It's now cheaper to stop using fossil fuels than to keep them: IEA

The IEA’s new Net Zero by 2050 report says that, after 250 years, humanity should now stop exploring for oil, gas and coal. It’s arguably as big a moment as the Paris Agreement; in one stroke, it completely wipes out the fossil fuel industry’s last remaining justifications for new capacity. People throw around the term ‘turning point’ a lot, but this really is one.

None other than the IEA’s Executive Director, Faith Birol, is reported by Sky News to have said that “continuing to put money into oil and gas projects may be ‘junk investments’ and it could throw domestic climate targets off course”.

The IEA also says that last year’s record surge in renewables is the ‘new normal’, and that 90% of all new energy built in 2021 and 2022 will be clean. Keep in mind, this is from an organisation that was founded explicitly to promote coal, oil and gas. Welcome to an energy revolution driven not by altruism, or politics, but by the cold-blooded logic of the marketplace… except in Australia it seems, where politics still seems to be the main issue, the federal (Morrison) government having announced it will spend up to $600m to build a new gas-fired power plant in New South Wales’ Hunter Valley — despite local experts warning the fossil fuel investment makes little commercial sense.

Ben van Beurden, the CEO of Shell, has announced that half of the oil giant’s energy mix will be clean somewhere in the next decade. “If we do not make that type of process by the middle of this decade, we have a problem not just as a company but as a society,” he said.

Global electricity generation by source (Source: ember-climate.org). For a larger image click here.

One can only wonder why the writing on the wall cannot be seen in Canberra.

One of the arguments cited by our politicians is “keeping energy prices down”, while communities around Australia are investing in large community batteries with the aim of becoming self-sustaining solar-powered communities. Even energy companies are seeing the need to get involved, with Ausgrid already rolling out community batteries.

Then there is the election ploy of saving jobs. Research into renewable energy employment from the University of Technology Sydney (UTS) in 2019 showed that even at that stage, “renewable energy currently employs more people than the domestic coal sector” and that “by 2035 the renewable energy sector could employ as many as 46,000 people under the AEMO’s Step Change Scenario”. The report also concluded that although construction and installation jobs now dominate the renewable energy labour market (75%), by 2035 as many as half of renewable energy jobs could be ongoing jobs in operation and maintenance.

It is clear that business and the Australian public are getting on with it, regardless of politics… and so far we have managed to avoid to some extent spending our taxes on stranded assets. But the recent announcement of the gas plant could change that.

Top image credit: ©stock.adobe.com/au/abriendomundo