Pops wrote:So why the big drop in RE investment even when oil prices were over $100/bbl?
Oil = primarily transportation. Renewables = primarily electricty. The only renewables to take a hit from cheap oil are in the transportation sector(biofuels, evs, etc.) There is not a strong correlation between oil prices and renewable investments. At least not currently. Cheap oil in the 80's reduced investments in renewables. But this time around renewable investments are still going strong even with cheap oil. Renewable investments are at quadruple their 2000 level.
Clean energy investment rose for the first time in three years in 2014, overcoming a slump in oil prices that unsettled the outlook for the industry. New funds for wind, solar, biofuels and other low-carbon energy technologies gained 16 percent to $310 billion last year.
“Healthy investment in clean energy may surprise some commentators, who have been predicting trouble for renewables as a result of the oil price collapse. The impact of cheaper crude will be felt much more in road transport than in electricity generation.”
The findings ease concerns that the oil price rout that began in the middle of last year would lead to a sharp reduction in funds for low-carbon energy, which is more costly than fossil fuels. “This increase in renewable energy investment demonstrates the resilience of the sector in the face of tumbling oil prices. This trend is set to continue as technology around renewables becomes more affordable. The increasing role that renewable energy plays in emerging markets will also help ensure sustainable growth for the sector.”
Unshaken by Oil
“Technologies such as solar are much more cost competitive now so you might not see as much pressure from low oil prices.”
Investment in biofuels, which are blended with gasoline to help cut emissions, was one of the few clean-energy segments to suffer a decline, dropping 7 percent to $5.1 billion.
Clean Energy Investment Jumps 16%, Shaking Off Oil’s DropPops wrote:The $232 billion invested in renewables in 2013 was dwarfed by the $1.6 trillion total global energy investment in that year reported by IEA, and of the 235GW of new generation capacity installed globally in 2012 only 76GW was wind or solar, according to EIA and BP
This changed in 2013 with renewables adding more capacity than fossil fuels. Renewables had even greater additions if you look at actual generation instead of generating capacity. There was alot of new coal capacity added in China and yet the utilization rates of China's coal plants are at record lows, approaching 50%. India's utilization rates are hitting record lows as well. In terms of actual generation, renewables additions to the power grid were more than triple fossil fuel's additions.
The race for renewable energy has passed a turning point. The world is now adding more capacity for renewable power each year than coal, natural gas, and oil combined. And there's no going back. The shift occurred in 2013, when the world added 143 gigawatts of renewable electricity capacity, compared with 141 gigawatts in new plants that burn fossil fuels.
"Despite the change in oil and gas prices there is going to be a substantial buildout of renewable energy that is likely to be an order of magnitude larger than the buildout of coal and gas." The question is no longer if the world will transition to cleaner energy, but how long it will take.
Fossil Fuels Just Lost the Race Against Renewableskublikhan wrote:World electricity sector increase from prior year TWh
source 2013
fossil fuels 110
renewables 383
nuclear 13
total 506
Energy Infrastructure Progress ReportChina is reducing coal use for power generation faster than expected as the use of cleaner-burning fuels and slowing economic growth drags thermal utilisation rates to a potential record low. Clean-fuel policies, as well as an economy growing at its slowest pace in 25 years, are driving lower coal use, with power companies using a greater mix of hydro, nuclear and renewable options, especially wind. Coal still makes up nearly two-thirds of China's energy mix, but utilisation rates at thermal power plants - nearly all coal-fired - have dropped to 52.2 percent.
China's coal use falling faster than expectedNEW DELHI: This summer has been the worst ever for both consumers and power generation companies. Thermal plants have run at the lowest capacity in 20 years. Most coal-based power plants can't recover even their operating costs while running gas plants has become commercially unviable. Average utilisation of coalfired plants dipped to 64% this June. Gas-based power projects operated at just 29% of their capacity during the first quarter and at 22.5% last month.
Power plants’ capacity utilisation at record lowPops wrote:Uni, just pointing out the facts as they sit, pooh-pooh them as you will they are still the facts.
Just to reiterate the point Ulenspiegel was making:
kublikhan wrote:2013 renewable highlights:
Solar PV investments declined 22% while installations increased 32%(declining costs).
Energy Infrastructure Progress ReportDeclining investments do not equal declining installations.
Pops wrote:The country’s embrace of natural gas means less love for wind and solar. New investments in renewable energy sources declined 5 percent in North America last year to $56 billion, the lowest since 2010, according to Bloomberg New Energy Finance. By comparison, North American oil and gas companies spent $168.2 billion on exploration and production last year, more than double 2009, data compiled by Bloomberg show.
This is misleading for 2 reasons Pops.
#1 2009 was an outlier in terms of new global investments(world wide recession and all).
#2. The outlook for oil and gas exploration and production has changed alot since that article was posted.
Global capital expenditures for oil and gas exploration and production projects are expected to drop 17% to $571 billion in 2015. The decline represents the third largest in global expenditures since 1985. If oil prices average $60/bbl, US E&P spending would drop 30-35%.
Based upon the expectation of $70/bbl WTI, international E&P spending is expected to decline at least 15%. The seven supermajors are estimated to be down by 9-15% due in part to the completion of or reduced spending.
Sharp drop expected in global E&P spending in 2015
The oil barrel is half-full.