Is big business poised to capture the renewables revolution? Danny Chivers draws up the battle lines.
The London Array, off Britain’s east coast, currently the world’s biggest offshore wind farm. Jointly owned by E-ON, DONG Energy, UAE-based Masdar and Canadian investment fund La Caisse. © London Array Limited
In January this year, the energy researcher Jeremy Leggett made a bold claim. He told the Guardian newspaper that we should expect a major oil firm to turn its back on fossil fuels soon and shift to renewable energy. ‘One of the oil companies will break ranks,’ he said, ‘and this time it is going to stick.’
Leggett points to the collapsed oil price, the falling costs of renewable-energy generation and potential government action on climate change as key factors that could persuade an oil corporation to jump ship. His comments were excitedly shared online by anti-fossil fuel campaigners.
But hang on a minute. Would this really be good news? To avoid catastrophic global climate change, we need to leave at least 80 per cent of known fossil fuels in the ground, and renewable energy will have a major part to play in that. But do we want our new, clean energy system to be owned and operated by the same corporations that have got us into our current mess? Do we trust the likes of BP, Exxon and Total to develop renewables in a fair and sustainable way?
To answer this question, we don’t need to look far. All over the world, companies and governments that have grown rich on our current fossil-fuelled system are doing their best to slow down, interfere with, co-opt and control the growth of renewable energy. We need to fight back with a different vision: of a democratically controlled, people-focused clean energy system built from the grassroots up.
A renewables revolution?
2014 felt like a big step forward for renewables. The amount of wind and solar power installed around the world grew by 15 and 32 per cent respectively. Solar electricity is now cheaper than the grid average in Spain, Italy, Australia, Chile, Germany, Brazil and at least 10 US states. UBS, the world’s biggest private bank, told its investors that large, centralized power stations are on the way out in Europe, to be rendered redundant by rooftop solar panels and home energy storage in the next 20 years. Meanwhile, the governments of India and China have announced solar- and wind-power schemes large enough to send panic through the Australian coal industry, whose expansion plans were reliant on exports to those countries.
These could be early steps towards a better energy future. Last year, I helped develop an online infographic showing how it is technically possible for everyone on the planet to have enough energy for a good quality of life, using only renewable technology that already exists. However, this will only be possible if the wealthy minority – mostly in Northern countries – stops overconsuming energy, so that everyone else can come up to a fair and sustainable level. This isn’t currently happening; instead, barring a blip for the 2008 financial crisis, total energy use in OECD countries has been steadily rising.
In order to avoid runaway climate change, our new cleaner energy sources would need actively to replace fossil fuel generation, not just add to it. There’s little point installing a solar-powered radio in a diesel-fuelled SUV. The current blossoming of renewable energy has dented coal use in a few countries – notably the US and China – but has so far failed to make much impact on a global scale. Between 2010 and 2013, the annual production of renewable energy grew by around 0.5 PWh (equivalent to a million million kilowatt hours) to 20 PWh per year; in the same period, annual fossil fuel use grew by 8 PWh – 16 times greater – to reach 128 PWh/year.
The trouble is, these necessary steps to a safer future – ramping down fossil fuel use, cutting Northern overconsumption and sharing clean energy fairly across the globe – fly directly in the face of our current growth-based economic system. As writer and activist Naomi Klein puts it: ‘What the climate needs now is a contraction in humanity’s use of resources; what our economic model demands is unfettered expansion.’
Renewable energy does offer us a (solar) ray of hope amidst the climate doom and gloom. These technologies give us the potential to build a new, decentralized, democratic energy system that meets the needs of the many rather than providing profits to the few. But there are powerful economic forces and vested interests lined up against us, ready to steer renewable energy in a very different direction.
What are we up against?
Let’s not kid ourselves. The fossil fuel industry’s main response to clean energy is to try to squash it. Selling the highly concentrated energy in oil, coal and gas is far more profitable in the short term than the slow-release, distributed energy from wind or solar power – especially when you factor in generous government fossil fuel subsidies, an international energy infrastructure already set up to use these fuels, and free rein to pump carbon pollution into the air at little or no cost. Whether it’s funding pro-fossil politicians, forging cosy links with officials or pouring money into anti-renewable front groups, the big oil, gas and coal companies are working hard to keep society hooked on their highly profitable products, and prevent alternatives from getting off the ground.
