Renewable energy overwhelms oil firms sooner than expected

Photo by Zbynek Burival on Unsplash

The rise of renewable energy, public demand for neutral carbon emissions, and government support for a more sustainable and greener source force big oil firms to reconsider their position decades earlier than what was first estimated.

Initial forecasts from big oil and mining companies first said that the industry would continue to peak until the 2040s. However, climate and energy experts are adjusting their predictions to an estimated 2020s date, decades earlier than expected.

Michael Liebreich, the founder of the research group Bloomberg New Energy Finance (BNEF), says that it will not take long after the first move has been made.

“The first 1% takes forever, 1% to 5% is like waiting for a sneeze – you know it’s inevitable, but it takes longer than you think – then 5% to 50% happens incredibly fast,” he says.

By 2030, BNEF expects demand for road fuels to peak, while coal is expected to peak by 2026. DNV GL, a global energy advisory, believes that by the same year, the oil will no longer be the world’s biggest energy source, and by the end of the 2020s, the world’s demand for crude will begin to fall.

Significantly, the change in demand forecasts for oil comes after the intensifying public outcry, demanding more concrete and immediate actions to address the climate emergency as a means to fight the increasing effects of climate change and global warming.

Aside from the public support for more sustainable resources, renewable energy itself has been developed to become cheaper and more efficient than it was a decade ago. Through this innovation, it has allowed countries to invest in renewables more so in recent years.

Notably, the United Kingdom reported this year that it is foreseeing 2019 to be the year that zero-carbon or low-carbon sources will generate more electricity than conventional coal energy plants for the first time since the Industrial Revolution or since 1882 when the first public power plant started operating.

Britain has started to heavily rely on zero-carbon sources such as wind, solar, and nuclear. Consequently, Britain’s National Grid detailed that in the first five months of this year, ending in May, the country only used 47% from carbon sources or energy plants that use coal or gas. Meanwhile, Britain used 48% of its total energy from low-carbon or zero-carbon sources, including Renewables (24%), Nuclear (18%), and Imports (6%).

The same goes for the United States, where its Energy Information Administration said in June that renewable energy sources such as hydroelectric dams, solar panels, and wind turbines generated almost 68.5 million megawatt-hours of power in April, as compared to the 60 million that coal produced that month.

Chris Stark, the head of the UK’s official climate adviser, the Committee on Climate Change, says the precedent set by the renewables industry proves that emerging technologies to capture carbon emissions can follow suit.

“Even ten years ago, we were looking at a very different trajectory for global temperatures. We’ve moved on to a trajectory that today looks like 3C of warming [above pre-industrial levels], but prior to this, we were on track for more than that; 4C, possibly even higher,” he says.

ExxonMobil, one of the top contributors for global carbon emissions, says that it is expanding its research efforts toward the stated goal of producing more (but cleaner) energy in the face of climate change. One of the initiatives involves working with multiple research institutions that soon will become commercially reliable.

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