renewable power capacity, falling costs, increases in investment and advances in enabling technologies, according to REN21. Renewable power generating capacity saw its largest annual increase ever in 2017, raising total capacity by almost 9% over 2016. Overall, renewables accounted for an estimated 70% of net additions to global power capacity in 2017, due in large part to continued improvements in the cost-competitiveness of solar PV and wind power, and estimates show that number is sharply increasing through 2018.
Solar PV led the way, accounting for nearly 55% of newly installed renewable power capacity in 2017. More solar PV capacity was added than the net additions of fossil fuels and nuclear power combined. Wind (29%) and hydropower (11%) accounted for most of the remaining capacity additions. In many places, according to other studies, new wind farms are now cheaper to build than keeping an existing coal fired power plants running.
Institutions send signal for coal phase-out
Fearing the cost of inaction on climate change, a group of institutions managing $32 trillion issued a stark warning during COP24, demanding that governments make immediate steep cuts in carbon emissions while phasing out coal.
Without a major course correction, they warn the world will face a financial crash several times worse than the 2008 crisis. Including some of the world’s biggest pension funds, insurers and asset managers, they are calling on governments to end fossil fuel subsidies and introduce substantial taxes on carbon. S&P Global, historically an influential source for fossil fuel investors, also published a report looking “at the economic implications of climate change, why progress in reducing our emissions has been slow, and ways policymakers and markets can still act to mitigate global warming” while advocating for a more aggressive strategy going forward.
“The long-term nature of the challenge has, in our view, met a zombie-like response by many,” said Chris Newton, of IFM Investors that manages $80bn and is one of the 415 groups that has signed the Global Investor Statement. “This is a recipe for disaster as the impacts of climate change can be sudden, severe and catastrophic.”
Insurers are growing increasingly worried that they won’t be able to cover losses from increasingly worse climate change fuel events. Investment firm Schroders said there could be $23tn of global economic losses a year in the long term without rapid action. Put into perspective, this permanent economic damage would be almost four times the scale of the impact of the 2008 global financial crisis. Standard and Poor’s rating agency also warned leaders: “Climate change has already started to alter the functioning of our world.”
Another investor demand on governments is to introduce “economically meaningful” taxes on carbon. Most are below $10 per tons, but needed to rise to up to $100 in the next decade or two, the investors said.
Who is still investing in coal?
Other reports released in time for the UN summit show that several major US, Chinese and Japanese financial institutions are still unabatedly pouring money into new coal plants.
According to Coalexit.org, since the Paris agreement was signed in 2015, some $500 billion has been sunk into such investments helping put the IPCC’s target out of reach. Since then over 92,345MW of new coal power plants have started operating. This is as much as all of Japan’s and Russia’s coal plants put together (Coal Swarm). What is even more shocking, another 670,000 MW are currently in planning or already under construction in 59 countries.
Just this year, the research identifies 1,211 institutional investors with a total investment of US $139.4 billion in coal plant developers. These are investments held by pension funds, insurance companies, mutual funds, asset management companies, commercial banks, sovereign wealth funds and other types of institutional investors.
The research finds that the largest seven investors are responsible for 30% of the investments in the 120 coal plant development companies (as identified by urgewald in October 2018). The so-called“Dirty 30” institutional investors together account for 57% of investments in 120 fossil fuel companies. To search this year’s finance data click here.
The largest single offender is unsurprisingly the US-based BlackRock, which invested over $11 billion in coal and other dirty sources. Two other US-based groups, including Vanguard ($6.2 billion) and Capital Group ($4.2 billion) made the top 10. As emissions rose sharply in the U.S., it was no surprise that President Trump sent only a small delegation to Katowice, mainly to officiate a ludicrous “Clean Coal” side panel that was mostly attended and disrupted by protestors.
Plans for a new nuclear power plant in Czech Republic are currently on the brink of collapse. Jan Ondřich explains the remaining options.
The Czech government still remains hopeful that it can start construction of a new nuclear power plant. But the Czech utility CEZ, which is listed on Prague stock exchange and in which the government holds 70%, will not be able to build such a plant without some form of a state guarantee – the investment cost may easily reach a level of current market capitalization of the whole company, that is some USD 200 million.
The government has considered various options, such as funding with the state budget, or the British-style contract for difference. This style of contract, which stipulates that the seller pays the buyer the difference between the value of an asset and the value at its contract time, means that when the market price for electricity generated by a CFD Generator (the reference price) is below the Strike Price set out in the contract, payments are made by the company (see diagram below).
The contract for difference guarantee has been rejected outright by Prime Minister Babis when he was heading the finance ministry in the last government. This has left the Czech government stuck between a rock and a hard place: the litigation risk from minority shareholders if the government ordered construction of the plant irrespective of its economic impact, and the threat that direct fiscal help can amount to illegal state aid under EU competition policy.
In the end the Czech government has only a few options if it wishes to go ahead and build the plant with recourse to the state balance sheet.
One option put forward by the Ministry of Industry and Trade is for the Czech state to set up a new special-purpose vehicle company of which it will own 100%. This company would acquire the new nuclear project from CEZ. In order to capitalize the company, the Czech state may sell a minority share to CEZ itself, to the EPC contractor or to other third-party investors.
This arrangement would enable the Czech state to raise its equity contribution by issuing bonds backed by the state budget. In addition, the Czech state could guarantee loans lent directly to the SPV by providing a parent-company guarantee – the lenders would have recourse directly against the state budget in case the SPV become insolvent. Such structure could enable the state to fund a new plant even without price floor mechanism if the lenders were comfortable enough with recourse to the state budget. However, it is unlikely that the state would find an equity investor for the minority share without guaranteed power price offtake since payback for the equity investor would solely depend on power price.
Another option proposed by the ministry draws inspiration from splitting of a German utility E.ON. In this scenario CEZ would be divided into two parts. Existing shareholders would be left with conventional power generation (a sort of Uniper), while the state would own carbon-free portfolio – that is renewables (mostly large hydro in the Czech Republic), grid and nuclear generation. The state-owned part of CEZ would then be capitalised through a state budget and would be able to borrow against a parent company guarantee provided by the government.
This scenario would also enable the construction of the new plant without power price guarantee if the Czech state was willing and able to provide enough equity for the construction and the lenders would be comfortable with the parent company guarantee. Just like in the first option, the government would find it difficult to attract co-investors without a firm guaranteed power price floor.
The “splitting” scenario presents one additional challenge – that is agreeing with minority shareholders on relative valuation of the two parts of CEZ. The state would end up owning the part of the company which has been generating the most shareholder value – the grid and the legacy nuclear assets. Minority shareholders would be left with largely lignite-fired generation fully exposed to the double risk of carbon and power prices. The cost of settling with minority shareholders would have to be included in the cost assessment of the new nuclear project.
It remains to be seen how the state can fund its new nuclear plant, and what the costs will be for taxpayers. In any case, it would be far cheaper to invest in renewable energy in the long run.
