Joanne McIntyre - 22 June 2017
We hear a lot about renewable energy but is it really replacing fossil fuels? Oil is still historically cheap, solar has a reputation for being costly, and what about President Trumps' love of fossil fuels? The truth may just surprise you...
Amid the announcements of massive offshore wind farms and solar energy parks you may wonder how much impact they are really having on fossil fuels. In June the first new coal mine to open in the US in a decade – which will provide energy for steel production - prompted President Trump to claim it “signals a new chapter in America’s long, proud coal mining tradition.” However in the US and around the world the energy markets are in a state of transition and despite Trump’s best efforts, renewables are taking over.
For some context, let’s consider BP’s Statistical Review of World Energy for 2016. Global coal consumption fell by 53 million tonnes of oil equivalent, or 1.7%, the second successive annual decline. The largest declines were seen in the US (-8.8%) and China (-1.6%) while coal consumption in the UK more than halved. World coal production fell by 6.2%, the largest decline on record. China’s production fell by 7.9% and US production fell by 19%.
Oil remains the world’s leading fuel, accounting for a third of global energy consumption. Oil gained global market share after 15 years of decline, aided by an average Brent oil price of just USD43.73 / barrel. World natural gas consumption grew by 1.5%; EU gas consumption rose sharply by 7.1%.
Renewable power (excluding hydro) grew by 14.1% in 2016, the largest increment on record. Wind provided more than half of renewables growth, while solar energy contributed almost a third despite accounting for only 18% of the total. Asia Pacific overtook Europe & Eurasia as the largest producing region of renewable power. China is now the largest single renewables producer.
Global nuclear power generation increased by 1.3% in 2016, all in China. And hydroelectric power generation rose by 2.8% in 2016.
It would seem that coal, the worst polluting fossil fuel, is well and truly on its way out. BP’s chief executive, Bob Dudley, went so far as to say that 2016 marked the completion of “an entire cycle” for coal. Production and consumption were “falling back to levels last seen almost 200 years ago around the time of the Industrial Revolution,” he said, adding that the United Kingdom has recorded its “first ever coal-free day.”
The main driver for any trend is ultimately money. For years, solar was considered an inefficient and expensive energy, but it’s now becoming cheap enough to push coal and even some natural-gas plants out of business faster than previously forecasted. For instance Bloomberg New Energy Finance (BNEF) has reported that solar costs already rival coal in Germany and the U.S. and very soon will do so in China, the world’s largest investor in renewable energy.
Concerns about climate change, the health effects of pollution and the development and maturation of renewable energy sources are all factors driving ahead their global adoption and expansion. Renewables have a bright future indeed.
*The August issue of Stainless Steel World magazine will have energy & renewables as its special focus. If you'd like to receive a free copy, or contribute to this issue, please contact me at email@example.com