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Playing for time at climate conferences

17 December, 2018 - 14:56

2018 saw temperatures, natural disasters and CO2 emissions hit record highs. Meanwhile, our world leaders are procrastinating, says Michał Olszewski.

Natural disasters – like this year’s California wildfires – will only get worse in 2019 (Public Domain)

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.

Categories: Blogs

COP24: a recipe for disaster?

14 December, 2018 - 15:00

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.

Categories: Blogs

How can the Czech Republic pay for new nuclear?

13 December, 2018 - 14:00

Plans for a new nuclear power plant in Czech Republic are currently on the brink of collapse.  Jan Ondřich explains the remaining options.

The government is considering various options in favour of the realization of a new nuclear power plant (Public Domain)

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.

Categories: Blogs

Local Clean Energy Fund is a Bright Spot in US Election Results

11 December, 2018 - 14:00

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.

Portland is one of the citites which have earmarked funding to take action against carbon emissions (Public Domain)

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.

Going local

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.

Categories: Blogs

Energy transition and youth employment in Spain and Greece

10 December, 2018 - 14:00

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.

The energy transition could result in hundreds of thousands of jobs, especially for young people (Photo by Radostina Primova)

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.

(Photo by Radostina Primova)

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.
Categories: Blogs

Puerto Rican energy: does calm come after the storm?

7 December, 2018 - 14:00

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:

Construction work in Rio Grande (Photo by Master Sgt. Joshua DeMotts, CCO Public Domain)

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.

(Photo by Le Anh Dao, CC BY SA 4.0)

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.

Categories: Blogs

California voters demand Democrats push clean energy

5 December, 2018 - 14:00

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.

California wants to transform the state’s electrical generation to 100% clean energy by 2045 (Photo by Tony Webster, CC BY 3.0)

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.

Categories: Blogs

Why doesn’t the media talk about climate change?

4 December, 2018 - 14:00

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.

The press failed to explain the consequences of global warming (Public Domain)

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.

Categories: Blogs

Next stop on the climate party circuit – Katowice, Poland

3 December, 2018 - 12:00

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.

The key objective of the meeting is to adopt the implementation guidelines of the Paris Agreement (Photo by Bentham Paulos)

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.

Categories: Blogs

Coal assets stranded in Southeast Asia

30 November, 2018 - 14:36

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.

A barge transports coal on the Mahakam river, Indonesia: the country is subsidizing coal, despite its risks (Photo by Andrew Taylor/WDM, CC BY 2.0)

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.

Categories: Blogs

Africa’s energy transition: opportunities and challenges for decent work

29 November, 2018 - 14:00

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.

The energy transition faces two important challenges: modernisation and Expansion (Public Domain)

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.

Categories: Blogs

10 countries demand net-zero emission goal in new EU climate strategy

27 November, 2018 - 14:00

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.

Eight European countries plead for a clear path towards net-zero emissions (Public Domain)

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.

Climate momentum

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.

Categories: Blogs

Global push for electric vehicles moves forward despite US chaos

26 November, 2018 - 15:35

The move toward electric vehicles is making steady progress worldwide, as companies and countries align behind aggressive growth targets. But a renewed battle between California and the Trump Administration on vehicle policies is throwing North American plans into turmoil. Ben Paulos takes an in-depth look.

While the Trump administration actively blocks EVs, other countries are investing (Photo by Visitor7, CC BY-SA 3.0)

A major global player in promoting zero-emissions vehicles is the ZEV Alliance, a consortium of 14 nations and sub-national governments in Europe and North America.

Members of the Alliance – consisting now nine US states, two Canadian provinces, one German state, and four European countries – have pledged to “strive to make all passenger vehicle sales ZEV (zero emission vehicle) as fast as possible, but no later than 2050.” Their goals add up to putting 10 million EVs on the road by 2025 and 20 million by 2030.

At September’s Global Climate Action Summit, the ZEV alliance welcomed Baden-Württemberg, the birthplace of the internal combustion engine and heart of the German car industry, and Washington state as new members.

Speaking at the Goethe Institute in San Francisco, Winfried Hermann, Minister of Transport for Baden-Württemberg, said that focusing the design of cities on the automobile “has proven to be a mistake. Cities around the world are facing similar problems.”

“Baden-Württemberg is well known for big, fast beautiful cars,” he said, since it is the home of Mercedes, Porsche, and Bosch. “Our economic strength is dependent on car sales and these car companies.”

Minister for transportation Winfried Hermann speaks at the Global Climate Action Summit in San Francisco in September (Photo by Ben Paulos).

Nonetheless, cities in Baden-Württemberg are banning older diesel vehicles in city limits, while adding bus and rail lines, lowering transit fares, and improving bike access. “We are not going to abolish the car,” Hermann said, “but the vehicles should be as clean as possible, and soon emission free.”

The world’s major carmakers have been setting their own goals, which add up to 15 million electric vehicles by 2025, according to figures from the International Center for Clean Transportation (ICCT). Half of these come from Volkswagen, Renault-Nissan, and Toyota, who have pledged to hit 20% to 25% of their new car sales by 2025.

