Around the world, governments are pitting utilities companies against solar energy. Power companies threatened by the renewable energy transition are staging last ditch efforts to fight back. Amid the green energy revolution we are seeing around the world since the Paris Agreement, utility companies are standing in the way. What will happen next?
While the majority of the world is trying to shift towards renewable energy there are barriers to making this global transition. However, some of the stiffest barriers are coming from big oil and utility companies. Utility companies are generally monopolies and customers usually don’t have any other options. They are typically regulated by elected or appointed state officials, who determine how big of a profit they can make from running plants and power lines. Because of these profit motivations, they have stalled renewable progress across the world for years. Big oil companies have been dominant in influencing economic power and influence on politics since the industrial revolution and the world’s increased reliance on energy from fossil fuels.
In the US State of Alabama, the state power regulators are imposing fees on customers who generate their own electricity with rooftop or on-site solar panels which has since led to a federal lawsuit. Environmental groups argue that such fees are purposely discouraging the adoption of solar power in the sun-rich state, while Alabama Power, the utility provider, maintains the fees are needed for “infrastructure upkeep”. The Southern Environmental Law Center and Ragsdale LLC has claimed that “Alabama is being left behind by other Southern states when it comes to solar generation, and the jobs, bill savings and other benefits that come with it”.
The US state of Kansas has similar policies. The Kansas utility company Evergy has vastly expanded wind power in the state, but is advocating for policies that would make customers less likely to install rooftop solar panels. That’s because if customers generate their own power, they won’t need to buy as much from Evergy. There’s a recurring theme here.
The. state of Wyoming is standing up for coal with the threat to sue states that refuse to buy it. Wyoming is America’s largest coal-producing state and is heavily dependent upon revenues from mining to run basic services as it produces 14 times more energy than it consumes. While legal experts say this strategy is on shaky ground, it will still try to fuel the rhetoric for supporting coal exports among the public.
These staunchly Republican states can see how renewable energy has taken over in other states and know they are fighting a battle against time. California is the furthest ahead on rooftop solar and is considering overhauling electricity rules to boost adoption further. The state has struggled with rolling blackouts in recent years due to fossil fuel reliance; solar energy statewide has provided some relief during surges in energy usage. This relief has shown the potential that solar energy has and it has these energy providers nervous about what’s to come.
Outside of the U.S., Australia is also rejecting the renewable energy revolution. Its federal government has poured $600m into a new gas-fired power plant about an hour and a half north of Sydney. Aside from the climate change implications, all advice given to the government, from its scientific advisor to the Australian Energy Market operator, admitted new gas plants would be more expensive. A bizarre decision for a country with great solar and wind power potential. The country has received international pressure from other western countries to ramp up its renewable energy commitments.Its recent bushfires as a result of record-breaking heat last year has only strengthened the argument for the country to embrace renewable energy.
These are obvious attempts to not only hinder the renewable energy transition, but save dwindling profits for those fossil fuel companies. The fact that governments believe that they can save their economies by propping up fossil fuels is just delaying the inevitable decline. It shows that Big Oil still has the money to spend lobbying governments. One report indicated that the five biggest oil and gas companies, and their industry groups, have spent at least €251m lobbying the European Union over climate policies within the past decade. The proof is there that renewable energy creates jobs and economic opportunity. In America alone, where many of the battlegrounds are, renewable energy workers outnumber fossil fuel workers by 3-to-1.
Public perception has shifted dramatically against big oil and governments that support them. Consumers have been the driving force even for the most liberal of governments. Few consumers want coal, especially now that they know about cheaper options. The losses to these places in the US and Australia are going to be so large that the rationale is to try to postpone that for as long as possible. Unfortunately this delay will slow the progress in achieving net zero emissions by 2050. However, through increased pressure, change can be implemented sooner rather than later. This year has already proven that big oil is at its knees as the renewable revolution continues to take hold.