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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Renewable Energy Continues To Eat Away At Fossil Fuel Dominance

Renewables are set to be the fastest-growing source of energy in the coming decades, giving fossil fuels such as coal and oil a run for their money in many parts of the world.  Sure, the world will continue to need oil, coal, and natural gas in the future, because energy systems cannot and will not switch to 100-percent low-carbon energy sources any time soon.  

Recent data and analyses suggest, however, that renewable energy sources such as solar and wind power and increased penetration of electric vehicles (EVs) are becoming increasingly competitive with the dominant energy sources of the 20th century—oil, coal, and natural gas. 

Increased rates of electrification and industrialization in emerging markets will support the rise in consumption of energy of all kinds, but all analyses point to slowing growth in oil and gas consumption. On the other hand, renewables have been the fastest-growing energy source in recent years and are expected to continue to be such in the coming decades. 

Last year, renewables accounted for 41 percent of the rise in energy demand, the largest of any energy source, BP Statistical Review of World Energy 2020 showed

To compare, natural gas represented 36 percent of the increase in energy demand, and oil was only 21 percent of the rise in total global energy demand, according to estimates from Reuters columnist John Kemp

According to BP, primary energy growth in 2019 was driven by renewables, followed by natural gas, which together contributed to over three-quarters of the net increase.  Related: Big Tech Still Loves The Oil Business

“The share of both renewables and natural gas in primary energy increased to record highs. Meanwhile, coal consumption declined, with its share in the energy mix falling to its lowest level since 2003,” BP said in its statistical review published earlier this year. 

Natural gas, coal, and oil will continue to be major sources of energy in the coming years, but renewables and EVs will encroach on their territory.

As per BP’s Energy Outlook 2020 published on Monday, renewables – led by solar and wind – will be the fastest-growing energy sources over the next three decades, with renewable energy use in the power sector growing quickly in all three scenarios that BP has examined—Rapid, Net Zero, and Business As Usual (BAU). The growth in renewables will be accelerated by declining costs and policies around the world to encourage a shift ‎to lower-carbon energy sources, BP said. 

The trend in renewables dominating power capacity additions has already started. According to estimates from research company BloombergNEF (BNEF), solar and wind power combined accounted for 67 percent of all new power capacity the world added last year, while the share of fossil fuels in new capacity declined to 25 percent. With a record 118 gigawatts (GW), photovoltaics (PV) accounted for 45 percent of new-build capacity and was the most popular technology deployed in a third of nations, BNEF said. 

Including hydropower, renewables accounted for three-quarters of all commissioned capacity globally last year. 

The use of coal in developed economies is sliding because older coal-fired plants cannot compete economically with new natural gas and renewable capacity, Ethan Zindler, head of Americas at BNEF, says. 

Going forward, cost competitiveness will be key to how much oil, gas, and coal that renewables can displace. 

Renewable power is increasingly cheaper than any new electricity capacity based on fossil fuels, the International Renewable Energy Agency (IRENA) said in June. 

In fuel demand for road transportation, the higher the penetration of EVs in major automotive markets, the more oil (gasoline) demand could be displaced. 

EV sales are set to benefit from the ‘green recovery’ plans of many governments, especially in Europe. China is also looking to boost EV use and has extended subsidies for EVs through the end of 2022, Ram Chandrasekaran, Principal Analyst – Transportation & Mobility at Wood Mackenzie, said last month. 

WoodMac expects total global EV fleet to jump to 323 million over the next 20 years—that’s 35 times the current level, as this year’s recession “has left a dent in the electric vehicle (EV) sector but it’s a scratch on the paintwork, not a big repair job.”

The energy transition is here, but it will be a gradual shift toward sustainable energy sources when the power systems and grids are ready to accommodate such a shift. Meanwhile, fossil fuels will still be needed decades from now. Even if we are past peak oil demand – as BP estimates in two out of three scenarios in its report today – that doesn’t mean we stop using oil, it means the use of oil stops growing year over year.   