There are exceptions to this rule. If those alternatives can provide decent short-term returns or access to new subsidies without disrupting the existing energy markets, then the big players might be tempted to step in. This is why the likes of BP, Shell and Exxon have moved into liquid biofuels, and why major power plants like Drax in Britain are starting to mix large quantities of woodfuel in with their coal supply.
Industrial biofuels and wood-fired power stations – along with the continued destruction caused by large hydropower dams – provide perfect examples of what can happen if supposedly ‘renewable’ energy sources are exploited for maximum profit, without proper consideration for people and the environment. Energy crops and hydroelectricity may both be sustainable on a small, local, carefully managed scale – but the current profit-driven rush to turn food crops and forests into fuel is leading to hunger, land grabs and deforestation; while megadams threaten huge areas of natural habitat along with the homes, lands and livelihoods of hundreds of thousands of people.
These projects should act as a stark warning. Wind and solar power are still relatively small industries on a global scale, but are growing fast. These technologies are far less destructive than fossil fuels, but that doesn’t mean they’re impact-free – especially if they develop to the scale we need for a fossil-free future. Will they be carefully manufactured in renewably powered workshops with strict respect for workers’ rights and environmental standards; using largely recycled materials, and built as part of community-run, co-operatively owned and democratic energy schemes which benefit the communities where they are sited? Or will they be churned out in nightmarish sweatshop conditions, using minerals from exploitative mining projects and sited in giant energy parks on cleared rainforest land from which the residents have been forcibly evicted?
It could go either way. Renewables could transform our energy system, with solar panels particularly well-suited for decentralized use: 85 per cent of today’s solar panels are spread over millions of rooftops, with only 15 per cent in solar parks. Increased access to and control over energy could empower millions of people, improving lives and livelihoods and boosting the political and social influence of marginalized communities.
Unfortunately, the risks are also clear. Wind and solar generators require a significant amount of building material and land space. Though requiring less than 1 per cent of the extraction needed to keep pulling coal, oil and gas out of the ground, ramping up renewables will mean a significant spike in demand for steel, cement, aluminium and copper that could have serious local impacts around the world if not carefully managed. Wind power, unlike solar, is far more efficient when built on a large scale; big wind farms typically require levels of capital investment that are out of the reach of community groups. They’re more likely to be installed by governments or large utility companies such as E.ON. Seventy-five per cent of all wind turbines are manufactured by just 10 companies.
The Desertec initiative gives us an example of what a profit-driven, centralized solar energy future might look like. We shouldn’t be surprised to see it develop along the same neo-colonial and racist lines as our current fossil fuel industry, where the rights of Indigenous peoples and communities of colour around the world are trampled in the pursuit of ‘cheap’ energy for the industrialized nations.
Who has power over power?
As wind and solar technology gets cheaper – and if low oil prices and increasing climate regulation and extraction costs make fossil fuels less profitable – we can expect more and bigger corporate players to move into the sector, including existing oil and gas corporations.
Energy supply in many countries is already in the hands of privatized utility companies, thanks to decades of privatization driven by neoliberal Northern governments and institutions like the World Bank. This has led to rising energy bills and the continuing failure to supply grid electricity to harder-to-reach (and thus less profitable) rural communities. Around 1.3 billion people worldwide still have no access to electricity, while many others struggle to afford it.
There are vital battles still to be fought over the ownership, control of and access to renewable energy. Who will pay for and own the building materials, the factories, the technical knowledge, the site of installation, the equipment and the energy it produces? The more democratic control that can be exerted over each stage of this process, the greater our chances of creating low-impact, climate-friendly energy systems that supply affordable energy to all. We also need the transition to be a fair one that retrains and transfers workers from the fossil energy sector; this will only happen if the voices of workers carry more weight in the process than the desires of the energy companies.
It’s hard to imagine the big privatized companies voluntarily working to reduce energy consumption in the North; it’s equally hard to envision them supporting a phase-out of fossil fuels as renewables expand, or supporting policies to provide affordable energy to those most in need. These companies have been driving our civilization towards a cliff edge, and now they are eyeing up the keys to our shiny, new, renewably powered electric bus.
At what price?
In an energy system built from numerous small producers rather than just a few big power stations, ownership of the distribution network also becomes more important. Smart grids could make it easier for producers and consumers to share and use energy more efficiently, reducing the need for centralized power production; however, whoever owns and controls these networks will ultimately determine who can use them and at what price, and will also have access to large amounts of data about households’ energy usage. The energy giant E.ONhas recently split its business in two, with one half taking the fossil power stations and the other focusing on renewables and ‘smarter’ distribution networks. Google has also invested billions in smart home metering.
