May Newsletter: The standout stories so far

May 28, 2020
By: Steven Hawes

The president of the European Union (EU), Ursula Von Der Leyen, has heeded  the call to channel funds to renewable energy in order to provide for a dual benefit in lowering carbon emissions and stimulating economic recovery.  This is on the back of calls and pressure from heads of states (like German Chancellor Angela Merkel), international bodies, trade unions, politicians, and industries to centralise climate change in post pandemic economic recovery plans.  At the same time, the growth of the renewable energy sector is soldiering on in countries like Kenya and Australia, amid the global economic downturn.  Below are the stories that stood out in the month of May 2020.

Hydrogen primed for key role in world’s greenest stimulus plan.  The European Union (EU) remains relentless in championing the transition to renewable energy and reducing carbon emissions to zero by 2050.  The EU president, Ursula Von Der Leyen has of today announced an ambitious post-covid green economic recovery stimulus package, centred around hydrogen energy. Most notably, the economic stimulus package includes an estimate of tens of billions of Euros for hydrogen technology and infrastructure for clean energy.  Implementation of the green proposal is subject to unanimous consent by all 27 member states of the EU (yahoo finance).   This is indicative of a goal to combine assistance for company recoveries with attempts to bolster companies to reduce carbon emissions (Reuters).   In addition, at a corporate level, the automotive industry had been increasing demands to the EU to expedite the transition to low carbon fuels, re-skill workers and encourage a Just Transition (Ends Europe). One can expect not only lower carbon emissions and economic recovery, but also inclusive economic development given a re-skilling of workers and the focus on the Just Transition.

COVID-19: Wind is ‘key building block’ for economic recovery. The Global Wind Energy Council (GWEC), together with a number of global industry participants have released a statement calling on governments, intergovernmental institutions, and lending bodies to place wind energy at the core of the post pandemic stimulus packages. Wind energy is one of the fastest growing industries and is estimated to create about 4 million direct and indirect jobs (Renews.Biz). This sentiment is shared by South Africa’s wind energy association, South African Wind Energy Association (SAWEA), which released a similar statement to the South African government (Engineering News)

Get back round the table with unions, Chancellor – let’s agree a post-Covid plan.  Trade unionists are urging the government of the United Kingdom to take advantage of the post pandemic times to reshape the economy to meet the challenges of the future, including the need to address climate change, which would play a part in creating millions of skilled renewable energy jobs.  This would contribute to meeting the needs of the future and towards establishing local value chains (Labour List).

North America: Oil demand drop, renewable energy resiliency prompts calls for federal clean energy investment in economic recovery.  In Canada, the Green Party MP, Elizabeth May is calling the government of Canada to support the renewable energy sector over the oil sector due to the resilience that green energy has shown in comparison to the dramatic drop in demand for oil caused by the pandemic (Hill Times).  In the United States, former staff members who had assisted Jay Inslee develop his climate policy during his 2020 presidential campaign are calling congressional Democrats to adopt the policy in the coronavirus relief legislation (Common Dreams).

Africa: André de Ruyter on Eskom’s serious air pollution problems.  Andre de Ruyter, the CEO of Eskom, South Africa’s national electricity provider, has reported that the entity is working towards the closure of its old coal fired plants (Moneyweb) in part to address Eskom’s serious air pollution output. In Kenya, the new renewable capacity facilitated by the Lake Turkana Wind Plant has increased the country’s energy sufficiency, ushering a reduction of the reliance on imports from Tanzania and Uganda (The East African).  This sufficiency and expansion of wind projects can be expected to play a part in the much-needed economic stimulus in the face of the global downturns caused by the pandemic.

Oceania: COVID-19 recovery plans must heed climate science. The Australian network of the UN Global Compact, a voluntary global CEO commitment to support sustainability principles and UN goals, has urged the Australian government to include stricter measures on carbon emissions in the country’s post pandemic stimulus package (Financial Standard). In Queensland, Renewable Energy Systems and Energy Estate have partnered to work on the Central Queensland Project to deliver 2 GW of wind, solar, storage developments and new transmission infrastructure (PV Magazine).

Corporate: Citigroup launches new ESG Investment Banking Group.  In response to the increasing emphasis on incorporating environmental, social and governance factors in business operations, Citigroup has announced that it is launching a business unit commissioned to assist clients on sustainability transitions across coverage areas.  This is due to the increased pressure from activists and investors.  As a result, companies that take ESG factors into account are rewarded (Reuters).  Earlier this year, Larry Fink, CEO of Black Rock, wrote, in an open letter to CEOs, that climate change is reshaping finance and that the firm has committed to placing sustainability at the centre of its investment approach (Black Rock). In further support of this view, a study by the global law firm Ashurst shows growing investor awareness to find climate change solutions  (Real Clear Energy).

A number of factors are indicative of the direction and positive growth of the renewable energy industry in the medium to long term.  These are: the proposal of a green stimulus by the EU, the continuous calls for a green economic recovery from heads of states among others, the resilience of the sector during the economic downturn caused by the pandemic in comparison to the oil sector, and the increasing commitments of ESG factors in business operations.  With the expansion of the industry and the focus on a Just Transition, one can expect lower carbon emissions and a gradual transformation of economies to engender inclusivity.

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