Overtaking Coal

For the first time, renewable energy has generated more electricity than coal in the United States. 

According to the Energy Information Administration (EIA), renewable power has overtaken coal generation last April by 16 percent. And renewables are expected to dominate the US power mix on May with EIA predicting that clean power will eclipse coal power by an additional 1.4 percent. 

Renewables dominating the energy mix of the United States is not a stroke of luck. In fact, clean power will consistently catch up with coal in the US in the near future says the Institute for Energy Economics and Financial Analysis (IEEFA): “Coal’s proponents may dismiss these monthly and quarterly ups and downs in generation share as unimportant, but we believe they are indicative of the fundamental disruption happening across the electric generation sector.”  

The IEEFA also foresees that renewable energy will generate more power consistently this year all the way to 2020 for the US. After all, coal’s share of the overall energy generation has been declining in the past few years from 45 percent in 2010 to 28 percent in 2018. By 2020, coal power is only expected to contribute just 24 percent of the needed power demand for the country.

The US is not the first country to achieve such a feat. Other countries have already managed to generate more power from renewables in the past.  One of the notable examples is Iceland, which produced 97 percent of the country’s household power requirements from wind in 2015. Its neighbor, Denmark also sourced 42 percent of its power from wind turbines in the same year. Similarly, Germany at one point was able to generate 78 percent of the day’s power demands from renewables.

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Germany was able to generate 78 percent of the day’s power demands from renewables at one point. Photo c/o Time.com

The decline of coal power in the US is in sync with the developments in the global energy trends. According to the International Renewable Energy Agency (IRENA), a third of the world’s installed electricity generation capacity in 2018 was from renewables. This is because 2/3 of the added power capacity last year came from renewable power.

Renewable power’s greater share in many countries’ energy mix only shows that renewables are the key to sustainable future notes IRENA Director-General Adnan Z. Amin. “The strong growth in 2018 continues the remarkable trend of the last five years, which reflects an ongoing shift towards renewable power as the driver of global energy transformation.”

The shift to renewable power is much needed since experts have warned us that we only have a few years left to mitigate the effects of climate change. The United Nations in its report Intergovernmental Panel on Climate Change last year stressed that the world only has 12 years to keep global warming to a maximum of 1.5 °C. Otherwise, we will all suffer the risks of droughts, droughts, extreme heat, and poverty. 

Plus, recently, we were greeted with the news that the Earth’s carbon dioxide level is at an 800,000-year high. Our world has breached 415 part per million sometime this May, a level that has not been seen in millions of years according to data from the Scripps Institution of Oceanography at the University of California-San Diego.

Taking drastic actions to limit global warming then is imperative for all of us. This means we should be cutting carbon dioxide emissions swiftly by reducing our fossil fuel consumption, the primary producer of greenhouse gasses. Going to renewable power is one of the best ways to decarbonize countries, after all.

Sadly, and as I have been pointing out, the Philippines is nowhere near the accomplishments of other countries when it comes to shifting to greener and cleaner energy.  Clearly, some of the major developers and major international banks have told me that they are no longer allowed to develop and/or finance coal power projects.

According to IRENA, the Philippines, from 2009 to 2018 only increased the share of renewable energy in the total power mix from 4732 to 6482 megawatts(MW) or roughly 37 percent. This growth is significantly less when compared to some of our Southeast Asian neighbors. For example, Vietnam has managed to grow its renewable power capacity from 7323 MW to 18523 MW or almost 153 percent in the same period. Likewise, Thailand has added roughly 152 percent of renewables into its generating capacity from 4130 MW to 10411 MW as well.

Some argue, that the Philippines only has a small contribution to the world’s carbon footprint. This is probably true, but it does not change the fact that the use of coal and fuel for power generation remains as the biggest contributor to greenhouse gas emissions in the country. However, this is not the only point.  A more important perspective here is the fact that the presence of coal has the tendency of INCREASING power cost.  As I have always argued the volatility of coal prices and the exchange rates contribute greatly to higher power costs.

The Philippine Climate Change Assessment Working Group 3 Report released last year notes that 41.8 percent of GHG emissions of the country comes from coal and fuel used for power generation and continues to grow by 3.7 percent annually. So, yes, there is a need for the Philippines to take drastic steps in decarbonizing our nation. This is feasible only if renewable power dominates our energy mix. And the sooner we act the better for us Filipinos as our country remains one of the most vulnerable countries to climate change. 

Many countries are working harder to do share their share for the environment by turning to renewable power. Soon, nations will have more cleaner energy to use as they walk away from coal. The Philippines is nowhere near such a state. Yet, one can remain hopeful that we can soon see our country is also taking the fight against climate change by like other nations by allowing renewable energy to flourish and surpass coal power in the country.

