Big energy hugely underestimates electric cars, renewable power – Green Car Reports
2016 BMW i3
Mass adoption of electric cars and renewable energy could significantly decrease global consumption of fossil fuels.
But does the established energy industry view these new developments as a threat?
In a recent report, ExxonMobil said coal could continue to provide the majority of the world’s electricity-generation capacity in 2040, and that electric cars would only make up around 10 percent of the U.S. new-car market by that time.
Yet new estimates from other sources indicate ExxonMobil and other fossil-fuel giants might want to take electric cars and renewable energy more seriously.
Falling costs for both electric cars and solar panels “could halt fossil-fuel growth by 2020,” according to findings by Imperial College London and Carbon Tracker reported by The Guardian.
By 2035, electric cars could make up 35 percent of the vehicle market, and could account for two-thirds of that market by 2050, according to the two institutions.
Oil field (Image: Flickr user johnny choura, used under CC license)
At the predicted 2050 level, electric cars could displace 25 million barrels of oil per day, according to their report.
The report also predicted that solar power could account for 23 percent of global electricity-generation capacity by 2040, and 29 percent by 2050.
Under that scenario, coal would be entirely phased out, while natural gas would account for just 1 percent of the generating mix, the report claims.
MORE: Global oil demand could peak by 2020, says Shell (Nov 2016)
The same predicted scenario would see coal and oil demand peak by 2020, while natural-gas demand would be “curtailed.”
These predictions are based in part on what researchers say are significant decreases in the prices of electric-car batteries and photovoltaic solar cells over the past few years.
Solar-cell prices have fallen 85 percent over the past seven years, while electric-car battery costs have fallen 73 percent in that time, according to Carbon Tracker.
Photovoltaic solar power field at Volkswagen plant in Chattanooga, Tennessee
It pegs the current average battery price at $268 per kilowatt-hour, but believes that will decrease to $100 per kwh by 2020.
Carbon Tracker, a think-tank that studies the potential impact of climate change on investment, believes fossil-fuel companies may be caught unprepared for a major shift.
“Electric vehicles and solar power are game-changers that the fossil-fuel industry consistently underestimates,” Luke Sassams, senior researcher at Carbon Tracker, said in a statement.
If the Carbon Tracker and Imperial College report’s findings prove correct, electric cars and renewable energy could have as much impact on the value of oil assets as the OPEC price war that triggered the price crash of 2014, notes Bloomberg.
The report predicts that about 2 million barrels a day will be displaced by 2025, equivalent to the amount of oversupply that triggered the price crash, the news service said.
Oil companies haven’t completely ignored alternative energy sources.
2017 Nissan Leaf
Royal Dutch Shell and Total have both discussed placing electric-car charging stations at their European fuel stations, and Total also controls solar-panel maker SunPower.
Norwegian oil giant Statoil and BP are also involved with offshore wind farms.
But it does not appear that any oil company anticipates a wholesale transition away from fossil fuels, so it will be interesting to see what might happen if such a transition really does occur.
[hat tip: Cameron Dearlove, Randall Hamlet, Laura Sanborn, International Man of Mystery]