Category Archives: solar power

Dirty minds don’t understand clean energy

Tech Energy vs Commodity Energy

Change is always difficult. Whatever system we are trying to change has evolved, adapted and solidified its behavior, vision, tendencies, bad habits and much more to a point of blind dependency. The more complex the system, the more linkages and tentacles of rootedness are working to keep things as they are.

This makes it hard to envision how a new system could work, even if our organizations are committed to system change in the face of multiple crises. Especially given the evermore specialization and compartmentalization of our current global system, change gets bogged down. Every time we look at a new, better sub-component of the system we notice how it doesn’t fit well with the other older components and deem it unsustainable, uncompetitive, etc. The problem lies in that we are focusing on improving the existing system instead of developing a new way of achieving a old goal.

We will be examining how this plays out in the energy sector and the vision towards a carbon-free future in the midst of the global climate crisis. Due to the length and diversity of the issues, we will be addressing it in a series of articles during the next few months, but for this article we would like to explore the notion of ‘Tech Energy’ and ‘Commodity Energy’, and the world of differences between them.

In large part, traders see energy as energy, and both are often traded in tandem. In general, most energy experts come from a commodity-based background and as alternative, clean, tech energy started appearing, they just added them to the list of options for achieved their energy goals. This was and continues to be a big mistake, because the economics of the two energy types are vastly different and require very different skill sets to deal with their obstacles, projections, feasibility, growth and general assessments for how to make each function.

To explore these differences, we will use the example of solar (tech energy) and oil (commodity energy). A photo-voltaic (PV) solar panel is, in simple terms, electrical circuitry embedded in a silicon wafer, a definition that could also be used to define a computer chip, hence PV manufacturers have been at times (misleadingly) defined them as “semiconductors”. However, even though using this definition for both fails short, it makes sense to use the same economic model for both, because PV solar panels and computer chips behave in similar ways economically, hence our use of the term ‘tech energy’. To highlight this reality, see the Graph 1 below.

gráfico 1

Graph 1: Costs of Computer Processing Power, Electricity from Solar PV, and Oil Price per Barrel, 1976-2014 (G.Jabusch 2015)

It is clear to see the similarity of drastic price declines in solar PV in cost per Watt (green line) and in computing power in cost per GigaFLOP (blue line) over a period of almost 4 decades. This decline is driven by increasing demand of new technologies, massive scaling up, and the ever-evolving technological frontier.

In comparison, oil follows the usual pattern of commodities that fluctuate in price according to demand and supply factors. Even though graph 1 shows that the cost PV solar has decreased by 170 times, if we compare it to oil, solar has improved its cost basis by 5,355 times relative to oil since 1970 (T. Seba ). Oil gets expensive when economies are growing, but PV decreases due to its sensitivity to demand/ scaling and its independence from a finite resource like oil which needs to be extracted from the ground. PV is also less geographically dependent and therefore more resistant to Geo-political risk, the threat of which will further increase when climate change impacts start causing more migration, water scarcity, land loss and ecological crashes.

Actually, technology is so sensitive to demand and scaling that it mainly gets cheaper over time. The other factors that make commodities fluctuate usually affect technologies in the rate of decrease, but the decrease is certain. Imagine the benefits if the global economy could apply this tech cost dynamic to energy. The more commodity-based energy we use, the more expensive it will get, always placing a weight on the growth, but with tech energy it gets cheaper the more we use.

Then there are the unavoidable costs of a commodity energy like oil. Oil costs a lot to explore, costs a lot to extract, costs a lot to refine, costs a lot to transport and if you consider the endless list of impacts at every level, it costs a hell of a lot to consume. In 2014 the world had one of the lowest levels of new fossil fuels discoveries in recent history (less than 5 months of global consumption), yet it was the highest cost ever for developing new oil supplies (almost 700 billion USD). Not only are these costs constantly increasing for lower returns, even when the barrel and pump prices are low or high, but these costs are transferred to all of us in numerous ways such as government subsidies, health costs, ecological costs and climate change.

For example, in 2013 for every $1 that any of the top 20 global oil and gas producers invested in new fossil fuel exploration, more than $2 were subsidized by the G-20 governments. In total, the G-20 provides $452 billion a year in subsidies to fossil fuel production, which is almost 4 times what the ENTIRE world provides in subsidies to renewables ($121 billion). We may think its only a rich country tendency, but no, in sub-Saharan Africa, energy subsidies (especially petroleum but also coal and gas) eat up on average around 5% of our GDP (IMF). Here in Mozambique we pay 1%-1,5% of our GDP for just petrol and diesel fuel subsidies alone and during the recent economic crisis our fuel debt was increasing at $7-10 million USD per month (IMF). Just to put this spending into perspective, at an African level, the percentage of GDP that goes to health is around an average of 6% based on the 2013 data for 51 African countries.

