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I’m a clean energy evangelist, but even a lot of 2020 energy headlines surprised me. Things happened that I didn’t know were possible. Moments I never imagined came to be. Clean energy showed its strength in the face of uncertainty.
Here are six times I had to lift my head off the ground this year and what it means for the ongoing transition to clean energy.
1. The day the oil price was negative
At the end of April, for the first time in history, the price of an oil futures contract fell below zero. In other words, the owner of the contract was willing to pay the merchants to remove the oil from their hands. It was almost impossible to imagine it a few months before.
“It was a terrifying moment that took your breath away,” Rebecca Babin, CEO of CIBC Private Wealth Management, told CNBC.
This strange world plot made many wonder, “What the heck is an oil futures contract?” The mainstream media delved into this volatile topic, and for the first time the general public (myself included) realized that oil is governed by two truly separate markets: that of commodities (oil itself). ) and futures trading (trading and financial transactions). .
More importantly, he highlighted the dangers of oil futures trading. While this anomaly was a confluence of many specific factors (falling demand for oil, geopolitical rivalry between oil-producing states, complete oil storage facilities) and the price of oil rebounded steadily over the next several months. , the world realized that the oil market is unpredictably volatile. . Related, it became clear that America’s shale industry is also in trouble. Overproduction, combined with heavy debt and high production costs, has forced hundreds of oil producers to file for bankruptcy in the past six years, a trend that accelerated in 2020.
2. That time we found that wildfires offset the emissions gains
If it weren’t for the pandemic, we could remember 2020 as the year of the forest fire. The year began with Australia engulfed in flames, creating so much smoke that scientists are categorizing it on a “volcanic scale” that blocked out some of the sun’s rays for months.
The wildfire season on the west coast of the United States was apocalyptic, with dangerous air quality spreading from Mexico and Canada for a month. The San Francisco sky turned orange. It felt like there was no escape. Beyond the diminished quality of the unbreathable air, this was also the year that wildfires got personal for me, as a fire swept through my community.
What makes wildfires particularly terrifying is the climate feedback effect; The more forest fires there are, the more carbon they release and further fuel climate change. Data from Bloomberg New Energy Finance suggests that emissions associated with the fires in the west offset all emissions reductions from decarbonization of the energy sector. In Australia, the fires unleashed the equivalent of twice the country’s total annual emissions.
With mega fires expected to become the new normal, efforts to decarbonize will have to intensify to offset this wild card.
3. The moment when renewable energies declared themselves ‘immune to COVID’
Despite the many, many obstacles during 2020, renewable energy had a great year. Some statistics:
In the words of IEA Executive Director Fatih Birol, “Renewables appear to be immune to COVID-19.”
While policies and finance are still needed to accelerate the speed of adoption and meet our climate goals, strong performance from renewables shows that the economy is there. Renewable energy is the cheapest form of next generation, and the projects make money for investors, something that cannot be said for many fossil fuel projects.
4. This time NextEra was worth more than Exxon
Seven years ago, ExxonMobil was the most valuable company in America. In October, NextEra Energy, the world’s largest wind and solar power developer, surpassed the oil company in market capitalization.
While ExxonMobil has regained the lead (for now), it reflects that the market believes fossil fuels are in decline. ExxonMobil is doubling down on oil and gas with plans to increase emissions, as the rest of the world (including other oil super-majors, with varying success) is seeking renewable energy. The market has chosen and sees clean energy as the future.
“[Oil companies] they are already being punished in the capital markets, “Danny Kennedy, co-founder of Sungevity and CEO of New Energy Nexus, an organization that supports clean energy entrepreneurs, told GreenBiz earlier this month.” That’s why Exxon is out of favor and NextEra is for it, why Ørsted is up and BP and Shell are down, why Tesla is booming while all those OEMs [auto] the companies, which are basically the transport of the oil companies, are being punished by the Stock Market “.
5. That time localities said ‘no more’ to natural gas in buildings
This year can be remembered as the tipping point for building electrification, with dozens of states and cities adopting policies to turn off natural gas. That paves the way for a new generation of all-electric buildings with appliances – gas stoves, dryers, water heaters, and space heaters – that can run on clean energy.
Logically, removing natural gas from buildings is a no-brainer. To consider:
Utilities and natural gas providers have been fighting tooth and nail against the rising electric tide, creating artificial grass clusters and spending heavily on public relations campaigns claiming that environmentalists want to take away your gas stove. The battle has been furious, with many people confused by the PR crossfire and unfamiliar with electrical appliances.
Despite those efforts, the movement to electrify buildings is cooking with … electric induction. States and cities across the country took important steps toward the gas transition, including New York, Nevada, Colorado, Maine, New Jersey, Michigan, Maryland, Connecticut, Massachusetts, the District of Columbia, Washington and California.
And with wheels in motion, all-electric buildings can be impossible to stop as people fall in love with electrical appliances and the cost of technologies goes down as they scale. Currently, appliances save money in the long run, but the start-up costs are more, kind of like electric cars.
6. That time a president ran (and won) on climate issues
During the 2016 presidential election, climate change did not receive a single question during four presidential debates.
Four years later, a majority (68 percent) of registered voters in the United States said that the weather was a voting problem, even in key states. Americans are four times more likely to be alarmed by climate change than to dismiss it. We had a Democratic Primary event dedicated to the weather. And Joe Biden The final push for the campaign was an advertisement. yelling at his opponent for being completely wrong with the weather.
Clean energy professionals, who numbered nearly 3.4 million in the 50 states before the COVID crisis, emerged as a strong voting bloc. And why wouldn’t they be? Their number is more than three times the number of people employed in oil drilling operations, oil refineries, coal mines, oil and gas field machinery manufacturing combined.
Most encouragingly, Biden’s campaign did not address climate as an isolated issue. Rather, it links clean energy policy with job creation, wealth generation, and addressing social inequalities.
Of course, the next task is to hold the new administration accountable. But hopefully, climate struggles in the coming years will focus on what policies will get us where we want to be, not on whether reality is real.
This essay first appeared in GreenBiz’s Energy Weekly newsletter, which is published on Thursdays. Subscribe here.
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