Portland, Oregon, will take $30 million a year from large corporations and spend it on climate protection. Support for the city’s most vulnerable populations is at the heart of the plan. Ben Paulos outlines planned initiatives.
Voters delivered a strong rebuke to President Donald Trump at the polls in early November, with Democrats flipping control of the US House of Representatives and gaining seven state governor seats.
This “blue wave” is likely to lead to gains in clean energy and climate policy, since the issues have become increasingly partisan, and increasingly the domain of the Democratic Party.
But voters also spoke for themselves on climate issues, through state and local ballot initiatives. While overall results were mixed, a new clean energy fund in Portland, Oregon, is a bright spot, and potential harbinger of things to come.
State roundup: mixed results
The 2018 campaign was notable for the number of candidates explicitly running on clean energy issues. Sean Casten, cofounder of an industrial heat recovery business, rousted incumbent Peter Roskam in Illinois, while New Mexico governor-elect Michelle Lujan Grisham ran a TV commercial showing her climbing a wind turbine.
Voters weighed in on a number of state and local ballot measures to promote renewable energy and cut oil and gas drilling. The results were not all good: a carbon tax failed in Washington state, limits to oil and gas drilling failed in Colorado, and a 50 percent renewables mandate failed in Arizona.
On the positive side, Florida voters limited offshore oil drilling, California voters rejected a repeal of a gas tax increase, and Nevada voters took the first step for a 50 percent renewables mandate (they will need to approve it again in 2020 to amend the state constitution, unless the legislature passes it in the meantime).
The Portland Fund
Perhaps the brightest result is approval of a local clean energy fund in Portland, Oregon. By a 65 to 35 margin, voters imposed a 1 percent revenue tax on businesses that do over $500,000 in local sales and $1 billion in national sales per year. Sales of basic groceries, medicines, and health care services are exempted.
While hundreds of cities and elected officials have made pledges and plans to cut carbon, only a handful have earmarked funding to take action. Boulder, Colorado voters approved a “climate action tax” in 2007, raising $1.8 million per year to pay for energy efficiency programs. Boulder is in the midst of a hostile takeover of Xcel Energy’s local electricity service, to create a new city-owned utility.
In May of 2018 voters in Athens, Ohio approved a “carbon fee” of about $1.70 per month on their electric bills to pay for clean energy programs, like putting solar panels on local schools.
But the Portland measure is the biggest by far, raising an estimated $30 million per year for the city of 650,000.
Opponents of the measure, organized as the Keep Portland Affordable Political Action Committee, argued that it will cost more like $79 million, which would be passed on to consumers. While opponents didn’t deny the importance of action on climate change, they pointed to a state program that already funds clean energy programs, and emphasized the rising cost of living in Portland, a booming community with rapidly rising housing prices.
“This measure is a regressive tax that will impact the people of Portland who can’t afford it,” said Portland Business Alliance President and CEO Andrew Hoan. “A program to provide access to energy efficiency resources already exists. Let’s reform the program we have and work together to keep Portland affordable for everyone.”
Damon Motz-Storey, spokesperson for the campaign, pointed out that large corporations would be “a consistent revenue source that will produce the funds year after year.” Given the big corporate tax cut approved by Congress earlier this year, plus low corporate tax rates in Oregon, he thinks “they can afford to pay their share.”
While the final list of affected companies won’t be known until the City of Portland releases their analysis next year, Motz-Storey thinks it will include about 120 firms, including Comcast, Walmart, and US Bank.
Even as the Portland fund won by a wide margin, a carbon tax in neighboring Washington state failed – for the second time. Measure 1631 did well in liberal urban areas like Seattle, but fared poorly everywhere else, especially in more conservative rural areas.
It is already prompting some in Seattle to think about a local, rather than statewide approach next time. “The carbon fee initiative had very strong support in certain pockets of the state,” points out attorney Greg Wong, who helped draft Washington’s carbon fee initiative. “So maybe it’s something that those local entities should consider.”
The Portland vote benefited from the precedent set by the Portland Children’s Levy, approved by voters in 2002. The Levy collects $21 million per year through property tax to pay for programs that support “positive early development, school engagement and academic achievement, high school graduation, and family safety and stability.”
It was also helped by putting low-income people and communities of color first. “Community-facing organizations” made up the core of the steering committee for the campaign, including the Asian Pacific American Network, Coalition of Communities of Color, NAACP, Native American Youth & Family Center, OPAL/Environmental Justice Oregon, and Verde.
A significant focus of the programs will be to benefit disadvantaged communities, while also cutting carbon emissions. About half of funds are set aside for renewable energy and energy efficiency programs, and another quarter for job training.
“Regenerative agriculture and green infrastructure,” such as tree planting and community gardening, will get about 15 percent of funds. Motz-Storey argues this will help make Portlanders more resilient to hot weather and other climate impacts. “It helps prepare those that are most susceptible to the weather changes coming from climate change,” he says.
Tax collection for the Portland Clean Energy Fund starts in January and new programs will roll out in 2020.
Youth unemployment, especially in southern European countries, remains unbearably high. Renewable energy and climate protection are an opportunity to create new, well-paid jobs in urban and rural areas. Dr Hartwig Berger explains.
Spain and Greece were hit hard by this summer’s droughts and wildfires – the Mediterranean regions are highly endangered by the climate crisis, and energy change there is urgent. At the same time, the opportunities for a climate-friendly transformation of the energy systems are very promising. The conditions there are excellent for the use of sun and often ideal for the exploitation of wind. There is a considerable scope for efficient and economical energy use too.
It therefore essential to train young people in qualifications and skills that are required for this vast economic transformation so that Europe can become a global leader in green energy and fulfil its Paris commitments. They can be offered a promising professional future instead of being marginalized from work.
At the beginning of 2018, a team from three countries conducted research in the Spanish province of Cádiz and in Athens. Their goal was to find out what opportunities there were for a climate-friendly energy change in the coming years and the additional demand for qualified work resulting from it. Next, they examined how the energy transition is viewed by stakeholders, local politicians and affected young people themselves and whether local communities are willing to participate in appropriate initiatives. Finally, the team developed a set of proposals on how such professional training should be designed in order to increase the prospects of subsequent employment.
The project was financed by the EU Climate Initiative (EUKI) of the German Federal Ministry for Environment.
Potential for renewables
The key results of the research are that the energy transition could result in hundreds of thousands of jobs, especially for young people. In addition, the Mediterranean’s sunny climate makes distributed solar energy a profitable option.
Transitioning to renewable energy and climate protection offer considerable employment potential. We expect a six-figure number of new jobs in Spain and almost a six-figure number in Greece for energy-efficient building refurbishment alone. In the various renewable energy tasks, we estimate the number of new jobs in both countries to be in the five-digit range. In the municipalities surveyed, the energy balance of the buildings is generally so unfavourable that the applicable national and European regulations virtually force refurbishments.