The ICCT counts 4 million battery-electric (BEVs) and plug-in hybrid (PHEVs) on the road worldwide as of August. China and the United States account for over 60% of those sales, while California accounts for half of US EV sales. China has by far the largest car market in the world, with 27 million cars sold last year, almost as much as the US and Europe combined. Norway has the highest market share for EVs, with just over half of all vehicles, including 28% from BEVs.

China pushes low-emission transportation

China has been increasingly aggressive at promoting what it calls “new energy vehicles,” which includes BEVs and PHEVs as well as a small number of fuel cell vehicles.

Speaking on another panel at the Summit, Wu Songquan from the China Automotive Technology & Research Center (CATARC) attributed China’s interest to severe urban air pollution, a reliance on imported oil for more than 60% of demand, and an economy that is still growing rapidly. Thanks to strong policy support, he expects Chinese consumers will buy one million non emission vehicles (NEVs) this year.

The government’s official goal is that NEVs should account for a quarter of sales by 2025 for both light-duty and heavy-duty vehicles, and 40% by 2030. Wu said that a government-appointed advisory panel has found that this level of penetration would require a staggering 80 million electric vehicle charging points by 2030.

On July 3, China’s State Council released the “Blue Sky Defence” plan, a three-year action plan to curb air pollution by 2020, with a focus on large cities. Two million NEVs, tighter tailpipe standards, and cleaner diesel fuel are key components of the plan.

Trump Turmoil

This steady progress is being threatened by policy turmoil in the United States. In August, the Trump Administration proposed freezing national fuel economy standards previously set by the Obama Administration. Rather than requiring car companies to hit a fleet average of 54 miles per gallon (mpg) by 2025, Trump would cap them at about 37 mpg. Trump has further proposed to block California’s ability to set its own vehicle emission standards, a right California earned by regulating vehicle emissions before the United States did, when it required catalytic converters on vehicles in the 1960s to address Los Angeles’ notorious smog problem.

California was also an early mover on advanced technology vehicles, adopting its first standard in 1990 and refining it since then. Thirteen states have followed California’s GHG emission standards while eight have adopted the EV mandate.

California Governor Jerry Brown has called the Trump Administration’s move “stupidity” and vowed to fight it.

“For Trump to now destroy a law first enacted at the request of Ronald Reagan five decades ago is a betrayal and an assault on the health of Americans everywhere,” Brown said in an August statement. “Under his reckless scheme, motorists will pay more at the pump, get worse gas mileage and breathe dirtier air.”

Dan Sperling, a professor at the University of California at Davis and a member of the board of the Air Resources Board (ARB), said that the conflict could lead to different standards between states, recreating the patchwork that auto companies lamented in the 1990s and 2000s, and that was resolved in the Obama years. And it will certainly result in years of litigation.

The US turmoil is creating uncertainty for states and car makers, but is causing unique consternation for Canada. Ontario has a substantial number of companies in the automobile supply chain, closely linked to companies in Detroit, just over the border. To ease the border differences for their industry, Canada “incorporates US policy by reference” into their own policies, according to Helen Ryan, head of the Canadian Department of Environment and Climate Change, speaking on the panel.

The panel moderator, ICCT’s Drew Kodjak, pointed out that due to “chaos in the United States” Canada’s “modus operandi is in tatters — there is nothing to align with anymore.”

“We may have to separate from that to retain independence,” Ryan replied. “We have our own legislative requirements and timelines. It is imprudent to align with any US policies since they are all uncertain.”

Despite the challenges, California is not slowing down, indeed they are accelerating efforts to cut emissions and reach Governor Brown’s goal of putting 5 million EVs on the road by 2030.

Sperling said the ARB is voting soon to create a new $2000 incentive for electric vehicle purchases and to move to the next phase of the state’s Low Carbon Fuel Standard, a requirement that petrol suppliers cut the life-cycle carbon footprint of their products. The standard has been an important driver for zero and negative-carbon fuels, like electricity and biomethane.

“Vehicles of the future have to be electrified, autonomous and connected,” Minister Hermann concluded. “New mobility services can replace private car ownership. This has great potential for efficiency, climate friendliness, and safety.”

Categories: Blogs

Will the new Mexican president take the energy reform to the next level?

23 November, 2018 - 14:00

With the upcoming inauguration of the Mexican president, a new parliamenterial confrontation is waiting. Attempted implementations of sustainable energy reforms, have never been implementated under the previous government due to corruption cases. Maximiliano Proaño asks about the feasibility under the new president.

Will Andrés Manuel López Obrador do it differently than his predecessor? (Photo by Presidencia de la República Mexicana, CC BY 2.0)

Andrés Manuel López Obrador (short: AMLO) will assume the Mexican presidency on December 1st, and his energy policy will play an important role in determining whether his term will be a success or failure, writes.

The last government of President Enrique Peña Nieto reached an agreement for an energy reform, and a series of laws was passed that called for energy auctions both in the oil sector and in renewable energies. However, the corruption scandals around his government prevented these reforms from being implemented.

AMLO’s new government will now be in charge of taking energy reforms to the next level. For this, he will have to make important decisions such as his promised review of oil contracts, a fracking ban, incentive policy for renewable energies, the future of public oil company PEMEX, among others. PEMEX is one of the fifteen largest oil companies of the world and the country’s biggest taxpayer.

