THE CARBON WAR

Things are coming together just as things are falling apart 259
London, 28 th September 2015
An investment bank, GMP Securities, funder of much fossil fuel historically,
has discovered solar. They host a discussion afternoon for their stakeholders
in the Royal Society of Chemistry, and call it “The African Energy Revolution”.
There is standing room only. Attendees span the financial sector and companies
of all kinds operating in Africa.
I am asked to kick proceedings off with my view of the world. I have fresh
ammunition for the part of my case that involves soaring incumbency costs and
increasing business-model questionability. Shell has announced this morning
that it is pulling out of oil and gas exploration in the Arctic, for the foreseeable
future, after disappointing results with its latest drilling. Having wasted $7
billion finding nothing, the company remains defiant. “Shell continues to see
important exploration potential in the basin”, the director responsible says.
By coincidence, we must presume, the company also launches a new
gambit on climate change today. They have convened a group of like-minded
companies and other players to advise governments on the energy transition,
funding it together with BHP Billiton, General Electric (GE) and others to the
tune of $6 million. They call it the Energy Transitions Commission. Sixteen
commissioners are to sit on it, seven from oil companies, nine from outside the
industry. These include some excellent people, with well-established concerns
about climate change. But Carbon Tracker has elected to lead what has fast
become a chorus of criticism of the move. “We question the credibility and
independence of any entity set up by energy incumbents with an interest in
maintaining the status quo”, CEO Anthony Hobley tells the Financial Times.
Shell are not here today, but GE are. After my opening presentation their
boss in Africa offers a different view of the future to mine. We have nothing
against solar, he says, but we see a gas-to-power revolution coming in Africa.
Gas turbines will proliferate all across the continent. GE already sells a lot of
gas turbines, and wants to sell more.
He does not address the dismal implications for climate change, should
GE, Shell and others achieve their current aim of spreading profligate use of
gas across Africa and the rest of the developing world.
Acwa Power’s CEO, Paddy Padmanathan, gives a presentation. Acwa,
Saudi Arabia’s biggest power-plant developer, has built many a fossil fuel plant,
but is increasingly deploying renewables, including solar. They have developed
the cheapest solar power in the world: 5.8 cents per kilowatt hour from a 200
megawatt plant sold to the Dubai Government in 2014. Paddy forecasts the