In an effort to combat climate change and to satisfy customer demand, the corporate community is expected to buy 7.2 gigawatts of green energy this year, which surpasses the roughly 5.4 gigawatts it purchased in 2017. The movement is taking place despite the Trump administration’s denial of climate science.
Corporations, generally, view the Trump administration as an aberration — that the globe is trending toward a low-carbon future and that subsequent public policies will reflect that movement. Nevertheless, the president can stall those changes and in fact, he has acted to do so by withdrawing from the Paris climate agreement, by trying to kill the Clean Power Plan and by placing tariffs on solar panel imports.
“Since the 1970s, fossil fuels have commanded a consistent 60-70% share of the global power generation mix. We think this 50-year equilibrium is coming to an end, as cheap renewable energy and batteries fundamentally remake electricity systems around the world,” Bloomberg New Energy Finance’s 2018 report says.
It adds that is expects $8.4 trillion of the $11.5 trillion invested in power generation between 2018 and 2050 to go into wind and solar energy. Another $1.5 trillion will be placed in other other zero-carbon technologies such as hydro and nuclear power.
Bloomberg said last week that U.S. companies comprise 4.6 gigawatts of the 7.2 gigawatt total. Facebook, meanwhile, is the biggest buyer at 1.1 gigawatts while AT&T is the second largest at 820 megawatts. They are followed by Norsk Hydro and Alcoa at 667 megawatts and 524 megawatts, respectively.
It is referencing the RE100, which comprises those companies that have committed to getting all of their electricity from renewable energy by 2050. The 140 current signatories have purchased 184 terawatt/hours of renewable energy, although to reach their 2030 targets, they must hit 197 terawatt/hours.
Wind and solar prices, meantime, are competitive with other fuel forms, although they are not available 24-7 while natural gas — for now — is the simplest and cheapest way to erect a power plant. Wind costs have fallen by 67% since 2009 while utility-scale solar has dropped by 86% since that time, according to the financial advisor Lazard. They all produce fewer emissions than coal. The cumulative effect is cheaper natural gas and renewables will continue to gain market share in this country, all at the expense of coal.
Stop Sign Ahead
But can federal policy stop, or delay, these moves? The appointments to lead key agencies, in fact, have hurt the environmental cause: Former Environmental Protection Agency Administrator Scott Pruitt and now the acting administrator Andrew Wheeler are both skeptics of manmade climate change.
Interestingly, the Public Employees for Environmental Responsibility successfully forced the EPA to show that Pruitt had no data before him when he publicly questioned the extent to which humans are responsible for global warming, or more precisely, the burning of fossil fuels. In fact, the group proved that Pruitt had been winging it.
“It appears Scott Pruitt’s positions were utterly unencumbered by the facts,” PEER General Counsel Paul Dinerstein said in a statement. “Amazingly, Pruitt had the gall to preach ‘sound science’ until his disgraceful exit.”
Pruitt announced early in his tenure that scientists who receive research grants from the agency will not be able to sit on its boards. That includes hundreds of independent scientists who are employed by universities but it does not preclude scientists employed by oil and natural gas companies.
Pruitt said such a step would reduce conflicts. Critics, however, said it would be nothing less than an attempt to purge boards of independent scientists and to leave them with those paid by corporate concerns.
It would appear that the Trump administration is out-of-step with much of corporate American and specifically with oil and gas drillers. While most oil and natural gas companies are averse to tighter regulations, they are now accustomed to operating at least in a carbon constrained world. Berkshire Hathaway Energy, Calpine Corp., Exelon Corp., General Electric Co., PG&E Corp. and Royal Dutch Shell are supportive of mandated carbon cuts.
At the same time that the U.S. president has been trying to derail formal efforts to curb CO2 emissions, he has been actively working to raise the cost of solar panels coming from China. Earlier this year, he said he would imposes tariffs on such imports. The Solar Energy Industries Association along with much of the utility sector vigorously opposes this action because it will raise the cost of rooftop solar panels and thus hurt the rollout of solar energy.
The irony of the tariff, which falls by 5% a year and which is ultimately phased out, is that it is intended to “save” or “prop up” the domestic solar manufacturing sector. But American solar panel makers make up just 5% of the global production market.
While the International Energy Agency said that global CO2 emissions rose 1.4 percent to 32.5 gigatons in 2017, the U.S. Energy Information Administration reports that they are falling in the United States: those emissions declined by 14%, or 861 million metric tons from 2005 to 2017. About two-thirds of the increase is coming from China and India, which are actively addressing air quality issues.
Despite Trump and the barriers he has put between the United States and global community, the private sector is taking a proactive role and looking to bridge those gaps. Markets are ensuring it does so by being good corporate citizens and by buying more green energy — a movement that will eventually overshadow the current political environment.