Renewable Energy To Remodel World Dominance Patterns
January 14, 2019 7:44 AM   Subscribe

This Report analyzes the geopolitical implications of the global energy transformation driven by renewables. It is the culmination of ten months’ deliberations by the Commission, involving four meetings held in Berlin, Oslo, Reykjavik and Abu Dhabi respectively, as well as consultations with business leaders, academics and policy thinkers. It is informed by a number of background papers drafted by experts in the fields of energy, security and geopolitics. [via CleanTechnica + bonus]
posted by infini (16 comments total) 25 users marked this as a favorite
 


Thanks for this post! From the report:
The impact of the extraordinary growth in renewables has mostly been felt in the electricity sector. Since 2012, renewables have added more new power generation capacity than conventional sources of energy. Solar power added more new capacity in 2017 than did coal, gas, and nuclear plants combined. Wind and solar now provide 6% of electricity generation worldwide, up from 0.2% in 2000. In the aggregate, renewables account for around a quarter of global electricity generation.
And there's a forecast graph that estimate renewables and fossil fuels will reach the same output in 2050, as renewables increase and fossil fuels decline, after we hit peak fossil fuel demand in 2025.

In the U.S., the next year looks positive, despite the garbage fire of national politics: After a boom year for new natural gas plants, renewables set to retake the lead -- As US carbon emissions increase, cutting natural gas will be the next job. (Megan Geuss for Ars Technica, January 14, 2019
In 2019, more renewable energy will be added to the grid than fossil fuel-based energy, according to estimates from the Energy Information Administration (EIA). That had been the trend between 2013 and 2017, but last year new natural gas-fired power plants outpaced renewable additions to the grid. As a result, US carbon emissions increased, notably from the power sector (Ars Technica), despite the rapid retirement of coal plants and a growing consciousness about the necessity of low-carbon energy.

EIA expects 2019 to be a more modest year for new energy capacity compared to 2018, with only 24 gigawatts (GW) of total capacity additions predicted for 2019 (EIA.gov) compared to the 34GW of capacity additions predicted for 2018 (EIA.gov). In 2018, EIA predicted that 21GW of natural gas plants would come online, with roughly 11GW of new renewables coming online, making 2018 the first year since 2013 in which renewables didn't make up the bulk of the new capacity added in the US.

What will 2019 look like?

2019 will look quite different, according to the EIA. Wind power alone, at 10.9GW, is currently scheduled to come online before the end of the year, likely spurred by the phase-out of an Investment Tax Credit (ITC) (FAS.org PDF) on newly built large wind projects that expires at the end of 2019. (Small wind projects, with turbines smaller than 100kW, can still take advantage of the ITC for some years to come.) In addition, 4.3GW of solar photovoltaics are set to come online in 2019.

Only 34 percent, or roughly 8GW, of planned capacity on the US grid will be natural gas, a marked decrease from last year.
posted by filthy light thief at 9:21 AM on January 14, 2019 [3 favorites]


I like the part of the report that contrasts renewables with fossil fuels:
First, renewable energy resources are available in one form or another in
most countries, unlike fossil fuels which are concentrated in specific geographic
locations. This reduces the importance of current energy choke points,
such as the narrow channels on widely used sea routes that are critical to
the global supply of oil.

Second, most renewables take the form of flows, whilst fossil fuels are stocks.
Energy stocks can be stored, which is useful; but they can be used only once.
In contrast, energy flows do not exhaust themselves and are harder to
disrupt.

Third, renewable energy sources can be deployed at almost any scale and
lend themselves better to decentralized forms of energy production and
consumption. This adds to the democratizing effects of renewable energy.

