Green Energy Revolution Megathread

[The Larch]

http://www.iea.org/newsroom/news/2017/april/global-oil-discoveries-and-new-projects-fell-to-historic-lows-in-2016.html?utm_content=buffer8655e&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

It's not only coal having a bad time recently...granted it'd only take another Gulf War to send oil price skyrocketing again, which would foster new investments.

Global oil discoveries and new projects fell to historic lows in 2016

Global oil discoveries fell to a record low in 2016 as companies continued to cut spending and conventional oil projects sanctioned were at the lowest level in more than 70 years, according to the International Energy Agency, which warned that both trends could continue this year.

Oil discoveries declined to 2.4 billion barrels in 2016, compared with an average of 9 billion barrels per year over the past 15 years. Meanwhile, the volume of conventional resources sanctioned for development last year fell to 4.7 billion barrels, 30% lower than the previous year as the number of projects that received a final investment decision dropped to the lowest level since the 1940s.

This sharp slowdown in activity in the conventional oil sector was the result of reduced investment spending driven by low oil prices. It brings an additional cause of concern for global energy security at a time of heightened geopolitical risks in some major producer countries, such as Venezuela.

The slump in the conventional oil sector contrasts with the resilience of the US shale industry. There, investment rebounded sharply and output rose, on the back of production costs being reduced by 50% since 2014. This growth in US shale production has become a fundamental factor in balancing low activity in the conventional oil industry. 

Conventional oil production of 69 mb/d represents by far the largest share of global oil output of 85 mb/d. In addition, 6.5 mb/d come from liquids production from the US shale plays, and the rest is made up of other natural gas liquids and unconventional oil sources such as oil sands and heavy oil.

With global demand expected to grow by 1.2 mb/d a year in the next five years, the IEA has repeatedly warned that an extended period of sharply lower oil investment could lead to a tightening in supplies. Exploration spending is expected to fall again in 2017 for the third year in a row to less than half 2014 levels, resulting in another year of low discoveries. The level of new sanctioned projects so far in 2017 remains depressed.

"Every new piece of evidence points to a two-speed oil market, with new activity at a historic low on the conventional side contrasted by remarkable growth in US shale production," said Dr Fatih Birol, the IEA's executive director. "The key question for the future of the oil market is for how long can a surge in US shale supplies make up for the slow pace of growth elsewhere in the oil sector."

The US shale industry has lowered its costs to such an extent that in many cases it is now more competitive than conventional projects. The average break-even price in the Permian basin in Texas, for example, is now at USD 40-45/bbl. Liquids production from US shale plays is expected to expand by 2.3 mb/d by 2022 at current prices, and expand even more if prices rise further. 

The offshore sector, which accounts for almost a third of crude oil production and is a crucial component of future global supplies, has been particularly hard hit by the industry's slowdown. In 2016, only 13% of all conventional resources sanctioned were offshore, compared with more than 40% on average between 2000 and 2015.

In the North Sea, for instance, oil investments fell to less than USD 25 billion in 2016, about half the level of 2014. Coincidentally, this is now approaching the level of spending in offshore wind projects in the North Sea, which has doubled to about USD 20 billion in the same period.

[viper37]

Fuck electric cars. I'm throughly unimpressed so far.

me too.  It's very good for California, less for Quebec and other northern climates.

[Admiral Yi]

me too.  It's very good for California, less for Quebec and other northern climates.

Why are they not good in cold weather?

[The Minsky Moment]

Fuck electric cars. I'm throughly unimpressed so far.

me too.  It's very good for California, less for Quebec and other northern climates.

?
Don't you have electric generation in Quebec??

BTW "northern climates" happen to be pretty good places to build solar power plants.  Heat is not essential to solar power generation - in fact, some panel designs are more efficient in cold weather, and the panels tend to degrade less quickly.  Cold climate sites that are high (altitude), dry and have clear skies are good prospects for solar.

[Admiral Yi]

Lighter engine weight maybe?  Less traction?

[The Minsky Moment]

I guess you would get less range b/c of running the heater etc. and just generally lower battery performance.  But it still functions.

[Barrister]

me too.  It's very good for California, less for Quebec and other northern climates.

Why are they not good in cold weather?

Batteries are far less effective at low temperatures.  I've seen this mentioned in reviews of Tesla's vehicles a few times.

If you keep your vehicle in a heated garage t doesn't matter, but otherwise it means a big hit in range / performance.

[viper37]

Fuck electric cars. I'm throughly unimpressed so far.

me too.  It's very good for California, less for Quebec and other northern climates.