Previous attempts at reform

Successive governments in Mexico have tried to reform the energy sector. However, always the critical point it was the constitutional change to allow private participation in oil, gas, and power sector. The reform was finally approved in December 2013, after a broad political agreement reached a year earlier with the signing of the “Pact for Mexico”.

This agreement – which included among many other issues an energy reform- was possible due to the consensus that PEMEX had to be modernized to be more competitive. Nine laws were approved and another 12 were amended, which opened the participation of private companies to the hydrocarbons, gas and electric power sectors.

Until this moment Peña Nieto´s credibility had not yet begun to plummet due to corruption scandals, which brought him the lowest presidential approval rating in Mexican history. In this way Peña Nieto no longer had a coalition with sufficient political support to adopt the next stage in Mexico’s energy reform. The reform during Peña Nieto’s government consisted of a sectoral liberalization and privatization process, and did not fulfill one of its main promises to Mexico’s citizens: a decrease in energy prices. All this resulted in reform rejection of more than 70% of the population.

AMLO and the energy sector

In this context, the energy reform was an important issue in the last Mexican presidential elections. AMLO campaigned on the promise to stop the privatization process of the energy sector and the liberalization of gasoline prices.

Another announcement during AMLO´s campaign was the review of oil contracts, where he promised to investigate possible corruption and the contradiction of national interests. Rocío Nahle García, the new Energy Secretary announced in August that 105 oil contracts, signed under Peña Nieto´s government, had already been reviewed and that work should be completed before the assumption of AMLO to the presidency on December 1. While AMLO has said that he will honor oil contracts, that does not mean that contracts stained by corruption will be fulfilled.

In July of this year, AMLO made a very important announcement that his government would not allow fracking. The announcement is important because Burgos Basin, in the northeast of Mexico, has the largest concentration of unconventional gas in the country and is one of the largest in the world. During the last years, there has been a real possibility that the exploitation large-scale fracking would begin. In fact, the drilling of experimental wells had begun but were suspended due to the fall in oil prices. However, last March, Energy Lewis – the largest producer of natural gas in Texas just north of the border – signed a contract for exploration and exploitation with fracking in Campo Olmos, located in the municipality of Hidalgo in central Mexico. This contract is one of the 105 that are currently being reviewed by the future Mexican government.

Renewable potential

While the Mexican energy debate is almost entirely about fossil fuels, Mexico has enormous potential for the development of renewable energies. The Energy Transition Law (LTE) set a goal of 25 percent renewables in electricity generation by 2018, which it is already reached. The energy mix should be 30 percent renewable by 2021 and 35 percent by 2024. Wind energy has already begun to play an important role. In 2017, Mexico reached an installed capacity of just over 4,000 MW, equivalent to 5.55% of total installed capacity. As we can see in the chart below, solar energy has reached only 0.89 of the Mexican installed electric capacity by 2017.

Source: Reporte de avance de energías limpias 2017, Secretaría de Energía México.

The chart above shows that if we discount hydroelectric energy, renewable energies make up almost 9% of Mexican electric installed capacity today. However, the prospects are much more ambitious: the first three long-term auctions committed to an installed capacity of 6,988 MW of wind and solar energy to 2020. The Mexican Wind Energy Association (AMDEE) affirms that by 2022, installed capacity could triple and reach 12,000 MW.

AMLO has not yet shown a clear policy push for renewable energies in Mexico. To achieve this, it will be key to generate adequate incentives for community and self-generation projects. So far, it is a good sign that AMLO has promised to close the door to corruption and fracking and to stop the privatization process of the energy sector while respecting legally concluded contracts made during the previous administration. If he manages to advance decisively in these matters, his government will be able to take the energy reform to the next step.

Categories: Blogs

When coal dies, what of the coal workers?

22 November, 2018 - 14:00

In principle, South Africa’s development agenda shows that the country understands the need for a just tradition to a low carbon economy. But what will this mean for the people working in the coal industry, whose livelihoods will slowly dwindle, asks science writer Leonie Joubert.

Policymakers need a more holistic plan than merely catering for the retirement of older workers (Public Domain)

 If coal is the blood that oxygenates South Africa’s economy, then Mpumalanga Province is the country’s beating heart. Here, in a radius of just 100 kilometers, the furnaces of more than three quarters of the country’s coal stations burn around the clock. Their wolfish appetite drives the business of harvesting coal from surrounding mines, and the energy that has poured out of them for decades has seeded a booming manufacturing sector whose industries have set up shop nearby.

These coal-fired power stations will shut down eventually. According to energy analysts here, it’s a question of when this happens, not if. When they do, the impact will ripple through the entire provincial economy: the jobs in the power stations themselves will dwindle, taking the mining and industrial jobs with them. Every household that relies on these jobs for a regular income, will have to absorb the economic shock.

“All of these workers are at risk,” explains researcher Jesse Burton, at the University of Cape Town’s (UCT) Energy Resource Centre (ERC), “not because of the country’s climate policies, but because of the inevitability of the economics surrounding coal energy generation.”

Jobs in coal stations are threatened by increasing global pressure for countries to move away from fossil fuels. Meanwhile jobs in mining and manufacturing here – such as steel manufacture, and other heavy industries – are threatened by increasing mechanisation, and rising domestic electricity costs.

