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ISSN 2753-7757 (Online)
Head and shoulders photo of Steve Hodgson, Editor-at-Large, New Energy World Photo:   Steve Hodgson
Steve Hodgson, Editor-at-Large, New Energy World

Photo:   Steve Hodgson

While negotiators at COP27 were struggling last week to reach an agreement to cut greenhouse gas emissions, a new report from the US suggests that a successful energy transition is already inevitable and will be rapid. New Energy World’s Editor-at-Large Steve Hodgson takes a look.

So this year’s COP27 came to its end with the verdict these gatherings often get – some progress, but not enough, and the Global South says it is not being supported by the Western countries which caused global heating in the first place. The European Commission’s Frans Timmermans’ pithy summary was that the agreement ‘does not address the yawning gap between climate science and climate policies’.

 

Nor does it ‘bring enough added efforts from major emitters to increase and accelerate their emissions cut’. Most (not all) of these emissions come, of course, from our energy industry and its customers, specifically from burning fossil fuels.

 

My attention was drawn to an altogether simpler summary global picture, not of climate change, but of the use of fossil fuels around the world which, according to the US-based Rocky Mountain Institute (RMI), has already peaked.

 

The RMI report
Founded by Amory Lovins back in the 1970s, the RMI says it is ‘intensely focused on transforming how we produce and use energy, because its production and use is responsible for 70% of the emissions’.

 

Published last week, it’s latest work: Peak fossil fuel demand, says that in country after country, sector after sector, fossil fuel demand has peaked and now faces a future of decline. Here’s the story in seven points:

  • Global fossil fuel demand peaked in 2019 and is now bumping along a plateau before inevitable decline sets in.
  • Renewables already supplied 85% of the growth in primary energy demand in 2019; and a higher proportion since then.
  • Every area of clean technology is moving up its own market share curve – as new, better and cheaper technologies usually do.
  • Fossil fuel demand destruction will therefore be at least four times as much as over the past decade; and all growth in primary energy demand will come from solar and wind.
  • Meanwhile, efficiency improvements curtail energy demand growth, and efficiency is increasing as cleantech comes further into the energy mix.
  • Therefore fossil fuel demand will be squeezed between the growth of renewables and efficiency gains.
  • By the second half of this decade, it will be obvious that fossil fuels are in terminal decline.

 

The beginning of the end
The endgame is here, says the RMI. Global energy demand is expanding slowly and, in such a low-growth system, the rapid rise of new, clean energy technologies inevitably means declining demand for old fossil fuels. Perhaps this will come after a plateau phase, as large systems are complex and ‘noisy’, and as incumbent energy players fight back to try to retain market share. Peaks can be like the Matterhorn, says the RMI, sharp and spiky, or more like Mount Fuji, which has a long plateau. But they are both peaks.

 

The RMI theory says that conventional thinking – that energy transitions are long, slow and manageable – is wrong. Driven by the rapid growth of new technology, they come quick and early. There are three stages – emergence or innovation, in which ideas are tried and costs fall; then rapid rollout, when new technology reaches price parity with old technology. The tipping point, when renewables supply all the growth in energy demand, occurs when they have a market share of just 5–10%. Finally, consolidation – renewables have taken over.  

 

Simple as that, apparently. And if the first part of this analysis – that the use of fossil fuels is peaking – needs confirmation, earlier this month we reported the results of the International Energy Agency’s (IEA) annual World Energy Outlook (WEO) report, which finds that: ‘For the first time, global demand for each of the fossil fuels shows a peak or plateau across all WEO scenarios.’ Not as radical (or as soon) as the RMI conclusion, but the IEA is looking in the same direction.

 

A post-fossil fuels era
I have been watching energy matters for a long time and remember when I first heard, at a conference in the 1980s, someone from an environmental group speculating about a post-fossil fuels era, and how revolutionary that felt. In those days, renewables were very new, largely experimental and rather exotic. Now the global wind and solar energy industries are established, mainstream and hugely important industries – and the numbers are still growing.

 

The RMI says that the transition is inevitable and will be quicker than conventional thinking suggests. Maybe there is more to be optimistic about than reports from Sharm El-Sheikh suggest.

 

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

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