Fourth, renewable energy sources have nearly zero marginal costs, and some
of them, like solar and wind, enjoy cost reductions of nearly 20% for every
doubling of capacity.42 This enhances their ability to drive change but requires
regulatory solutions to ensure stability and profitability in the power sector.
Pretty much a slam dunk just in these practical areas.
posted by No Robots at 10:35 AM on January 14, 2019 [7 favorites]


My takeaways from the report were:
  • Petro-states are fucked. Countries that have engaged in resource extraction without turning around and investing that "rent" income in productive capacity are gonna be in trouble. (Do you want populist revolutions? Because that's how you get populist revolutions.) Exceptions are places like Norway, and maybe some of the more enlightened Gulf states. It's not clear why the US will continue to prop up Saudi post-2020, unless we get another round of corrupt leadership here in the US, or they start proving their utility very directly.
  • While the US has been dicking around with shale oil and gas, China has prepared to cut us off at the (renewable) pass. They are positioned to be the leader in renewable-energy systems, at least as of right now. However: it's not clear to me whether this is an advantage with a 'moat'. Most of this manufacturing capacity has been built in the last decade, which means, obviously, it can be built in less than a decade, and the first-mover advantage may be thin.
  • Coal mining is out; mineral mining is in. The new petro-states could be mineral-states, particularly those with large deposits of rare earths, lithium, etc. Some metals which are not economical to mine just for themselves (they are only extracted as byproducts of more valuable ores) may become so, sparking new exploration. Money to be made, people to be exploited, the usual. However, the report thinks cartels in rare-earths will be unlikely. So, no "Cobalt OPEC".
  • The report leans heavily on the number of renewable-energy patents by country as a proxy for interest in renewables. Probably not bad as methodology, but I wouldn't count on the global IP law system mattering for much if the stakes get high. I could absolutely see countries deciding to invalidate each others' patents domestically, if doing so would promote their own interests; this is like pharmaceutical patents * 10. Trade secrets and mixed state/industrial espionage will probably dominate when the chips are down.
  • The "local" politics of major cities can have international significance. Decisions by large cities on their energy policy can have more effect than the national policies of many (smaller) nations. (This is probably broadly true on a number of topics, not just energy.) The report suggests that this makes cities' politics more important; my guess is that we'll just see national governments preempt local/regional governments from doing anything geopolitically sensitive. In most cases I expect national governments to win this fight (they have the guns, after all) but maybe not everywhere.
  • Renewable energy is local. Most renewables aren't easily traded over long distance as fungible commodities like coal/oil/gas. Electricity can't be (easily) shipped across oceans, except as manufactured products like hydrogen, syngas, or refined aluminum. The report suggests that energy markets will become regional rather than global; what this really means is that there won't be a uniform global "market price" for energy. Some places may find themselves with structural disadvantages due to high energy prices, while other places may find themselves with structural advantages, but they will have to be exploited locally rather than simply sold. My (admittedly optimistic) guess is that this favors states with renewables and good governance.
  • Electricity can't be easily stockpiled, as oil can. It's harder for states to build up reserves to protect against supply interruptions if they depend on electricity imports, vs. depending on oil/gas imports. If a country finds itself uncomfortably dependent on its neighbors now, they're really not going to like importing electricity that can be turned off at a moment's notice. Within regional blocs, this means the net exporters could exert a lot of influence.
  • More multipolarity, less focus on the Middle East. No reason for Europe to import energy from the Persian Gulf if they can get it from Southern Europe (or North Africa, or Turkey / Near East, whatever). Even more so for the US. Probably bad for US allies of convenience (Saudis, Kurds) and perhaps good for US adversaries (Iran). Might change the Sunni/Shi'a power balance generally. My bet: Iranian influence grows regionally, but shrinks globally. Not a good time to be a Kurd or Iraqi Sunni.
To my eye, it starts to look less like the late 20th century and more like the 19th; fewer global conflicts but a lot more tension within regions and at national borders. Big question is whether late 20th c. international institutions maintain any sway, or if we're back to hard power and gunboat diplomacy.
posted by Kadin2048 at 11:51 AM on January 14, 2019 [10 favorites]


A couple of points to yours, Kadin2048:

Electricity can't be easily stockpiled, as oil can. It's harder for states to build up reserves to protect against supply interruptions if they depend on electricity imports, vs. depending on oil/gas imports. If a country finds itself uncomfortably dependent on its neighbors now, they're really not going to like importing electricity that can be turned off at a moment's notice. Within regional blocs, this means the net exporters could exert a lot of influence.

