The Renewable Energy Party Is Over

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The Renewable Energy Party Is Over

From 2004 to 2011, global investment in wind, solar, biomass, biofuels, and other green energy grew at a compound annual rate of 26.7%. Then, in and around 2011, many governments abandoned renewables subsidies in favor of capacity auctions, and growth in global renewable energy investment ceased.

More notably, accelerating growth in some regions masked shrinkage in others. For example, investment in North and South America has not increased since 2007 and even in Asia it has not increased since 2015. Furthermore, renewable energy investment in Europe has been declining steadily since 2011, and investment in the UK and Germany is now approaching zero.

For those seeking to replace fossil fuels with renewables, it’s also important to recognize that the current level of investment, at ~$300 billion a year, is too low to support a global transition to renewable electricity or to meet global emissions targets. Analysis indicates fossil fuel replacement in electric generation will happen only if lavish government subsidies are reinstated. More likely, the much-anticipated global renewable electricity transition will fail simply because of a lack of funding.

Bloomberg New Energy Finance (or BNEF), recently published a new report providing data and analysis through the second quarter of 2018. What do the facts in this and other reports tell us?

First, it’s clear that current renewable energy investment levels are simply slowing the rate of growth in fossil-fueled electric generation. And renewables are doing next to nothing to impact global demand for fossil fuels in transportation, industrial heat, or residential and commercial HVAC.

According to the most recent BP Statistical Review, global electricity demand in 2017 was 621 TWh higher than in 2016; that’s an increase of 2...

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