There has been much talk of the ‘climate emergency’ in recent weeks, alongside protests, meetings between campaigners and the Environment Secretary, and the latest report from the Committee on Climate Change.1 This calls on the government to change the UK target, set by the Climate Change Act, from an 80% reduction in carbon emissions by 2050 to net zero.
The committee report examines a wide range of evidence that our climate is changing significantly – and the influence of carbon dioxide emissions on that change – and calls for a range of policy responses to reduce UK emissions.
Meanwhile, in the US, the most celebrated US investor recently placed a $10bn bet on future global energy markets. Given Warren Buffett’s track record, we should ask what we can learn from Berkshire Hathaway’s major investment in the acquisition of Anadarko, a US shale gas producer, by Occidental Petroleum.
According to the International Energy Agency,2 ‘global energy consumption in 2018 increased at nearly twice the average rate of growth since 2010… [and] demand for all fuels increased, led by natural gas, even as solar and wind posted double-digit growth. Higher electricity demand [led to] over half of the growth… Energy efficiency saw lacklustre improvement… CO2 emissions rose 1.7% last year and hit a new record’.
So, even as we consider a net-zero target for the UK – with a drive to electric vehicles [EVs] and more energy efficient buildings to reduce heating and cooling needs – we see growing total demand for energy and higher electricity demand, even before we start a mass move to EVs and gas-free homes.
The IEA says: ‘Demand for all fuels rose, with fossil fuels meeting nearly 70% of the growth for the second year running. Renewables grew at double-digit pace, but still not fast enough to meet the increase in demand for electricity around the world.’ One reason is clear – using wind, solar and batteries as our primary energy sources is unaffordable right now. The need for green energy incentives and subsidies demonstrates they are not yet economic.
Renewables grew at double-digit pace, but not fast enough to meet the rise in demand for electricity
However, a low carbon vision for the world requires wind, solar and batteries to add far more capacity to supply over the next two to three decades than US shale has added over the past 15 years. And that might just be what has prompted Buffett to invest in Anadarko. If we cannot achieve further rapid growth in renewable generation, and a reduction in energy demand, fossil-fuel demand will grow. This may not fit with a low carbon vision, but it is current economic reality.
Chinese demand grew most – up 3.5%, the highest since 2012, and a third of global growth, with the world’s largest increase in solar and wind generation. More than 95% of this went into electricity generation.
Europe, meanwhile, presents a different picture. With 1.8% economic growth, energy demand increased by only 0.2%. German energy efficiency resulted in a 2.2% drop in energy demand and a 6% cut in oil use. Coal and gas use fell too, with almost all net growth in Europe met by renewables.
So, the significant drive to cut energy use and carbon emissions in Europe is bearing some fruit. What Buffett’s latest big bet shows, however, is that we need further significant growth in investment in green technologies and reductions in the cost of renewable energy generation and storage.
The ‘Sage of Omaha’ recognises this. Berkshire Hathaway Energy (BHE) Renewables encompasses BHE Solar, BHE Wind, BHE Geothermal and BHE Hydro, making BHE the owner of one of the largest renewable energy portfolios in the US, delivering renewables to millions of US homes.
We must cut demand and emissions further, however, by improving energy efficiency across the economy, particularly in our building stock. We must not simply cut energy use, but improve the overall performance of the building.
Australia’s Nabers scheme shows what can be achieved in the commercial market – stable policies and political leadership delivering better buildings, attracting more demanding tenants and generating better returns.
We need to design buildings for better performance, both in terms of energy and their comfort, wellbeing and sustainability. New CIBSE guidance on health and wellbeing, as well as a new edition of CIBSE Guide L, will offer practical ways to do this.
■ Dr Hywel Davies is technical director at CIBSE www.cibse.org
References:
- CCC, Net Zero – The UK’s contribution to stopping global warming
- IEA, Global Energy and CO2 Status Report: the latest trends in energy and emissions in 2018