References:

https://qz.com/1610977/solar-wind-plus-other-renewables-beat-coal-for-first-time-in-us/

https://cleantechnica.com/2016/02/04/how-11-countries-are-leading-the-shift-to-renewable-energy/

https://news.abs-cbn.com/news/11/20/18/greenhouse-gas-emission-in-ph-rising-report

IRENA RENEWABLE CAPACITY STATISTICS 2019

Press Release: Summary for Policymakers of IPCC Special Report on Global Warming of 1.5ºC approved by governments

http://www.ipcc.ch/pdf/session48/pr_181008_P48_spm_en.pdf

https://edition.cnn.com/2019/04/29/business/renewable-energy-coal-solar/index.html

https://www.forbes.com/sites/johnparnell/2019/04/03/one-third-of-worlds-power-plant-capacity-is-now-renewable/#5801d1043064

https://www.usatoday.com/story/news/world/2019/05/13/climate-change-co-2-levels-hit-415-parts-per-million-human-first/1186417001/

Everyone Is Reaping The Benefits of Lower RE Prices, But What About Us?

The International Renewable Energy Agency (IRENA) says that all renewable energy technologies will be at par with fossil fuel costs by the year 2020.

In its report, Renewable Power Generation Costs in 2017, the organization noted the significant drop of prices from 2010 for both solar photovoltaic (PV) power, which dropped by 73 percent and onshore wind by 23 percent.

At present, onshore wind power average cost is at $0.06 per kilowatt-hour (kWh) while solar is to $0.10. These amounts are close to the cost of electricity generation from fossil fuels, which is somewhere between $0.05 to $0.17 per kWh.

The study predicts that solar prices will trim down by as much as 50 percent by 2020 and that in the next couple of years, both RE technologies are likely to cost $0.30 per kWh.

For the director general of IRENA, these falling costs are an indication that significant changes are about to sweep the energy sector: “These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system,” he noted.

The report also stresses that soon the RE sector will flourish even without subsidies and will continue to do so with the proper government support: “Already today, and increasingly in the future, many renewable power generation projects can undercut fossil fuel-fired electricity generation, without financial support. With the right regulatory and institutional frameworks in place, their competitiveness should only further improve.”

 

solar prices

Solar prices will trim down by half by 2020. Photo c/o http://www.wsj.com

 

Fortunately for the Philippines, we have access to plenty of sunlight. In fact, one study showed that the country could generate as much as 16.17 watts per square meter of solar power. However, our regulatory framework and support for the RE sector are weak. This means we cannot hope to lower down the costs of our renewables unlike what is happening in other countries.

We have to keep in mind that traditional sources of energy continue to dominate our energy mix and will continue to do so in the next 10 years. A BMI Report said that the share of coal is likely to increase by 10 percent over the decade, “The share of coal [is]actually increasing over our 10-year forecast period—from just under 50 percent in 2017 to over 55 percent by 2027,” BMI noted.

The Fitch-owned BMI also sees that RE will contribute around 20 percent of the total power mix in 2020 and a decrease to 16 percent in 2027.

Now, those figures are alarming since the above numbers do not reflect our government’s commitment to shifting to greater use of renewables, to as much as a third of the power mix. This is a point stressed even by BMI: “However the country has released few details on how they intend to reach its target, particularly given the dominance of coal in the project pipeline,”

So, while other countries around the world are enjoying lower costs of power because of RE, the Philippines is not only being left behind but will also have to endure the complete opposite of lower costs of energy: the higher cost of power.

As I have been saying again and again in this blog, our dependence on traditional sources of power comes at a high cost because we import our raw materials, particularly coal from other countries.

The BMI estimates that the Philippines imports around 75 percent of its coal supply from Australia and Indonesia. We pay for these imports in dollars.

Let us not forget that experts predict that the Philippine Peso will be the worst performing currency in Asia this year. The head of trading for the Asia Pacific at Oanda Corp. in Singapore, Stephen Innes even described the Philippine peso as “ the local whipping boy in the region.” Just in the middle of February, the Philippine Peso hit an 11-year low as it fell to P52.12 against the United States dollar.

And as the peso falls against the dollar, we can expect higher power rates. Last February, the biggest power distributor in the country, Meralco has announced a rate hike of P1.08 per kilowatt hour (kWh). This means that the average household consuming 200 kWh per month will need to shell out additional P216 for their monthly bill for January partly because of the depreciation of the peso against the greenback.

That’s just the problem with relying heavily on coal power plants. The Filipino people end up paying more for their power consumption for things beyond their control such as the peso depreciation or increase of costs of imported coal because these two are passed on costs to consumers. We could help alleviate the plight of the Filipino consumers if we can tap our natural resources and rely heavily on them for our energy needs instead.

It is ironic and sad that the Philippines, a country that has natural resources available for more development and use of RE, has to rely on imported coal for our energy needs. Clearly, something must be done about it to help alleviate the suffering of Filipino consumers.

References:

Renewable Power Generation Costs in 2017, IRENA

http://www.manilatimes.net/coal-top-55-ph-power-mix-2027/377594/

https://www.rappler.com/business/196059-philippine-peso-weakest-p52-us-dollar

http://www.manilatimes.net/meralco-hike-rates-p1-08-kwh-feb/378957/

https://www.bloomberg.com/news/articles/2017-12-21/philippine-peso-seen-as-asia-s-laggard-for-2018-as-deficit-grows