Market forces may be the primary driver of energy shifts in 2016. The future of energy in the long term is clear, more efficiency and renewables and less fossil fuels. While we are already moving forward on all these fronts no one can predict exactly how long it will take to supplant fossil fuels.
It is clear that we are seeing tremendous growth in renewable energy and this can be expected to continue in 2016 and beyond. Although fossil fuels appear to be in their death throes, it may take far longer for hydrocarbons to die than some optimistic enviro-pundits are predicting.
In the wake of the COP21 deal signed by every nation on earth it is apparent that we will be substantially reducing greenhouse gas emissions. However, no one should expect that the fossil fuel industry will go quietly, even if it they are the primary cause of climate change.
As Exxon’s crimes have demonstrated, the oil industry’s self interest takes precedence over the well-being of the Earth and humanity. They have and will continue to use their considerable power to push back against regulations that undermine their interests. They will use their psuedo-science to counter credible science, and their minions in the Republican party will continue to stymie any legislation that threatens their core business. They will also attack and discredit anyone who has the audacity to speak the truth.
The glut of oil may be attenuated somewhat in 2016, but their is a wicked logic to increasing rather than decreasing extraction. Bringing as much oil to market as possible in the short term is one way of mitigating longer term risks. This may cause many oil producers to be reluctant to reduce extraction. It should be noted that those companies that are scaling back extraction in 2016 are doing so for financial reasons not COP21 and certainly not concern for the planet.
It is clear that fossil fuels are being replaced by renewable energy. The fossil fuel industry is in trouble and the situation is destined to worsen as subsidies are coming under increasing scrutiny. The financial losses and diminishing oil industry profits we saw in 2015 signal the beginning of the end for fossil fuels. Simply put concerns about stranded assets make oil a bad investment. As this trend continues these market forces will continue to make fossil fuels less attractive.
Declining price points and increasing efficiency of both stationary batteries and EV batteries are contributing to the unstoppable growth of renewable energy. The COP21 deal signals the end of fossil fuels and the dawn of unprecedented growth
The fossil fuel divestment movement has grown and came of age. Concerns about stranded assets are driving investor concerns as they grapple with the realization that fossil fuels will be replaced. The fossil fuel industry has reason to be nervous as there is a powerful logic and a strong economic case that can be made for divestment.
We know that low oil prices have already decreased production
of the more energy intensive and costly forms of fossil fuels (eg tar
sands and shale oil).
Despite the malfeasance of the oil industry market forces are driving growing interest in sustainability. According to many observers sustainability has reached a tipping point. A number of climate focused companies put forward a number of products, projects and leaders. The successful outcome of COP21resonated throughout the business community. Companies showed that they can double their revenues and add value. Simply put sustainability contributes to the bottom line, lends legitimacy to profitability and combats the culture of corruption. Climate solutions that combine people, product and profit makes a compelling case for Sustainability and this holds true for corporations, banks and investors.
As revealed by PwC, Risky Business and other reports, acting on climate change is an opportunity that makes economic and business sense. The science of sustainability is supporting the kind of business leadership we saw at the World Economic Forum (WEF). This is translating to growing interest in sustainability at business schools. While we still need more consistency we are seeing major corporate initiatives to reduce greenhouse gases because they realize that carbon emissions are a growing liability.
Market forces are driving sustainability into the DNA of the business community. According to the 2016 Energy and Sustainability Outlook Survey by Ecova, the majority of the 700 energy, sustainability, facility and finance professionals surveyed indicated that cost savings remain the number one driver of energy and sustainability management decisions. They are looking to new approaches with many respondents saying that they intend to use data collection and monitoring devices to manage resources. A large and growing number of respondents plan to use energy data to increase financial efficiency and guide budgetary decisions in 2016.
As stated by Ecova,
“The survey illustrates steady advances toward long-term energy and sustainability management goals.”
These professionals also anticipate ongoing growth in distributed (local) energy with an increasing number of respondents saying that they are or will be considering including distributed energy.
The Ecova survey revealed that industry professionals are not as concerned about energy rate increases as some had suggested.
Over the course of the three years that Ecova has conducted this survey, LED (Light Emitting Diode) retrofits have been reported to be the best investment made by respondents.
The survey also showed that water conservation and management is becoming an imperative. We are also seeing clear movement towards waste optimization and zero waste initiatives.