One additional interesting fact linked to health, the estimated cost of the impacts of fossil fuels on health, not only is it not covered by the fossil fuel sector, but is a huge part of the national health cost of many countries. In the US, 1/3 of healthcare costs are from burning fossil fuels ($9000/person/year, totaling to almost $900 billion) and worldwide 30-40% of deaths are due to pollution (A.Lightman 2014). In Europe it has been calculated that the health cost of burning coal are as high as 42.8 billion Euros per year (Heal 2013) and when you consider that the dirtiest power plants, industrial parks, mines, etc are in the global south we can only imagine the scale of the health impacts and their associated costs. However, we will cover the true cost of fossil fuels in a future article on the issue, including ecosystem loss, climate change and more.

All of this information is not new or unknown to our political elite, or at least it shouldn’t be. The truth of the matter is that the transition has been slow because the system doesn’t want it to happen. Research has shown that the biggest obstacle for clean energy to succeed is the lack of political will and proper polices, not technology, not costs and not economics. Another issue is that we often hear people discussing how to fix the system, the problem is that there isn’t anything to fix. The capitalist system and one of its founding pillars “fossil fuels” has been working the way it has been designed to, and very efficiently to the benefit of a small group of elites. Lets not forget the fact that “Just 8 men own same wealth as half the world” (Oxfam report 2017). So when we hear the excuses that solar is too expensive, not competitive, it isn’t reliable, can’t cope with big demand, etc, etc, please understand that either the person hasn’t done their home work, or has vested interests in fossil fuels, or has come from a commodity energy understanding of the economics. In the case of the last one, we can empathize, because at quick glance we also underestimated the power of tech based economics.

We remember when the cellular network was starting in Mozambique, we just couldn’t understand how it would work given the then super high cost for installation of the network, the air time cost and the extremely high cost of cell phones, etc. Especially in a poor country like Mozambique, with a small group of elites. The market seemed too small, but when we learned that the strategy was also focusing on the lower income urban population, and even rural areas, we were even more confused of how it could be sustainable. Luckily, we learned from a friend who was a telecommunications expert and had a good understanding of how the tech-based economics works, and when that person explained to us step by step, it was amazing how these obstacles are overcome and it was the first time we became aware of how sensitive technology based economics are to increasing demand, massive scaling and technological advancements.

For clean alternative energy to succeed we need to have the people with the right economic understanding for the unique differences that tech based energy brings, and if we continue to use the experts that come from dirty energy and commodity-based mindset, we will continue to delay, at a huge cost, the inevitability and necessity of a carbon-free future. Now, we understand that the use of the word inevitable may seem strong to some, but it is actually not.

As the cost of solar energy continues to decrease it will gain market shares from fossil fuels. Already in 42 of the 50 biggest U.S. cities, solar power is now cheaper than electricity from the power grid (G. Jabusch 2015). The higher cost for lower returns of exploring and extracting new fossil reserves, the pressure to mitigate climate change, the decreasing of subsidies and take up of the cost associated of the numerous impacts caused by fossil fuels, and more, are all trends that are gaining support and these pressures will sooner or later slowly strangle this monster called fossil fuels. Let us be humane and give this monster a quick death and move on to a new clean energy system, but this time we must also make it socially just. This topic we will cover in detail on one of our upcoming articles of our series around Good Energy.

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Corporate Impunity: Strategies of struggle (Part I)

2016 was an important year in our continent’s struggle against corporate impunity: the first session of the Southern African Peoples Permanent Tribunal (PPT) took place in Swaziland. This Court, which was founded more than 30 years ago in Italy, is an independent body that examines situations of systemic human rights violations – especially in cases where existing legislation (both national and international) is not capable of safeguarding the rights of populations. Although it does not have the power to issue an obligatory sentence for the company (which, by the way, is very important and is one of the reasons we are working for – but let’s talk about it later on), the PPT is strategically very important: On the one hand, it allows victims to be heard and advised by a panel of experts from various areas and to establish partnerships; and on the other, it is a moment of complaint and visibility for the cases, and therefore, of exposure to infringing companies. And although in our country this criminal impunity is often seen as a synonym of cleverness and of the perpetrators degree of influence, on the international level things are not quite like that. Being labelled as a human rights violator is a matter of great concern to these corporations, and therefore it can lead to a change of attitude – not because their ethical principles and values are very important to them, but simply because a bad reputation affects the only thing that truly matters to corporations: their profits.

