Coal comeback unlikely after Paris climate pact withdrawal, says utility CEO

Renewable Energy Market Reform aligns solar and wind with modern grid pricing, tackling intermittency via batteries and demand response, stabilizing wholesale power prices, and enabling capacity markets to finance flexible supply for deep decarbonization.

Key Points

A market overhaul that integrates variable renewables, funds flexibility, and stabilizes grids as solar and wind grow.

✅ Dynamic pricing rewards flexibility and demand response

✅ Capacity markets finance reliability during intermittency

✅ Smart grids, storage, HV lines balance variable supply

ALMOST 150 years after photovoltaic cells and wind turbines were invented, they still generate only 7% of the world’s electricity. Yet something remarkable is happening. From being peripheral to the energy system just over a decade ago, they are now growing faster than any other energy source and their falling costs are making them competitive with fossil fuels. BP, an oil firm, expects renewables to account for half of the growth in global energy supply over the next 20 years. It is no longer far-fetched to think that the world is entering an era of clean, unlimited and cheap, abundant electricity for all. About time, too. 

There is a $20trn hitch, though. To get from here to there requires huge amounts of investment over the next few decades, to replace old smog-belching power plants and to upgrade the pylons and wires that bring electricity to consumers. Normally investors like putting their money into electricity because it offers reliable returns. Yet green energy has a dirty secret. The more it is deployed, the more it lowers the price of power from any source. That makes it hard to manage the transition to a carbon-free future, during which many generating technologies, clean and dirty, need to remain profitable if the lights are to stay on. Unless the market is fixed, subsidies to the industry will only grow.

Policymakers are already seeing this inconvenient truth as a reason to put the brakes on renewable energy. In parts of Europe and China, investment in renewables is slowing as subsidies are cut back, even as Europe’s electricity demand continues to rise. However, the solution is not less wind and solar. It is to rethink how the world prices clean energy in order to make better use of it.

Shock to the system

At its heart, the problem is that government-supported renewable energy has been imposed on a market designed in a different era. For much of the 20th century, electricity was made and moved by vertically integrated, state-controlled monopolies. From the 1980s onwards, many of these were broken up, privatised and liberalised, so that market forces could determine where best to invest. Today only about 6% of electricity users get their power from monopolies. Yet everywhere the pressure to decarbonise power supply has brought the state creeping back into markets. This is disruptive for three reasons. The first is the subsidy system itself. The other two are inherent to the nature of wind and solar: their intermittency and their very low running costs. All three help explain why power prices are low and public subsidies are addictive.

First, the splurge of public subsidy, of about $800bn since 2008, has distorted the market. It came about for noble reasons—to counter climate change and prime the pump for new, costly technologies, including wind turbines and solar panels. But subsidies hit just as electricity consumption in the rich world was stagnating because of growing energy efficiency and the financial crisis. The result was a glut of power-generating capacity that has slashed the revenues utilities earn from wholesale power markets and hence deterred investment.

Second, green power is intermittent. The vagaries of wind and sun—especially in countries without favourable weather—mean that turbines and solar panels generate electricity only part of the time. To keep power flowing, the system relies on conventional power plants, such as coal, gas or nuclear, to kick in when renewables falter. But because they are idle for long periods, they find it harder to attract private investors. So, to keep the lights on, they require public funds.

Everyone is affected by a third factor: renewable energy has negligible or zero marginal running costs—because the wind and the sun are free. In a market that prefers energy produced at the lowest short-term cost, wind and solar take business from providers that are more expensive to run, such as coal plants, depressing wholesale electricity prices, and hence revenues for all.

Get smart

The higher the penetration of renewables, the worse these problems get—especially in saturated markets. In Europe, which was first to feel the effects, utilities have suffered a “lost decade” of falling returns, stranded assets and corporate disruption. Last year, Germany’s two biggest electricity providers, E.ON and RWE, both split in two. In renewable-rich parts of America, power providers struggle to find investors for new plants, reflecting U.S. grid challenges that slow a full transition. Places with an abundance of wind, such as China, are curtailing wind farms to keep coal plants in business.