But in terms of job losses relating to the transition away from coal, the change doesn’t need to throw the region’s economy into a tail-spin, according to analysts. By learning from other countries’ mistakes, and planning holistically, South African policymakers can make sure that the transition for workers employed by the coal industry is as just as the wider objective of decarbonising the economy is intended to be.

Burton warns, though, that where similar moves away from coal have happened in other countries, these have often happened quickly. In some places, the local economies haven’t recovered yet (There is some interesting reading on this on the Coal Transitions website).

The ERC recently did the number-crunching on what the implications would be of phasing out coal in order for the economy to meet an emissions reduction target that’s comparable with South Africa’s contribution towards stabilising the global climate at no more than a 2°C increase in temperature, relative to pre-industrial levels. As with any gear-change in an economy, there will be trade-offs. In this case, the benefits of burning less coal in Mpumalanga will mean less local-scale environmental pollution associating with mining and burning the coal. There will also be the global benefits of reducing the carbon waste that’s being pumped into the atmosphere which is driving climate collapse.

But the impact of job and livelihood losses will be felt disproportionately in communities where there are already high levels of poverty and inequality, following decades of exploitative race-based labour practices under British segregation policies and the South African government’s pre-1994 apartheid state rule.

When it comes to planning for the job losses that’ll inevitably happen as a result of old power stations being mothballed, and new ones being scaled down, Burton says that policymakers need a more holistic plan than merely catering for the retirement of older workers who will eventually be given the golden handshake.

Many of these mines and heavy industries need semiskilled and skilled workers, and are actively involved in training people with the necessary skills to fill these posts. Mines are ideally placed to train people with transferable skills, so that when jobs in mining and manufacturing decline, workers can move across to other industries.

The mass roll-out of utility-scale solar and wind projects in South Africa in recent years can also help absorb the jobs shed by the coal industry: while photovoltaic panels aren’t made locally yet, the assembling and installation could soak up many of the more skilled jobs shed by the mining industry. But boosting this will call for strict policies on local procurement, to stabilised demand and produce a predictable market.

The country has strong environmental laws that call for mining companies to pay for and manage the rehabilitate of land and ecosystems that are damaged through mining or coal burning, but companies often don’t follow through on doing this restoration work because the state is slack in pushing for implementation of these laws. Rehabilitation processes could generate plenty of jobs, if the state forced them to follow through on their legal obligations to repair environmental damage.

Burton also argues that the country, and Mpumalanga Province itself, will need to boost other sectors within the region’s economy, such as agriculture and agricultural processing, which can be a lively jobs area.

Because this kind of planning and response spans the jurisdictions of more than one government department, an appropriate response can’t be housed in any single department, be it the Department of Energy, or Labour, or Trade and Industry. It would be better stationed within the Office of the Presidency and create policy and coordination bridges across the various departments, both at national level and down to provincial level.

The government recently created a presidential coordinating commission on climate change, which could oversee this sort of process, or it could set up a commission geared towards managing a just transition.

But one of the biggest constraints to helping communities make this transition in a way that’s fair and pro-poor, falls well outside the gambit of the national departments that manage energy, resources, and mining, argues Burton: the failure of our education system will continue to limit the prospects of so many people needing to find alternative forms of employment.

Categories: Blogs

Democrats won a clean energy victory in midterm elections

20 November, 2018 - 14:00

Though the 2018 U.S. Midterm elections didn’t produce a clear victory for the climate, it was far from a defeat. While three of four far-reaching state ballot initiatives didn’t pass, the Democrats will take over leadership of the House of Representatives and several energy progressive candidates also won key governor’s races, L. Michael Buchsbaum takes a closer look.

A true sign of hope for the climate comes from the victory of many progressive state legislators and gubernatorial candidates ( Photo by Rob Bulmahn, CC BY 2.0)

By taking the House, which has previously been at least as right leaning and anti-environmental as President Trump himself, Democrats now largely have control over the creation of future legislature. All new bills must originate and be passed by the House before moving into the Senate and ultimately, a Presidential signature.

Going forward, Democrats can hold hearings and launch new efforts to address climate change and energy-related issues, placing the environment front and center before voters ahead of the 2020 Presidential campaign.

More representative of America, over 100 women will also have seats in the new House. Also, reflective of Bernie Sanders’ continuing Socialist Democratic revolt, it’s set to become younger, more ethnically diverse, and potentially more liberal. And seven of the incoming Democrats are also scientists.

However the nation remains deeply enmeshed in an on-going crisis of democracy largely fueled by the Republican’s fight to maintain minority rule at all costs. They recognize that despite his victory, Trump received less votes than Clinton. Indeed the Republicans have actually lost five of the last six Presidential elections in terms of popular votes going back to 2000’s tainted victory for George W. Bush. And this year, despite winning over 40.5 million votes for Democratic Senatorial candidates (55.4%) compared to only 31.5 million (43%) for Republicans, the Senate is now poised to become even more deeply Republican.

As-of-press-time, charges of voter suppression, counter-charges of voter fraud and the still undecided Senate and governor’s races in Florida and Georgia, highlight the nation’s growing distrust with the system itself.