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Carlos Blanco on September 14 2020 said:
    It is correct that fossil fuels will still be around for a while but the oil business players need to realizes that it's time to rethink their strategy. The energy transition will be driven not only by government policies toward green energy but also the demand from future consumers. Fossil fuels have became unpopular for the young generation. The investors also have started to move away from oil and gas investment. Overal, this is an encouraging news. Renewables should be the energy of the future.
  • GOPAL LAL SOMANI on September 15 2020 said:
    Following is the future for the smooth transition of fossil fuel to RE technologies with Battery Storage.
    The RE technologies are variable and not reliable for cost-effective 24x7 solutions in the past.
    The solar and wind generation cost has declined in all markets and batteries prices are declining rapidly. The integration of all such technologies i.e. WWSS (Hydel, Wind, Solar, and Storage) and innovation in technologies with higher efficiency output are now reliable, sustainable, cheap compared to fossil generation, and available at affordable prices in all markets.
    DSG + Battery Storage having smart grid harmonization functions is the future for 24x7 power supplies to all segments i.e. Agriculture pumps, Rural population, Commercial and industrial Segments. India’s immense solar potential being harnessed by the installation of well-engineered 500 KW to 2.5 MW small scale DSG with a storage system connected to its 50000 to 60000, 33 / 11 KV Distribution S/S spread over all across will transform the energy sector. The road map is set for 24x7 clean energy supply at affordable prices to the rural population by 2030 will be easily met.
    The entire demand for the rural population will therefore switch over to clean energy sources from fossil fuel to 100% Clean Energy by 2030.
    Similarly, low-cost electricity supply to the EV charging stations at each fuel pump station will facilitate all the public and private vehicles to easily switch over to Electricity. This attempt in a phased way will also transform the transport segment to achieve 100 % successful switchover to RE generation facilities supplying 24x7 systems i.e. Water, Wind, Solar, and Storage.
    We are consuming human lives and the environment at a rate almost equal to the total acknowledged economy due to the use of fossil fuels and therefore social costs are critical to understand for policy and politics.
    The sharp reduction of cost on wind, water, solar, and storage and innovation in RE generation technologies makes a perfect case for the 100 % elimination of carbon-intensive power generation technologies by 2030.
    We must look into the electrification of everything on agriculture, residential, commercial, transport, industries, EV charging including heating and cooling requirements with fast deployment of WWSS technologies.
    For this to happen, a fair assessment of energy demands in each segment to be made through the deployment of carbon-neutral greenhouse generation technologies and to achieve these radical changes in the Electricity Acts, Electricity Rules, and Tariff Policies with cost economic evaluation and social benefits. A road map to transform the energy sector and switch over providing 100 % clean energy by 2030 is the need of the hour for all emerging markets.
    I’ve assessed enormous benefits and savings by application of carbon-neutral green technologies for electricity generation and EV charging at an affordable cost that could be realized as the electricity generated by the WWSS systems is cheaper, affordable for 24x7 supply apart that operation cost curves will start converging rapidly in a WWSS world with even the minimal costs on carbon.
    The installation of solar + BES at each 33/11 KV S/S and extending supplies to EV stations with smart grid harmonization functions is the cost economic solutions that will technically fit into the existing fuel supply network and the national grids. Such a shift to meet 24x7 demand for the rural population in all markets without any subsidy or capital grant will bring radical changes in the electricity supply system and transform the sector.
    I am open to discussion on this concept and welcome all stakeholders to be a party to realize solarisation of all rural 33 / 11 KV S/S by the installation of DSG with BES and extending supplies to EV charging. This will ensure day time power to starving the Rural population, provide energy security, and generate huge employment.
  • GOPAL LAL SOMANI on September 15 2020 said:
    We are consuming human lives and the environment at a rate almost equal to the total acknowledged economy due to the use of fossil fuels and therefore social costs are critical to understand for policy and politics.
    Power Generation from Solar and Wind are variable in nature, unreliable not a sustainable solution for 24x7 supply apart that the solutions had not been a cost-effective solution in the past.
    The sharp reduction of cost on wind, water, solar, and storage and innovation in RE generation technologies now makes a perfect case for the 100 % elimination of carbon-intensive power generation technologies and the use of fossil fuel in transport by 2030.
    We must look now into the electrification of everything on agriculture, residential, commercial, transport and EV charging, industrial including heating and cooling requirements with fast deployment of WWSS (Water, Wind, Solar, and Storage) sustainable technologies.
    For this to happen, a fair assessment is required for energy demands to be met through carbon-neutral greenhouse generation technologies. To achieve these goals radical changes in the automobile industry to switch over to EV, Electricity Act, Electricity Rules, Regulations, and Tariff policies need to be framed apart that cost economic and social benefits could be worked. A road map to transform the energy sector and switch over providing 100 %, 24x7 clean energy by 2030 is the need of the hour.
    I’ve assessed enormous benefits and savings by the deployment of carbon-neutral green technologies and that the electricity will be much cheaper apart that operation cost curves will start converging rapidly in a WWSS world with even the minimal costs on carbon
    DSG with Battery Storage and smart grid harmonization functions for India’s Rural Energy Demand will fit into the Distribution network and the system will meet 24x7 demand for the rural population and charge 33/11 KV GRID S/S spread in rural areas without any subsidy or capital grant. The energy transition is here for the shift toward sustainable energy sources when the power systems and grids are ready to accommodate such a shift. The huge investment flowing into EV charging and that means that the use of oil will also stops growing year over year.
    I am open to discussion on this concept and welcome all stakeholders to be a party to realize carbon-neutral clean energy by deployment of WWSS technology and solarisation of all rural 33 / 11 KV S/S by the installation of DSG with BES. This will ensure day time power to starving the Rural population, provide energy security, and generate huge employment.
  • Jon Smith on September 15 2020 said:
    The fact remains, and will always remain, that wind and solar provide small amounts of energy at unpredictable times and are therefore quite useless for powering modern society.
    Less than 3% of global energy comes from wind and solar - this after decades of heavy investment!

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