The corollary is that the electricity system is being re-regulated as investment goes chiefly to areas that benefit from public support. Paradoxically, that means the more states support renewables, the more they pay for conventional power plants, too, using “capacity payments” to alleviate intermittency. In effect, politicians rather than markets are once again deciding how to avoid blackouts. They often make mistakes: Germany’s support for cheap, dirty lignite caused emissions to rise, notwithstanding huge subsidies for renewables. Without a new approach the renewables revolution will stall.

The good news is that new technology can help fix the problem.  Digitalisation, smart meters and batteries are enabling companies and households to smooth out their demand—by doing some energy-intensive work at night, for example. This helps to cope with intermittent supply. Small, modular power plants, which are easy to flex up or down, are becoming more popular, as are high-voltage grids that can move excess power around the network more efficiently, aligning with common goals for electricity networks worldwide.

The bigger task is to redesign power markets to reflect the new need for flexible supply and demand. They should adjust prices more frequently, to reflect the fluctuations of the weather. At times of extreme scarcity, a high fixed price could kick in to prevent blackouts. Markets should reward those willing to use less electricity to balance the grid, just as they reward those who generate more of it. Bills could be structured to be higher or lower depending how strongly a customer wanted guaranteed power all the time—a bit like an insurance policy. In short, policymakers should be clear they have a problem and that the cause is not renewable energy, but the out-of-date system of electricity pricing. Then they should fix it.

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Electric Vehicle Market Growth accelerated as EV adoption hit 2 million in 2016, per IEA, led by China, Tesla momentum, policy incentives, charging infrastructure buildout, and diesel decline under Paris Agreement goals.

Key Points

EV adoption rose to 2 million in 2016, driven by policy, China, and charging buildout, yet still only 0.2% of cars.

✅ 2M EVs on roads in 2016; 60% YoY growth

✅ China led with >40% of global EV sales

✅ Policies target 30% share by 2030 via EVI

The number of electric vehicles on the road rocketed to 2 million in 2016 as the age of electric cars accelerates after being virtually non-existent just five years ago, according to the International Energy Agency.

Registered plug-in and battery-powered vehicles on roads worldwide rose 60% from the year before, according to the Global EV Outlook 2017 report from the Paris-based IEA. Despite the rapid growth, electric vehicles still represent just 0.2% of total light-duty vehicles even as U.S. EV sales continue to soar into 2024, suggesting a turning point.

“China was by far the largest electric car market, accounting for more than 40% of the electric cars sold in the world and more than double the amount sold in the United States,” the IEA wrote in the report published Wednesday. “It is undeniable that the current electric car market uptake is largely influenced by the policy environment.”

A multi government program called the Electric Vehicle Initiative on Thursday will set a goal for 30% market share for battery power cars, buses, trucks and vans by 2030, aligning with projections that driving electric cars within a decade could become commonplace, according to IEA. The 10 governments in the initiative include China, France, Germany, the UK and US.

India, which isn’t part of the group, said last month that it plans to sell only electric cars by the end of the next decade. Countries and cities are looking to electric vehicles to help tackle their air pollution problems.

In order to limit global warming to below 2 degrees Celsius (3.6 degrees Fahrenheit), the target set by the landmark Paris Agreement on climate change, the world will need 600 million electric vehicles by 2040, according to the IEA.

After struggling for consumer acceptance, Tesla Inc. has made electric vehicles cool and trendy, and is pushing into the mass market as the United States approaches a tipping point for mass adoption with the new Model 3 sedan.