Indeed, largely out of this frustration with Washington, many environmental advocates also aimed their efforts at shaping state and local governments through four progressive energy and climate centered ballot initiatives. Sadly, all but one failed to pass.

In Arizona, voters said no to accelerating the shift to renewable energy to 50% by 2030. In Colorado, voters said no to an effort to sharply limit fracking on non-federal land. And a measure to make Washington the first state to tax carbon emissions also fell short. However, in Nevada voters passed a measure very similar to the one rejected in Arizona. But because of bizarre state regulations, before the measure can become law, it has to survive a second popular vote in 2020.

Indicative of the roll of money in U.S. politics, in proportion to each ballot initiative’s popularity, Big Oil & Co flooded the races with advertising, pouring hundreds of millions of dollars into the multiple campaigns. The industry-backed group, Protect Colorado, threw roughly $38 million into opposition spending against Proposition 112, an initiative that would have required new statewide measures preventing fracking wells being dug within 2,500 feet of all occupied buildings, hospitals, schools and “vulnerable areas” such as parks and irrigation canals–up from the current 250-400 feet.

Key to empowering local governments up and down the expanding populations around Denver, exactly where frackers are moving, 112’s backers hoped to keep drilling out of people’s backyards. On the other side, largely funded by Anadarko Petroleum and Exxon-Mobile, Protect Colorado filled the corporate media airwaves with messages that 112 would “wipe out thousands of jobs and devastate Colorado’s economy for years to come.”

By contrast, the main group backing the proposal, Colorado Rising for Health and Safety, raised about $1 million, relying on grassroots efforts and social media. While only winning 44% across the state, the major population centers in Denver, Boulder, and Broomfield Counties, as well as in many of the pricey skiing and scenic mountain areas around Aspen, Telluride and Steamboat Springs voted, often by over 70%, for it.

In Arizona, at least $54 million was spent fighting over its energy direction. The state’s biggest utility, Arizona Public Service, or APS, poured more than $30 million into an industry-sponsored political action committee called Arizonans for Affordable Electricity. They in turn spread mailers and messaging warning that generating 50% of the desert state’s energy from the sun would cost households an additional $1,000 in bills per year. They were opposed by an umbrella activist group called Clean Energy for a Healthy Arizona. While supported by many grassroots organizations, the group got a huge assist from California billionaire investor and political activist, Tom Steyer, who donated the biggest chunk of the nearly $25 million raised.

Meanwhile, Washington ended up setting a state spending record over citizen’s attempts to put a fee on carbon pollution. The Clean Air, Clean Energy coalition, with help from Google’s Bill Gates and other billionaires raised more than $15 million. Meanwhile, oil companies belonging to the Western States Petroleum Association pumped over $31 million into activities and actions opposing the measure.

But a true sign of hope for the climate comes from the victory of many progressive state legislators and gubernatorial candidates. Throughout the 2018 campaign, many Democrats won on platforms of reshaping their respective states’ energy portfolios by mid-century. Jared Polis, Colorado’s new governor-elect vowed to put Colorado on a plan to be 100% renewable powered by 2040. Both Nevada’s new governor, boosted with support from Tesla’s Elon Musk and other clean energy investors and Michelle Lujan Grisham, the new governor of New Mexico, have backed sourcing 50% of their state’s electricity from renewables by 2030. Democrat and billionaire JB Pritzker, who won the governor’s race in Illinois, also vowed to harness the Midwestern state’s rich wind and solar resources and put the state on track to use 100% “clean energy” by 2050.


Categories: Blogs

Polish electricity prices on the rise

19 November, 2018 - 14:00

Poland has seen relatively low electricity prices in recent years. While prices have been growing for our neighbours (e.g. Germany), Poland has managed to keep them fairly flat. However, all the signs are that this state of affairs is about to end, writes Michał Olszewski.

The days of cheap electricity in Poland are coming to an end (Public Domain)

Recent weeks have brought a series of signs that electricity prices in Poland are going to rise. Wholesale market prices for energy have increased by about 25% on last year prices.

Wholesale power prices could rise up to 70 percent

For the time being, the alarms are primarily being sounded by local government officials negotiating contracts for the supply of electricity as summer turns to autumn. The Town Hall in the city of Olsztyn stated that the prices being tendered by suppliers are 35% higher than last year. Janusz Malinowski, the president of the Łódź Metropolitan Railway, told “Puls Biznesu” that one supplier suggested a rate 70% above last year’s. “A shock and an omen of horrors in the budgets of rail carriers,” Malinowski commented on Twitter. And not without reason: such a large increase in prices would inevitably entail a rise in ticket prices.

And what about households? The energy minister Krzysztof Tchórzewski reassures us that there is no question of price increases for private consumers. Energy prices in that sector are regulated, meaning that dramatic year-on-year price increase won’t happen. But in contrast, the head of the Energy Regulatory Office warns that with the current hikes in wholesale prices, a lack of increases for individual consumers would mean a loss of about PLN 3 billion for energy companies.

The most important question is: why the price hike? In recent years, Polish energy policy has focused on preserving the status quo with regard to coal. Independent energy market analysts have for years been warning that the cost of CO2 emissions allowances would increase. And that is precisely what happened this year. The response of the Polish energy minister was to visit Brussels and intimate that this was collusion against Poland.

