Articles in EnglishSteps forward continue to outnumber steps back, notwithstanding the Trump election. But.State of The Transition, November 2016. CEO of Saudi renewables developer ACWA Power, Paddy Padmanathan: Investing and making profits in renewables. The global energy transition remains in a state of net forward momentum as of the end of November. However, evidence that the society is in danger of reaching its eventual target of complete or near-complete energy decarbonisation too late to save the planet from runaway global warming was particularly clear this month. As if we didn’t know it before the events of November, this is going to be a tight race. The Paris Agreement, a global decarbonisation pact adopted by every independent nation on Earth, entered into force on November 4th. I summarised the state of play in international climate politics, as it stood after the Marrakech climate summit, in a blog on November 21st. In essence, every government but the Trump regime-in-waiting sees the Paris process as «irreversible». In the Marrakech Declaration 195 of them essentially told the climate-denying President-elect that he will lead a rogue state in a minority of one on the climate issue if he walks away from the treaty. 360 US companies wrote to Trump adding that withdrawal from the Paris accord would put US prosperity at risk. Corporate front runners around the world this month performed consistently with such an analysis. In Europe, notably, Dong Energy profits soared in the third quarter as a result of successful offshore wind projects and the selling off of their gas grid. The company began life as Denmark’s national oil company. This month their CEO, Henrik Poulsen, announced Dong’s intention to divest all remaining oil and gas assets and focus just on renewables, mostly offshore wind. The company sees «strong investor demand», Poulsen said. About the author Jeremy Leggett is a well respected author and commentator, founder of Solarcentury and SolarAid, Chairman of Carbon Tracker, climate-and-energy activist, historian and futurist. He is the author of several books on energy, climate change and withdrawal from fossil fuels. He contributes frequently to the Financial Times and the Guardian. Leggett is Doctor of Philosophy in Earth sciences from Oxford University. One example of that was HSBC’s UK pension scheme investing £1.85bn in a fund recently established by the UK’s largest fund managers, LGIM, with no coal, reduced oil and gas exposure, and a focus on low carbon investments. Said LGIM’s head of sustainability, Meryam Omi: «This is a powerful message that we are sending to companies that they need to step up to meet the challenges of moving to a low carbon economy.» The chief investment officer at HSBC’s UK pension scheme, Mark Thompson, added that this would be «the new normal.»Another mover in this general direction is the UK’s National Grid, which is disposing of its UK gas grid, recognising the rapid expansion of renewables, and making investments in batteries and smart meters accordingly. CEO John Pettigrew says that «2015 was the last year we operated the system in the way it has operated for the past 50», with coal power plants being paid to meet peaks of demand. Now adjustments focus on paying companies to reduce demand. Soon, in a country where solar generation has exceeded coal for months at a time of late, batteries and smart meters will add to the capability to keep lights on and emissions down. In America, Tesla shareholders voted through a $2.6bn merger deal with SolarCity, approving CEO Elon Musk’s vision by an 85% majority, despite Wall Street scepticism. Musk has now created the world’s first EV-battery-solar conglomerate. Others will not be far behind, I predict. In October Mercedes-Benz unveiled its latest EV at the Paris Motor Show, and parent Daimler announced it will be building a €500 million battery factory in Germany. In November Mercedes-Benz announced plans to introduce a residential energy storage product to the US market in 2017, and set up a new energy company, Mercedes-Benz Energy Americas, to market it. The writing on the wall when it comes to electrification of road transport can be seen in a regular flow of announcements these days. Notably this month, Daimler joined with VW, BMW and Ford to announce a €1 billion project to build 400 EV charging stations, a staging post to the thousands they and other EV converts envisage across Europe. As the Wall Street Journal has put it, oil companies are «binging on debt» – not least Shell – and often borrowing money just to pay dividends As for where the electricity comes from for EVs going forward, renewables seem set to win on simple economics. In some southwestern American states, new wind farms can be built today for just $22 a megawatt-hour and solar projects are less than $40 a megawatt-hour. The average lifetime cost for US natural gas plants is $52 and for coal $65. Trump may want to dig coal, but who is going to pay to burn it? All this may seem obvious to converts to renewables in the utility industry. But most of the oil and gas companies continue to dig in and try to find ways to justify and defend the status quo. Shell boss Ben van Beurden is among the oil leaders who are lobbying for a major role for gas far into the future. He came out with a remarkable example of tunnel vision this month. The ability to make money from renewables «has been remarkably absent», he told a conference in Paris. In attendance was the CEO of Saudi renewables developer Acwa Power, Paddy Padmanathan. «I did talk to him for a few minutes as he was leaving to point out that we are investing and we are making profits,» Padmanathan said. «And we are making profits with solar energy priced at $0.05 per kWh.» Sometimes one has to wonder about the kind of advice people like van Beurden are getting. Why would he discount the developments at Dong Energy, for example? That former-oil-and-gas now-renewables company undermines every oilman who likes to say that oil companies cannot profitably entertain major changes in their business model. And of course the oil industry hardly stands up to close inspection when it comes to profitability, as my blogs spanning 2016 have chronicled. As the Wall Street Journal has put it, oil companies are «binging on debt» – not least Shell – and often borrowing money just to pay dividends. As well as increasingly unattractive economics, the oil and gas industry faces a burgeoning catalogue of environmental problems. Previous blogs this year amount to a depressing story, notably when it comes to gas leakage. In November, one little noticed development was particularly instructive of the winds of change, I would suggest. In Monterey county, California, the citizens voted on November 9th to ban fracking completely. There have been other such bans, both in the US and abroad. Two things made this one singular. First, Monterey is a county long extolled as a major oil target. Second, the oil and gas industry engaged in a multi-million dollar lobbying blitz to defeat the proposed ban. My prediction is that there will be ever more of this kind of adverse citizen reaction to their routine operations around the world, as the clean energy transition becomes ever more tangible and credible to the public, and as the environmental problems routinely associated with oil and gas operations become ever more exposed. But now comes the fate-of-civilisation question. Will the continuing collage of progress that we have seen in November, as in all the other months of 2016, be enough to beat the climate change clock? This month the North Pole reached a scarcely credible 36 degrees F (20˚C) warmer than normal for the time of year, with the extent of Arctic ice at an unsurprisingly record low. This sits most uncomfortably alongside UNEP’s warning to the world this month, in its Emissions Gap report, that nations will have to go much further with emissions reductions plans than they have, before 2020, if there is to be any chance of keeping below the 1.5˚C global warming that the Paris Agreement aims at. Even 2˚C, the upper limit of ambition, is very questionable. Yet China is still burning way too much coal, according to reports in November by Bloomberg, Carbon Tracker, and others. At the same time, it has scaled back solar and wind ambitions. With Trump in the wings, the world needs Chinese leadership badly. As I describe in The Winning of The Carbon War, there has been much evidence of that since 2014: China has worked very closely with Obama’s America both in delivering the Paris Agreement, and shepherding it into force. Now they have to go it alone. The same disparity between Paris commitments and policy action can be found in Europe, where, for example, officials are mulling removal of priority access for renewables to the grid ahead of other forms of energy. In the UK, the numbers of civil servants working on climate has been cut, even as the government bends over backwards to support shale drillers and waste billions attempting a nuclear renaissance.