Renewables are very much on the side of the angels at COP26, which began this week in Glasgow under the steely gaze of Greta Thunberg and an army of young campaigners at a gathering that many are billing as the last chance to save the planet from environmental catastrophe.
As Recharge Editor-in-Chief Darius Snieckus pointed out as he set the scene for the epoch-making climate conference, wind and solar are already winning the battle on costs grounds, and in the hearts and minds of the people of the world who understand that things have to change.
On the other side of the battle are global fossil fuel interests and – so far at least – the focus has been on coal. A pledge by more than 40 nations, including for the first time coal-heavy economies such as Vietnam and Poland – to exit the most polluting power source was hailed as a milestone by COP26 host the UK. A number of analysts backed that view, even if others questioned the timescales involved and the absence of major coal economies such as China, Australia and India.
Not that India has been out of the limelight in Glasgow. Prime Minister Narendra Modi’s surprise commitment to target net zero by 2070 for the Asian giant was the first blockbuster announcement of the summit and also divided opinion, with some praising it as a crucial statement of ambition and others branding it “twenty years too late” to make an impact on global heating.
Elsewhere in COP26’s first week, the announcements came thick and fast. Nations agreed to accelerate the roll-out of green hydrogen, and there was the launch of an initiative to develop a global standard for renewable H2. The US unveiled its ‘Net Zero World’ plan and a new body for long-duration energy storage was born.
What we don’t yet know is the final verdict – when the talking is done, the summit concludes, the communiques issued and the world either faces the next decades with a renewed sense of determination or a sense of dread. Watch this space.
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If coal has so far played the villain at COP26, what about those other planet-heating sources of emissions? The dynamics of the world’s oil & gas giants at the summit are fascinating to observe, given that many of the biggest names in that sector are increasingly also among the heaviest investors in renewable energy.
Shell chief executive Ben van Beurden told investors that the supermajor won’t be represented in Glasgow after being told it was “not welcome“. But as Recharge’s oil & gas-focused sister title Upstream explained, that’s not the whole story, with some giants of the sector present – albeit in a low-key way – and insisting that they have plenty to contribute to the debate, even if the public often views them with deep suspicion.
The increasingly complex dual role of oil & gas as part problem, part solution was in focus away from COP26 as its biggest players this week continued their inroads into renewables, with supermajor TotalEnergies confirming itself as a contender for Norwegian offshore wind in conjunction with green power giant Iberdrola, and Italy’s Eni upping its share in the world’s largest offshore wind build, Dogger Bank.
In this environment, the question of whether a fossil fuel giant moving toward a critical mass in renewables should spin-out and away oil & gas operations becoming a drag on their financial prospects is increasingly a heated talking point. BP CEO Bernard Looney was adamant this week that the UK supermajor is “better together”, with oil & gas providing the “cash machine” for necessary investments in the energy transition. Though this expressed view chimes with several other oil company CEOs, including at Equinor and TotalEnergies, the mood music in boardrooms continues to be rapidly changing.
Nobody is going to argue about the presence of renewables titans such as Vestas and Orsted at COP26, but away from the limelight it’s not all plain sailing for the world’s green power giants.
Wind OEM Vestas had to cut its profitability forecast for the second time this year as global supply chain instability and inflation continued to bite. Finance chief Marika Fredriksson – who this week announced she will stand down by March – told Recharge the situation is “very tough” for Vestas, but external in nature and not to be compared with the internal crisis it faced when she took up her post in 2013.
For Orsted, profits were hit by the lower wind speeds that have afflicted several key players in the sector this year, but the Danish offshore giant insisted it was still on track to meet its full-year guidance.
Orsted is a leader in a gathering offshore wind revolution that came into focus in a special series of Recharge digital roundtables this week, staged in conjunction with sister shipping title Tradewinds. High-level panels heard why the global sector is uniquely well-placed to respond to many of the demands emanating from COP26, and how the US offshore wind industry is taking off from a platform of collaboration and technical innovation.
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