Trouble trifecta: coal, no renewables, and poor infrastructure

But it doesn’t end there: Polish coal prices have risen by about 14% since the beginning of the year. For the Polish power industry, which is still built on coal, that is another problem. And paradoxically the raw material supposed to guarantee Poland’s energy independence is being imported in ever-increasing quantities from Russia.

The past three years have seen the archaic model of the energy system preserved: the Law and Justice government has inhibited the development renewable energy through regulations to keep private investors from developing renewables or becoming prosumers (both producers and consumers). This means that the anticipated increases in coal prices and emissions allowances cannot be dampened to any notable degree by renewable production.

And another issue: the Polish power industry needs serious amounts of money for investments and a refit of transmission lines, some of which are in terrible condition. Instead, the government has chosen to invest in even more coal power plants. One of the present government’s flagship investments is to be a new coal-fired power plant in Ostrołęka. Presented as low-emission, it will be key to the energy security of north-eastern Poland, which is devoid of major energy power plants. It is also a symbolic investment – the Law and Justice government has announced that it will be the last investment in a new coal-fired power generator. This symbol comes at a price – the construction cost for the power plant is estimated at over PLN 6 billion (about 1.4 billion Euros).

Expensive coal, no renewable energy, and no infrastructure investments mean that the days of cheap electricity in Poland are coming to an end. It is doubtful that this state of affairs will have been changed by the energy minister visiting Brussels and suggesting that this is a conspiracy by the energy companies.

Some analysts warn that after 2020 Poland may become the country with the most expensive electricity prices. It would be a sad punch line to the joke of inaction and years wasted by the Polish energy sector.

Categories: Blogs

What’s next for the energy transition in Uruguay?

16 November, 2018 - 14:00

Over just four years, Uruguay increased its share of wind power from one percent to 33 percent. And in September, the country made headlines as it reached a new historical wind record of 48.94 percent. This is of course an amazing development, but there are still issues to be solved, says Maximiliano Proaño.

Privatization of power generation pushes electricity prices in Uruguay (Public Domain)

Uruguay’s energy transition has made amazing progress. But at the same time, the privatization of power generation and the burden that the country has the highest electricity prices in all of South America are serious problems for Uruguay. The public energy utility company UTE must increase its power share from renewables further, and implement policies that reduce residential electricity prices.

The country has done a lot to get to where it is today by investing 3% of its annual GDP in renewable energies. Policy makers have focused on three key policies to drive this trend: auctions, fiscal incentives and net metering. Auctions have been carried out through tenders, assuring bidders that their produced electricity will be consumed for the next 15 to 20 years. The fiscal incentives are mainly tax credits and exemptions of the value-added tax (VAT) on items such as wind turbines and related technologies. And net metering allows consumers to sell excess electricity to the grid and be refunded for it. However, due the high cost of these three incentives, the government has warned that these subsidies will be removed soon.

Today, the renewable energy sector in Uruguay already employs more than 11.000 workers. As such, it is in need of investments in a specialized human capital in this new technological development. That is why, during the month of October 2018 in the small city of Durazno, the Center for Training in Operation and Maintenance in Renewable Energies (CEFOMER) was founded, which is the first of its kind in the country.

The center’s goal is to train people in all types of companies in the wind, solar, photovoltaic, solar thermal and biomass sectors. It was made possible thanks to joint cooperation between the National Institute of Employment and Vocational Training (Inefop), the Ministry of Industry, Energy and Mining, the Technological University of Uruguay (UTEC), the Chamber of Industries of Uruguay and the Intersindical Workers’ Plenary (PIT-CNT).

Privitization and the energy transition

Perhaps the biggest criticism that trade unions and NGOs have of Uruguay’s energy transition is that it has largely led to privatization of the electricity sector. Before this privatization, the public company National Administration of Power Plants and Transmissions (UTE), generated, transmitted, distributed and commercialized 100% of the electricity in the country.

Today, AUTE, the union workers of the company UTE, claim that more than 50 percent of electricity generation is in the hands of private companies. Gabriel Soto, the President of AUTE, has stated that: “The change in sources was made through a strong process of privatization, which generates an inefficient use of these energy when combining them with others. They freed companies from 100 percent of taxes.” Soto also added “There are investments of 3.5 billion dollars that did not leave any money to the state. The companies were offered a 20-year contract through which the UTE is committed to buy all the energy they generate and pay them in dollars at a fixed price”.

In addition, the high price of electricity (especially that in the residential sector) must be addressed by Uruguayan energy reform. Uruguay is the country with the most expensive electric power in all of South America, before Chile, Brazil and Argentina. Gabriel Soto claimed that a family of four spends about four percent of their income on electricity, while poor households pay up to ten percent.

Even though residential electricity prices are now almost 20 percent lower than in 2010, the energy transition has not changed Uruguay’s position in this regard. Over-generation seems to be a big part of the problem when private companies are secured buyers for the next 15 to 20 years as stated above.