Consumer interest and charging infrastructure, as well as declining demand for diesel cars in the wake of Volkswagen’s emissions scandal, has spurred massive investments in plug-in cars, and across Europe the share of electric cars grew during virus lockdown months, reinforcing this momentum. An electrical vehicle “cool factor” could spur sales to 450 million by 2035, according to BP chief economist Spencer Dale.

Volkswagen, the world’s largest automaker, plans to roll out four affordable electric vehicles in the coming years as part of a goal to sell more than 2 million battery-powered vehicles a year by 2025. Mercedes-Benz accelerated the introduction of ten new electric vehicles by three years to 2022 to take on Tesla as the dominance of the combustion engine gradually fades. 

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Ontario Hydro Rate Cuts address soaring electricity prices, lowering hydro bills via refinancing, FAO-reviewed costs, and long-term infrastructure investment, balancing ratepayer relief with a projected $21 billion net expense over 30 years.

Key Points

Ontario electricity bill relief spreading infrastructure and green energy costs over 30 years via refinancing.

✅ 25% average bill cut; $156 to $123 per month

✅ FAO projects $21B net cost over 30 years

✅ Costs shifted to long-term debt, infrastructure, green energy

Premier Kathleen Wynne is making no apologies for the Liberals’ 25 per cent hydro rate cuts, legislation to lower electricity rates that a legislative watchdog warns will cost at least $21 billion over three decades.

In the wake of Financial Accountability Officer Stephen LeClair’s report on the “Fair Hydro Plan,” Wynne emphasized that Ontario electricity consumers demanded and deserved relief.

“You all read the newspaper, you listen to the radio and you watch television — you know the problems that families are having around the province paying for their electricity costs,” the premier told reporters Thursday in Timmins.

That’s why the government moved forward with a rate cut, with recent Hydro One reconnections underscoring the stakes, that will see the average household’s monthly hydro bill drop from $156 to $123 once it fully takes effect next month.

In a 15-page report released Wednesday, the financial accountability officer estimated the initiative would cost the province $45 billion over the next 29 years amid a cabinet warning on prices that electricity costs could soar, while saving ratepayers $24 billion for a next expense of $21 billion.

Both the Progressive Conservatives and the New Democrats oppose the Liberal rate cut, arguing that a deal with Quebec would not lower hydro bills.

But Wynne said the government has in effect renegotiated a mortgage so it will bankroll hydro infrastructure improvements over a longer time period, though some have urged the next government to scrap the Fair Hydro Plan and review options, in order to give customers a break now.

“We’re talking about a 30-year window here. It took at least 30 years, probably 40 years, to let the electricity system degrade to the stage that it had in 2003,” she said, noting “we were having blackouts and brownouts around the province” before her party took office that year.

“There were thousands of kilometres of line that needed to be rebuilt . . . that work hadn’t been done over those generations, so electricity costs were low over that period of time but the work wasn’t being done.”

When her predecessor Dalton McGuinty came to power in 2003, Wynne said Queen’s Park began spending billions on infrastructure improvements, including expensive subsidies for green energy, such as wind turbines and solar panels.

“There’s a lot of work that has been done since then. Literally thousands of kilometres of line have been rebuilt. The coal-fired plants have been shut down. The air is cleaner. There’s less pollution in the air. The system is reliable and renewable,” she said.

“So there’s a cost associated with that and what was happening was that was work that had to be done — and all of those costs were on the shoulders of people today.”

Wynne noted “this electricity grid is an asset that is going to be used for generations to come.”

“My grandchildren are going to benefit from this asset, so I think it’s fair that we spread the cost of that over that 30-year period,” she said.

“That’s how we made this decision.”

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Uber Elevate eVTOL Batteries enable electric air taxis with advanced energy storage, lithium-ion cell quality, safety engineering, and zero-emissions performance for urban air mobility, ride-hailing aviation, and scalable battery pack development.

Key Points

Battery systems for Uber's electric air taxis, maximizing energy density, safety, and cycle life for urban air mobility.