From an economic point of view, the prosuming (production and consumption) of solar electricity required by households, businesses and public institutions themselves in the investigated regions is also very attractive. In Greece, the legal framework is favourable. In Spain, fundamental improvements can be expected in the near future. Even for low-income households and businesses, solar power generation is economically viable, provided that there are favourable microcredits, state subsidies and offers for a so-called “energy contracting” *.
At present, young people in the regions who are trained in energy management have clear difficulties to find jobs in their field. Their chances improve significantly if vocational training is closely linked to practical learning in companies or communal activities. But close attention must be payed to prevent misuse of apprenticeships by companies.
Policy proposals: local and regional training
The team came up with the following proposals to improve youth unemployment and switch to clean energy:
– Municipal action plans at both local and regional level. Action days should be organized in towns to present possible or existing projects and to inform citizens and local businesses about national and regional energy plans, as well as the possibilities for funding activities related to energy and climate protection. For renovations and energy efficiency projects, the study recommends building cooperatives or neighbourhood associations.
– Programs for targeted “dual” qualification of young unemployed people and energy refurbishments in municipal buildings. The energy-saving provisions for buildings should include natural techniques and the use of renewable energy sources on site. In autumn 2018, a test project was launched in small towns near Cádiz and in Athens for schools in these regions, which are notoriously hot in summer and cold in winter.
– Programs for “round-up” training of young people. It is crucial that these programs begin now because in the coming years, a large number of experts will be in demand for the use of solar energy. Training should include planning, installation, monitoring, economic efficiency calculations for solar systems, plus energy-saving measures.
– Professional training programs in climate protection activities for youth in rural areas. Young people without jobs and training have the greatest difficulties in finding a job in the regions studied. Therefore, providing professional training in the sectors of agriculture, forests and green urban environment will be important.
– The existing “European Youth Guarantee” should be extended to finance training in occupations in which a high demand for skilled workers can be expected in the future. This is undoubtedly the case in the areas of energy transition and climate protection.
The detailed study “How to Reduce Youth Unemployment by Fighting Climate Change” is available at www.hartwig-berger.de.
Dr. Hartwig Berger (Berlin), was before his retirement a private lecturer for sociology at the FU Berlin and at times deputy in Berlin and chairman of the Ökowerk Berlin.
- *”energy contracting” is a bold technical term. It refers to contracts in which a company typically invests at its own expense in energy-saving measures or energy installations and then “recovers” its own costs by means of the savings achieved, etc.
Since multiple failures of the Puerto Rican electricity network due to climate catastrophes, the government is looking for new ways to create more energy security. Energy reforms are intended to remedy the situation, but what role do renewable energies play? Maximiliano Proaño explains:
In September 2017, Hurricanes Maria and Irma destroyed an important part of Puerto Rico’s electric grid, leaving many people without power for months. Indeed electricity generation dropped by 60% in the fourth quarter of 2017 from the same period in 2016.
This tragedy raised a national debate about the security and resilience of Puerto Rico’s energy grid. The crisis presented the necessity of energy reform and opened the opportunity to modernize the energy system which relied heavily on fossil fuels. In June 2017, 47% of its electricity came from petroleum, 34% from natural gas, 17% from coal, and 2% from renewable energy. The share of renewable energy in the country is meager considering Puerto Rico’s potential for wind, solar photovoltaic and ocean waves resources. In fact, using only 10% of these resources could provide an estimated 115% of electric energy demand. In order to change to renewable energy, recent report identified four critical areas for policymakers:
- The promotion of an energy vision for Puerto Rico’s self-sufficiency and credibility
- An independent regulator with enforcement powers
- A modern regulatory framework and integrated resource plan (IRP)
- The involvement of cooperatives and municipalities in the transition
Puerto Rico’s parliament has recently passed an energy reform law in hopes of increasing electrical security and resilience. Governor Ricardo Roselló signed the Transformation of the Electrical System Law, and on November 6th it was approved by the Senate. The law includes measures to make the electrical system more resistant to atmospheric events through the use of small-scale power plants, a revision of the routes of the distribution system and burying lines in urban centers. The energy policy also includes a goal of 100% renewable energy by 2050. Another important aspect of the project is the elimination of incineration as alternative renewable energy.
The energy policy also privatizes the Puerto Rico Electric Power Authority (PREPA). The government sees this as justified because the current public monopoly in the energy sector practically abandoned maintenanceof the electrical grid infrastructure. The new law establishes that no supplier can own more than 50% of the generation assets. It also allows for people to become “prosumers” – both producers and sellers of their own small-scale energy like solar panels. In addition, the law aims to facilitate the interconnection of distributed generation and microgrids.
Solar energy companies have expressed concern because the law allows charges in the net metering system. Net metering means that if a person produces their own power, they can use it whenever they want instead of just when it is produced.The bill affirms that the Electric Power Authority, its successor, or operator of the transmission and distribution network may propose as part of its tariff charges to clients for net metering. It will be the Energy Commission that will evaluate said charges as part of the tariff proposal.
But this bill would do little to stop the development of natural gas, according to the Institute of Energy Economics and Financial Analysis (IEEFA). In the short term, it has been proposed that combined power plants make up for the elimination of coal and oil plants (which are currently two-thirds of current electricity generation). Critics have pointed out that Puerto Rico does not produce natural gas, nor does it have its reserves. Nearly all natural gas is imported from Trinidad and Tobago as liquefied natural gas (LNG). If the goal is to achieve 100% renewable energy generation by 2050, focusing on natural gas will not be enough.
Another benefit of the current focus on switching to renewables is that it creates a more resilient power network. Abandoning mega-projects and instead focusing on small, distributed generation will make power outages more rare.
As for renewable energies, while the new law sets impressive goals, it does not propose clear incentives to achieve it while it proposes a plan to rebuild the electricity system through gas plants.
A vital area of the reform must be the involvement of cooperatives and municipalities in the transition. In my opinion, this is an essential absence of the new Puerto Rico’s energy framework. The process of privatizing the energy sector can be very harmful if it means the concentration of the property in a few hands. On the other hand, a process of controlled “privatization” can also mean a positive experience of local development, increasing energy cooperatives, self-generation or private partnerships with municipalities for local projects, which distributes the benefits among many.
Almost all of California’s representatives to the US House are now Democrats, and the state is pushing harder than ever for sustainability. Will the US state be able to clean up its energy by 2045? L. Michael Buchsbaum takes a look.
In September, after enduring catastrophic year-round wildfires, floods, drought and other calamities, California’s outgoing Governor Jerry Brown, decided to take the next step in fighting combat climate change. He signed into law SB100, a plan to transform the state’s electrical generation to 100% clean energy by 2045. Key to the plan is ramping up battery storage and using the emerging technology to replace existing fossil fuel generation. Immediately following November’s midterm elections, the government began forcing stubborn utilities to comply.
