Fossil Fools Going Extinct: Old energy industry blind to emerging renewables ~ The rise of renewable energy may signal the end of fossil fuels sooner than expected. While fossil fuels companies are distracted trying to shore up their dominance, a nimble energy market has emerged with the ability to take them on, and win. I THINK ITS TIME TO CALL IT. Renewables and associated storage, transport and digital technologies are so rapidly disrupting whole industries business models they are pushing the fossil fuel industry towards inevitable collapse. Some of you will struggle with that statement. Most people accept the idea that fossil fuels are all-powerful — that the industry controls governments and it will take many decades to force them out of our economy. Fortunately, the fossil fuel industry suffers the same delusion. In fact, probably the main benefit of the US shale gas and oil revolution is that its keeping the fossil fuel industry and its cheer squad distracted while renewables, electric cars and associated technologies build the momentum needed to make their takeover unstoppable - even by the most powerful industry in the world. How could they miss something so profound? One thing Ive learnt from decades inside boardrooms, is that, by and large, oil, coal and gas companies live in an analytical bubble, deluded about their immortality and firm in their beliefs that renewables are decades away from competing and we are so cheap and dominant the economy depends on us and change will come, but not on my watch. Dream on boys. Their delusion however, is good news for the world. If the industry really understood what was happening, it would pull out all stops to prevent it. While theyd ultimately fail, it would cost us decades of lost time — decades we cant afford if we are to stabilise society and reduce the risk of collapse. I intend to spend this year writing about these trends. They cant be covered in a single column because they are so broad and interconnected. In fact this is perhaps the best example Ive seen of system-wide transformational change driven by parallel, apparently disconnected forces. Here I will provide an overview, with further reading, so you can more easily see the signals emerging around us. Ill then dive into more detail over the coming months. I think its important to always start with a reminder of the underlying context. As I argued in my book The Great Disruption, dramatic economic change is not a choice we get to make, but an inevitable result of physical science. This is because business as usual, with results like ever-increasing resource constraint or a global temperature increase of four degrees or more, would trigger economic and social collapse. So the only realistic outcomes are such a collapse or an economic transformation that prevents it, with timing the only big unknown. I argued transformation was far more likely and, to my delight, thats what we see emerging around us today — even faster than I expected. In parallel, we are also seeing the physical impacts of climate change and resource constraint accelerating. This is triggering physical, economic and geopolitical responses, from melting Arctic ice and spiking food prices to the Arab Spring and the war in Syria (see here for further on that). The goods news in this growing hard evidence is that the risk of collapse is being acknowledged by more mainstream analysts. Examples include this commentary by investment legend Jeremy Grantham and a recent NASA-funded study explained here by Nafeez Ahmed. So the underlying driver — if we dont change in a good way, well change in a very bad way — is gathering acceptance. While it now frames thinking in this area, the mistake many make is to then extrapolate that risk into a likely global policy response as the main driver of change. The thinking goes that we need a Pearl Harbour moment — a physical event that forces a global policy agreement to change. As I also argued in The Great Disruption, thats not how systems change or how our global market society works. Things are far more chaotic and messy, though ironically probably more predictable. In that systems context, economics is the best lens through which we can both see the triggers for transformation and are able to measure its progress. And lets remember we care more deeply about economics and markets — at both the personal and macro level — than about polar bears or ecosystems. Crazy and irrational, but still true. So when we see the price of solar plunge at extraordinary speed and watch its deployment swing like a wrecking ball through the utility sector, we should acknowledge its going to have more impact on the human system response to climate change than the terrifying acceleration of the melting of the Arctic. And when I say wrecking ball I probably understate it. As this excellent overview from Stephen Lacey at Greentech Media explains, the utility sector now faces a death spiral, and its likely many of them wont make it. This is not a theoretical future crisis — growth in renewables is the prime reason the top 20 European utilities have lost $600 billion (no, not a typo!) in value over the past five years. Thats what the financial carbon bubble bursting in a sector looks like — ugly and messy — and theres many more to come. When we see the price of solar plunge we should acknowledge its going to have more impact on the human system response to climate change than the melting of the Arctic The utility death spiral is a great example of system complexity that is simple to understand. Solar energy costs have plummeted so far that in most places you can get electricity cheaper from your own solar panels than you can from a utility... Continues @ abc.net.au/environment/articles/2014/03/19/3966986.htm by Paul Gilding
Posted on: Wed, 19 Mar 2014 09:19:19 +0000
Trending Topics
Recently Viewed Topics
© 2015