Ten cases from Swaziland, Zimbabwe, South Africa, Zambia and Mozambique were presented in last year’s PPT, most of them related to the extractive industry. From our country, for the serious impacts that their activities have on the communities around them and for the noncompliance with the promises they made to those communities before settling in the region (to the point that one of them actually started its mining activities without resettling those living within the concession area – as we have denounced through various channels including this one), we took to the court VALE and JINDAL. A Panel of Jurors listened attentively to the communities’ grievances and to a contextualization made by invited experts, and then released its deliberations.

This year the process is repeated: in August, seven cases from the Southern Africa region will be presented by the affected communities themselves and by the civil society organizations who work with them. This time, the general theme of the cases is Land, Food and Agriculture. In addition to cases presented by Zambia, Malawi, Tanzania, Madagascar and Mauritius – who will denounce large corporations such as Parmalat and Monsanto – this session of the PPT will also hear the denunciation of two Mozambican cases: the proposed Mphanda Nkuwa dam on the already strangled Zambezi River; and ProSavana, the Mozambican, Brazilian and Japanese governments’ triangular partnership program that aims to develop agribusiness in the Nacala Corridor. These two Mozambican cases have the same particularity: they are not yet implemented. However, and this is what made us chose these two cases for this year’s PPT (because, let’s face it, what we are not lacking in our country are examples of human rights violations by private initiatives), despite not being implemented yet, its impacts are not less significant.

In Mphanda Nkuwa, for example, local communities were visited for the first time in 2000 by representatives of the companies responsible for the construction of the dam. They ere warned that they could not build new houses in that region because they would not be compensated for them. Since then, these people live in total uncertainty and can no longer make any long-term plans, at the risk of losing their assets when they start construction. ProSavana, on the other hand, has been characterized by the secrecy, manipulation and misrepresentation of information with the aim of promoting a false idea that the project will promote agricultural development in the northern region of the country, while in fact it is an initiative that will serve to facilitate large scale encroachment of peasant lands. This program will also destroy the livelihoods of local populations and exacerbate their already grave poverty. There are already reports of manipulation and intimidation of leaders of local peasant organizations.

The mobilization of civil society (Mozambican, Japanese and Brazilian) in opposition to ProSavana was fundamental to halt to the initial plans of this program and postpone the conclusion of its Master Plan. The purpose of taking these two cases to the PPT is to bring together even more elements that may help stop these projects.

Spaces such as the PPT are also crucial for perceiving trends, identifying development models, and analyzing common practices of transnational corporations – as well as their strategies to escape responsibility. Thus, by moving these experiences to a more global scale, it is easy to see that these violations of fundamental human rights are not perpetrated by one or another transnational corporation in isolation. That is, these are not a couple of rotten apples in a sack full of beautiful apples. Rather, it is a generalized behavior that is enabled by an architecture of impunity, characteristic of our extractive capitalist development system. This architecture of impunity puts corporate rights above human rights, and makes way for an abundant number of examples of very lucrative corporate crimes.

The architecture of impunity consists of several elements and actors:

We have the economic power of corporations – on the basis of which these establish their relations with one another and with states – and of international financial institutions;

We have political power, which in turn is responsible for capturing policies and politicians that fail to regulate the collective interests of society to serve private interests;

Trade architecture, embodied by numerous trade and investment agreements, facilitates profit and allows corporations to file lawsuits against governments should they make decisions that affect their anticipated profits;

Legal power is represented by the financial capacity to hire and dispose of influential lawyers who defend corporations in endless processes, as well as by inadequate and insufficient legal instruments that regulate their actions; and finally

Social power, which is exercised in all spheres of our lives through the influence that corporations have in the media, academic spaces, civil society organizations, among others.

Discussing some of these elements and developing the cases that will be presented in the PPT next month, were the objectives that motivated the Workshop on the Architecture of Impunity, held in the context of the Southern Africa Campaign to Dismantle Corporate Power. Since it is the affected communities themselves who present the cases to the Panel of Jurors in the PPT, this enabled them to get the support of several resource people, to appeal, discuss and deepen the specificities of their denunciations and also to identify common ground with the other cases.

