Part 5: Resisting Renewables — The end of fossil fuels
At long last we have reached the final article of this renewable energy series. In the previous four articles I responded to arguments in favour of renewable energy skepticism provided by Ed Ireland in his 2016 piece Renewable energy depends on fossil fuels. Covering the mining and recycling industries, the economics of battery storage, the potential for renewable steel as well as the possibility of renewable transportation, all aspects of the impending renewable energy transition were laid out in detail. Looking at this transitional roadmap, we found that the path to a renewable future has fewer roadblocks than ever before; however there remain loose ends yet to be tied up. In the final article of this series we will compare the economic and environmental costs of renewable energy and its closest fossil-fuel competitor, natural gas.
“Renewables and fast-reacting fossil technologies appear as highly complementary and that they should be jointly installed to meet the goals of cutting emissions and ensuring a stable supply.”
As quoted above, Elena Verdolini, Francesco Vona and David Popp in their 2016 article analyse the development of wind and solar industries between 1990 and 2013 which they conclude supports the use of fast-reacting fossil technologies like natural gas to support the development of renewable power.¹ If this conclusion were to be taken seriously, it would be easy to justify maintained or even expanded funding for natural gas project; however the authors’ jump from their positive analysis to their normative conclusions remain deeply flawed.
Immediately it must be said that a sample from 1990–2013 will be inherently misleading if it is used as an assessment of the current or future performance of renewable power. As we have demonstrated in previous articles, development in the renewable power industry occurs so rapidly that historical data remains largely unhelpful. For example, just compare the cost of battery storage since 2013, which has declined from $663/kWh to the current cost of $156/kWh.² Such a significant decline in the cost of battery storage has radically reshaped the energy landscape so that there remains no legitimate need for natural gas to provide stability to the grid. These advances in battery technology over this time period provide renewable energy projects with all the reliability needed and can do so without relying on fossil fuels.
Instead of blindly accepting Verdolini et al.’s conclusions, one only needs to look at real-world examples of renewable energy performance to see that Ireland’s narrative regarding the reliability of renewables is a false one. South Australia, for example, is already running successfully on over 50% renewables, and have done so without any connection to the national grid during the month of February.³ In late January the inter-state transmission towers connecting South Australia to the national grid were damaged due to a tornado which forced the state to rely heavily on regional power sources. Thankfully the hard work of grid operators allowed power within the region to be maintained as South Australians not only avoided blackouts, but enjoyed the country’s cheapest electricity for several days — a product mostly of the state’s renewable power and battery storage projects.⁴ The ability for the region’s renewable capacity to prevent blackouts under these difficult circumstances is just one positive example of how renewables can act as a reliable source of power when necessary. The reliability of renewable power under these circumstances is both a demonstration of the strength of renewables, as well as a clear sign that support from fossil fuels does not need to be expanded.
The Environmental Cost of Natural Gas
Without the exaggerated concerns about energy reliability, the poor environmental prospects of natural gas seriously challenge its legitimacy as a fuel source. In terms of the eco-friendly potential of natural gas, the NETL report that CNG and LNG offer a 50–60% CO2 emissions reduction in comparison to coal.⁵ Whilst this would seem to be a great deal, the 50–60% figure remains misleading as it strictly refers to CO2 emissions whilst ignoring other greenhouse gasses.
As the Union of Concerned Scientists argue, because the drilling, transportation and extraction of natural gas often results in methane leakage, the environmental benefits of this fuel source in comparison to coal are minimal.⁶ Methane is not only a primary component of natural gas, but “is 34 times stronger than CO2 at trapping heat over a 100-year period and 86 times stronger over 20 years”.⁷ Whilst technological advancements in drilling, transportation and extraction procedures could reduce the amount of leakage, developing this technology would require significant government funding which could instead go to the already more environmentally friendly renewable energy sector. Gas drilling has also been found to produce increased air pollution which present a serious health risk for nearby residents.⁸ Compare this environmental outlook with the possible 100% reduction of emissions that renewable energy offers in comparison to coal and the superior option seems clear.
