Tag Archives: Climate

Emissions Story

Emissions Story, the September issue of TerraJoule.us, queries whether future growth of global CO2 emissions may be lower than forecast, due to demographic changes in population and fertility rates; the completion of fossil fuel adoption cycles in a majority of the world’s economies; and the ferocious learning rate of global wind and solar power:

Recent data from China indicates that, in 2015, 100% of the growth in that country’s electricity system was more than amply covered by two sources: wind, and solar power. According to Greenpeace—which contrary to historical perceptions now possesses actual data gathering capabilities on the ground globally, including Beijing—China’s power generation in 2015 grew by only 22 TWh. But combined new wind and solar generation grew by 48 TWh. This is precisely the regime-change that TerraJoule.us has been warning about over the past year. While we remain with our forecast that wind and solar will more reliably come to dominate growth in global power generation by the year 2020, it is telling that in several important domains—the UK, China, the US—the ability of combined wind and solar to crowd out other energy sources in the market for electricity growth is telling. TerraJoule.us is increasingly concerned that energy transition itself is starting to land more forcefully, move more quickly, than many understand. If so, the implications for global emissions growth— a huge scientific and political challenge—could be altered meaningfully, if not dramatically…

…To emphasize this point further, it’s now clear that CO2 emissions in the OECD have peaked. If that conclusion seems uncertain to you, then attempt the following experiment: try to model a case where the OECD enters a new adoption cycle for fossil fuels. Try to make the case that Japan, Australia, Europe, and the United States will see a new push into coal, oil, and natural gas. Not easy, right? The OECD is also host to aging populations, and low fertility rates. And it’s also the epicenter of persistently low interest rates which are telling you that future growth is likely to either be low—or much lower than most would hope. So again, given all those factors, try to make the case for a net gain in combined oil, coal, and natural gas. Even in domains where you can make the case for consumption upticks in one of those sources, you will generally find that either one or two of the other sources are in decline.

In the continuously updating TerraJoule.us Global Grid Decarb Monitor, the forecast for power generation growth from solar is maintained this month, but the forecast for global  growth from wind power is revised up sharply, due to capacity factor gains and rapid 2016 deployment: again, mainly in the US and China.

Finally, The TerraJoule.us Transition Index, composed of 70% ETFs and 30% individual equities, rose to 102.51 to finish the month of August, having started the new year at a notional value of 100.

–Gregor Macdonald, Editor of TerraJoule.us – A Journal of Energy Transition.

New Directions in Global Oil

New Directions in Global Oil, the April issue of TerraJoule.us, reviews the expanded supply capabilities created over the past five years by the global oil industry. Because North American oil supply growth, however, cannot be expected to continue during a low priced environment, we speculate OPEC will be successful in its quest to win back market share. More broadly, TerraJoule.us concludes that the forecast for global oil production over the next five years will essentially track global growth. If global GDP weakens, oil supply will guide downward. If global GDP strengthens, oil production will advance, and supply the global economy with oil at an affordable price. This new equation is made possible by the intersection of new production capacity with the phenomenon of energy transition, in which oil itself has lost market share every year since the start of the new millennium.

In the second essay of this month’s issue, “The Path We Are On“, we welcome back new writer and analyst Justin Ritchie, of the University of British Columbia. Mr. Ritchie’s essay focuses on the four main pathways of future GHG emissions, and asks questions–in light of slowing global economic growth–about the probabilities of future demand growth for fossil fuels. Again, given the energy transition already underway, Ritchie’s essay, along with this month’s issue, calls into question wildly high projections for future energy consumption. This is an important topic, that probes issues surrounding the tendency to extrapolate past growth into the future.

In the continuously updating TerraJoule.us Global Grid Decarb Monitor, projections for marginal growth from wind and solar are largely maintained for both 2016 and 2017. We maintain our view of better global growth next year. And one note of interest here: new generation from solar in 2016 is forecasted to exceed new generation from wind power.

Finally, The TerraJoule.us Transition Index, composed of 70% ETFs and 30% individual equities, stands at 97.54 having started the new year at a notional value of 100. The Index plays a favored super-theme of TerraJoule.us: that the global economy is transitioning away from liquid fossil fuels, to the powergrid. And, that the costs of fossil fuel extraction and combustion increasingly place the energy-capture technologies of wind and solar power in a favorable position. Industrial names in the index continue to perform well in 2016, while the basket of solar equities continues to underperform.

–Gregor Macdonald, Editor of TerraJoule.us – A Journal of Energy Transition.