With almost 40 million citizens, the state is the world’s fifth largest economy. It’s also one of the world’s greenest economies. California’s non-CO2 emitting electric Generation (nuclear, large hydroelectric, and renewables) accounted for more than 56 percent of total in-state generation for 2017, compared to 50 percent in 2016. Overall, the state’s Energy Commission estimates that 32% of retail energy sales were powered by renewable sources alone last year—far ahead of any other U.S. state. But the state still imports large volumes of dirty energy—partially because since 2000, all of its coal-fired generation and all but one of its nuclear plants have shuttered. Making up the gap is fossil gas, on average generating 33% of the state’s electricity.
California’s blue (green) wave
California has some of the highest retail costs for energy, and one might expect citizens to voice their opposition through the ballot box. But with fires raging, the electorate chose overwhelmingly to back Democrats at both the state and federal level. Voters sent 46 Democrats to the House of Representatives (out of 53 total delegates), flipping six seats including one in the heart of Orange County, Reagan Country, where voters had never before sent anyone other than a Republican to Washington.
Locally, Californians elected even more Democrats to the State Assembly, giving them a greater Super-Majority there. And over 62% of voters chose to elect Democrat and current Lt. Governor, Gavin Newsom as out-going Jerry Brown’s successor, essentially endorsing his clean energy agenda.
Since the 2002 establishment of a 20% Renewable Power Standard (RPS) by 2017, the state has progressively met and set new green energy standards. In 2008, then-Gov. Arnold Schwarzenegger revised the target upwards to 33% by 2020. In 2015, the legislature passed SB 350 establishing a new target of 50% by 2030. To get there, earlier this year California became the first U.S. state to mandate solar rooftop panels on almost all new homes. Today most utilities are actually meeting their 2020 targets, and many are already closing in on 50%.
California’s SB 100 follows on this gradual greening by establishing three new targets: 50% by 2026 (four years ahead of schedule), 60% by 2030 and 100% “carbon-free” energy by 2045. It also includes adding at least 1.3 gigawatts of energy storage to the state’s grid by 2020.
The so-called “carbon free energy” includes “baseload” renewables like geothermal and some biomass, as well as large hydro, new nuclear or natural gas with carbon capture and storage (CCS). Potentially zero-carbon could also include “Power to X” hydrogen generated from renewable energy coupled to storage—a cutting-edge system that’s gaining more traction.
Post-election push for renewables
Not wasting any time, immediately after the election, the California Public Utilities Commission (CPUC) approved a plan forcing PG&E, the state’s largest electricity provider, to accept stationary energy storage solutions as alternatives to the polluting natural gas-fired peaker plants. The CPUC mandated that the company begin to install over 568 MW of stationary energy storage spread over four installations.
Now cleared for construction is a 300 MW/1,200MWh installation by Vistra Energy Corporation that will become the largest battery storage project in the world. Tesla was contracted for the second largest installation of the bunch, with a 182.5 MW facility being built south of San Jose, California. According to Bloomberg—it will become the second largest stationary battery worldwide. They and other batteries are scheduled to come on line beginning by the end of 2020.
Building upon the rapid advance of lithium-ion based batteries worldwide, the cost of “storage at this scale is likely now cheaper than the total cost to run the gas plants,” said Alex Eller, senior energy research analyst at Navigant in an interview with the publication Utility Dive following the CPUC’s decision.
Transit emissions remain high
Despite California’s cleaner electricity, with almost 30 million individual drivers, its clear that transportation emissions are actually now the state’s biggest carbon problem, generating almost 40% of the state’s overall greenhouse gas emissions. To help combat this, Governor Brown established a target of 5 million zero-emission vehicles on California streets by 2030, as well as 250,000 zero-emission vehicle chargers, including 10,000 DC fast chargers, by 2025.
Additionally, the California Air Resources Board (CARB) also approved a plan to allocate nearly $500 million, largely funded by revenue generated from the state’s unique Cap and Trade system, to facilitate more electric medium- and heavy-duty vehicles. The funded projects include an electric school bus pilot, clean truck and bus vouchers and heavy-duty vehicle investments to put cleaner trucks on the road.
But each vehicle drawing power from the grid is, in terms of carbon emissions, only as clean as the overall grid. And buyers, despite the State initiatives, may still be priced out of expensive electric vehicles if battery technologies don’t both advance and become cheaper. However the new laws and overall mandate given to the Democrats are sending strong investment signals to businesses and consumers. “In 2017, $2.5 billion was invested in clean energy technology in the United States,” the nonprofit research organization Next 10 reports, “with 57.2 percent ($1.4 billion) going to California companies.” And it is already responsible for about 47 percent of all electric vehicles ever sold in the US.
While historically resistant to renewables, much of the generating industry is starting to salivate over their emerging opportunity to become the oil of the future and “own the plug” powering the new electric vehicle fleet. Ronald O. Nichols, president of Southern California Edison, whose company has made a commitment to install 50,000 charging stations in the area, anticipates that over 7 million electric cars will be operating in California within 12 years.
In any case, California’s citizens seem ready for a cleaner, greener future – let’s hope their newly-elected representatives are listening.
For the past few years, news headlines have been crammed with reports of extreme weather events unfolding around the world. Recently, UN climate scientists issued their most urgent warning yet: we have 12 years in which to bring carbon emissions in check or face run-away climate breakdown. But journalists are only now starting to join the dots between the two. Why has South Africa’s media failed in its role to inform us that the planet is burning, when nature has been sending out warning flares for decades? Leonie Joubert asks.
This week, one of South Africa’s leading daily online news websites the ran a story announcing that it was launching a series called ‘Our Burning Planet. It’s a call to action from the newsroom which acknowledges that it’s finally time to start reporting on just how much of a threat climate change is to our country and ‘civilisation’. Its focus will be to look specifically at the overlap between climate change and poor governance. ‘The Earth is on fire,’ the accompanying headline cried, ‘it’s time to start worrying.’
Behind the scenes, a handful of irritated local science journalists muttered amongst themselves that it was about time that mainstream newspapers started paying attention to what we’ve been saying for years is the most important story of the century.
But the Daily Maverick’s announcement did get us thinking again about why it is that the media – one of the most important pillars of a functioning democracy – has failed so badly in its role to educate and activate the voting public, and hold government accountable for how it responds to climate Change. This was a slow burning emergency which has been rolling towards us for decades, but now it’s erupting into very real Flames.
It’s not just the southern African media that’s at fault. The failure seems to be global, and worldwide we’re seeing newsrooms running similarly self-reflective editorials, asking why this issue hasn’t been front-page news for years.
Here are two of the main reasons South African journalists are failing in their role as educators and advocates for a healthy society.
Environmental stories: ‘nice to have’ but not headline news
Climate change issues are seen as an environmental story, and the environmental ‘beat’ is still seen as a nice-to-have rather than headline news.
Most editors think that once their teams have done the important reporting – the politics, the economics, even the sports writing – if they’ve got a bit of unfilled space in the paper or budget for extra copy, then they can pop in an altruistic little environmental piece.
