Even Trump can't dismiss the success of renewables

What impact will the climate-sceptic, coal enthusiast President Trump have on the prospects for renewable energy? How will Brexit affect the UK’s renewable sector? And what’s driving the growth of clean energy in Asia? These were key questions for participants at a Guardian roundtable on the future of wind and solar power, supported by Julius Baer.

And the answer to the Trump question? Precious little impact at all. The sheer strength of the renewables sector – driven by plummeting costs and a growing appetite among consumers and business alike – means it will continue to thrive despite the new administration’s doubts. That was the near-unanimous view of the participants. And it might even win over the president himself, as his business brain engages with the potential of clean energy on the one hand, and coal’s lack of it on the other.

Gina V Hall, investment director at The Carbon Trust, predicted that “a lot of the talk about bringing back coal jobs will start to fade. The rhetoric will be put aside in the face of the facts.” And the most persuasive fact of all is market logic. With renewables approaching grid parity (costing the same as electricity bought from the mains supply), their momentum is becoming unstoppable.

Many of America’s most powerful companies, such as Apple and Google, are strongly committed to clean energy, said Hall, “and they’re not going to let the government get in the way of what they want to do.”

Several participants at the roundtable pointed to the fact that clean energy enjoys strong bipartisan support. As Laura Cozzi from the International Energy Agency commented, over half of the renewable capacity installed recently is in Republican-governed states. Such support might even help secure the future of the tax credits that presently help underpin new investments in the sector, said Anja-Isabel Dotzenrath of E.ON Climate and Renewables.

“The word ‘renewable’ doesn’t feature in Trump’s America First plan – but it is full of talk of exploiting the country’s natural resources, delivering low-cost energy and creating jobs. Well, wind and solar can do all that.” And they have the potential to do a lot more, particularly in the rustbelt areas Trump is committed to helping.

The jobs argument is particularly powerful, given that more US citizens are employed in solar power than in generating electricity through coal, oil and natural gas combined. As Clark MacFarlane, CEO of Siemens Wind Power UK, put it: “Trump’s core policy is more jobs. So why do anything to destroy American jobs, especially ones delivering low-cost energy?”

Investors in the US are wary of being caught on the wrong side of history, said Martin Wright, chair of the Renewable Energy Association. “A lot of them are starting to view fossil fuels like tobacco – as a pariah sector.” And they don’t want to be left with stranded assets, stuck in coal as the market moves decisively away from it. By contrast, the falling prices of solar and wind make it increasingly appealing. Environmental economist Paul Ekins, of University College London, summed it up: “The markets will trump Trump.”

Impact of Brexit on renewables
So much for the US – but what about Brexit? Here the message was more nuanced. While the economic case for renewables remains as strong in the UK as it does in the US, withdrawal brings some unwelcome uncertainty. European energy directives have helped drive Britain’s renewables for years now – so what will it be like outside the fold?

Ekins worries that Brexit will render UK researchers isolated “from people who had been their closest colleagues … I’m hearing that European [research] consortia are just not looking for British partners any more. Why would they, when the whole purpose is to build long-term relationships, and they simply don’t know what will happen after 2020?”

Other panellists shared his concerns. “The EU has a really strong, joined-up R&D programme [on renewables],” said Hall. “Can the UK [government] fill its shoes?” With so many new ideas being spun out of universities, the future of Britain’s renewables sector could, in part, depend on government commitment to funding UK-based consortia post-Brexit.

Whatever the final shape of the Brexit deal, Pierre Tardieu, chief policy officer of WindEurope, takes comfort from the fact Britain and the EU are broadly aligned on climate and energy policy. “In this area, at least, negotiations might be positive.” Ideally, he said, this consensus on clean goods and services would be on a global scale. Unsurprisingly, MacFarlane, whose company has invested in a major new wind turbine factory in Hull, agreed: “The last thing we need is new barriers.”

Despite concerns relating to the obstruction of “the ebb and flow of workers to and from the EU”, Macfarlane remains broadly sanguine. “I don’t like the uncertainty,” he concluded, but “at present, things are workable. And if the government’s new industrial strategy can get behind renewables, then it could be positive.”

Growth in China and India
The real growth story in wind and solar, of course, is happening not in Europe or the States, but Asia, with both China and India investing heavily. So what’s driving that?

It’s partly the same story of falling costs, with China eyeing huge export markets – in solar in particular. But there’s also growing local demand, driven by two things – energy access and health. “Public health concerns in China are changing energy policy fundamentally. There’s no going back now,” said Helena Molin Valdés of the UN Environment Programme.

Anil Raj, co-founder of Indian solar business OMC Power, pointed out that air quality is front-page news there. “People worry about pollution in European cities, but they are like sanatoriums compared to New Delhi. Politicians spend a lot of time there, and they can’t help but see and feel it too, and that’s why things are happening.”

But, he added, the need for energy access will always be the prime driver. “There are two narratives around energy. A developing-world narrative and a carbon-reduction one.” For the former, energy access is king. “We have 350 million people living off grid in India. If we needed to burn coal [to connect them], we would do that.” So it is fortunate, he continued, that fossil fuels are not the solution: “The cheapest and fastest way of connecting [off-grid people] in India is via renewables.” Sarah Chapman, CEO of Faro Energy, said that’s increasingly true in Latin America too.

Energy storage next big thing
So is everything in the renewables garden rosy? Not for Ekins. “We’re not getting nearly enough investment to meet the Paris target [of keeping the global temperature rise to two degrees above pre-industrial levels].” Other panellists echoed his concerns.

So how can the process be sped up? “We need to design the power markets of the future to favour renewables,” said Cozzi. That will become all the more important as technologies such as smart grids and improved battery storage come into play. Wright argued for simplification, moving away from incentives based around specific technologies to a system in which if you’re producing renewables – or enabling storage of renewable power – you get paid for it, regardless of technology.

And, he added, the government shouldn’t be shy of setting some tough rules to drive progress: “Look at the buildings industry. If you hadn’t had some tough regulation there, you wouldn’t have indoor toilets or double glazing.” Householders need incentives to do the right thing, he argued: “So why not link stamp duty to SAP [energy-efficiency] ratings?”

All panellists agreed that the sheer speed of technological change would continue to disrupt the energy market – and, in the long term at least, renewables should be the clear winner. As battery technologies improve, so wind and solar will become even more appealing, overcoming the intermittent nature of such power sources (the wind doesn’t always blow, the sun doesn’t always shine), by storing the electricity they produce for when it’s needed. “Storage will give us the next generation of energy billionaires,” predicted Ekins.

Put all that together, and the logic of renewables becomes irresistible, said Wright. “It’s not a case of doing it to save the planet any more. People are seeing this as a business opportunity. It’s as simple as that.”

Source:theguardian.com