by Joe Romm: ‘Fossil fuels have lost. The rest of the world just doesn’t know it yet…’
Traditional energy companies and mainstream financial publications are finally waking up to the new reality: The shift to renewable energy, electric cars, and a low-carbon economy is now unstoppable.
The details of this transition are spelled out in a new, must-read, 4000-word article in the Financial Times, “The Big Green Bang: how renewable energy became unstoppable.”
What is most remarkable about the article is that it appears in the Financial Times. The free-market oriented paper is the “most important business read” for the world’s top financial decision makers and “the most credible publication in reporting financial and economic issues” for global professional investors, according to surveys.
We simply don’t see articles like this in Rupert Murdoch-run Wall Street Journal or even the New York Times, which continues to misreport the clean energy revolution and just hired a columnist who spreads misinformation on climate solutions.
The business community, though, is starting to see the writing on the wall, especially in Europe. The CEO of Royal Dutch Shell, Europe’s largest company, declared in a recent speech that the transition to a low-carbon economy is not just “unstoppable.” It is a necessity that “must be embraced” if an oil company like Shell is to survive and thrive. The low-carbon future, he explained, will be built around renewable electricity and electric cars.
The Financial Times article, in fact, begins with an anecdote of a company that developed a better turbocharger for gas-powered cars. After getting some interest from big car companies last year, in January, “Suddenly, none wanted new products for cars running on fossil fuels.” Instead, car companies were putting their limited R&D budgets into electric cars, a seismic shift at an unprecedented speed.
Electric cars that were hard to even buy eight years ago are selling at an exponential rate,” explains FT’s environment correspondent Pilita Clark, “in the process driving down the price of batteries that hold the key to unleashing new levels of green growth.”
Indeed, one key reason the clean energy revolution is unstoppable is the dramatic and ongoing improvements in battery cost and performance. Advanced batteries are game-changing not only for the electrification of transportation, but also for the continued rapid penetration of renewables.
Battery prices have been cut in half since 2014. Europe’s largest power company, Italy’s Enel, projects battery costs falling some 30 percent more by 2021, the FT reports.
One reason battery prices are going to continue to plummet is that a staggering amount of new production capacity is being built. Tesla’s Gigafactory has gotten most of the press attention in this country, but it is “only one of at least 14 megafactories being built or planned,” the FT reports. Nine of the factories are in China.
“Investors say important trends like this are obscured in countries where the existence of climate change is still so widely contested that the scale of the energy transition is under-estimated,” explains Clark, referring to countries like the United States.
The article ends by quoting Eddie O’Connor, CEO of Mainstream Renewable Power, an Irish wind farm developer and a big winner in Chile’s 2016 auction for new generation. The company easily beat providers of fossil fuel power — even though all bids had to guarantee meeting electricity demand 24 hours a day.
“Fossil fuels have lost,” O’Connor said. “The rest of the world just doesn’t know it yet.”