It is undeniable that Uruguay through a decisive public policy has facilitated its massive growth of renewable energies, which has meant the transition in five years from a polluting and non-renewable matrix to a mostly clean and renewable electricity sector. However, there are two challenges that the Uruguayan energy sector must face to make it fit for the future. The first is to build up enough human capital to face these new challenges, the second is to reduce the residential electricity tariff to make the consumers benefit from the energy transition.




Categories: Blogs

Renewables in Germany close in on 40% of total generation

15 November, 2018 - 14:00

Germany is edging ever closer to its national target of 65% renewable energy by 2030: even as new government regulations slow down the speed of the Energiewende, market forces and Mother Nature have ensured that throughout 2018, renewable energy will cover at least 38% of Germany’s total electricity consumption. L. Michael Buchsbaum takes a look.

Germany’s renewables have enjoyed a record setting run throughout 2018 (Public Domain)

Germany will still miss its 2020 greenhouse emissions targets, and it may not meet its 2030 goals either. The slow greening of the heat and transport sector in Germany remains a continued concern. However, overall emissions from energy are trending downwards as renewables overtake coal.

So far in 2018, renewables (on- and off-shore wind, solar PV, biomass and hydro) covered a full 38% of gross electricity consumption in Germany. The new figures tallied by the Center for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW) and the Federal Association of the Energy and Water Industry (BDEW) show an increase of 3% compared to the same period last year. In January, April and May 2018, renewables hit highs of 43% due to the extremely strong winds and the high number of hours of sunshine. Looking forward through the rest of the year, the groups believe that if wind demand stays at its average pace throughout 2018, the 38% renewable level will prevail.

During the first three quarters of 2018, almost 170 billion kilowatt hours (billion kWh) of electricity was generated by renewable sources. This is a sharp increase compared to last year’s 155.5 billion kWh in the same period. Moreover, renewables over this stretch were nearly on par with electricity generated from lignite and hard coal, which was around 172 billion kWh. Indeed, coal’s share of the energy mix was down almost 7% from last year, while natural gas also fell by almost 8% percent to around 59 billion kWh.

Overall, onshore wind energy continued to be the largest source of renewables during this period, generating almost 63 billion kWh, an increase of more than 13% over the same period last year. Likewise, solar PV generated more than 41 billion kWh over this period, jumping nearly 16% year over year. In the third and fourth places, respectively, were biomass with around 34 billion kWh (steady since last year) and hydropower, where there was a decline of almost 10 percent to around 13 billion kWh due to persistent drought.

Bringing up the rear for renewables’ share, offshore wind contributed around 13 billion kWh of overall power generation. However, this is extremely impressive considering that just four years ago, offshore wind was considered a niche technology. Today offshore wind is poised for major increases in the near term, and is seen by some experts as a potential renewable baseload.

“Renewables are clearly in the fast lane, while the contribution of conventional energy sources to cover gross electricity consumption is steadily declining. However, there is still a lot of work to do to reach the target of 65% renewables by 2030,” said Stefan Kapferer, Chairman of the BDEW Management Board. He is concerned that Germany’s energy grid may be the most fragile part of the overall system, especially with regards to offshore wind. “Everything must be done to press ahead with the urgently needed expansion of the North-South grid corridors and to create adequate framework conditions for the operation of electricity storage systems. These are prerequisites for making full use of the electricity generated from renewables and achieving the climate goals,” he said.

Indeed, Germany’s renewables have enjoyed a record setting run throughout 2018. By the end of June, they had produced enough to power every household in the country for a year as their combined power output hit a record 104 billion kilowatt hours (kWh), according to energy firm E.On. Year over year, that was 9.5 per cent more than in 2017 and a third more than three years ago, the company said, citing in-house analysts who supply data to its sales teams.

Energy consumption is expected to fall further next year. According to initial estimates by energy market research group AG Energiebilanzen (AGEB), the country’s energy consumption will likely drop by almost five percent over the entire year due to higher energy prices, warm weather and increasing efficiency, outweighing solid economic growth and a population increase.

So far, while renewables have increased and energy consumption has fallen, German CO2 emissions have largely stagnated. This is partially because transportation emissions have continued to rise. In addition, an increasing amount of Germany’s energy is simply exported to neighboring countries. A case in point is RWE’s sale of power generated from coal mined at the giant Hambach and other open pit mines to Belgium.

But this year, partially because of renewables’ sharp increase, Germany’s CO2 emissions are on course for their largest drop since the 2009 recession. Indeed, after remaining virtually unchanged for the four previous years, AGEB calculates a decline of about 7%. Ominously, another factor involved in this drop are the higher temperatures across Europe. The trend has likely continued throughout October, as Germany’s National Meteorological Service (DWD) reported an “exceedingly sunny and very warm” month. The DWD also said the first ten months of the year have never been as warm as in 2018, since German-wide weather measurements started in 1881.

However, this does not mean the nation is on track for further emissions reductions in the coming years. Hans-Joachim Ziesing, a member of the federal government’s independent Energiewende monitoring expert commission, said the drop was largely caused by one-off effects. While certainly good signs, Germany still remains short of its goal to cut greenhouse gas emissions by 40% below 1990 levels by 2020. “I would warn against calling this a trend,” Ziesing said. “I would also warn against believing that we are now taking big steps towards the 2020 climate targets. The gap is far too large to get there on the basis of this year’s developments.”


