Connect with us

Energy

BP stands firm on its climate position despite pushback

Steven Li

Published

on

Oil

After Shell pledged to set emissions targets for its operations and products, BP has pressured to follow suit. And to an extent, it’s worked. BP has accepted a resolution put out by a group called Climate Action 100+, which describes itself as “an investor initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change”. That resolution affirms BP’s commitment to remain compliant with the emissions targets set forth by the 2015 Paris Agreement. But despite its commitment to abide by some proposals, the scope of BP’s commitment is certainly limited.

Only 8% of BP’s investors voted in favor of the proposal put out by another organization, Follow This, which wants BP to reduce its emissions across the board. That is, also “police” its customers in committing to reducing emissions as well. It’s no surprise that the oil giant wouldn’t commit to changing its entire course of business just to match Shell. Although it’s unclear how much BP contributes to greenhouse gas emissions on a sole basis, it is clear that committing to emissions targets would unequivocally reduce shareholder value.

BP’s Climate Position

Despite standing firm on its existing climate commitment, BP isn’t a climate change-denying organization either though. Just recently, it raised a $100 million fund to partner with projects looking to help reduce emissions. Specifically, though, the funds would go towards its own upstream oil and gas operations. Said operations are those related to identifying oil sites and drilling, in which BP invests over $15 billion annually.

With BP being an oil giant, it’s unsurprising that it won’t commit to certain emissions targets. But despite Shell’s seemingly bold commitment to reducing emissions, it still contributes to the $200 million spent towards delaying climate policy. Additionally, both BP and Shell contribute to a $195 million spending of said oil companies to run sustainability campaigns, per The Guardian.

Investments in Campaigns and Lobbying

Keep in mind that BP brings in some $303.7 billion in annual revenue. Spending hundreds of millions of dollars to run campaigns and lobbyist efforts hardly begins to scrape the surface of its organizational wealth. This disparity might have caused BP to not halt business relations with any of its lobbyist partners like Shell did. It donated $13 million to a campaign in Washington State, successfully blocking Ballet initiative 1631, which would impose “$15 fee on every ton of carbon dioxide produced in the state”. Lobbyist investments presumably save BP money by those measures, and by large margins too.

It’ll be interesting to see if BP continues to maintain its position in the long run.

Continue Reading
1 Comment

Energy

Climate change poses a serious threat to power grids

Austin Wang

Published

on

It’s common knowledge that the oil and natural gas industries are bad for the environment, but the fact that oil and gas threaten electricity supply is much more counterintuitive. Climate change and the resulting extreme weather are a growing cause of blackouts, and as “dirty” energies contribute to climate change, they also indirectly threaten the stability of the power grids they supply.

Blackouts become a rapidly-growing threat

While it may seem far fetched that climate change has caused significant increases in outages, there has been a huge rise in blackouts over the past decade. A report by Climate Central finds that from the mid-1980s to 2012, blackout rates increased tenfold. From 2003 to 2014, an estimated 147 million people were affected by weather-related blackouts.

Storms, tornadoes, and extreme heat all cause blackouts, and climate change only increase the frequency of these events. As global warming continues to raise temperatures, blackouts will become more and more frequent.

Heatwaves make electric grids unusable

Today, heat waves are a serious threat to energy security. Yesterday, one of the largest electric grids in Texas declared an energy conservation emergency as temperatures rose above 100 degrees. As residents scrambled to use air conditioning, electricity demand spiked across Texas. The Energy Reliability Council of Texas suggested that residents reduce energy demand from 3 to 7 pm to prevent blackouts.

Similar energy emergencies could happen all across hot arid regions of the U.S. A study from UCLA’s Institute of Energy and Sustainability found that climate change could cause sweeping blackouts in LA. The combination of a growing population and rising temperatures could easily increase air conditioner use and trigger power grid shutdowns.

Blackouts during extreme heat can be incredibly dangerous as people struggle to cool their homes. In the 1995 Chicago heat wave, an estimated 739 people died due to extreme temperatures and power failures.

Detroit takes a stand to improve power grid security

In Michigan, the state with the most weather-related power outages, citizens are advocating for change. An estimated 800,000 Michigan residents suffer from weather-related blackouts every year and outages are expected to become more frequent.