It’s a bit like someone taking care of all their day-to-day responsibilities – running the kids to school, paying the bills, doing the grocery shopping, turning up at work ready for a meeting – and only if they’ve got a bit of spare change in their time budget, they’ll spend a bit of it doing some charity work over the weekend because, you know, we all want to make the world a better place.
Few South African newsrooms have specialist science or environmental reporters. And few are willing to pay skilled freelancers a fair fee to generate these stories. Few newsrooms give climate issues the front page, because they don’t join the dots between a functioning environment, and a healthy society. Without the free services offered by nature, there would be no food, no water, no clean air, no regulated climate. Without a healthy environment, there will be no school runs, no homework, no groceries to buy, or food on the table.
Our schools have failed us
I’ve just run a short climate change training programme with some professional communicators. Even after two days of wrestling with the basic science of climate change, many were still confusing ambient air pollution (the environmental and health problems associated with, for instance, soot and smoke coming from chimneys or car exhaust fumes) with carbon emissions that lead to climate change.
This is basic high school level science and yet these individuals, some of whom had tertiary training, still weren’t seeing the difference even after having it explained several times.
Levels of scientific literacy – in our newsrooms, and in society at large – is cripplingly poor, and this is the failure of our education system. How can we have an active and responsive citizenry, fired up by responsible journalism, if most of us don’t understand how the natural world works, and how our very survival depends on it?
The climate change story isn’t an environmental story. It’s a political story, an economic story, a health story, a development story… it’s even a sports story (several of the Cape Town Cycle Tour races, amongst the country’s biggest cycling events and significant tourism money spinners, have been cancelled, shortened or stopped mid-way in the past few years, because of extreme winds, fires, heatwaves, or rain).
If South Africa hopes to meet its developmental commitments, and steer itself towards a just low-carbon, pro-poor economy, we all need to need to study up on what climate change means for every aspect of this country.
The UN Climate Summit kicks off today in Poland. These events are always full of promises and deals. Bentham Paulos takes a look back at the promises made at September’s summit in California to see what the Poland meetings will mean for future progress.
Today begins the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change – COP24 for short – in Katowice, Poland. As the sense of urgency around climate change grows, the organizers hope the meeting will serves as “Paris 2.0… [and] make the framework really operate.”
The groundwork for COP24 was laid in September at the Global Climate Action Summit, when thousands of delegates from around the world gathered in California. This was not an official UN event but is on the “party circuit” of world climate events. Such events help keep people excited and pushing forward, to “Take Ambition to the Next Level,” as organizers put it.
The San Francisco event drew some 4000 delegates from around the world for a week of meetings, sales pitching, fundraising, deal-making, showcasing, celebrity-gawking, and attention-seeking. It drew an uncounted number of others for public events, side-meetings, and protesting in the streets.
Above all it was an opportunity for a bewildering number of announcements and pledges from governments, companies, universities, and many other actors.
The Summit organizers counted 74 official announcements, though there are even more that didn’t make their catalog. Here are ten chosen at random to give an idea of the scope and scale of ambitions announced at and around the Summit.
#1 American solar developer SunRun announced plans to put 100 MW of solar on affordable housing in California, enough to serve 50,000 low-income families.The installations will be done through building owners at no cost to the tenants.
#2 Baden-Württemberg, the birthplace of the internal-combustion engine and the heart of the German auto industry, joined the ZEV Alliance, a coalition of nations and states pledging to “strive to make all passenger vehicle sales zero-emission vehicles as fast as possible, but no later than 205. Washington Governor Jay Inslee also pledged his state to the Alliance at the Summit, bringing membership up to 16, including Germany, California, and the UK.
#3 Many parties agreed to buy electric vehicles for their own fleets. The Under2 Coalition Zero Emissions Vehicle Challenge saw 12 new states and regions commit to buying ZEVs, including Scotland and Catalonia; nineteen US mayors announced the formation of an EV purchasing collaborative; and Clif Bar and Delta Electronics joined 21 other businesses in the EV100 program, run by The Climate Group.
#4 Twenty-nine foundations and philanthropists pledged 4 billion over the next five years to combat climate change—the largest-ever philanthropic investment focused on climate Change. Most of the foundations have long been active on climate issues; it’s not clear how much new funding is involved.
#5 The Powering Past Coal Alliance announced ten new members, including the Capital Territory of Australia, the Balearic Islands, Wales, the US states of Connecticut, Hawaii, Minnesota, and New York, and the cities of Honolulu, Los Angeles, and Rotterdam. The Alliance now counts 74 members, including 29 national governments, 17 subnational governments and 28 businesses, working together to phase out coal and transition to clean energy.
#6 Many corporations announced clean energy and carbon reduction goals. Business services giant Salesforce signed the Step Up Declaration, a new alliance of 21 companies “dedicated to harnessing the power of the fourth industrial revolution” to cut Carbon. That coalition is managed by Mission 2020, an NGO led by former UNFCCC leader Christiana Figueres. Salesforce achieved “net-zero greenhouse gas emissions and a carbon neutral cloud” last year, and has a new skyscraper, the tallest building in San Francisco, that is 100% renewable-powered and certified LEED Platinum.
#7 The CEO of the Port of Rotterdam announced a new coalition of ports committing to cut carbon, including Hamburg, Barcelona, Vancouver, Los Angeles, Long Beach and Antwerp. The coalition will cut emissions in their own operations as well as advocate for carbon limits on shipping. The International Maritime Organization (IMO) agreed in April to cut the shipping sector’s overall CO2 output by 50 percent by 2050.
#8 Mahindra Group in India will be carbon neutral by 2040, 10 years faster than the Paris agreement, according to Anand Mahindra, the grandson of the company founder. The Mahindra conglomerate operates in 20 industries, from cars and tractors to information technology to real estate. Their clean energy division has built 1210 MW of solar projects in India and has another 1990 MW of projects in the works. At the Summit, they joined the EP100 group, companies that work on energy productivity.
#9 Nine law firms joined Lawyers for a Sustainable Economy, each agreeing to provide up to $2 million in pro bono legal services to small nonprofits and emerging technology companies by 2020.
#10 California Governor Jerry Brown announced that ““if Trump turns off the satellites, California will launch its own damn satellite to monitor pollution sources in the state.The Trump Administration has proposed cutting NASA’s Earth Mission budget that pays for climate-sensing satellites. California would work with San Francisco-based Planet Labs, which has launched almost 300 satellites in the past five years.
This is just a taste of the many pledges and plans that were rolled out in anticipation of COP24. The Katowice meeting, according to the UN, aims to adopt the implementation guidelines of the Paris Climate Change Agreement. The Talanoa Dialogue will also convene, a facilitated dialogue led by Fiji to “take stock of the collective efforts of Parties in relation to progress towards the long-term goal.” This new round of work takes place against the bad news that this year’s CO2 emissions are the highest yet, according to the UN Environmental Programme.