The Economic Cost of Natural Gas
From an economic perspective, things are also looking dire and are only getting worse for the natural gas industry. Onshore wind and solar PV plants are already considered cheaper in new-build prices compared to even the most environmentally friendly fossil fuel projects, meaning that an investment in natural gas already pays less than an equivalent investment in wind or solar power.⁹ Although this economic gap between renewables and natural gas is only small at this stage, the downward trajectory of renewable costs show that this margin will only continue to widen in the coming years.
Perhaps the most damning account of natural gas’s prospects comes from the Rocky Mountain Institute, as they report that “by the middle of the 2030s, clean energy could drop in cost so much that it will be cheaper to build and run new renewables than to keep existing gas plants running”.¹⁰ If the prediction of the Rocky Mountain Institute is correct, this would spell the end of all gas projects — old and new alike. A decrease in costs this significant puts a hard cap on the future of natural gas, with investments in the industry facing a real threat of producing stranded assets in the near future.
Compare these prospects to the success of the renewable power industry and the difference is stark. IRENA estimates, for instance, that a doubling of Australia’s renewable investment by 2030 will lead to a 1.7% increase in GDP.¹¹ Notably this figure accounts for the economic losses of the subsequent decline in fossil fuel industries, as the Climate Council estimates an influx of more than 28,000 jobs across the country if renewable power can be expanded to 50% of supply.¹² When considering natural gas’s limited longevity as well as the falling cost of renewables it simply doesn’t make sense to support natural gas investments anymore.
Resisting renewables
My argument across this series has been simple: Australia needs to move to a renewable energy regime without offering complimentary support for fossil fuels. By taking a system-wide look at the renewable energy industry I have been able to highlight how this transition could be made possible, making stops along the way to debunk arguments often made against renewable energy. Such an approach is an unfortunate necessity it seems, as by focusing purely on one sector within the renewable energy transition critics can easily shift their attention to other areas without having to develop real counter-arguments. It is only by examining the totality of the renewable energy challenge that we can on one hand expose the illegitimacy of renewable skepticism, and on the other hand appreciate just how big of a challenge this transition will be. I remain confident, however, that such a transition is not only a possibility, but that with the right support it presents Australia with an unprecedented opportunity for economic and environmental prosperity.
[1] Elena Verdolini, Francesco Vona and David Popp, Bridging the Gap: Do Fast Reacting Fossil Technologies Facilitate Renewable Energy Diffusion? (August 26, 2016). FEEM Working Paper №51.2016. http://dx.doi.org/10.2139/ssrn.2830434.
[2] Veronika Henze, “Battery Pack Prices Fall As Market Ramps Up With Market Average At $156/kWh In 2019,” December 3, 2019. Accessed January 19, 2020. https://about.bnef.com/blog/battery-pack-prices-fall-as-market-ramps-up-with-market-average-at-156-kwh-in-2019/.
[3] Giles Parkinson, “South Australia re-connected to main grid as AEMO completes delicate opperation,” February 17, 2020. Accessed March 21, 2020. https://reneweconomy.com.au/south-australia-re-connected-to-main-grid-as-aemo-completes-delicate-operation-16930/.
[4] Ibid,.
[5] National Energy Technology Laboratory, Cost and performance baseline for fossil energy plants, Volume 1: Bituminous coal and natural gas to electricity (San Antonio: NETL, 2019), 10.
[6] National Union of Concerned Scientists, “Environmental Impacts of Natural Gas,” June 19, 2014. Accessed January 12, 2020. https://www.ucsusa.org/resources/environmental-impacts-natural-gas.
[7] Ibid,.
[8] Ibid,.
[9] Ken Baldwin, “FactCheck Q&A: is coal still cheaper than renewables as an energy source?” The Conversation, August 14, 2017, accessed January 17, 2020, https://theconversation.com/factcheck-qanda-is-coal-still-cheaper-than-renewables-as-an-energy-source-81263.
[10] Adele Peters, “It’s now cheaper to build new renewables than it is to build natural gas plants,” November 9, 2019. Accessed March 21, 2020. https://www.fastcompany.com/90402331/its-now-cheaper-to-build-new-renewables-than-it-is-to-build-natural-gas-plants.
[11] IRENA, Renewable Energy Benefits: Measuring the Economics, (Abu Dhabi: IRENA, 2016), 26.
[12] Climate Council, Renewable Energy Jobs: Future Growth in Australia, (Canberra: Climate Council of Australia Ltd., 2016), 20.
