Just 10 per cent of global utility firms prioritising renewables over fossil fuel investments, University of Oxford research finds
Energy utility companies around the world are continuing to invest heavily in fossil fuel-based power generation, advancing strategies that threaten to undermine the transition to net zero emissions and blow a hole in the Paris Agreement's goal of limiting global warming to 1.5C, a major new study has found.
University of Oxford researchers analysed the activities of more than 3,000 power utility companies over the past two decades using a machine-learning technique, which found only 10 per cent had prioritised renewables over expanding fossil fuel generation such as gas or coal power.
Moreover, many of these firms had continued to invest in fossil fuels in parallel with renewables, albeit at a slower rate than for clean energy, according to the study.
Published in the journal Nature Energy, the findings suggest that most traditional utilities around the world remain committed to their conventional fossil fuel dominated power generation activities, while smaller, independent producers are leading the way on the rollout of renewables.
"This research highlights a worrying gap between what is needed to stop global warming, and what actions are being taken by the utility sector," said the study's lead author Galina Alova, researcher at the University's Smith School of Enterprise and the Environment. "Although there have been a few high-profile examples of individual electric utilities investing in renewables, this study shows that overall, the sector is making the transition to clean energy slowly or not at all."
The study follows a tumultuous period for the global economy, which has seen renewable energy remain far more resilient to the impacts of Covid-19 than fossil fuels, as oil prices have plummeted to unprecedented levels and major oil firms have announced multi-billion pound write downs on their assets.
The coal sector also continues to wane. Last week UN Secretary General Antonio Guterres warned the coal sector was "going up in smoke", as he called on India - one of the world's largest users and producers of coal - to halt its support for the carbon intensive energy source.
Today's study further highlights the rising risk of utility companies being left with stranded fossil fuel assets as the net zero transition to cleaner and cheaper power sources gathers pace, Alova warned.
She also warned the negative economic impacts of the pandemic could hamper much needed investment in greener sources of electricity, particularly in developing countries.
"The global transition to a low carbon future might be further jeopardised by the strain that Covid-19 pandemic has put on public and private finance, as well as supply chains, resulting in delay or cancellation of new renewable energy projects," she added. "This could be especially detrimental to developing countries that are dependent on green development finance."
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