Joseph Dutton, Research Fellow at the Energy Policy Group, University of Exeter and Geoffrey Wood, teaching fellow in International Energy Law at the University of Stirling Law School discuss this issue.
Joseph Dutton defines the tipping point for renewable energy as being whether or not renewable energy can stand on its own two feet commercially and compete with fossil fuels on a subsidy-free basis. In general, Joseph points out, costs for producing power from alternative sources has fallen dramatically over the past few years.
The whole discussion about whether renewable fuels can take over from fossil fuels has to be looked at in the context that electricity generation supply is only one part of the energy supplied by fossil fuels. In fact, fossil fuels produce a wealth of other products that we use all the time, including plastics, asphalt, heating fuel and so on. As Joseph Dutton says, we are seeing strong growth of renewables in electricity generation, with obvious implications for coal, gas and car fuel usage in Europe. We are also seeing movements towards renewable fuels in haulage, but it is unlikely that we can replace all the chemical and by-products of crude oil with alternatives and have the same usage for them.
Dr. Woods adds that in Scotland, over 50% of electricity now comes from renewable sources. But, renewables are not going to supply fertilizers, for example. We are concentrating primarily now on electricity production, but globally we have ignored transport, heating and cooling. You cannot have a transition towards a decarbonised energy, Dr. Woods says, unless you take into account these other uses.
Host John Harrison asks: If renewable energy is reaching the tipping point, why is it that only 25% of all investments into energy are going into renewable energy? Joseph Dutton says that this is because some companies don't look at renewable energy as a market that they really want to be involved in. At the same time, quite a lot of the fossil fuel companies are starting to buy into renewable fuels, to add to their portfolios. But the level of electricity we have coming from renewable source is quite impressive compared to where we were a few years ago.
Dr. Woods points out that the transfer from a fossil fuel economy to a renewable fuel economy could lead to global financial meltdown because of the major role that fossil fuel companies play in world economies. A transition of this scale can not happen overnight, he says. Dr. Woods also mentions that a lack of holistic vision, a lack of political will, incompetent companies, are holding the development of renewables back. The fossil fuel economy, Dr. Woods says, has spread around the world and it is still doing very well, even if it kills large numbers of people — 52,000 people last year alone in Britain through pollution. What we should be doing, Dr. Woods says, is working on education and providing fossil fuel companies with a stable regulatory framework, one in which they can see the advantages of investing in renewables. Right now, both guests say, we have cuts to renewable industries taking place, with the birth of ideologically driven austerity.
The G20 pledged to rule out inefficient fuel subsidies in 2009. But subsidies for fuel and exploration alone are still in place, to the tune of $88 billion a year. Joseph points out that the whole discussion about subsidies is difficult as some people consider things such as tax breaks to be a subsidy, and others do not. It depends on the adopted point of view. But subsidies into the fossil fuel industry can be said to short-termism in as far as government policies go.
President-elect Trump said that Climate Change is a hoax perpetrated by China. Joseph Dutton says that Trump is giving mixed signals in his hopes to revive coal. He also wants to promote onshore oil and gas. Trump, however, is unlikely to move back towards coal whilst at the same time maintaining the natural gas (fracking) industry in the U.S. As a result of this, we may see America starting to export natural gas to other countries, as LNG and if that happens, that could have a further effect on coal that is being used elsewhere. Dr. Woods says that In terms of the Paris agreement, Trump seems to be very firm about America withdrawing, but as with many things, what he said might not be what he actually does.
To the question, is there a case that energy should be removed out of the reach of petty politics, Dr. Woods says that you can look to Denmark for example. Back in the 1970s, Denmark was over 90% dependent on oil. Over the past 45 years because of a cross-party program, the country has kept to a renewable, sustainable fuel program, and in whole, they have done pretty well, and are now one of the world’s leaders in sustainable energy.
Perhaps the strongest point made in this program is that energy provision cannot operate purely according to free market principles. It never has done and it never will do. Therefore, if we wish renewable to take over, to get beyond the ‘tipping point,’ this will demand looking at the renewable energy industries on a cross-party, long-term financial and political basis.
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