But the struggle to end corporate impunity is not only fought in the field of opinion sentences, nor is the important opinion of a panel of judges our only weapon to demand a different behavior from transnational corporations. Another battle is being waged to develop a legal instrument that will ultimately have the power to condemn and punish corporations – since the absence of such an instrument is currently one of the biggest gaps in international law. We are talking about the UN Intergovernmental Working Group, created in 2014 with the mandate to develop a binding treaty for transnational corporations on human rights issues, which will meet in October this year for its third session. At this time, transnational corporations simply have to follow voluntary standards and guiding principles that “advise” best practices on human rights issues. There is no doubt that this blind faith in corporate goodwill has had grave and irreparable consequences, both on people and on the planet. In next month’s article, we will look into this issue more carefully, getting deeper into the debate about the urgency of a legal mechanism that is accessible to any community affected by the operations of a transnational corporation. For now, we continue to look closely at next month’s PPT, certain that this will be another important moment regarding the convergence of struggles for a fairer, healthier and more common-good oriented world.

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When African Renewable Energy Was Hijacked

A few years ago, during the United Nations climate change negotiations in Paris in December 2015, 55 African leaders launched the Africa Renewable Energy Initiative (AREI). It pledged to follow a people-centred approach to renewable energy development and energy access work across our continent. It talked about rights and equity, very important for our context and for justice. It talked about community ownership and distributed power for African people, in both senses of the word ‘power’. It demanded new and additional renewable energy for our people – no double counting of funds for other projects. It was an African-owned and African-led initiative.

JA! people participated in the AREI meetings in Paris in December 2015 and in Marrakesh in November 2016. Civil society was included into this process from the beginning. Could this become something we would be proud of as Africans? The AREI was a unique approach, in a continent marred by ever-increasing development of dirty energies like coal, oil, gas and big hydro, where it is commonplace to sacrifice our people, kill the local ecology, grab lands and destroy the climate at the same time. The AREI put in strong and important criteria in place to avoid these terrible impacts and said that projects would not support fossil fuels or nuclear.

The AREI really pledged to be different. And this pledge to go for a different, people-based approach is really important. It moves us away from a system fix approach to a system change approach, to change the base principles which drive how we think about energy for people.

In Paris, developed countries stepped forward with $10 billion in pledges to support this initiative. But would these countries really let this initiative survive? Or would money talk? The frightening answer came just over a year later, and by early March 2017, the AREI was already in danger.

The first attack came from the European Commission (EC), and the French government which had helped birth this initiative in the UN talks in their country. What did the attack look like? They came forward at the board meeting with a plan to fund 19 renewable energy projects with an investment of a whopping 4.8 billion. You can read the press release dated 4 March of the European Commission at this link – http://europa.eu/rapid/press-release_IP-17-442_en.htm. When something sounds too good to be true, it usually is. The claim for 4.8 billion is false, they are providing a mere €300 million themselves and hoping to leverage the rest. Not just that, remember the AREI’s commitment for new and additional projects with strong criteria to prevent environmental injustices? Well, these proposed projects were already partly pre-existing ones, with all kinds of double-counting and dodgy accounting taking place on the financing. Some of the projects, like a geothermal project in Ethiopia, are from 2014, the year before the AREI initiative was even finalized. Worst of all, these projects are being rammed through without caring about criteria and impacts. Our colleagues discovered that at least 1 of these projects involves fossil fuels interests. We heard that 14 of these projects were just rubber-stamped through, while 5 of them were not even reviewed due to lack of time. The base principles of AREI were the first to be under attack. Even the vague notion of system change is threatening to the system.

 

African civil society began to hit back at this affront. By early April, JA! had joined over 180 African organizations who signed up to a letter demanding this hijack of the AREI be reversed. Last week at the UN negotiations in Bonn, on 18 May 2017, 111 international organizations outside of Africa released a letter supporting the African demands for the EC and France to stop the hijack of African renewable energy. A lot of media pick-up has happened around these letters.

The EC knows it is being watched and is now on the back-foot. Our European colleagues were invited to a meeting with them in Bonn last week, where they found out that the EC is seriously trying to do damage control. They are shocked by the media pick-up and are calling it a scandal. But they are not yet saying how they will do things differently. This meeting took place on 16 May 2017. Some mainstream system-fix type civil society people already wanted to stop the international letter since they said the EC is talking to us. Others said, no way, the EC and France need to be exposed and they made sure the letter was released 2 days later, before the Bonn talks closed. You can read the press release here- http://campaign.r20.constantcontact.com/render?m=1102862873361&ca=c6022777-a64f-4bd8-b159-69ebbf8df668.

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