Presentation delivered by Carbon Tracker's Kingsmill Bond and Rachel Carr at COP24 Katowice, 06 Dec 2018
Link to Carbon Tracker Myths of the Energy Transition series by Kingsmill Bond: https://www.carbontracker.org/myths-of-the-transition-renewables-are-too-small/
Link to event livestream: https://unfccc-cop24.streamworld.de/webcast/action-hub-morning-session-5th-december (from 59mins)
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Kingsmill Bond - Myths of The Energy Transition, COP24 Poland
1. Kingsmill Bond, CFA
Carbon Tracker Initiative
December, 2018
kbond@carbontracker.org
Myths of the energy transition. Don’t lie
in ignorance
Presentation at COP 24, Katowice
2. 2
Index
• A. What is going on: technology disruption
• B. The myths.
• C. The counter
• 1. Too small to matter
• Too slow to matter
• 2. Incumbent forecasts.
• 3. Too expensive.
• 4. Intermittent.
• Hard-to-solve
• 4. Help the poor.
• Emerging market demand growth
• D. Reality: stranded assets; stranded lives; stranded thinking.
11. 11
The Myths: Too small to matter
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2000 2002 2004 2006 2008 2010 2012 2014
Thermal Nuclear, hydro, biomass Solar and wind
European electricity supply TWh
Source: BP
24. 24
Myth 3: Too expensive
US LCOE 2018 $/ MWh
Source: Lazard
25. 25
The second inflection point
Source: Carbon Tracker
Share of global coal fleet where new renewables are cheaper than coal
operating costs
China
Europe
26. 26
Costs over time
Source: Our World in data, BNEF, Carbon Tracker
Electricity costs $/ MWh
Lots of subsidy
Renewables start to compete
Game over
30. 30
What has been done
0%
10%
20%
30%
40%
50%
60%
Denmark Portugal Ireland Spain Germany Lithuania Greece UK Italy Romania
Solar
Wind
Share of electricity from solar and wind 2017
Source: BP
31. 31
The rest of the world has a long way to catch up
Share of electricity from solar and wind 2017
Source: BP
37. 37
Myth 5: Help the poor
Source: Carbon Tracker
Share of global coal fleet where new renewables are cheaper than new coal
Vietnam
Philippines Ukraine
43. 43
Carbon Tracker The myth series
• Too small to matter. October 2018
• Intermittency. November 2018
• Hard-to-solve. December 2018
• High costs. January 2019
44. 44
Now over to you
• Which of these have you encountered most frequently?
• Are there any other myths you’ve encountered?
• Do you still see any of these as a genuine obstacle?
• Are you a merchant of doubt?!
54. For more information please visit:
www.carbontracker.org
@CarbonBubble
If you are interested in knowing more,
please get in touch:
kbond@carbontracker.org
Hinweis der Redaktion
.
Myth: there are not enough of various minerals. Rare earths, cobalt, nickel, copper are common candidates.
This is a perennial argument and comes from three fallacies.
First to assume you need everything at once
Technology reduces the need for the most expensive metals
Price brings forward supply
Myth: Fossil fuels provide lots of well-paying jobs.
Fossil fuels are by the few for the few. Small number of jobs and a large amount of money going to a small number of people.
Fossil fuels are in a very small number of locations. About 90% of the world’s oil is controlled by 5% of its population. Solar and wind are everywhere.
Renewable based systems have far more local jobs than fossil fuel systems.
There are 11 million jobs in fossil fuel extraction and 10 million in renewables.
There are of course a number of other assumptions that one can make.
Energy demand growth is likely to be 1-1.5%
Solar and wind supply growth is likely to be 15-20%
This gives a range of peak fossil fuel demand from 2020 to 2027. So it is reasonable to say that the 2020s will be the peaking decade.
Myth. Electricity is small and not that important. Only 20% of end demand. This is true but irrelevant.
There is an error at the heart of most energy calculations. People compare electricity which is high quality and can be used at once with fossil fuels which need conversion and suffer inevitable thermodynamic losses
As a result 43% of all energy supply is needed to make electricity.
And because the world is electrifying, nearly three quarters of the growth ins supply comes form electricity
This is like those who said cars are not horses or mobile phones are not landlines.
The argument is that the share of coal in electricity supply is the same today as it was 30 years ago. So there has been no change and will be no change.
Look at the detail. All the growth came from China. The era of rapid coal demand growth in China is over.
Other countries will not pick up the slack because they have cheaper cleaner alternatives
It is a mistake to look backwards not forwards
Disruption requires simplicity. Detailed models struggle to model radical change.
Peak fossil fuel demand in total means that each sector has to peak.
All fossil fuels are subject to regulatory pressure
Fossil fuels compete with each other and with renewables. Technology and the markets are encouraging this.
Fossil fuels are by the few for the few
8 out of ten people live in countries that import fossil fuels
Transition risk impacts not just the producers of fossil fuels, but related sectors, from electricity to automotive, from fertilizers to capital goods.
These sectors comprise up to a quarter of global equity indices.
According to Fitch, 25% of bonds are in sectors impacted by the transition.
Moody’s recently released a report where they identified $2.2 tn of bonds which have significance exposure to the transition