For the past couple of weeks, I am following British ESO Control Room (@NGControlRoom) accounts tweets. They are publishing the percentages of low-carbon energy resources in the British electricity. Nowadays, when you add up wind and solar, it doesn’t add up to 15%. Gas is on the rise again.
IEA has published some estimated costs regarding renewable gas. Hydrogen costs 12-25$/mmbtu and biomethane around 10-22$/mmbtu. In countries like Turkey, biomethane costs may be lower due to cheap feedstock. Another graph from the same page (WEO2019), shows the amount of permitted hydrogen in the gas grid by countries. France has the highest limit with 6%, Germany’s limit is 2%. Under certain circumstances, it gets to 8%.
One other interesting story was from Georgetown, Texas. The city achieved 100% renewable energy by 2017. But last year customer bills increased and now the people don’t look happy. The reason is not so simple. One explanation claims that the city over contracted its energy needs and had to sell excess energy in the spot market. Low natural gas prices in Texas caused losses when excess generation from low carbon contracts was sold in the spot. Al Gore also hailed the city.
The renewable success of Texas can be attributed to George W Bush. His support for wind generation has paved the way for more wind generation in Texas. On the other hand, Barack Obama has hailed himself as the enabler for shale gas and oil.
What is the biggest threat to the rise of renewables? It is a technology that enables us to recover resources from shale and tight rocks. Fracking has lowered oil and gas prices worldwide. The lower oil and gas prices are rendering all alternative options in clean energy to unfeasible for the time being.
Varun Sivaram, in his book “Taming the Sun” gives examples of how cheap Chinese solar panels destroyed alternative solar technologies. Startups crashed, new photovoltaic technologies came to a halt.
Three years ago, China was hailed as scrapping 100 coal projects. But in the last two years, it installed 43000 MW new coal plants. Recently there are political narratives that fuse coal and energy security back again in China. On the other hand, there is a significant slowdown in solar. This will impact world renewable and solar growth too. Back to coal and retreating from solar will hamper the climate change efforts.
In all these examples, what I see is the beauty of a narrative that captivates us with numbers but numbers are not matching those narratives. The future, like everything else, is a mixed picture. Britain is not producing 100% clean electricity, green gas is not cheaper, 100% renewable cities are seeing backlash from higher bills, not only low oil and gas prices are a problem for clean energy tech but also cheap clean tech is problem for innovation, China’s energy picture is not what it looks like….
Practically no economist has seen the 2008 economic crises as coming. Despite all these models and genius in the field, forecasting is difficult. But this trauma of past failure is causing economists to overpredict the next crises. I fear that this sentiment is infecting the climate change discussion as well. This pushes the private entities to engineer their narratives and statistics as if they are the greenest of all. This creates a veil that hides the ongoing reality.
The next wave of cleantech will rise with increasing oil and gas prices, that is for sure. But R&D and financing are not where it should be. Political pressure is not helping. European targets are getting determined on a broader horizon (20-30 years instead of 5-10), so practically postponing the significant changes to the next governments. The engineering of narratives to create an illusional “change” is getting short of the reality we are facing.