I like the way the report elaborates various different scenarios and examples on the way to their choice of conclusion. On this topic, they do however mention that interconnectivity regionally means that if one neighbour starts to dominate, states do have some choices left such as having back up sources in available local renewables, as well as turning to other states in their vicinity within the interconnected grid. From the report (pg 51)


Some argue that countries that dominate electricity grids may exercise undue
control over their neighbours, and that inter-state electricity cut-offs will become
an important foreign policy tool, applied strategically in the same way as oil
and gas sanctions.1

Notably, however, electricity trading tends to be more reciprocal than trade
in oil and gas. Whereas oil and gas flow in one direction, from an exporter to
an importer, the trade in electricity between countries flows both ways. A
country that generates solar power may import energy from a neighbouring
country when it rains, but export energy to that neighbour when the sun shines.

[...]
Even if an exporter of renewable electricity acquires a dominant position with
respect to an importing country, that asymmetry cannot easily be used as an
instrument of geopolitical pressure. This is because countries will have alternative
options at their disposal: they can either produce the electricity
themselves, for instance by deploying renewable energy at home, or import
electricity from neighbouring countries.110 As a result, renewable energy
exporters will always be part of a complex web of interdependencies between
importers and exporters that would tend to curtail the potential to use renewable
electricity as a geopolitical weapon.

posted by infini at 12:13 PM on January 14, 2019 [2 favorites]


It seems to me that the transition from stockpile to flow system will foster a global integrated grid that would make use of ultra-high voltage transmission. This would make international cooperation the foundation of energy policy as it is now with trade policy. Nation states would have a vested interest in assisting each other in order to maintain the smooth transmission of electricity. In a truly integrated system, producers and consumers could simply re-route their supplies to get around any state that tried to block transmission.
posted by No Robots at 12:13 PM on January 14, 2019 [2 favorites]


Well hell yeah, the clamp down on solar, the war on Elon Musk, who is, as we all can be, his own worst enemy. All of this with Trump, the cherry on top, is the death throes of fossil fuel, and the fire that will destroy Earth, is destroying Earth, while we allow ourselves to be mind diddled by these last century profit takers, who are handing out free blindfolds.
posted by Oyéah at 12:36 PM on January 14, 2019 [2 favorites]


This is what stood out for me in the sections I have read and made notes on up until now (I'm up till page 68).

* most renewables take the form of flows, whilst fossil fuels are stocks.
Energy stocks can be stored, which is useful; but they can be used only once.
In contrast, energy flows do not exhaust themselves and are harder to
disrupt.


I don't yet know what yet, maybe it will come to me once I glean through to the end of the report, but somehow, this bit, this crucial and critical difference, feels to me like an important one, that will impact and influence our models of the world flows going forward. Especially given our digital flows in our internetworked world, and the value flows I've documented in the last mile of informal trade in East Africa.

On preview, No Robot has capture one important aspect of this shift in their comment.

* Trade flows, trade routes, trading patterns, are all going to change - fossil fuels make up almost 15% of all merchandise trade. This will impact shipping - oil tankers! LNG ships! - as well as strategic chokepoints and bases. This map captures current flows and bottlenecks, which won't hold the same critical importance they do right now.

