“King coal still reigns” was the headline emblazoned across a full page article in The Weekend Australian on the 28-29 April 2012, by Environment Editor Graham Lloyd. The article’s subtitle was, “The world is in the grip of a fossil fuel boom that shows no sign of fading.”
Nothing could be further from the truth. The latest data on global investment in new power production shows the dramatic decline in fossil fuel investment, and an astonishing increase in renewables investment.
In 2004, according to Bloomberg New Energy Finance and the International Energy Agency, investment in renewables was $52 billion, with $250 billion invested in fossil fuels. By 2008 the peak in fossil fuel investment had arrived: it dropped to $140 billion, while renewables overtook it with $155 billion in investment.
By 2010 the amounts were $90 billion in fossil fuels and $211 billion in renewables, and by 2011 only 14 per cent or $40 billion of investment was in fossil fuels while 86 per cent or $260 billion was in renewables.
King coal has in fact been dethroned. It will take a while for the global power system to phase out old power stations and be dominated by renewables, but the transition is proceeding much faster than imagined by most institutions, as well as media like The Australian. The International Energy Agency predicted in 2008 that the world would build 64 GW of coal generation in 2010, but when the dust settled on projects built in 2010, only 14 GW of coal was actually built.
Graham Lloyd’s article says that, despite the good intentions, renewable energy projects are struggling to get finance, yet he gives no data to support this.
Bloomberg reported that the 2011 investment in renewables was made up of 59 per cent solar (the price of solar photovoltaic cells fell 50 per cent over this period, leading to a 36 per cent growth in their purchase), 33 per cent wind and 8 per cent smart energy systems, such as smart grids that enable renewables to be more easily accommodated.
But surely this is not happening in Australia, where king coal must still be in control of the market? Bloomberg found the data is clear here as well: in 2011 coal attracted just 17 per cent of value of completed electricity generation projects, gas attracted 36 per cent, and renewables 41 per cent (of this 41 per cent was wind and solar was 6 per cent).
The emerging economies of China and India have become the dominant source of this global renewables investment. In 2004, Bloomberg New Energy Finance showed that the developing world contributed just one-fifth of renewables investment, but by 2010 the developing world contributed more than half the growing total of renewables.
Australia is not leading the charge on the adoption of clean energy, but it is certainly part of a global movement that will be seen in history as one of the great shifts in economic change. Perhaps King Coal is highly aware of this dramatic fall in its dominance in the power market place. The role of Murdoch’s media empire in talking up Old King Coal seems to be one of the ‘fiddlers three’, trying desperately to help keep the king merry as his kingdom collapses.
Peter Newman is Professor of Sustainability of Curtin University. Ray Wills is CEO of the Sustainable Energy Association.