Since the 1970s, the renewable energy sector has usually trembled each time oil goes through the “bust” phase of the commodity cycle.
When crude was dear, users became interested in wind, solar and hydro.
However, when oil became cheap, they gorged on it once more, turning their backs on novel, cleaner, but costlier alternatives.
Today, oil is again in the doldrums. It plunged by 60 percent in price between June last year and January, falling to just over US$40 a barrel, before pulling back to about US$60.
So does this herald another crisis for green energy, further complicating the fight against carbon pollution?
Not necessarily, observers say.
Lower oil prices may indeed lead to more emissions in the transport sector, where electric vehicles have struggled to penetrate even at times of high pump prices, they say.
Transport accounts for about 14 percent of the world’s annually tally of greenhouse-gas emissions.
As the cost of gasoline falls, “people drive more, and tend to buy thirstier cars,” said Pascal Canfin, a climate expert at the World Resources Institute think tank.
However, the picture is different when it comes to energy production, which contributes to 35 percent of world emissions.
“In most [electricity] markets, renewables are not competing with oil, they’re competing with natural gas and coal,” said Alden Meyer, an analyst at the Union of Concerned Scientists, a US non-governmental organization.
The question whether gas and coal will track oil in its extreme movements is unresolved for now, Canfin said.
However, already, an increasing number of high-end oil projects — deeper-water and marginal fields and tar sands, for instance — are being shelved.
Investment in oil around the world is likely to decline this year by between 10 and 15 percent, the specialist bank Evercore IS forecasts.
Advocates of wind say unit costs of their technology are falling, which makes turbines better able to withstand a fall in fossil energy.
Last year, 51,477 megawatts of wind-generated capacity were added, a record increase of 44 percent over the previous year, according to the Global Wind Energy Council (GWEC), the industry’s lobby.
“Not only the low prices, but also the cost stability of wind power makes it a very attractive option for utilities, independent power producers and companies who are looking for a hedge against the wildly fluctuating prices of fossil fuels,” GWEC secretary-general Steve Sawyer says.
Another risk factor for fossils is climate policy, said Dimitris Zenghalis of the Grantham Research Institute on Climate Change at the London School of Economics.
Unbounded fossil consumption “is incompatible with climate objectives,” Zenghelis said bluntly. “If you’re an investor, you have to take that risk into account.”
UN members on Friday completed a new round of negotiations toward a planned climate deal to be sealed in Paris in December.
The pact aims to limit global warming to 2oC over pre-industrial levels.
The prime concern for investors, said Zenghelis, is “stranded assets” — long-term fossil projects that could be scrapped.
According to research published last month in the science journal Nature, one-third of all oil reserves, half of gas and more than 80 percent of coal reserves must be left untouched until 2050.
This would be the sole way to meet the global 2oC target, according to the study, led by specialists at University College London.
Targets for climate action include reducing the subsidies for fossil fuels, which according to the International Energy Agency amounted to US$550 billion in 2013, and imposing taxes on carbon pollution.
Another goal would be to boost energy efficiency.
“If governments use lower oil prices to overhaul their fossil subsidies or introduce environmental taxes, then the fall in prices will be excellent news for the climate,” World Bank senior economist Stephane Hallegatte said.
Historically, though, green policies typically get sidelined when oil prices fall.
Governments usually prefer to reap the benefits of a short-term economic lift.
And they are loath to stir unpopularity with the public or opposition from powerful lobbies by introducing energy levies.
This time, though, the conditions seem more favorable: The science about the dangers of fossil pollution — just published by the UN’s expert panel — is clear, and public awareness is high.
“Politically, now this is a very good time to do it,” Zenghelis said. “It just remains to be seen whether policymakers will take advantage of it.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the