So in Katowice, like in San Francisco, there will be another flurry of meetings, sales pitching, fundraising, deal-making, showcasing, celebrity-gawking, and attention-seeking, as the party circuit rolls on.
Coal is now more expensive than renewable energy – and while this is good news for the climate, it’s bad news for developing countries who have invested in coal. Renato Redentor Constantino looks at how Japan and Korea are divesting, and the IMF’s opinion on stranded assets.
Countries in Southeast Asia who have invested in coal are finding themselves high and dry.
Because of competition from renewable energy, the Philippines is facing at least $21 billion in stranded coal plant assets, representing all new proposals in the pipeline. The figure represents over a fourth of the country’s national budget.
In Indonesia, 133 trillion Indonesian Rupiah is projected to be spent in 2021 to subsidize its thermal coal sector expansion, but the allocation can only delay, not prevent, what is taking place globally.
But it appears that the international development community is finally addressing the financial risks of investing in coal. Key commentary from officials attending the annual International Monetary Fund and World Bank meetings held in Bali shows that the demise of coal power in Southeast Asia is on its way.
“Coal projects… could also become stranded assets in the future”
On stage with World Bank CEO Jim Kim, IMF chief Christine Lagarde was asked about the looming crisis linked to unrecoverable coal investments in Southeast Asia.
The question to Lagarde was pointed: is the IMF going to look into the impact of stranding coal power assets on Southeast Asia’s economic stability? And did she think the region’s central banks could afford to downplay stranding coal power assets and energy transition risks?
Lagarde was initially evasive in her response, dwelling mostly on the importance of eliminating fossil fuel subsidies. But she eventually said she did not answer the question right away because she did not know the numbers. Pressed again whether the IMF would look into stranding coal—the subprime asset of the future—Lagarde’s answer, captured on video, was clear, “Yes! Absolutely. Yes!”
The IMF chief’s response is welcome and many hope she will follow through. The energy transition is already well underway and it is best for the region’s financial regulators to come to terms with new and rapidly changing realities in the power sector.
Currency fluctuations, regulatory environments that take into account techno-economic change, and the massive and still growing risks associated with the ongoing global energy transition are together hastening the demise of coal power in Southeast Asia today.
Lagarde did well to speak with clarity. The V20 Group of Finance Ministers of Vulnerable Countries echoed the concern, stating in their October 14 ministerial communiqué their intention to “promote International Financial Institution responses to ensure macroeconomic stability addressing energy transition risks and opportunities and the stranding of carbon intensive investments.”
During the meetings in Bali, Philippe Le Houèrou, CEO of the International Finance Corporation (IFC), published a statement indicating the importance of helping to green portfolios and reduce “exposure to coal projects, which are not only bad for the environment but could also become stranded assets in the future.” IFC is the private sector arm of the World Bank Group.
Le Houèrou said the IFC wants “to develop a green equity investment approach to working with financial intermediaries that formally commit upfront to reduce or, in some cases, exit all coal investments over a defined period.”
IFC’s public affairs head, Aaron Shane Rosenberg, who was also in Bali, demonstrated welcome candor when he was asked about challenges they expected to face regarding unrecoverable stranded coal investments. In an emailed response, Rosenberg said IFC is working with companies to help them identify stranded assets.
“We are only at the very beginning of being able to do this ourselves. We are working to better identify all of the risks… in our own carbon pricing analysis,” said Rosenberg. He added IFC has already started discussing with clients their ability to identify and disclose their own carbon risks as well.
Coal phaseouts in Japan and Korea
Earlier, Marubeni Corporation, the biggest player in Japan’s power generation business, which has also been actively involved in the construction of coal plants across Asia, announced it was moving away from coal.
In a statement that sent shockwaves across Southeast Asia, Marubeni said it “recognizes that climate change is a major issue shared by all of humanity. It is a problem that threatens the co-existence of the global environment and society, a problem that has an enormous effect on Marubeni’s business and its shareholders, and a problem that Marubeni believes must be dealt with swiftly.”
As a result, Marubeni said it will cut its coal-fired power net generation capacity of approximately 3GW in half by 2030. In addition, Marubeni made a commitment not to enter into any new coal-fired power generation business unless under exceptional circumstances. Marubeni’s total electricity business amounts to 13,620 MW. It has plants in Indonesia, the Philippines and Vietnam, among other countries.
In addition, coal is losing ground in South Korea. South Chungcheong, a province home to half of South Korea’s coal power generation, recently joined the Powering Past Coal Alliance, becoming its first member in Asia. The province has 30 units of coal-fired plants representing 18 GW and is home to the second and third largest coal-fired plants in the world. South Chungcheong announced it will close 14 coal power units by 2026, and some of them will be transformed into environmentally-friendly power plants.
South Chungcheong’s announcement was on October 2. Two days later, South Korea’s two state-run occupational pension funds said they will halt further investments in coal power plans while increasing their renewable energy portfolios. The South Korea’s Government Employees Pension Service (GEPS) and the Teachers’ Pension (TP) both “announced the plan in line with the Moon Jae-in administration’s initiative for a low-carbon economy.”
In a statement read in a joint press conference in Seoul, the institutions said they “will no longer take part in the financing of any coal plant development projects here and abroad.” According to the Yonhap News Agency, GEPS and TP are “the two biggest public pension funds in South Korea after the state-run National Pension Service”, overseeing together over US$20 billion as of the end of 2017.
While Japan and Korea are moving away from coal, the World Bank and IMF are just beginning to talk about the dangers of stranded assets. Vulnerable countries risk losing billions by investing in coal rather than renewables, and will need responses from international financial institutions as soon as possible.
Renato Redentor Constantino is the executive director of the climate and energy policy group Institute for Climate and Sustainable Cities. He is an international climate policy analyst and climate finance expert with over two decades of experience in the field, and has been engaged in the UN climate negotiations since 2001. He was senior advisor to the Philippine presidency of the Climate Vulnerable Forum (CVF) and the Vulnerable 20 Group of Finance Ministers, and has been an advisor to the Philippine delegation to the UNFCCC for several years. He is currently a member of the CVF Advisory Group and board member of the People’s Survival Fund, the Philippines’ first legislated adaptation funding mechanism.
Africa’s energy landscape is changing, but not in a uniform direction. New discoveries of oil and gas are accompanying the expansion of renewable energy generation. What does the continent’s energy transition hold for jobs and sustainable development, asks Moustapha Kamal Gueye.
Because of its vulnerability to climate change, Africa as a whole is facing the double challenge of tackling climate change and coping with its consequences on production, growth, and employment in all economic sectors. While adaptation efforts are already, and will continue to be needed, preventing the worst possible impacts of climate change from materialising is also critical. Otherwise, the achievement of the 2030 Agenda for Sustainable Development may be compromised. Indeed, over the past decade, climate change and extreme weather events have caused unprecedented damage in African countries, ruining infrastructure, threatening economic activity, and destroying jobs. The most visible manifestations are the droughts in southern Africa, floods in West Africa, and desertification of entire areas in the Maghreb region.