* And something called stranded assets, as the world changes:

The global fossil fuel system has a built asset value estimated at 25 trillion
US dollars141 and continues to add one trillion dollars of assets each year.142
A giant network of oil wells, coal fields, power stations, pipelines, oil tankers
and refineries extends across the world. Yet no more than a quarter of total
coal, oil, and gas reserves can be burned before the ‘well below 2o
C’ target of the Paris Agreement is exceeded.143

Parts of the fossil fuel system could become ‘stranded assets’ as a result of
policy action and the falling costs of renewable technologies. Asset stranding
occurs when assets have suffered unanticipated or premature write-downs,
devaluations or conversion to liabilities.144 IRENA has noted that electricity
generated from renewables will become cheaper than electricity generated
by new fossil fuel assets in all major locations by 2020.
145 It is therefore only
a matter of time in many parts of the world before green electricity becomes
cheaper than electricity generated from existing assets, at which point it
would make sense to close down fossil fuel generators.


This, and the number of people out of jobs in the fossil fuel industries are all issues of concern (pg 63). But I worry more about these expensive assets being a trigger for blocking change than any concern over joblessness by the those who control these things.

The risk of stranded assets might not be fully reflected in the value of companies
that extract, process or distribute fossil fuels. Moreover, these assets are
counted when countries calculate their national resources. Were the risks to
be priced in, the value of these companies, and the credit ratings of certain
countries, could experience a sudden drop. This might have systemic consequences,
even trigger a climate ‘Minsky moment’,148 given the large sums
involved. One study found that no less than 12 trillion US dollars of financial
value could be lost in the form of stranded assets.149 To provide context, the
Great Recession of 2008 was sparked by losses in the US subprime mortgage
market of 0.25 trillion US dollars.

posted by infini at 12:37 PM on January 14, 2019 [1 favorite]


China has prepared to cut us off at the (renewable) pass. However: it's not clear to me whether this is an advantage with a 'moat'. Most of this manufacturing capacity has been built in the last decade, which means, obviously, it can be built in less than a decade, and the first-mover advantage may be thin.

Its not really first mover advantage. Concerning wind energy, Denmark enjoyed first mover advantage and continues to do so really, though this has been eaten into quite slowly over the last 10-15 years. There are also German and US companies amongst the biggest turbine manufacturers in the world. Chinese companies may continue to grow but this is by no means written in stone. Regarding solar PV, twenty years ago it looked like a showdown between the US, Japan and Germany. Germany spent a lot of money from about 2000 onwards to support a domestic market and it is possible to make a case that the market thus created played a substantial part in creating the demand which eventually led to more global interest, albeit that other countries also started to throw subsidies into the pot from about 2005 on. However, as this happened it increasingly became Chinese companies which took advantage of these emerging markets. This is perhaps a bad thing in terms of German industrial strategy, it won't drive the returns that Denmark saw on its early investments in the wind sector, but its probably a good thing in terms of access to cheap, mass produced PV.

Is the growth in PV manufacture we have seen in China replicable? Its been aided by cheap labour so perhaps not replicable in the west. There are rumours that pollution control may not be all it could be in China so that may also make for conditions which may not be replicable in the west.Somewhere with similar characteristics would have to be able to throw a lot of money at building the large scale of factories in China, and China will have nailed down the economies of scale aspect of manufacture that will make catching up difficult. One possibility might be technical breakthroughs elsewhere, which might be possible but I think this would still require somebody betting pretty big on scaling up even from a big jump forward in tech.
posted by biffa at 1:26 PM on January 14, 2019 [3 favorites]


On a personal note, a few years ago I spent a couple of thousand bucks on 400W worth of solar panels, four golf-cart batteries, a charge controller, and a 1000W inverter. This year I had to buy four new batteries for about 500 bucks.

Compare this to the $20,000 the local power company wanted to set a few poles and a transformer in order to bring me electricity the quarter-mile from the last pole.

The down side? I don't get to use resistance-based appliances such as toasters and space-heaters, and every now and then I have to check the batteries and add water to the cells.