?
Don't you have electric generation in Quebec??

As BB said, battery power tends to be not very good in cold weather.  Current cars, those on the market right now have about 45 minutes autonomy in winter, for the best of them (except Tesla, but that's 100-150k$ cars).  The worst of them have about 15-20 minutes autonomy in cold climate.  If you warm up you car 5 minutes before leaving, that means you have 10 minutes left.  In a city like Montreal or Quebec, that's how long you need to get out of your driveway

BTW "northern climates" happen to be pretty good places to build solar power plants.  Heat is not essential to solar power generation - in fact, some panel designs are more efficient in cold weather, and the panels tend to degrade less quickly.  Cold climate sites that are high (altitude), dry and have clear skies are good prospects for solar.

solar power plants and battery powered cars are two different things.

I can see the appeal for new products, like Tesla's solar shingles and windows, but for Quebec, we have cheap electricity for a few years still, so I exclude producing any kind of TW via solar power, that just costs too much.  We have enough wind in some places, but sun, in many places, we don't have enough of it to reliably power an entire city, let alone cover the heating needs - in an afforable way - during winter.

[jimmy olsen]

Now if only they could influence the current administration into having a sane policy.

https://www.bloomberg.com/news/articles/2017-04-25/biggest-u-s-companies-setting-more-renewable-energy-targets

Biggest U.S. Companies Setting More Renewable-Energy Targets

by Brian Eckhouse

‎April‎ ‎25‎, ‎2017‎ ‎8‎:‎00‎ ‎PM

Almost half of the biggest U.S. companies have established clean-energy targets for themselves, according to a report Tuesday from sustainable investors and environmental groups including the World Wildlife Fund.

It's not just the biggest U.S. companies -- 44 percent of the smallest 100 members of the Fortune 500 have also set goals, up from 25 percent in 2014, and 48 percent of the entire list.

Many are finding that renewable energy isn't just cleaner, it's also often cheaper. About 190 Fortune 500 companies collectively reported about $3.7 billion in annual savings, according to Power Forward 3.0, a report by WWF, Ceres, Calvert Research & Management and CDP.

"We're not talking about anecdotal information anymore," Marty Spitzer, a WWF senior director of climate and renewable energy in Washington, said in an interview. "We're talking about large, large savings."

Potential savings and sustainability goals prompted corporations to buy almost 3.7 gigawatts of power generated by clean-energy projects in 2015, and another 2.5 gigawatts last year, almost all from wind and solar, according to Bloomberg New Energy Finance.
Technology companies are among the biggest buyers of clean energy. Alphabet Inc.'s Google expects to be powered entirely by clean energy this year. In January, Apple Inc. agreed to buy the output from a proposed 200-megawatt solar farm in Nevada to help power a data center in Reno, Nevada. And Salesforce.com Inc., the San Francisco-based business software company, this month said it has reached net-zero greenhouse-gas emissions.

But it's no longer just tech companies. About 63 percent of Fortune 100 companies have clean-energy targets, according to the report. Such targets include commitments to reduce greenhouse-gas emissions and increase energy efficiency and renewable energy.

The 190 Fortune 500 companies reported emission reductions equivalent to mothballing 45 coal-fired power plants for a year, according to the report. It also found that 23 of Fortune 500 companies have 100 percent renewable-energy targets.

[jimmy olsen]

Awesome news! 

http://www.telegraph.co.uk/business/2017/05/19/electric-vehicles-cost-conventional-cars-2018/

Electric vehicles to cost the same as conventional cars by 2018

Alan Tovey, industry editor
19 MAY 2017 • 6:25PM
The cost of owning an electric car will fall to the same level as petrol-powered vehicles next year, according to bold new analysis from UBS which will send shockwaves through the automobile industry.

Experts from the investment bank's "evidence lab" made the prediction after tearing apart one of the current generation of electric cars to examine the economics of electric vehicles (EVs).

They found that costs of producing EVs were far lower than previously thought but there is still great potential to make further savings, driving down the price of electric cars.

As a result, UBS forecasts that the "total cost of consumer ownership can reach parity with combustion engines from 2018", with this likely to happen in Europe first.

"This will create an inflexion point for demand," the analysts said. "We raise our 2025 forecast for EV sales by ~50pc to 14.2m -  14pc of global car sales."

If the prediction comes to pass, traditional car industry giants could face ruin. Germany's Volkswagen Group - the world's biggest car company - is racing to catch up with rivals' investment levels in electric drivetrains, the components which deliver the power into the wheels, having largely ignored the technology in the past.