To be sure, African countries focus most of their attention on adaptation to climate change. At the same time, however, an increasing number of governments across Africa consider a sustainable energy transition as a central aspect of their climate strategies. In this regard, several questions remain to be answered. How to achieve a sustainable energy transition that delivers inclusive growth and jobs? How to reduce the gap in skills in order to unleash the potential for vibrant enterprises and green jobs? And finally, how to develop public policy frameworks that are conducive to a just transition for workers, enterprises, and communities? This article touches upon these issues.
Context and issues in Africa’s energy transition
Compared to the majority of fossil fuel-dependent industrial countries, the energy transition in Africa presents a distinct feature. With the exception of a few countries such as South Africa, most African countries are not in a situation of pressure where they need to phase out of coal to meet their energy needs through alternative energy sources. Africa’s energy transition rather faces two important challenges: modernisation and expansion.
Modernisation is about exploiting the continent’s vast endowment of renewable energy resources, including biomass, wind, solar, and hydro-power potential. It also implies moving away from the use of inefficient and hazardous forms of energy by over 700 million people and towards the deployment of modern fuels and sources of energy for cooking, heating, and lighting. In the fossil fuel sector (especially oil and gas), both resource and labour productivity need to be improved. Expansion is about bringing to scale adapted technologies to meet the energy needs of a growing population of 1.2 billion people, of which only 30 percent have access to reliable electricity.
Globally, we are witnessing a shift in the energy landscape, away from fossil fuels and towards less-polluting sources of energy. In Africa, however, a closer look reveals a different picture. On the one hand, there is an expansion in energy generation from renewables. For example, the recently launched Taiba Ndiaye Wind Project in Senegal will generate 158-megawatt of additional capacity. In Ghana, the planned Nzema Solar Power Station will be the largest installation of its kind in Africa, and it is expected to increase Ghana’s electricity generating capacity by 6 percent and allow nearly 100,000 homes to benefit from clean energy. Morocco, a pioneer in this area, seeks to deploy about 1.5 gigawatts of solar and wind capacity across the country to meet its goal of increasing the share of renewables in its energy mix to 42 percent by 2020. In April 2018, South Africa signed contracts with 27 independent renewable energy power producers, worth US$4.6 billion, to produce 2,300 megawatts of electricity over the next five years.
One the other hand, since 2004, there has been a wave of oil and gas discoveries in countries such as Chad, Ghana, Guinea, Guinea-Bissau, Kenya, Liberia, Mali, Mauritania, Mozambique, Sao Tome Principe, Senegal, Sierra Leone, Tanzania, Togo, and Uganda. According to the Africa Energy Outlook 2014, 30 percent of global oil and gas discoveries made between 2010 and 2014 have been in sub-Saharan Africa. A number of countries that were previously net energy importers will become energy exporters in the next five years due to increasing oil exports. And based on certain estimates, sub-Sahara Africa is expected to outpace Russia as a global gas supplier by 2040.
Therefore, while the African energy landscape is changing, it is not in a single direction. The energy transition is complex and has important ramifications for the structure of economies and future development prospects. Climate change is an essential aspect to it, but so are many other key aspects of the sustainable development goals, such as reducing the health impact on women and children of the use of inefficient cooking fuels; powering productive industries in rural areas and modernising agriculture; and the overall improvement of living conditions.
What are prospects for new job creation?
Studies by the International Labour Office and other institutions have pointed to four types of possible impacts of climate change and greening policies on labour markets. Firstly, the expansion of greener products, services, and infrastructure will translate into higher labour demand across many sectors of the economy, thereby leading to the creation of new jobs. Examples include jobs in renewable energy, energy efficiency, manufacturing, transportation, and building and construction. In addition to direct jobs, indirect employment is created along the supply chains, including in the building of necessary infrastructure. And as new income is generated and spent across the economy, further employment is created.
Secondly, some of the existing jobs will be substituted as a result of transformations in the economy from less to more efficient, from high-carbon to low-carbon, and from more to less polluting technologies, processes, and products. Examples include the shift from the manufacturing of internal combustion engines to the production electric vehicles, as well as the energy transition itself, as clean energy replaces fossil fuels.
Thirdly, certain jobs may be eliminated, either phased out completely or massively reduced in numbers, without direct replacement. This may happen where polluting and energy- and materials-intensive economic activities are reduced or phased out entirely, such as in the closing of inefficient coal mines.
Finally, many, and perhaps most, existing jobs (such as plumbers, electricians, metal workers, and construction workers) will simply be transformed and redefined as day-to-day workplace practices, skill sets, work methods, and job profiles are greened. For instance, plumbers and electricians can be reoriented to carry out similar work with solar water heating or solar photovoltaic systems.
On the energy transition more specifically, two common questions are whether clean energies generate more employment than fossil fuels, and whether this applies in the context of Africa. Several studies indicate that renewable energy technologies create more jobs than fossil fuel technologies. One study concludes that per dollar of expenditure, spending on renewable energy can produce nearly 70 percent more jobs than spending on fossil fuels. The International Renewable Energy Agency (IRENA) estimated that the renewable energy sector employed nearly 10 million people worldwide in 2016, with 62,000 jobs in Africa. Nearly half of these jobs are in South Africa and a quarter in North Africa.
In relation to the notion of modernisation mentioned above, replacing the millions of kerosene lamps, candles, and flashlights used in many African countries with modern solar lighting can provide a cheaper alternative and stimulate green jobs. A study found that replacing these lighting systems with modern solar lighting technologies for people living outside the grid could create 500,000 new jobs related to lighting in countries of the ECOWAS region.
Bridging skills and capacity gaps to reap the employment dividend
More than 10 million young African men and women are expected to enter the labour market each year over the coming years. Most analysts tend to agree that the traditional public sector will not be able to absorb this new work force. Entrepreneurship and self-employment are indispensable to create quality jobs in large numbers, and the energy transition can play a central role in this regard. For that to happen, skills development and upgrading, entrepreneurship promotion, and enabling policy and governance frameworks are required.
A global review of skills for green jobs including four countries in Africa (Egypt, Mali, South Africa, and Uganda) revealed the existence of a gap between the goals and targets set in environmental policies and the human resources available for their implementation. The same applies in the energy sector. Some skills gaps already exist for technical and engineering positions and could grow as the renewable energy sector continues to expand. Skills gaps could lead to project delays or even cancellations, cost overruns, and faulty installations. Efforts are needed in education and training systems to develop renewable energy curricula, integrate modules into vocational training courses, support apprenticeships, and establish common quality standards. Nonetheless, there are promising experiences. For example, Cape Verde launched a Renewable Energy and Industrial Maintenance Center (Cermi), whose main activity is the training of professionals in the areas of design, assembly, and maintenance of photovoltaic installations.
