Renewables Update

Renewables are unstoppable
― thoughts on President Trump’s speech announcing his decision to withdraw from the Paris Agreement on Climate Change in Japanese

13 June 2017 (Japanese original published on 2 June 2017)
Mika Ohbayashi, Director, Renewable Energy Institute

United States President Donald Trump announced that the U.S. would no longer participate in the Paris climate agreement. It is very irresponsible and extremely regretful that the U.S., the world’s second largest greenhouse gas emissions country, withdraws from the Paris Agreement in which nearly 200 nations participate.

The Paris Agreement is a legally binding international accord. Both developed and developing countries promised to move towards the overall target of “keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels,” the agreement sets a goal to reach net zero human-caused GHGs emissions in the second half of this century. To this end, all parties to the Paris Agreement are required to formulate and submit emissions reductions plans and implement domestic measures to achieve them.

It is significant that the Paris Agreement has progressed from the Kyoto Protocol which imposes only developed countries’ emission reductions, and that all countries agreed to participate. One of the reasons why the climate change negotiations succeeded in providing a groundbreaking agreement among parties is the fact that from the year 2000 onwards, particularly since the beginning of the 2010s, the explosive deployment and cost reduction of renewables have made it easier to achieve emissions reductions around the world, including developing countries.

Initially, the renewable energy technologies were limited to some developed countries. The accelerated deployment of renewables started in the U.S. in the 1970s and expanded into Denmark in the 1980s, Germany in the 1990s and Spain in the 2000s underpinned by structural reform of the electricity system, including the introduction of unbundling as well as policy measures such as Feed-in Tariff system. Especially in Germany, renewables have followed a steady upward path from the 1990s to the present, serving as a model of renewable energy policies for other countries. And the fact that the German rate payers have supported the solar PV expansion in their country, has promoted global expansion of the solar PV industry and intra-industry competition and resulted in technological innovation and improved efficiency, thereby making a significant contribution to slashing solar PV costs.

Renewables are now expanding rapidly in major developing countries, which is the key to reducing GHG emissions going forward. The global solar PV generation capacity has tripled from approximately 100 GW to roughly 300 GW at the end of 2012 to the end of 2016. In 2016 alone, the total capacity of solar PV installations surged by 75 GW, of which an astounding amount of 35 GW was introduced in China ⅰ . Solar electricity prices have also decreased dramatically: they stood at 2.9 US cents/kWh in Chile in August 2016, 2.4 US cents/kWh in Abu Dhabi in September 2016, and 3.8 US cents/kWh in India in May 2017. In those areas where the amount of solar radiation is high and the land price is relatively low, 2-4 US cents/kWh has become increasingly common.

Meanwhile, the global generation capacity of wind power, which has continued to expand as a competitive energy source, has more than doubled over the past five years, from 238 GW in 2011 to 488 GW in 2016. China is the world leader in this field as well, with 23 GW of power generation capacity newly installed in 2016. Wind electricity prices have also remained steady, hovering at around 3-4 US cents/kWh in countries such as Morocco, the U.S., Egypt, Brazil, Peru, South Africa and Australia. Furthermore, the prices of offshore wind power, which had thus far been thought to be the most expensive renewable, fell last year to as low as 5.3 US cents/kWh, unimaginable two years ago ⅱ .

In 2015, global investments in renewable energy were three times as large as those in fossil fuels (gas and coal). As the world’s largest investor, China now dominates the world in renewable energy expansion and investments. It invested twice as much in renewables as the U.S. in 2015 ⅲ .

Looking back, we find that “100% Renewables” was a slogan for COP21 in 2015, when the Paris Agreement was adopted ⅳ . The world’s leading companies declared that they would make their electricity used 100% renewables and accelerated international negotiations on climate change ⅴ . It was also possible that such efforts became possible because the cost of renewables has hugely declined. Large consumers have become able to choose renewables without paying any extra costs, or rather, to purchase renewables on a more stable basis at lower prices than fossil fuels, whose prices are unstable.

In this way, improvement of technology efficiency and expansion of renewables have been ongoing, supporting and supported by international climate change negotiations ⅵ . Renewables have now become the cheapest source of electricity in many countries and regions across the world.

