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6 mind-bending energy moments of 2020

From negative oil prices to jaw-dropping valuations, even the experts were surprised by these market developments. Read More

(Updated on July 24, 2024)

I’m a clean energy evangelist, yet even I was surprised at many energy headlines of 2020. Things I didn’t know were possible happened. Moments I never imagined came to be. Clean energy showed its strength in the face of uncertainty.

Here are six times I had to pick my jaw up off the floor this year, and what it means for the ongoing transition to clean energy. 

1. The day the price of oil went negative 

Negative oil prices

At the end of April, for the first time in history, the price for an oil futures contract dipped below zero. In other words, the owner of the contract was willing to pay traders to take oil off their hands. It was almost impossible to imagine just months earlier. 

“It was a take-your-breath-away kind of scary moment,” Rebecca Babin, managing director at CIBC Private Wealth Management, told CNBC.

This bizarro world plotline made many wonder, “What the hell is an oil futures contract?” Mainstream news outlets got deep into this wonky topic and for the first time, the general public (myself included) realized that oil is governed by truly two separate markets: the commodity (the oil itself) and futures trading (the financial wheeling and dealing). 

It highlighted the disconnect between the commodity and the financials, and the dangers of oil futures trading. While this anomaly was a confluence of many specific factors — plummeting oil demand, geopolitical rivalry between oil-producing states, full oil storage facilities — and the price of oil steadily recovered for the next several months, the world realized the oil market is volatile and far from a sure bet. Related, it became clear the U.S. shale industry is also in trouble. Overproduction, combined with heavy debt and high production costs, has forced hundreds of oil producers to declare bankruptcy in the last six years — a trend that accelerated in 2020. 

2. That time we found out wildfires offset emission gains 

Wildfire emissions

If it weren’t for the pandemic, we might remember 2020 as the year of the wildfire. The year started with Australia engulfed in flames, creating so much smoke that some of the sun’s rays were blocked for months and scientists are categorizing it on a “volcanic scale.”

The wildfire season on the west coast of the U.S. was apocalyptic, with hazardous air quality spanning from Mexico and Canada for a month. San Francisco’s sky turned orange. It felt like there was no escape. Beyond the diminished quality of unbreathable air, this was also the year wildfires got personal for me, as a fire raged through my community. 

Data from Bloomberg New Energy Finance suggests the emissions associated with the fires in the west offset all of the emissions reductions from the decarbonization of the power sector. In Australia, the fires unleashed the equivalent of double the country’s total annual emissions. What makes wildfires particularly scary is the climate feedback effect; the more wildfires there are, the more they release carbon and fuel more climate change.

With megafires expected to become the new normal, efforts to decarbonize will have to step up to offset this wildcard. 

3. The moment when renewables were declared ‘immune to COVID’

New power capacity in US FERC

Despite the many, many obstacles during 2020, renewable energy had a great year. A few stats: 

In the words of IEA’s executive director, Fatih Birol, “Renewables appear to be immune to COVID-19.”

While policy and finance are still needed to accelerate the speed of adoption to meet our climate goals, renewables’ strong showing proves the economics are there. Renewable energy is the cheapest form of new generation, and projects make investors money — something that can’t be said for many fossil fuel projects.

4. That time NextEra was worth more than Exxon

Exxon v Nextera market cap

Seven years ago, ExxonMobil was the most valuable company in America. In October, NextEra Energy, the world’s biggest wind and solar developer, surpassed the oil major in market capitalization. 

While ExxonMobil has retaken the lead (for now), it reflects that the market believes fossil fuels are in decline. ExxonMobil is doubling down on oil and gas with plans to increase emissions, as the rest of the world (including other oil supermajors, with varying success) are looking to renewables.

The trend is bigger than Exxon. The market has picked, and it sees clean energy as the future. 

“[Oil companies] are already being punished in the capital markets,” Danny Kennedy, co-founder of Sungevity and CEO of New Energy Nexus, an organization that supports clean-energy entrepreneurs, told GreenBiz earlier this month. “That’s why Exxon is out of favor and NextEra is in favor, why Ørsted is up and BP and Shell are down, why Tesla is booming while all those OEM [auto] companies, which are basically of oil companies’ carriage, are being punished by the stock market.”

5. That time localities said ‘no more’ to natural gas in buildings

gas stove

This year may be remembered as the tipping point for electrification of buildings, with dozens of states and cities embracing policies to transition away from natural gas. That clears the way for a new era of all-electric buildings with appliances — gas stoves, dryers, water heaters and space heaters — that can run on clean energy.

Logically, phasing out natural gas from buildings is a no-brainer. Consider: 

Natural gas utilities and providers have been fighting the rising electric tide tooth and nail, creating astroturf groups and spending big on public relations campaigns crying environmentalists want to take away your gas stove. The battle has been raging, with many people confused by the PR crossfire and unfamiliar with electric appliances. 

Despite those efforts, the movement to electrify buildings is cooking with … electric induction. States and cities across the country took important steps to ditch gas, including New York, Nevada, Colorado, Maine, New Jersey, Michigan, Maryland, Connecticut, Massachusetts, the District of Columbia, Washington and California.

And with the wheels in motion, all-electric buildings may be impossible to stop as folks fall in love with electric appliances and the cost of technologies decrease as they scale. (Currently, electric appliances save money in the long term, but the upfront costs are more — kind of like electric cars.)

6. That time a president ran — and won — on climate

Biden Climate Ad

During the 2016 presidential election, climate change didn’t get a single question during four presidential debates

Four years later, the majority (68 percent) of registered voters in the United States said climate was a voting issue, even in key swing states. Americans are four times more likely to be alarmed by climate change than to dismiss it. We had a democratic primary event dedicated to climate. And Joe Biden’s final push of the campaign was an ad calling out his opponent for being dead wrong on climate. 

Clean energy professionals, which numbered nearly 3.4 million in all 50 states before the COVID crisis, emerged as a strong voting bloc. And why wouldn’t they be? Clean energy employs more than three times the number of people working in oil extraction operations, petroleum refineries, coal mines, oil and gas field machinery manufacturing combined. 

Most heartening, the Biden campaign didn’t approach climate as a siloed issue. Rather, it linked clean energy policy to creating jobs, generating wealth and addressing social inequities. 

Of course, the next task is to hold the new administration accountable. But hopefully, the climate fights in the coming years will be about which policies get us to where we want to be — not about whether reality is real.

This essay first appeared in GreenBiz’s newsletter Energy Weekly, running Thursdays. Subscribe here.

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