Mark Twidell, Director of Energy at Tesla, was recently in Adelaide, Australia, where he spoke at a Southstart entrepreneur’s conference, reported Financial Review. Originally, Tesla’s chairwoman, Robyn Denholm, was scheduled to speak at this event, but she was ill, so Twidell stepped in. Here’s to wishing Tesla’s chair a speedy recovery.

Twidell spoke about the electric vehicle industry’s demand for lithium as well as the demand from the energy industry. He noted that the use of large storage batteries was sharply increasing.

“Australia has the raw materials in abundance like no other nation on Earth,” said Twidell. He also said around 40 large storage batteries on an industrial scale were in the planning stage around Australia, which had a big opportunity in front of it exporting “climate solutions.”

“Let’s actually increase the benefits to Australia,” he said, adding that the lithium-ion battery value chain is forecast to be $400 billion by 2030. He also pointed out that the economics of renewable energy is currently driving its take-up on top of the environmental benefits. “It’s the economics at the end of the day which transitions us to where we are going,” he said.“The environmental benefits make sense, but economics will see us through.”

The article gives a short background on Twidell. He headed the team that set up Tesla’s big battery at Hornsdale near Jamestown. This battery in mid-north South Australia was built in fewer than 100 days back in 2017, and at the time, it was the world’s largest battery storage project. It was constructed in a partnership between Tesla and the French group Neoen.

Twidell also emphasized just how fast the renewables transition is happening. He noted that the transition to renewables is speeding up and that it’s pointless to try to argue otherwise. “It’s a huge economic opportunity. It’s silly to fight to say the transition isn’t happening. It’s happening quickly,” he said.

How Quickly Is This Transition Happening?

I’m going to dive into a couple of examples that reflect on this last point.

Coal is being replaced with renewables in the U.S. 

Energy News Network reported just a few hours ago that solar and wind’s competitiveness over coal is accelerating. Around four-fifths of U.S. coal plants are either scheduled to close by 2025 or cost more to operate than solar and wind power would. This is backed up by a new research analysis from Energy Innovation: Policy & Technology.

One of the key trends mentioned is that out of the 235 plants in the U.S. coal fleet, 183 are “uneconomic or already retiring.” That is 80% of the plants in service in 2018. To paraphrase, the total share of all the U.S. coal plant capacity from 2018 will no longer be competitive beyond the next few years. Coal is dying and being replaced by renewables.

The reason coal plants are becoming noncompetitive is due to the levelized cost for new solar or wind falling quicker than planned. In 2020, the capacity factor for existing coal plants fell to 40%. That is down from 2017’s percentage of 53%. This means plants are being used less often. And less use means less profit — or no profit. You can read more about that here.

Renewables are a threat to LNG projects in the Philippines

The Manila Standard reported that the growth of renewable energy in the Philippines could leave liquefied natural gas (LNG) projects worth $14 billion stranded. That’s a lot of money left to be stranded. Sam Reynolds, an energy finance analyst for the Institute for Energy Economics and Financial Analysis (IEEFA) was interviewed in the article.

“As renewables prices continue to drop and global LNG markets tighten to increase fuel costs, LNG-related investments will become increasingly uncompetitive in the Philippines market, especially as smaller electricity consumers become eligible to choose their retail suppliers.”

Reynolds also noted in his report that the rapidly declining cost for renewables demonstrated that long-term pricing shifted in favor of renewable energy growth. “As policies in the Philippines accelerate the transition to clean energy, natural gas-fired power plants reliant on volatile imported fuel prices will realize fewer opportunities for long-term guaranteed returns,” he said.

He also pointed out that there’s a rapid buildout of LNG import infrastructure and this is due to the anticipated depletion of the Malampaya deepwater development–the nation’s only domestic source of natural gas. High gross domestic product growth is expected over the next decade. Exporting countries and industry players pushed the narrative that natural gas represents a viable transition fuel from coal to renewables, he pointed out. He estimated that the total value of the proposed LNG import infrastructure — which includes power plants, ports, regasification facilities, and pipelines — is around $13.6 billion. All of these are at risk of being stranded due to the rapidly changing legal and commercial landscape.

The Transition Is Happening Fast

Renewable energy has been the fastest-growing energy source in the United States — increasing 100% from 2000 to 2018, according to the Center for Climate and Energy Solutions.

Solar generation, including distributed solar, is projected to climb from 11% of total U.S. renewable generation in 2017 to 48% by 2050. This will make solar energy the fastest-growing electricity source.

The report from the Center for Climate and Energy Solutions noted that renewables made up 26.2% of global electricity generation in 2018. This is projected to rise to 45% by 2040 and that increase is most likely to come from solar, wind, and hydropower. You can read more of that here.

In the US, renewables grew from 17.5% in 2018 to 18.3% in 2019 to 20.6% in 2020. The trend from 2010–2020 is even more noticeable.

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