What does the U.S. situation look like now? Especially prominent is the growth of solar PV installation. In 2016, approximately 15GW of new PV capacity and around 8GW of new wind capacity were installed in the U.S., each ranking second in the world behind China.

Global renewable energy employment reaches 9.8 million, of which 780,000 are employed in the U.S. renewable energy sector ⅶ . Especially, the solar workforce increased in 2016 by 25% year on year to more than 370,000 employees, far exceeding 86,000 coal-fired generation jobs (around 180,000 jobs in oil-well drilling and gas extraction and 50,000 jobs in coal mining) ⅷ .

It is said that 84% of President Trump’s supporters want solar PV to expand ⅸ , while 86% of wind farms are in fact located in areas with strong Republican support ⅹ .

According to the Forbes’ ranking of the world’s top brands, Apple occupies first place, followed by Google, Microsoft, Facebook, Coca-Cola and Amazon ⅺ . These are among the companies which have declared the above-mentioned transition to 100% renewables ⅻ and the world’s most admired and successful companies based in the U.S.

Withdrawal from the Paris Agreement means that the U.S. will be unable to participate in the international rules set forth under the agreement. Some also are concerned that the U.S. may cease to take the initiative in accelerating the global energy transition, eventually resulting in the country’s abandonment of huge benefits it could enjoy from the transition.

However, the shift to renewables that has been being promoted on a global basis will not be affected significantly by this withdrawal announcement. As mentioned above, China has become the world’s largest investor in renewables, and current renewable energy expansion is underpinned by reduced costs. Faced with the same situation, we will see renewables continue to expand in the U.S. from this point onward as well.

As soon as it was reported that President Donald Trump was expected to announce the withdraw from the Paris Agreement, a number of states and local governments as well as industries including the fossil fuel industry, reiterated their determination to strengthen their efforts on mitigation of climate change. California, the largest state in the U.S., has already set a goal of increasing to 50% the electricity derived from renewable sources by 2030, meanwhile, the State Assembly is currently engaged in a debate on legislation that would require the state to get 100% of its electricity from climate-friendly energy sources by 2045.

The shift to carbon-free economies based not on fossil fuels but on renewables will enable us to not only avoid climate change risks but also realize well-being and sustainable growth around the globe, including the U.S. Completely lacking the understanding of these matters, President Donald Trump’s decision was a mistake. Nevertheless, I believe many companies and state and local governments in the U.S. will overcome the mistake that the federal government has made.

 ⅰ Snapshot of Global Photovoltaic Market 2016 - 2017 Edition, IEA PVPS, 2017
 ⅱ Column by Renewable Energy Institute ‘How fast can costs come down in Japan’ 8 May 2017
Bloomberg New Energy Finance Summit, Michael Liebreich, 25 April 2017
 ⅲ Renewable Global Status Report, REN21, June 2016
Bloomberg New Energy Finance Summit, Michael Liebreich, 25 April 2017
 ⅳ Comment by Renewable Energy Institute 'The World Has Taken a Step Toward 100% Renewables – Global Climate Change Agreement Reached at the Paris UN Conference’ 24 December 2015
 ⅴ Column ‘Apple of the U.S.: Realize 100% Renewable Energy’, 21 April 2017
‘Proposal for Promoting Renewables in the Corporate Sector in Japan' Renewable Energy Institute, 22 April 2017
 ⅵ Column 'Faith, Hope and the Energy Revolution' Steve Sawyer, 3 March 2016
 ⅶ Renewable Energy and Jobs -Annual Review2017, IRENA, May 2017
 ⅷ U.S. Energy and Employment Report, the U.S. Department of Energy, January 2017
 ⅸ Clinton, Trump supporters deeply divided over use of fossil fuel energy sources, Pew Research Center, 31 October 2016
 ⅹ Republican know wind energy is a good deal, Wind Energy and Electric Vehicle Review, 8 May 2016
 ⅺ Forbes: The World’s Most Valuable Brands, Forbes, 2017
 ⅻ RE100% Companies, the Climate Group, 2017

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