The tipping point between renewable energy and fossil fuels has been reached, says a new United Nations (UN) report. The UN Secretary-General Antônio Guterres said that we are entering a renewable era and leaving the era of fossil fuels. According to the report, ‘In 2024, renewables made up 92.5% of all new electricity capacity additions and 74% of electricity generation growth’. While almost the entire world has increasingly switched to renewables, the United States 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.
According to the UN report, the cost of renewables has dropped, while their installed capacity has increased significantly; this is particularly the case for solar photovoltaic (PV) 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, PV plants with storage have cheapened, making CSPs a much more cost-efficient 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 many renewable energy plants. As we saw in the recent Spanish grid collapse, 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.
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.
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?
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 stabilize the grid is again economically attractive. In other words, renewables are now competitive today 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.
The Intergovernmental Panel on Climate Change 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 walk the talk about providing funds to poorer countries for their energy transition. While the European Union (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. While President George Bush 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.
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. 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.
A Lot of Hot Air.
With the cost of renewables dropping below that of coal, where does this leave companies that touted carbon capture, not through natural carbon sinks such as compensatory forestry, but 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 enhance 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. The key players are oil companies: ExxonMobil, Chevron, British Petroleum (BP), and Shell.
Not surprisingly, an analysis—Li, M., Trencher, G., & Asuka, J., Feb 16, 2022, PLOS ONE —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’. 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% 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% 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. This is the new G1's ‘Trump-based world order’, instead of the G7's so-called ‘rule-based world order’.
---
This article was produced by Globetrotter. Prabir Purkayastha is the founding editor of Newsclick.in, a digital media platform. He is an activist for science and the free software movement
Comments