Categories: Blogs

Urban mobility: Berlin’s mean streets vs. Copenhagen’s sanity

13 November, 2018 - 14:00

“The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.” Italian philosopher Antonio Gramsci

Berlin’s bicycle infrastructure lags far behind. What measures would be necessary for positve change? (Public Domain)

It’s a nasty shock returning to the streets of Berlin after a week cycling in downtown Copenhagen. Never in all my many years biking here (I first moved to West Berlin in 1985, never owned a car) have I experienced such tension, animosity, and violence in traffic than today. And it’s not just cyclists versus cars; it seems everyone on the move is at one another’s throat:  cyclists, pedestrians, street-front store owners, the drivers of private cars, taxis, trailer trucks, and commercial vans. Parked cars are a huge factor, too, clogging Berlin’s many narrow, cobbled streets. And the severity of the mess in Berlin appears even uglier when compared to Copenhagen, dubbed the world’s most bicycle-friendly city for good reason.

Berlin has ten cycling fatalities by way of motor-vehicle-related accidents this year, which already equals last year’s total. And the number of cycling accidents is set to outpace last year’s gloomy statistic of 7,111 cycle-car mishaps (for some inexplicable reason this figure doesn’t count the cyclists injured, sometimes fatally, by car doors suddenly opened in their path.) Berlin is ranked a lowly 36th of 39 German cities for biking infrastructure.

These days, I’m not on my bicycle for more than about 15 minutes in central Berlin without experiencing some kind of altercation, crack-up or near-miss. Yesterday afternoon on Köpenickerstrasse, I saw a young lady on a mountain bike (hipster get-up, headphones, no helmet) very nearly get blindsided by a large commercial van taking a right-hand turn. At the very last second, the van driver slammed on the brakes, the woman swerved, and bloodshed was only just averted. I glared at the van driver as I passed him; he shouted back something at me that I fortunately didn’t quite get. And then on the return trip a fellow cyclist on a (too narrow) bike lane near Alexanderplatz barked at me sharply for coming too close as I passed him. Meine Güte! This is an average day on Berlin’s streets – and the sidewalks aren’t much better.

Sure, cyclists blame the cars, the motorized classes curse the bikes, pedestrians shout at cyclists on their pavements, the bikers retort there’s no bike lanes on the hyper-congested streets. My colleague’s wife bruised her collar bone last week when another cyclist slammed full-speed into her (she on bike, with helmet.)

The crux of the problem in Berlin is that it’s a city in transition – see Gramsci quote. It’s a growing city, which was never made for hundreds of thousands of autos in the first place, and is transitioning to a low-carbon, sustainable metropolis in which the likes of bikes will one day replace motor vehicles, as has happened, partially, in Copenhagen.

This transition is part of the left-wing Berlin government’s mandate. In 2016, cycling proponents in Berlin gathered enough signatures (over 100,000 in 3.5 weeks) to hold a popular referendum that would have compelled the city to have two-meter-wide bike lanes on every major street, 350 km of lanes for children, 200,000 bike parking spots at public transportation nodes, 100 km of fast lanes for commuters, and other adornments. But the Social Democrat-Greens-Left Party government that came to power negotiated with the referendum’s organizers to drop the petition and join them in formulating a “bicycle law.” City hall earmarked €20 million for new lanes and refurbishing older ones, and passed a so-called Mobility Law that prioritizes sustainable mobility in city planning. Ever more bike lanes will be protected from street traffic by iron poles that physically separate cycle and automobile traffic. The measures were heralded as visionary and deemed sufficient to catapult Berlin to the front of the pack in ten years, perhaps even enabling it one day to catch up with Copenhagen.

So far, though, there’s not much evidence of this happening. The increased traffic from the additional roughly 30,000 to 50,000 new Bürger that Berlin adds annually to its 3.6 million population renders any of the small-scale progress worthless.

And this gets to the heart of the problem: too many vehicles on the roads and parked on both sides of the streets. Berlin has to do what Copenhagen has done, not only create safe bike lanes and bike bridges but also make owning, driving, and parking a private car in the city prohibitively expensive. One notices immediately in Copenhagen that there are less cars; in fact, only 22% of households own a car. The city makes practitioners of the loud, polluting, climate-killing luxury of urban motorfare pay for it in taxes, registration fees, and parking. “Owning a car is very expensive in Denmark,” the website Expat Life in Denmark warns, “so if you do not really need a car on a daily basis, you are financially better off not owning one.” Newly purchased vehicles are taxed up to 150% of the sticker price. The portal estimates that car taxes and fees, including mandatory parking fees, can easily run to more than €3,700 a year, and more for older, dirty models.

Of course, these are also fewer car owners in Copenhagen because the bicycling infrastructure is so extensive. In both Denmark and Germany, surveys show that the majority of citizens say they’d rather bike to work than drive. In Copenhagen, they can because, say its urban planners, of the political and public will that turned it into a cycler’s Shangri-La . The making of a cycle-friendly city isn’t foremost a financial challenge, but rather an administrative one: one-way streets, parking on just one street side, and lots of white paint and metal posts.

In Copenhagen, I learned to my surprise, most cyclists don’t even wear helmets.




Categories: Blogs