Detroit has taken steps towards improving power grid security. Utility DTE Energy proposed a $4.2 billion dollar plan to modernize Detroit’s energy grid and make it more resilient to weather-related disasters. However, some argue against fixes that fail to target the root of the problem.

Instead, many activists in Detroit are advocating for the expansion of solar energy. Using solar panels to create community-based micro-grids would allow communities to continue using power during blackouts. Decentralizing the energy supply could also make utility bills cheaper and reduce citizens’ reliance on large utility companies. On a larger scale, solar energy would also slow climate change and the resulting extreme weather effects.

Continue Reading

Energy

Investors lose confidence in renewable energy as China halts subsidies

Austin Wang

Published

on

renewable energy

Over two months ago, the Chinese National Energy Administration (NEA) announced it would stop providing subsidies for onshore renewable energy projects. The announcement seems to have shaken investor confidence. In the first half of 2019, renewable energy investment in China dropped by 39%.

Since China accounts for around 24% of global investments in renewables, it led the charge in a global slowdown of investments in renewables. Overall renewable investment dropped around 14% with U.S. investment dropping 6% and European investment dropping 4%.

Will China Bounce Back?

Still, China’s future looks fairly green. Despite a decrease in investment, China is still providing incentives and power-purchase agreements for solar companies.

Furthermore, China’s goal is grid parity (making solar energy reach the price of coal power). China’s not known for its laissez-faire economics, so the country will probably support the solar industry more in the future.

Chinese renewables will also likely perform much better in the second half of 2019. Twenty-one gigawatts of new renewable energy projects were announced in late May, so investments in them should rise significantly.

Global Renewable Energy Investment Outlook

Even if China bounces back, global renewable investment does seem to be on the downturn. While the U.S. and Europe only experienced small decreases in investments, the world needs to significantly increase renewable capacity to stop climate change.

A combination of factors including detrimental tariffs and shifts in conservatism has caused renewable slowdowns in many developed areas. However, several countries have continued to expand renewable energy development. India increased investments in renewables by 10% and the U.K. increased investment by 35%.

The Big Picture for Renewable Energy

In the grand scheme of things, renewable energy is definitely gaining ground. Despite decreases in investments, renewable-generated-electricity has been growing in volume.

Despite decreases in investments, renewable energy has been growing in volume.
Despite decreases in investments, renewable energy has been growing in volume.

In the United States, renewables comprised 23% of the national energy supply in April. This April marked the first month in U.S. history where renewables contributed more electricity than coal. Although renewable energies always perform better in the Spring, this milestone still signals that renewable energies are becoming more and more cost-competitive.

Conclusions

Short term volatility is inevitable but the overall trend is clear: new technology favors renewables, and we can only expect the capacity of renewables to grow in the long run.

The real question is: will renewable energies scale up fast enough to prevent the worst effects of climate change?

Continue Reading

Energy

Sunnova Energy Becomes Latest Solar Financier To Plan IPO

Steven Li

Published

on

Sunnova

Texas-based Sunnova Energy, one of the solar market’s leaders working on residential solar and energy management, has reportedly made plans to IPO later this year. Though Sunnova declined to comment on the Reuters report that initially broke the news, anonymous sources close to the company appear to be credible.

Financially, Sunnova’s cap table is a lot more crowded than its closest competitors, including Sunrun, the current market leader in residential solar ownership, and Solar City, now part of Tesla.

The company has reportedly raised over $2.5 billion in funding, a mix of debt and equity fundraising. Its competitors, on the other hand, raised at most in the hundreds of millions prior to IPO. Despite publicly announced round-sizes, Sunnova’s valuation is a black box. As such, Sunnova’s IPO price is far from clear.

Either way, Austin Perea, a solar analyst at research firm, Wood Mackenzie, believes that a Sunnova IPO could clarify investor interest in residential solar. Specifically, with respect to Sunnova’s localized distribution model, market interest is largely unclear. An IPO by a unicorn like Sunnova would offer unprecedented clarity into the private company.

Continue Reading

Trending

Share via