What I like is that I have no monthly bill and no unwanted new neighbors (so far).
posted by Agave at 6:22 PM on January 14, 2019 [5 favorites]


* most renewables take the form of flows, whilst fossil fuels are stocks.
Energy stocks can be stored, which is useful; but they can be used only once.
In contrast, energy flows do not exhaust themselves and are harder to
disrupt.

I don't yet know what yet, maybe it will come to me once I glean through to the end of the report, but somehow, this bit, this crucial and critical difference, feels to me like an important one, that will impact and influence our models of the world flows going forward.


Perhaps because a storable surplus is necessary for the formation of primitive states? If energy is not in storable form then it’s fundamentally more tenuous as a basis for states.
posted by kadonoishi at 10:57 PM on January 14, 2019 [1 favorite]


Also sprinkled throughout the report is the subsequent democratization of electricity (and power, so to speak) as the pattern of access (flows rather than stocks) changes.

A far more fundamentally interconnected world with less incentives to squabble over a storable resource is the vision they hope to seed in our mind's eye among the rubble that is the current day.
posted by infini at 11:09 PM on January 14, 2019 [1 favorite]


I don't yet know what yet, maybe it will come to me once I glean through to the end of the report, but somehow, this bit, this crucial and critical difference, feels to me like an important one, that will impact and influence our models of the world flows going forward.

I think they are aiming to reframe the usual discussion of RE vs FF to play up the advantages relating to the democratisation that infini notes as well as the impact on geopolitics. The framing they do is unusual and important I think, its certainly not the norm. Infini's point about storage still holds but I think there is value in the different perspective rather than the norm of the status quo of framing which tends to focus on the key advantage for FF vs disadvantage for RE re easy availability vs more active planned management of availability.
posted by biffa at 1:14 AM on January 15, 2019 [2 favorites]


I think there is value in the different perspective rather than the norm of the status quo of framing which tends to focus on the key advantage for FF vs disadvantage for RE re easy availability vs more active planned management of availability.

Yes, I agree with you on this. This whole exercise has been one of flipping the contemporary perspective and frames of reference, and its an important one. Their 'disruption' is in our thinking and perceiving the future to be, from the perception of a struggle to one of welp, its here, look at these data points and years ... this transition starts now tbh.

Plus, the issues of availability vs management become moot with increasing digitization, as they mention towards the end of the report in the section on "cyber" - essentially smart cities are doing exactly this, managing availability and consumption proactively and "smartly" - something which was not available at the start of the fossil fuel era signaled, in this report, by the shift of British naval power from steam to oil.
posted by infini at 4:07 AM on January 15, 2019 [1 favorite]


^Yep, flow management is no problem. Just ask the pipeline guys ;)
posted by No Robots at 7:46 AM on January 15, 2019


"US President Jimmy Carter: “No one can ever embargo
the sun or interrupt its delivery to us”."

But, if the powers that be who support the carbon economy decide to fill the sky with diversionary dust, so to speak, won't that cut down on solar gains?

The article didn't mention the Lithium of Afghanistan, being one of the largest lodes anywhere. Supposedly Japan was going to develop this after the US military discovered it, according to articles I read here. You gotta know that will go to China, one way or the other, since they are the closest major battery makers.

I even wonder if the California fires, attributed to PG&E negligence, were not caused by attacks on the grid, for whatever reason, even experimentation. The result will play out in the energy sector as PG&E files for bankruptcy, the power supplier for the worlds fifth largest economy is in bankruptcy. Who will step up? What will happen. PG&E, or at least California is very proactive in how they get their electricity, shutting down flows from large coal plants, and investment into solar.

I'm just sayin' those players aren't going down easily. This is going to take a lot of cooperation and effort on everyone's part, and the current war in the world is about marketing oil, heroin, metals, and the future of these enterprises. Regardless of what ideological friction plays across the surface of things, it is just the bedspread that covers the doings of big industry.
posted by Oyéah at 5:30 PM on January 15, 2019


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