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With the rapid development of clean energy, is the fossil era coming to an end?
2023/6/5
It is certain that human society will eventually bid farewell to the fossil age, but the time is not easy to judge. It depends not only on the speed of development of clean energy, but also on how determined people are to pursue clean energy. In the final analysis, the issue of energy security is the fundamental reason why fossil fuels will not be replaced in the short term. What is relatively certain is that wind and solar power are propelling the world into a new era. And perhaps the straw that is most crucial to crushing oil demand is electric vehicles.
European Commission President Ursula von der Leyen recently stated that the growth model centered on fossil fuels is outdated. Although this statement is a family statement, it is still quite weighty. While adhering to the green transition, the EU is also creating a sustainable development model. The EU Green Deal aims to cut emissions by more than half by 2030 and achieve net zero emissions by 2050. To do this, we must phase out fossil fuels as soon as possible and transition to the era of green energy. To this end, the European Union has approved a carbon tax reform plan to actively promote the development of renewable energy industries such as wind energy and solar energy and electric vehicles while increasing the cost of carbon emissions.
Europe hopes to become a global leader in green energy transformation. It has taken the lead in replacing coal and oil heating and power with natural gas, and has also greatly increased the proportion of clean energy power generation. If the EU's ambitious energy transition and growth model is promoted around the world, will it mean the end of the fossil age?
This is a complex subject. To deal with climate change and protect the earth, it is certain that human society will finally bid farewell to the fossil era. The question is when will the change come?
A more reliable quantitative analysis is to study where the peak of oil demand is, based on which we can judge when fossil fuels represented by oil will withdraw from the stage of history.
Many observers believe that with the rise of clean energy, the demand for oil and natural gas will start to decline in the next 10 years. The energy transition has become the right topic no matter when and where, and the transition from fossil fuels to low-carbon energy sources such as wind, solar and hydrogen cannot be overemphasized. Indeed, global investment in wind, solar and other transformative technologies hit a record $1.1 trillion last year, putting investment in low-carbon energy on par with investment in traditional oil and gas production for the first time. It can be seen that the development of low-carbon economy has become the consensus of the world.
Even so, it's hard to pin down which year will be peak oil. The International Energy Agency expects oil demand to hit record highs this year and fossil fuel use to continue for decades. The forecasts of some major research institutions are also more cautious, oil and natural gas will continue to exist, but future production capacity will be reduced due to reduced demand, because oil demand will be gradually replaced by electrification, wind and solar power will phase out natural gas; while hydrocarbon demand More concentrated in the production of petroleum derivatives such as petrochemical products and plastics.
Because of this, the global energy pattern has not changed as fast as imagined. Studies have shown that the world needs to invest 35 trillion US dollars to change the existing energy structure, so that renewable energy accounts for about 90% of the total power generation. This means we need to accelerate the expansion of wind and solar capacity. However, the actual situation is that due to the impact of the new crown epidemic in recent years, the increase in clean energy production capacity has shown signs of slowing down. The European Union's newly installed wind power capacity increased by 40% year-on-year last year, but the follow-up has been weak, and it is difficult to meet the level required by the Paris Agreement to limit the increase in global temperature to 1.5 degrees Celsius above the pre-industrial average. Another example is the electric vehicle industry, which is in full swing. Now it is also facing the problem of shortage of key minerals and raw materials. New mines are not put into production, and the ore grade is also declining.
Of course, when fossil fuels will quit depends on how determined people are to pursue clean energy. United Nations Secretary-General Guterres recently urged the world's major carbon-emitting countries to accelerate the transition to renewable energy. He reiterated his call to strive to phase out coal in OECD countries by 2030 and all other countries by 2040, especially in developed countries to ensure net-zero power generation by 2035.
However, things backfired. The G7 summit held in Japan not long ago did not set a deadline for stopping new coal investment, and even agreed that new development investment in natural gas is still needed, citing "geopolitical conflicts and their impact on oil and gas". . The Western countries headed by the Group of Seven obviously "suspended" the implementation of the energy and environmental goals that they had "firmly committed" out of their own interests, and they were inevitably ridiculed by the world.
