A boom in electric vehicle and solar energy deployment driven by falling costs will halt growth in oil and coal demand from 2020, according to new analysis from Carbon Tracker and the Grantham Institute. Electric vehicles could make up a third of the world’s road transport market by 2035 and solar PV alone could supply nearly a quarter of global power generation by 2040, marking a sharp increase with major implications on the demand for fossil fuels that pose serious risks for businesses, investors and governments failing to embrace reality. Many investors, governments and some energy companies see the writing on the wall and are pulling away from dirty energy in favour of renewables to maximise benefits – but large fossil fuel firms and backward facing governments like those in the US and Australia are putting people at risk by gambling on business as usual.
— Climate Home (@ClimateHome) February 2, 2017
- Game-changing growth in solar energy and electric vehicles is projected for 2020 and beyond, as costs plummet and economic forces drive the clean energy transition on. The cost of solar PV has dropped 85 per cent in the past seven years, meanwhile the electric vehicle market is expanding 60 per cent year on year, with more than 1 million vehicles now on the roads after battery costs fell 73 per cent in seven years. Fresh analysis factoring in real world economics projects a steep increase in solar energy and electric vehicle deployment, with solar PV alone supplying nearly a third of global power generation by mid-century and electric vehicles making up the same proportion of the global transport market by just 2035, increasing to two-thirds by 2050.
- Massive gains made by clean energy technologies in transport and power sectors will halt growth in demand for oil and tighten stranglehold on coal. Within a single decade fossil fuels could lose 10% of market share to solar PV and electric vehicles according to this analysis – similar losses wiped 100 billion euros off the value of European utilities that ignored the rise of renewables, and caused the collapse of the US coal industry. The surge in growth of electric vehicles in the next decade could lead to 2 million barrels per day of oil demand being displaced, disrupting the market as much as the OPEC market-share war that triggered the price crash of 2014, wiping hundreds of billions of dollars off the value of fossil fuel producers.
- Backing a 21st century energy agenda will boost jobs, security and quality of life while betting on business as usual in a changing world is a dangerous and risky gamble. The governments, investors, and businesses ditching fossil fuel assets in favour of renewables are already benefitting from an unstoppable energy transition that will increase public health in cities, boost resilience in rural communities, and drive job creation all over. But risk experts warn that fossil fuel firms and regressive governments pandering to dirty energy interests that are trying to resurrect 19th century industries are at serious risk of devaluation, stranded assets and diplomatic isolation.
- Electric Cars Could Cause Oil Market Disruption on Par With OPEC (Bloomberg)
- Cheaper renewables to halt coal and oil demand growth from 2020: research (Reuters)
- Oil and coal demand could peak by 2020: Study (CNBC)
- New energy forecast has good news for Elon Musk, but spells trouble for Trump (Mashable via Yahoo)
- ‘Clean coal’ not a factor in future energy mix: new report (ABC)
- AUDIO ‘Clean coal’ not a factor in future energy mix: new report (ABC)
- Coal and oil demand to peak in three years: report (Financial Review)
- Coal and oil demand ‘could peak in 2020’ (Climate Home)
- Electric cars and cheap solar ‘could halt fossil fuel growth by 2020’ (The Guardian)
- Is EV Revolution Threatening Oil Company Investor Death Spiral? (CleanTechnica)
TOOLS AND RESOURCES
- Full report: Expect the Unexpected – The Disruptive Power of Low-carbon Technology (Carbon Tracker Initiative)
- Interactive dashboard: Expect the Unexpected – The Disruptive Power of Low-carbon Technology (Carbon Tracker Initiative)
- Analysis: Two charts show how fossil fuels could peak by 2020 (Carbon Brief)
- #Resist: Submit a comment on the Dakota Access Pipeline (350.org)
- Report: US Energy and employment (US Department of Energy)
- Graphic: US solar jobs Vs fossil fuel jobs (Forbes)
- Top video: Fossil Fuels: A Risky Business? (Carbon Tracker Initiative)
- Images: Solar Workers (Creative Commons), Tesla Prototype Testing (Creative Commons), Demolition of Coal Tower (Creative Commons)
- “Electric vehicles and solar power are gamechangers that the fossil fuel industry consistently underestimates. Further innovation could make our scenarios look conservative in five years’ time, in which case the demand misread by companies will have been amplified even more.” – Luke Sussams, Senior Researcher at Carbon Tracker
- “Oil majors already do scenario analysis but, as Exxon previously indicated, they do not assign sufficient probability to a rapid (low-carbon) transition. There appears to be a desire to justify business-as-usual at some companies, which does not constitute sound risk management.” – James Leaton, head of research at Carbon Tracker
- “We’re hiring workers in the rust belt. We’re helping families keep farms they’ve held for generations. The lifeblood of our industry is in rural America.” – Tom Kiernan, CEO at American Wind Energy Association
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