Originally published on CleanTechnica
by Zachary Shahan
The executive director of the International Energy Agency (IEA), Fatih Birol, was on a Global Action Day panel last week in Abu Dhabi and he made his usual pitch for what Obama basically called an “all of the above” energy strategy. For countries, companies, and organizations that have large investments in fossil energy, this seems to be the popular approach — highlight the angelic nature of renewables and their sudden cost-competitiveness and growth, but then throw around some claims that we still have to accept the energy rapists amidst us and engage in a moral Macarena while we push forward with continued fossil energy growth*. That’s a misleading pitch, in my humble opinion, and it’s all about protecting certain investors and economic interests rather than protecting future generations and providing insight into smart 21st century investment choices.
The panel discussion almost slipped by, disappearing into a haze of loosely remembered pitches for common energy conference talking points. I had heard all of this before and it was old and spineless on Day 1, so it certainly wasn’t a stimulating sales pitch on Day 3,000.
However, two clean energy stats highlighted close to each other in Birol’s time on the mic jumped out at me. He emphasized that over 50% of new global power capacity came from renewables in 2016 (and the same was the case in 2015), but then a few moments later, in response to a question from moderator Michael Liebreich, he noted that only 16% of the $1.8 trillion invested in energy globally in 2015 was invested into renewables. Wait, what? …
First of all, it needs to be acknowledged that there’s a notable conflation in topics here — the first figure concerned electricity generation capacity but the second one included energy for transportation (primarily oil) as well as electricity. Oil investments for transportation purposes are a gigantic portion of total energy investment, so the point of highlighting these two figures isn’t to pretend they come from the same pie. Based on 2015 figures, renewables must have represented 42% of energy investments. Still not >50%, but not as dramatic as 16%.
Nonetheless, the wide gap in investment figures versus new capacity figures was striking — cheap renewables dominate new power plant installations, but polluting fossil fuels dominate energy investments**. It was pretty shocking to me to hear, in the face of renewable cost-competitiveness and the looming Tesla Model 3 (which represents EV cost-competitiveness plus dramatic consumer benefits), only 16% of 2016 energy investments were in renewables. As Birol and Liebreich pointed out, the world needs to double its investments in renewables in order to hope to keep global warming below 2°C, which is seen by the scientific community as absolutely critical for humanity and maybe not even adequate.
This feeds pretty perfectly into my article last weekend about the totally insane carbon bubble. Money is flowing into pollution assets that are generally becoming less competitive or are already uncompetitive, assets that will almost certainly be stranded before the end of their “investment life” (the period during which investors expect them to make money).
The “all of the above” pitch highlighted at the top is hollow, because the future isn’t “all of the above.” But in case that still isn’t clear, I’ll keep typing.