Looking back, 2020 will be a thick chapter in the history books. This year will be remembered for all kinds of catastrophes, from public health to economic devastation. But it may also be remembered as the turning point for clean energy and the year that changed the world’s trajectory away from certain catastrophic climate change and toward a cleaner, greener energy landscape. 2020 was the year that showed us that oil is not, in fact infallible, and that peak oil is, in fact, inevitable--and it’s right around the corner if it’s not already happening as we speak. When the pandemic brought the global economy to a screeching halt earlier this year, oil prices dove to historic lows, not just shattering previous rock bottoms, but plunging way past zero, with the West Texas Intermediate crude benchmark ending the day of April 20 at nearly $40 in the negative. And while oil has recovered considerably from that stunning crash, the industry has been shaken to its core and will likely never return to its former glory.
For many world leaders and energy and economics experts around the world, this crash had a significant silver lining. It provided a unique and necessary interruption to business as usual in which the powers that be could finally, at long last, take the necessary steps to phase out fossil fuels and reorient the planet away from certain climate death. The World Economic Forum advocated for a “new energy order” and a “great reset.” International agencies such as the United Nations, the International Energy Agency, and the European Union, are all either drafting or implementing green stimulus plans. And in places where the government has not yet led the charge, such as the United States, the private sector has stepped up: a surprising number of blue chip companies have petitioned the U.S. Congress for a green energy stimulus. Related: 3 Reasons Why Oil Could See An End Of Year Rally
This sea change has not stemmed from environmentalism alone--far from it. Countless studies have shown that it makes financial sense too, and that green energy will be a massive jobs creator around the world going forward. In fact, a lot of the world leaders in renewable energy right now are not in it for environmentalism at all. They’re in it because it’s making them a lot of money. Environmental, Social, and Corporate Governance (ESG) investing is not just a trend--it’s here to stay, and those who resist it are likely to get left behind.
All this is to say that while many other economic sectors languished this year, battered by low demands, lockdowns, and supply chain woes, renewable energy companies have had a very, very good year. In fact, a record year. “The numbers are eye-popping,” wrote CNBC this week. “Enphase Energy is up 594%, while SunPower has advanced 484%. Sunrun is up nearly 400%, while Sunnova has gained 310%.”
And then of course there are electric vehicle companies. Unless you’ve been living under a rock you’ve likely been unable to escape the news of Tesla’s meteoric rise in anticipation of the company’s addition to the S&P 500. The company’s stock value has risen more than 700% over this year, and has created no small number of “Teslanaires” out of its shareholders. “Tesla stock is now worth more than the combined valuations of General Motors, Ford, Fiat Chrysler Automobiles and Toyota,” Yahoo! Finance reported this week. And Tesla didn’t even set the record for EV company stocks this year--I think it’s safe to say that that distinction goes to Nio, which saw a jaw-dropping increase of more than 1,000%.
2020 may go down in history as the year that turned everything around for the energy industry and the environment, but 2021 probably isn’t going to be too shabby either. The United States has just passed the nation’s biggest energy bill in a decade, and it’s betting big on renewables. Renewable energy technology is advancing faster than ever, and the sector is on track to keep getting stronger and stronger.
By Haley Zaremba for Oilprice.com
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