✅ Ex-Tesla battery leader guides pack design and cell quality

✅ All-electric eVTOL targets zero-emissions urban air mobility

✅ Focus on safety, energy density, fast charge, and lifecycle

Celina Mikolajczak, a senior manager for battery pack development at Tesla, has been hired by Uber to help the ride-hail company’s “flying car” project get off the ground. It’s an important hire because it signals that Uber plans to get more involved in the engineering aspects of this outlandish-sounding project.

For six years, Mikolajczak served as senior manager and technical lead for battery technology, cell quality, and materials analysis. She worked with Tesla’s suppliers, tested the car company’s lithium-ion batteries for long-term use as the age of electric cars accelerates, oversaw quality assurance, and conducted “failure analysis” to drive battery cell production and design improvements. In other words, Mikolajczak was in charge of making sure the most crucial component in Tesla’s entire assembly line was top of the line.

Now she works for Uber — and not just for Uber, but for Uber Elevate, the absurdly ambitious air taxi service that hinges on the successful development of electric vertical take-off and landing (eVTOL) vehicles. There are practically zero electric planes in service today, and definitely none being used in a commercial ride-hail service. The hurdles to getting this type of service off the ground are enormous.

Her title at Uber is director of engineering and energy storage systems, and today marks her first week on the job. She joins Mark Moore, the former chief technologist for on-demand mobility at NASA’s Langley Research Center, who joined Uber almost a year ago to help lend a professional appearance to Elevate. Both serve under Jeff Holden, Uber’s head of product, who oversees the air taxi project.

Uber first introduced its plan to bring ride-sharing to the skies in a white paper last year. At the time, Uber said it wasn’t going to build its own eVTOL aircraft, but stood ready to “contribute to the nascent but growing VTOL ecosystem and to start to play whatever role is most helpful to accelerate this industry’s development.”

Instead, Uber said it would be partnering with a handful of aircraft manufacturers, real estate firms, and government regulators to better its chances of developing a fully functional, on-demand flying taxi service. It held a day-long conference on the project in Dallas in April, and plans to convene another one later this year in Los Angeles. In 2020, Uber says its aerial service will take off in three cities: LA, Dallas-Fort Worth, and Dubai.

UBER’S TAKING A MORE PROMINENT ROLE

Now, Uber’s taking a more prominent role in the design and manufacturing of its fleet of air taxis, which signals a stronger commitment to making this a reality — and also more of a responsibility if things eventually go south, as setbacks like Eviation's collapse underscore.

Perhaps most ambitiously, Uber says the aircraft it plans to use (but, importantly, do not exist yet) will run on pure battery-electric power, and not any hybrid of gasoline and electricity. Most of the companies exploring eVTOL admit that battery’s today aren’t light enough or powerful enough to sustain flights longer than just a few minutes, but many believe that battery technology will eventually catch up, with Elon Musk suggesting a three-year timeline for cheaper, more powerful cells.

Uber believes that in order to sustain a massive-scale new form of transportation, it will need to commit to an all-electric, zero-operational emissions approach from the start, even as potential constraints threaten the EV boom overall. And since the technology isn’t where it needs to be yet, the ride-hail company is taking a more prominent role in the development of the battery pack for its air taxi vehicles. Mikolajczak certainly has her work cut out for her.

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National Electricity Market review calls for clear coal-fired closure schedules to safeguard energy security, backing a technology-agnostic clean energy and low emissions target with tradeable certificates to stabilise prices and support a smoother transition.

Key Points

A review proposing orderly coal closures and a technology-agnostic clean energy target to protect grid reliability.

✅ Mandates advance notice of coal plant closure schedules

✅ Supports clean energy and low emissions target with certificates

✅ Aims to stabilise prices and ensure system security

THE Latrobe Valley’s coal-fired power stations could be forced to give details of planned closures well in advance to help governments avoid major threats to electricity supply, amid an AEMO warning on reduced reserves across the grid.

