As World Embraces Renewables, Trump-Era US Clings to Fossil Fuels
Prabir Purkayastha
WHILE releasing a new report on the tipping point between renewables and fossil fuels being reached, the UN Secretary General António Guterres talked about how we are now reaching a renewable era, and the end of the road for fossil fuels. According to this UN report, "In 2024, renewables made up 92.5 per cent of all new electricity capacity additions and 74 per cent of electricity generation growth." While almost the entire world has increasingly switched to renewables, the US stands out as the sole "dissident", with the Trump administration denying climate change and still backing fossil fuels.
Not that they can stop the march of history. But given that we are already out of time, the US, the second largest emitter of greenhouse gases and one of the wealthiest countries in the world, can certainly worsen our transition to a hotter world.
(From the Report Released by the UN Secretary General)
The chart above shows that as the costs of renewables have dropped, the installed capacity of renewables has increased significantly, particularly for solar photovoltaic plants, which utilise solar panels. Concentrated solar plants (CSPs), which use lenses/mirrors, concentrate solar rays to heat water into steam, and then utilise it in a steam turbine-driven conventional generator. By the end of this decade, the levelised cost of electricity from such solar plants is expected to approach that of fossil plants. However, photovoltaic (PV) plants with storage have a steep drop in prices, making CSPs a much more costly option today, except perhaps in desert regions. The advantage of CSPs is that their turbines provide inertia, helping the grid remain stable – a crucial issue for grids with a large number of renewable energy plants. As we saw in the recent Spanish grid collapse a few months ago, the grid's failure was partly due to a lack of turbines to provide sufficient rotational inertia, thereby increasing the grid's ability to handle frequency fluctuations.
Let us look at the good side of our energy transition. For the first time, solar and wind energy are now cheaper than coal, natural gas, or oil, and are the quickest options for installing new electricity generation. The difference in the last 3-5 years in this transition from fossil fuels to renewables can be seen below:
· Between 2010-2022, solar and wind power became cost-competitive with fossil fuels –
coal and gas
· By 2023, utility-scale solar photovoltaics (PV) and onshore wind energy had lower generation costs than fossil fuels
· Today, about 75 per cent of new wind and solar PV plants offer lower prices of energy than existing fossil fuel plants
The long-talked-about renewable transition is finally here! The question is, do we have the political will to do what is not only necessary in climate terms but also economically a better option for all of us? Or will the old fossil lobby, particularly in the US, sabotage humanity's transition to a low carbon future?
Let us first look at the big picture that has emerged in the last few years. Solar and wind have now become the fastest growing sources of energy and provide electricity at costs well below that of fossil fuels. Increasingly, it is economically cheaper than coal and oil. With the cost of batteries dropping, adding grid-level batteries and short-term hydro-storage schemes to stabilise the grid is again economically attractive. In other words, renewables are now competitive even without taking into account our climate goals. This is the real inflexion point that we have been talking about since the 1980s, when solar photovoltaics hit the scene. That day is finally here.
That brings me to the Intergovernmental Panel on Climate Change or IPCC. The IPCC had two goals. One goal was to bring to all countries the need for quick climate action to prevent a catastrophic rise in global temperature. The other is to provide the means to fund the energy transition, phasing out fossil fuels, particularly for low-income countries. The understanding that drove such climate action was that the rich countries, who had already occupied the bulk of the existing carbon space due to their past carbon emissions, would help the poor countries fund this transition.
How have these dual goals been met? While the rich countries have been willing to talk about climate goals, right from the beginning, they have not been willing to talk about providing funds to poorer countries for their energy transition. While the EU and United Kingdom, the biggest occupiers of global carbon space after the US, have been investing in their renewable energy transition, the US has not only twice walked out of the global climate agreements but has also provided incentives to its fossil fuel companies. President George Bush only walked out of global climate change agreements, saying American lifestyles are not open to global negotiations. President Trump has gone even further. He is not only a climate change denier but is providing incentives to fossil fuel companies to burn even more carbon fuels and wants to drill for oil and natural gas even in Siberia.
I have already written in these columns about the problem with IPCC making carbon credits an important focus of their discussions. Carbon credits are simply like blood money: rich countries paying poor countries to create or maintain carbon sinks, for the continued and profligate use by rich countries of carbon fuels – coal, oil and natural gas. As we have detailed earlier, these were mostly accounting frauds, in which certain companies issued fraudulent carbon credits, allowing continued carbon emissions in the rich countries. Some of this carbon blood money also reached some partners in the global south, but the bulk of the proceeds of the fraud stayed at home in countries issuing the so-called carbon credits.
With cost of renewables dropping below that of coal, where does this leave companies who touted carbon capture, not through natural carbon sinks such as compensatory forestry, but carbon capture: actual separation of CO2 from the exhaust gases after burning fossil fuels? This is the other carrot that is being dangled before us for rich countries continuing to burn oil, gas and coal.
Today, the only place that carbon capture still has economic relevance is in separating carbon dioxide and using it "to enhanced oil recovery projects, where it is injected into oil fields to extract additional oil that would otherwise be trapped underground" (Charles Harvey and Kurt House, New York Times, Aug 16, 2022). This is why the two authors also describe carbon capture as Big Oil's Large Grand Scam!
The other use of fossil fuels is in the production of what is called grey hydrogen, where hydrogen is produced for its use in the manufacture of steel, ammonia, petroleum refining, methanol and plastic production. It, however, releases greenhouse gases in the form of CO2 to the atmosphere, so it is called grey hydrogen. Grey hydrogen is used as a chemical and not as a fuel. Here again, the key players are oil companies: Exxon, Mobil, British Petroleum (BP), and Shell.
Not surprisingly, an analysis of their business activities shows, "...a continuing business model dependence on fossil fuels...We thus conclude that the transition to clean energy business models is not occurring, since the magnitude of investments and actions does not match discourse." (Li, M., Trencher, G., & Asuka, J., Feb 16, 2022, PLOS ONE) In other words, oil companies are continuing with their business as usual under the cloak of carbon capture, grey hydrogen, etc., along with a lot of hot air. Incidentally, these four companies alone are responsible for 10 per cent of all global warming in the world since 1965.
Yes, the fall of renewable prices below that of fossil fuels means that renewables today provide not only a cleaner and better alternative to fossil fuels, but also a cheaper one. Whether it is electricity generation or transport, fossil fuel-based solutions are being rapidly replaced by solar and wind in power generation and electric vehicles in transport. Even the European Union, held in thrall by Trump and the US, is shifting away from fossil fuels. China and India are both investing heavily in renewables, with India having reached its goal of 50 per cent of installed capacity in renewables well ahead of its goal. For most developing countries, the renewable route is not only more carbon-friendly but also the cheaper option.
The only country acting as the spoiler is the United States, which, though it is no longer competitive in manufacturing, believes that it can extract "rent" from others – we are the biggest military power and also control the global currency, the dollar. Therefore, we will make up our rules for trade and our right to emit greenhouse gases! It has become a rogue nation that survives through open looting, which it calls trade, and it has the right to print money whenever and however much it needs. This is the new G1's "Trump-based world order", instead of the G7's so-called "rule-based world order". Shall we call this transition from Huxley's Brave New World to Orwell's Animal Farm?