Will companies like these be content with government or household contracts to build these systems; or will they seek ways to extract ongoing profits from charging for network use or selling customer data? Like the internet, an energy-sharing network could be a space for collaboration and co-operation, or for corporate rent-seeking and control; the way it is set up, and who owns the infrastructure, will be key. The governments of Spain and Arizona, under pressure from energy company lobbying, have announced taxes on solar panel owners as ‘payment’ for their connection to the grid; this may be a taste of things to come.
We mustn’t forget the technologies that use energy, either. A transition to electric vehicles will be vital for ending our dependence on oil, but this needs to be accompanied by a serious shift from private car use towards public transport and cycling, otherwise electricity demand will rocket beyond a level that can be met by renewables. Most of the expansion of the electric vehicle market has so far been driven by car manufacturers (particularly Renault, Nissan, Tesla and Mitsubishi), supported by government incentives; this could explain why the number of fully electric cars on the road is expected to hit a million in 2015, while electric bus numbers lag behind in the tens of thousands.
The rollout of electric vehicle charging stations in the US (and increasingly Britain) is being spearheaded by Tesla, the company run by ‘playboy billionaire’ Elon Musk (the inspiration for Tony Stark in the Iron Man films). Many are quick to praise him for taking these kinds of financial risks to develop valuable transport infrastructure; but of course the rewards for his company could be huge – and we’ll end up with an electric charging network under private, not public, control. There’s a wider point here, too: should the introduction of sustainable technology be reliant on the whims of billionaires? What’s to stop Musk getting bored with electric vehicles and pouring all his resources into his space exploration company SpaceX instead?
This increasing reliance on companies, not governments, as providers of energy services and infrastructure is driven by a global economic system based on market ‘liberalization’, profit maximization and endless growth. It’s a trend that we need to reverse if we want renewable energy truly to be a force for good.
Luckily, alternative models are appearing all over the world. Renewable energy co-operatives have hundreds of thousands of members and are building and installing their own solar, wind and small-scale hydro projects from Indonesia to Costa Rica. They own three-quarters of Denmark’s wind turbines, and are growing rapidly in Spain, Britain and elsewhere; in Germany, more than half of renewable electricity generation is owned by citizens, co-operatives and community groups.
The energy industry has been taken back into public hands by democratically elected governments in Venezuela and Bolivia. The popular state-owned energy system in Uruguay has had real success in expanding energy access, and is now working on efficiency and wind power projects. Interest in locally controlled energy has been reignited in Europe by referendums in two major German cities (Hamburg and Berlin), where citizens voted in favour of their local councils buying back the energy grid from transnational companies.
However, it won’t be possible to achieve true energy democracy without changes to our wider political and economic system. What’s the use of campaigning for publicly owned energy if the national or local government is corrupt, undemocratic, or heavily influenced by vested interests?
We need to pursue the democratization both of our energy and our politics in parallel. In fact, we should see this as an opportunity, because these projects can support and mutually reinforce each other. Unaccountable corporate energy systems give powerful vested interests excessive influence over everything from household spending to government policy. Breaking the power of the fossil fuel corporations and big utility firms, and creating new income streams for communities, co-operatives and the public sector, will open up all kinds of new spaces for democratic change.
To make this happen, we need to pick some ambitious but achievable short-term goals that catalyse further change. There are lessons to be learned from Germany, Denmark and Bolivia, where government support for renewable energy co-operatives has led to a genuine transfer of power towards the grassroots. Bringing energy industries back under national or local control could be a valuable step, if combined with other democratic reforms; Norway, Denmark and Uruguay all have strong representation from workers on their national energy bodies.
To achieve these goals, we will need to reduce the power and influence of the fossil fuel companies, kicking their representatives out of government and moving subsidies away from polluting fuels and towards clean energy. Divestment campaigns shouldn’t just call for an end to fossil fuel funding but galvanize a shift in public investments into cleaner alternatives: not corporate renewable schemes but community energy, sustainable local transport and energy efficiency projects.
We can’t just sit back and expect the falling price of solar and wind to sweep away the old energy order. Renewable energy could be a powerful tool for dismantling the current failed system – but we need to use it wisely, and not let it fall into the wrong hands!
Original article: http://newint.org/features/2015/03/01/renewable-energy-keynote/