UBS's research was to help understand what it called the "most disruptive car category since the Model T Ford". The findings are based on its deconstruction of a Chevy Bolt, which it considered to be "the world's first mass-market EV, with a range of more than 200 miles".

The 2017 car - which cost $37,000 - was taken apart piece by piece and the parts analysed. UBS said that the Bolt's electric drive was $4,600 cheaper to produce than thought, "with much cost reduction potential left".

"We estimate that GM (which produces the Bolt) loses $7,400 in earnings before interest, and tax on every Bolt sold today, mainly due to a lack of scale."

Tesla's highly anticipated Model 3 - another small electric vehicle - is expected to lose billionaire Elon Musk's company $2,800 per car for the base version, according to UBS, but Tesla will break even at an average selling price of $41,000.

The bank predicts this will be achieved as customers opt for higher specification vehicles, making electric cars a viable business proposition, with upmarket EVs likely to be more profitable than mid-range versions.

"Once total cost of ownership parity is reached, mass-brand EVs should also turn profitable," UBS said.

Although the costs of EVs and current cars will be the same for motorists by 2018, manufacturers will not reach parity until 2023, when they will make 5pc margins on EVs - about equal to the profit on current vehicles.

EVs matching the cost of conventionally fuelled cars sooner than expected will send a seismic shock throughout the sector, from manufacturers right down through their supply chains, with UBS warning "the 'time to get ready' and win in the space shrinks".

It also warns that the aftermarket for replacement parts could be radically disrupted because electric drivetrains suffer less wear than traditional engines.

"Our detailed analysis of moving and wearing parts has shown that the highly lucrative spare parts business should shrink by ~60pc in the end-game of a 100pc EV world, which is decades away," UBS said.

It also forecast tech companies grabbing a bigger slice of the industry, with the deconstruction of the Bolt revealing that its electronics content was $4,000 higher than in an internal combustion engines, excluding the battery.

Professor David Bailey, car industry expert at Aston University, said: "If this really is the moment that the car industry reaches parity then the inflexion point is far earlier than anyone was expecting."

Ian Fletcher, principal automotive analyst at  IHS Markit, added: "We are not going to see the death of diesel or petrol anytime soon but manufacturers are weighing up the investment cost of traditional engines against electric, as well as the levies they face over the emissions of their fleets."

[The Minsky Moment]

Now if only they could influence the current administration into having a sane policy.

https://www.bloomberg.com/news/articles/2017-04-25/biggest-u-s-companies-setting-more-renewable-energy-targets

Shell just came out publically attacking Trump's anti-Paris Accord position.
The problem is that Trump's stance has nothing to do with what's good for business or the economy.  It is just a signaling mechanism to the knuckle-dragger vote.

[jimmy olsen]

That Indian plan is too ambitious, but I think that Chinese plan seems achievable. That would be a big help.

http://oilprice.com/Alternative-Energy/Renewable-Energy/China-And-India-On-Aggressive-Electric-Vehicle-Push.html

China And India On Aggressive Electric Vehicle Push
By Nick Cunningham - May 14, 2017, 5:00 PM CDT 
China and India are rolling out plans to dramatically accelerate the adoption of electric vehicles (EVs), initiatives that have prompted the IEA to take notice and promise a review its long-term oil demand forecast.

In last year's World Energy Outlook, the IEA projected that electric vehicles would grow rapidly over time, but still not fast enough to upend the oil market. The Paris-based energy agency said that it expected to see 30 million EVs on the roads by 2025 and 150 million by 2040, up from just 1.3 million as of 2015. But still, even that large number would only eat into 1.3 million barrels of oil demand per day (mb/d) by 2040, only marginally impacting demand and prices decades from now.

To be sure, other analysts and agencies have more aggressive figures, but the IEA often sets the tone for long-term forecasts. That is why it is important that the IEA has promised a deeper review of its assumptions in its 2017 World Energy Outlook, to be released in November.

The changes could be significant because a growing number of countries are stepping up their policy initiatives to support EV adoption. The two most important are China and India, two countries that the IEA itself has said will make up the bulk of oil demand growth going forward. For example, by 2040, the IEA expects global oil demand to grow by 11 mb/d. But China accounts for 4.1 mb/d of demand growth over that timeframe and India adds 6 mb/d. There are other regions in the world that will see demand grow substantially, but the industrialized world will see steep losses. To keep things simple, China and India are the two most important countries when trying to gauge long-term oil demand growth. "The choices made by China and India are obviously most relevant for the possible future peak in passenger car oil demand," the IEA said.