Various intervention models and programs to promote job creation in clean energies have shown a clear advantage of combining technical and vocational training with entrepreneurship training. Particularly for African countries, entrepreneurship and self-employment are becoming priorities in youth employment strategies and policies. In view of Africa’s specific business environment, micro-enterprises have an important role here. In general, micro-enterprises are defined as businesses with up to 10 employees, small businesses as those with 10 to 100 employees, and medium-sized enterprises as those with 100 to 250 employees. In Africa, the majority of job creation is coming from the smallest businesses (less than 19 employees). In the East Asia and Pacific region, job growth is mostly concentrated in enterprises with 20–99 employees, while in Latin America and Eastern Europe/Central Asia, more than 40 percent of job creation is by businesses with more than 100 employees.
Typically, young entrepreneurs in the energy space face challenges related to access to finance, lack of technical knowledge, and lack of experience in business management. It should also be noted that because of the prevalence of unemployment and underemployment, there are some entrepreneurs by vocation, but also a large number of entrepreneurs by necessity. As a result, in the absence of strategies and tools to support entrepreneurship, a large proportion of young entrepreneurs remain in the informal economy.
Nevertheless, many young African women and men see the potential associated with the development of micro and small enterprises in the renewable energy sector. Remarkable initiatives are underway throughout Africa, with dynamic companies such as M-Kopa Solar, which operates in East Africa in the distribution and installation of solar kits. Many such small and micro enterprises active in the distribution of energy systems, maintenance and operation, and sometimes in assembly would benefit from policies to support their integration in value chains and the development of local supply chains. Government policies favouring local content and after-sales services can be helpful. Through the use of such policies, for example, the Tunisia Solar Plan enabled the development of joint ventures and local manufacturing of solar water heaters.
Africa’s energy transition is well underway, structured by national and regional contexts and priorities, as well as global policy frameworks and commitments that countries have made. Critical to its success is the fine combination of new fossil fuel discoveries and the expansion of renewables across the continent. A critical dimension of the energy transition for Africa also has to do with cost of technologies. As Collier and Venables have put it, Africa cannot afford cost-increasing mitigation: any measures that it takes to green its energy usage must also be cost-reducing.
Although most studies indicate net job gains in the energy transition, in Africa as in other parts of the world, issues of temporal and geographical disconnect exist. These refer to the fact that new jobs are not necessarily created in the same locations and regions, and at the same pace as other jobs may be displaced or eliminated in the energy transition.
The notion of a just transition for all implies that policies are in place to manage social and employment impacts carefully, in order to avoid social and economic disruptions. The fear of job losses can act as a powerful social and political force to maintain the status quo and slow progress. Effective social dialogue, planning for a just transition, and social protection policies are all elements of a just transition framework that can help African countries manage their energy transition well.
The views and opinions in this article are those of the author and do not represent views or opinions of the International Labour Office.
Moustapha Kamal Gueye, Coordinator, Green Jobs Programme, International Labour Office.
The article is repostet from the International Center for Trade and Sustainable Development.
Ministers from ten EU countries have urged the European Commission to chart a “credible and detailed” path towards net-zero greenhouse gas emissions in 2050, ahead of the launch of a landmark climate strategy next week. Sam Morgan gives detailed insights.
Energy and environment ministers from Denmark, Finland, France, Italy, Luxembourg, the Netherlands, Portugal, Slovenia, Spain and Sweden have co-signed a joint letter to EU Commissioner Miguel Arias Cañete calling for “a clear direction” towards net-zero emissions.
According to fresh EU energy rules and European Council conclusions from March, the Commission has to present a climate strategy by the end of 2018 that will show how Europe can meet the goals of the Paris Agreement.
On 28 November, the EU executive is scheduled to launch its vision for 2050, which will include eight different options or pathways that can drag the bloc’s economy onto a Paris-compliant trajectory. Member states will eventually choose the one they agree on.
The EU’s energy governance law obligates the Commission to include at least one pathway towards net-zero greenhouse gas emissions, as well as one scenario that should be in keeping with the Paris deal’s top-level target of limiting global warming to just 1.5 degrees by century’s end.
In their joint letter, obtained by EURACTIV and dated 14 November, the ten member states, which represent 51% of the EU population, “encourage the Commission to set a clear direction towards net zero GHG emissions in the EU by 2050” and insist that the pathways should be presented in a “credible and detailed way”.
EURACTIV understands that Cañete is adamant that net-zero options should remain in the strategy, despite heavy lobbying by countries like Poland, and that the Spanish Commissioner’s team is in daily contact with State Secretary for Environment Michał Kurtyka.
Kurtyka, whose duties involve making sure this December’s UN climate summit goes off without a hitch, is reportedly concerned that the strategy could derail efforts at COP24 in Katowice.
It is still unclear whether the Commission will actually recommend one of its options explicitly to member states or leave the question entirely up to the Council’s discretion.
But President Jean-Claude Juncker, who is pencilled in to appear at COP24, could throw his weight behind the net-zero choice, particularly as EU heads of states prepare for next year’s “future of Europe” summit in Romania, scheduled in May.
The letter from EU capitals adds momentum to the net-zero emission goal that was kicked off in October by a United Nations report from scientists at the Intergovernmental Panel on Climate Change (IPCC), charting a pathway for keeping global warming below 1.5C.
It was followed up by a European Parliament resolution that urged the Commission to make sure the strategy includes a net-zero option for 2050, which was also backed by the centre-right EPP group.
During the early days of drafting the strategy, it was reported that the Commission could either include net-zero but only for ‘mid-century’ rather than 2050 or strike the option from the text altogether.
MEPs also voted in favour of updating the EU’s current overall emissions reduction pledge for 2030, set at 40%, to reflect better the results of the IPCC report and suggested it should increase to 55%.
In the letter, ministers insist that the Commission proposal should bear in mind the “consistency” of 40% with the proposed options for 2050, although EURACTIV also understands that the EU executive has used 45% as its baseline for all eight of its scenarios.
In June, EU climate boss Cañete said that new laws on energy efficiency and renewables meant that Europe will “de facto” reach 45% without further legal changes. But experts insist that this is not enough to stick to even the Paris Agreement’s lower target of 2 degrees warming.
All signatories to the Agreement will have to finalise or update their emission cut pledges (NDCs) by 2020 and climate policy observers maintain that next year’s headline issue will be by how much the EU should bump up its overall target.
But what happens between 2030 and 2050 is largely untouched by the Commission’s strategy as far as targets or milestones are concerned.
EURACTIV understands that the EU executive originally wanted a step-by-step roadmap but that approach was reconsidered during the drafting process, given its previous long-term effort was vetoed by Poland in 2011 and again in 2012.
That means that when EU leaders sit down to discuss the strategy, perhaps at the December European Council summit, they will only have to debate the end point, the 2050 goal, rather than the process to get there.
Berlaymont officials are due to give the strategy a final vetting this week and the college of Commissioners will look to approve it on the morning of 28 November.
Sam Morgan is author from EUROACTIV, his articles are about climat change and the environment.
This post has been republished from EURACTIV.