However, this also raises a sensitive and serious issue for us, that is, the issue of energy security. In fact, this is also the fundamental reason why fossil fuels will not be easily replaced in the short term. Taking Europe as an example, geopolitical conflicts have caused a surge in electricity prices in Europe, which in turn has affected economic growth. Germany, Europe's largest economy, is still under the shadow of recession. At present, European countries put energy security and supply chain security at the forefront of economic development and social stability, which is enough to show that the introduction of any public policy cannot be separated from the consideration of the interests of all countries.
It is perhaps more certain that wind and solar power are propelling the world into a new era. As global fossil fuel power generation declines year by year, clean energy is moving to the center of the world stage. According to the "Global Electricity Review" electricity data collected from 78 countries and regions around the world (accounting for 93% of global electricity demand), the global electricity generation in 2022 will reach the cleanest level on record, and the growth of wind and solar power generation will reach a record high , accounting for 12% of total global electricity generation, of which solar was the fastest growing source with an increase of 24%. In addition, renewables and nuclear together accounted for 39% of global electricity generation. Looking ahead, wind and solar energy could provide up to 75% of the growth in clean energy between now and 2050, with increasingly lower production costs. The study shows that the proportion of wind power and solar power generation in Europe reached an all-time high of 22% last year, surpassing oil and natural gas for the first time, and effectively curbing the demand for coal. Renewable energy is increasingly dominating the EU power market, and the pace of renewable energy construction in Europe has been significantly accelerated.
There is a classic expression in economics: If you do not invest in the future, you have no future.
Judging from the current development trend, electric vehicles may be the most critical straw that crushes oil demand. Statistics show that the electric vehicle market is expanding rapidly. Ten years ago, about 130,000 electric vehicles were sold worldwide, and now it takes only a week to reach the same figure. Sales of electric vehicles, which accounted for 10 percent of global new light vehicle sales last year, will accelerate this year and enter the field of heavy vehicle transportation. This is why some well-known economists claim that electric vehicles will "destroy" the global oil industry by 2030, while Bloomberg predicts that electric vehicles will trigger a global oil crisis.
European Commission President Ursula von der Leyen recently stated that the growth model centered on fossil fuels is outdated. Although this statement is a family statement, it is still quite weighty. While adhering to the green transition, the EU is also creating a sustainable development model. The EU Green Deal aims to cut emissions by more than half by 2030 and achieve net zero emissions by 2050. To do this, we must phase out fossil fuels as soon as possible and transition to the era of green energy. To this end, the European Union has approved a carbon tax reform plan to actively promote the development of renewable energy industries such as wind energy and solar energy and electric vehicles while increasing the cost of carbon emissions.
Europe hopes to become a global leader in green energy transformation. It has taken the lead in replacing coal and oil heating and power with natural gas, and has also greatly increased the proportion of clean energy power generation. If the EU's ambitious energy transition and growth model is promoted around the world, will it mean the end of the fossil age?
This is a complex subject. To deal with climate change and protect the earth, it is certain that human society will finally bid farewell to the fossil era. The question is when will the change come?
A more reliable quantitative analysis is to study where the peak of oil demand is, based on which we can judge when fossil fuels represented by oil will withdraw from the stage of history.
Many observers believe that with the rise of clean energy, the demand for oil and natural gas will start to decline in the next 10 years. The energy transition has become the right topic no matter when and where, and the transition from fossil fuels to low-carbon energy sources such as wind, solar and hydrogen cannot be overemphasized. Indeed, global investment in wind, solar and other transformative technologies hit a record $1.1 trillion last year, putting investment in low-carbon energy on par with investment in traditional oil and gas production for the first time. It can be seen that the development of low-carbon economy has become the consensus of the world.