But those two countries are also in the midst of formulating some aggressive EV policies. Both pay an enormous price tag for imported oil and also suffer from horrific air pollution in many of their cities. EVs, in that sense, offer solutions to economic, national security, environmental and public health problems.

China said last month that it would seek to have at least one-fifth of its annual auto sales to come from EVs by 2025. That would mean some 7 million EV sales annually in China in less than a decade.

However, that plan looks modest when compared to what India wants to achieve. A new policy proposal from a government-run think-tank in India says that India should move to 100 percent EV sales by 2032. Under this scenario, no gasoline or diesel-fueled cars would be sold in India after that date.

The IEA was essentially left breathless by that plan, calling it "ambitious." Indeed, that scenario would require 10 million EVs sold annually in India by the end of the next decade, essentially ten times the number of total vehicles on the road in 2015.

Although much remains to be seen, "it is a good step that will help India to be among the global leaders in deploying a technology that is crucial to temper increasing oil import needs, local air pollution in cities, and limit CO2 emissions," the IEA said in an emailed response to Bloomberg.

For India, the rapid transition to electrification of its auto fleet could yield $60 billion in savings between now and 2030, the government report said. To achieve the goal it would require limiting registration for gasoline and diesel cars, and it would also hinge on public subsidies for EVs and charging stations.

The proposed changes in China and India are only a few, if the most important, examples of a worldwide trend towards EVs that is just getting underway. France's new President Emmanuel Macron said that by 2040 he hopes sales of gasoline or diesel-powered vehicles will be entirely phased out. Norway hopes to hit that threshold as soon as 2025.

There is a great deal of uncertainty in these targets, to say the least. Not every, or even most, of the government objectives will be reached. But it isn't the specific numbers or dates that are important, but the directional change. EV adoption is accelerating and will likely to continue to accelerate, often in a non-linear fashion. That suggests that the IEA is indeed quite conservative in its prediction that only 1.3 mb/d of oil demand will be erased by 2040 because of EVs.

By Nick Cunningham of Oilprice.com

[11B4V]

Coal's where it's at. Coal FTW.

[jimmy olsen]

Interesting graphic, given how much bigger the market is these days, a quicker ramp up makes buisness sense, but is much more logistically difficult. Let's hope they succeed.

Tesla's deliveries are still tracking close to Ford's Model T revolution
Fred Lambert

- May. 24th 2017 11:44 am ET
@FredericLambert

Ford's Model T is credited for creating a transportation revolution by making the first affordable and truly mass-produced car.

Tesla is trying to do the same thing with electric cars, which make for an interesting comparison to track their respective progression.

Ford really started to make a difference when Model T production started to reach high volumes. In the 1920s, they reached an insane production rate of over 1 million units per year.

But like anything else, that took a while to achieve.

They started producing the car in late 1908, but they only reached an annual production rate of over 100,000 units 5 years into production.

Surprisingly, Tesla's deliveries have been tracking close to Ford's Model T deliveries. Visual Capitalist made an interesting chart showing the comparison:

Tesla has been tracking ahead of Model T if you track it from the start of Model S production.

2017 will be a decisive year since Tesla is on track to deliver between 90,000 and 100,000 Model S and X, but it needs to deliver 170,000 vehicles to keep tracking the Model T.

As we previously reported based on Tesla's part orders, the company would need perfect production execution in order to deliver 80,000 Model 3s in 2017.

Therefore, there's still a possibility for Tesla to keep track in 2017, but it's almost impossible. The automaker has a better shot in 2018, which will be the Model 3's first full year of production.

Visual Capitalist makes an interesting link between the Model T's impact on US road infrastructure and the possible impact of Tesla's growing fleet of EVs:

"Ford's assembly line and uncomplicated design allowed for cheaper pricing, which helped Ford sales to take off. With many new Model Ts hitting the road, the United States government was able to generate enough revenue from gasoline taxes to enable the sustainable development of roads in the United States."

They suggest that it could have a similar impact on the US' electric vehicle charging infrastructure:


Tesla recently announced an important expansion of Supercharger network in order to support the arrival of the Model 3 and its growing fleet of Model S and Model X vehicles.

The timing is also interesting since VW will also have to deploy an impressive number of charging station through its DieselGate settlements. The plan for California includes installing ultra-fast 320 kW chargers, and the plan for the whole country includes a 'nationwide 150 kW+ fast charging network'.

Those networks being deployed around the same time as the Model 3 will likely create a similar growth model as the Model T and the US road expansion. In other words, those next few years could significantly change the auto industry in the US.

[garbon]

Sigh