The much-anticipated review of the national electricity market, to be released on Friday, will outline the need for clear schedules for the closure of coal-fired power stations to avoid rushed decisions on ­energy security.

It is believed the Turnbull government, which has ruled out taxpayer-funded power plants in the current energy debate, will move toward either a clean-energy or a low-emissions target that aims to bolster power security while reducing household bills and emissions.

The system, believed to be also favoured by industry, would likely provide a more stable transition to clean energy by engaging with the just transition concept seen in other markets, because coal-fired power would not be driven out of the market as quickly.

Sources said that would lead to greater investment in the energy sector, a surplus of production and, as seen in Alberta's shift to gas and price cap debate driving market changes, a cut in prices.

It is likely most coal-fired power stations, such as Yallourn and Loy Yang in the Latrobe Valley, would see out their “natural lives” under the government’s favoured system, rather than be forced out of business by an EIS.

The new target would be separate from the Renewable Energy Target which have come under fire because of ad hoc federal and state targets.

The Herald Sun has been told the policy would provide tradeable clean-energy certificates for low-emissions generation, such as wind, solar and gas and coal which used carbon capture and storage technology.

Energy retailers and large industrial users would then be ­required to source a mandated amount of certified clean power.

Federal Energy Minister Josh Frydenberg has repeatedly said any solution must be “technology agnostic” including gas, renewable energy and coal, amid ongoing debates over whether to save or close nuclear plants such as the Three Mile Island debate in other markets.

Energy Networks Australia’s submission to the review, chaired by Chief Scientist Alan Finkel, acknowledged the challenges in identifying potential generation closures, particularly with uncertain and poorly integrated state and national carbon policy settings.

The group said given the likelihood of further closures of coal fired generation units a new mechanism was needed to better manage changes in the generation mix, well in advance of the closure of the plant.

It said the implications for system stability were “too significant” to rely on the past short-term closures, such as Hazelwood, particularly when the amount of power generated could drive energy security to “tipping point”.

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STM Electric Buses Montreal launch a zero-emission pilot with rapid charging stations on the 36 Monk line from Angrignon to Square Victoria, winter-tested for reliability and aligned with STM's 2025 fully electric fleet plan.

Key Points

STM's pilot deploys zero-emission buses with charging on the 36 Monk line, aiming for a fully electric fleet by 2025.

✅ 36 Monk route: Angrignon to Square Victoria with rapid charging

✅ Winter-tested performance; 15-25 km range per charge

✅ Quebec-built: motors Boucherville; buses Saint-Eustache

The first of three STM electric buses are rolling in Montreal, similar to initiatives with Vancouver electric buses elsewhere in Canada today.

The test batch is part of the city's plan to have a fully electric fleet by 2025, mirroring efforts such as St. Albert's electric buses in Alberta as well.

Over the next few weeks, one bus at a time will be put into circulation along the 36 Monk line, a rollout approach similar to Edmonton's first electric bus efforts in that city, going from Angrignon Metro station to Square Victoria Metro station. 

Rapid charging stations have been set up at both locations, a model seen in TTC's battery-electric rollout to support operations, so that batteries can be charged during the day between routes. The buses are also going to be fully charged at regular charging stations overnight.

Each bus can run from 15 to 25 kilometres on a single charge. The Monk line was chosen in part for its length, around 11 kilometres.

The STM has been testing the electric buses to make sure they can stand up to Montreal's harsh winters, drawing on lessons from peers such as the TTC electric bus fleet in Toronto, and now they are ready to take on passengers.

Keeping it local

The motors were designed in Boucherville, and the buses themselves were built in Saint-Eustache.

No timeline has been set for when the STM will be ready to roll out the whole fleet, but Montreal Mayor Denis Coderre, who was on hand at Tuesday's unveiling, told reporters he has confidence in the $11.9-million program.

"We start with three. Trust me, there will be more." said Coderre.

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