Even so, it's hard to pin down which year will be peak oil. The International Energy Agency expects oil demand to hit record highs this year and fossil fuel use to continue for decades. The forecasts of some major research institutions are also more cautious, oil and natural gas will continue to exist, but future production capacity will be reduced due to reduced demand, because oil demand will be gradually replaced by electrification, wind and solar power will phase out natural gas; while hydrocarbon demand More concentrated in the production of petroleum derivatives such as petrochemical products and plastics.
Because of this, the global energy pattern has not changed as fast as imagined. Studies have shown that the world needs to invest 35 trillion US dollars to change the existing energy structure, so that renewable energy accounts for about 90% of the total power generation. This means we need to accelerate the expansion of wind and solar capacity. However, the actual situation is that due to the impact of the new crown epidemic in recent years, the increase in clean energy production capacity has shown signs of slowing down. The European Union's newly installed wind power capacity increased by 40% year-on-year last year, but the follow-up has been weak, and it is difficult to meet the level required by the Paris Agreement to limit the increase in global temperature to 1.5 degrees Celsius above the pre-industrial average. Another example is the electric vehicle industry, which is in full swing. Now it is also facing the problem of shortage of key minerals and raw materials. New mines are not put into production, and the ore grade is also declining.
Of course, when fossil fuels will quit depends on how determined people are to pursue clean energy. United Nations Secretary-General Guterres recently urged the world's major carbon-emitting countries to accelerate the transition to renewable energy. He reiterated his call to strive to phase out coal in OECD countries by 2030 and all other countries by 2040, especially in developed countries to ensure net-zero power generation by 2035.
However, things backfired. The G7 summit held in Japan not long ago did not set a deadline for stopping new coal investment, and even agreed that new development investment in natural gas is still needed, citing "geopolitical conflicts and their impact on oil and gas". . The Western countries headed by the Group of Seven obviously "suspended" the implementation of the energy and environmental goals that they had "firmly committed" out of their own interests, and they were inevitably ridiculed by the world.
However, this also raises a sensitive and serious issue for us, that is, the issue of energy security. In fact, this is also the fundamental reason why fossil fuels will not be easily replaced in the short term. Taking Europe as an example, geopolitical conflicts have caused a surge in electricity prices in Europe, which in turn has affected economic growth. Germany, Europe's largest economy, is still under the shadow of recession. At present, European countries put energy security and supply chain security at the forefront of economic development and social stability, which is enough to show that the introduction of any public policy cannot be separated from the consideration of the interests of all countries.
It is perhaps more certain that wind and solar power are propelling the world into a new era. As global fossil fuel power generation declines year by year, clean energy is moving to the center of the world stage. According to the "Global Electricity Review" electricity data collected from 78 countries and regions around the world (accounting for 93% of global electricity demand), the global electricity generation in 2022 will reach the cleanest level on record, and the growth of wind and solar power generation will reach a record high , accounting for 12% of total global electricity generation, of which solar was the fastest growing source with an increase of 24%. In addition, renewables and nuclear together accounted for 39% of global electricity generation. Looking ahead, wind and solar energy could provide up to 75% of the growth in clean energy between now and 2050, with increasingly lower production costs. The study shows that the proportion of wind power and solar power generation in Europe reached an all-time high of 22% last year, surpassing oil and natural gas for the first time, and effectively curbing the demand for coal. Renewable energy is increasingly dominating the EU power market, and the pace of renewable energy construction in Europe has been significantly accelerated.
There is a classic expression in economics: If you do not invest in the future, you have no future.
Judging from the current development trend, electric vehicles may be the most critical straw that crushes oil demand. Statistics show that the electric vehicle market is expanding rapidly. Ten years ago, about 130,000 electric vehicles were sold worldwide, and now it takes only a week to reach the same figure. Sales of electric vehicles, which accounted for 10 percent of global new light vehicle sales last year, will accelerate this year and enter the field of heavy vehicle transportation. This is why some well-known economists claim that electric vehicles will "destroy" the global oil industry by 2030, while Bloomberg predicts that electric vehicles will trigger a global oil crisis.
When that day comes, we should take comfort in the end of the fossil fuel age. After all, sustainable green development is exactly what we are pursuing.
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