2023 review: A changing climate
By Anders Lorenzen
There can be no doubt that, despite it not being much of a surprise amongst the followers of climate science, 2023 is confirmed to be the warmest year ever recorded. It is the number one story and, even though it was anticipated, it is still scary news and confirms we are heading into uncharted territory. The situation can only be altered if the world’s governments rapidly scale up their ambitions. These include cutting fossil fuel use and emissions, protecting nature, setting aside more land for wildlife and forest, and conservation zones such as rewilding initiatives.
COP28
This brings us neatly to the much-anticipated COP28 UN climate summit, this year held in the Arab oil state United Arab Emirates (UAE). Hopes were not too high due to the strong fossil fuel interests of the host country, and it was revealed that a large number of fossil fuel lobbyists had been invited to the summit. Leaked documents revealed that the UAE intended to use the occasion to strike new oil deals.
The summit started nevertheless positively with an agreement on the Loss and Damage Fund, with the hosts amongst other countries straightaway contributing to the fund, although a very minuscule amount compared to how much is needed for developing economies to deal with the impacts of climate change. In addition, countries pledged to triple renewable energy capacity by 2032. On the deal itself, the big issue was whether there was going to be a reference to fossil fuels in the final agreement. In the first draft the term was mentioned as an option, then completely disappeared from the text in the two following versions.
In the final version the term `phase down` was used rather than `phase out`. The latter wording having been a key demand from the most pro- tackling climate change governments, which included those poor communities most in the firing line and least responsible for climate change. Whether the summit was a success depends on who you ask. Some would argue that fossil fuel interests won due to the heavy presence of fossil fuel interests which allowed the deal to be watered down and keep fossil fuel production going long into the future.
The camp who argues it was a success and that fossil fuel interests lost, would argue that just having fossil fuel mentioned in a final COP agreement was a success. Powerful fossil fuel producing countries such as Saudi Arabia had failed to prevent this, and the pledge to triple renewable energy capacity by 2030 was a clear signal of the direction of travel. As is often the case neither of those two camps is right, and the reality is probably somewhere in the middle.
The global pattern of climate-fuelled extreme weather
Consistent with climate research, as the planet heats up climate impact events also accelerate. And 2023 became one of, if not the most severe year ever for extreme weather events. What is most significant about this, is that whether rich or poor no area on the globe was immune. From January to December each geographical area on the globe was impacted by extreme weather caused by the burning of fossil fuels, and you would be hard pressed to find a single country not affected.
From a historic drought in Argentina, to a French winter drought, to the winter of 2022/23 in Europe being the second-warmest ever experienced. South Asia experienced its worst ever April heatwave on record, devastating floods occurred in Congo, and in various areas of China both severe heat and severe rainfall was recorded, as was the worst ever wildfire season in Canada, and in Spain unprecedented heatwaves set new temperature records. These are just a few of examples of a string of 2023 events.
The offshore wind energy industry faced huge challenges in 2023
A series of political and economic events made 2023 a particularly difficult year for the renewable energy industry, with many exploring how best to decarbonise economies. The most significant challenge was to the offshore wind industry, when it suddenly became much more expensive to fund offshore wind farms causing some projects to collapse. The Danish company, Orsted, the world’s largest offshore wind developer, found itself in serious trouble having to ask for support from the Danish Government, and causing the European Union (EU) to step up to support the European Offshore Industry.
A combination of problems including a COVID-19 hangover and the war in Ukraine caused serious supply chain issues that delayed projects and added extra costs, including a sudden increase in the cost of electricity contributing to inflation, higher commodity costs and high costs of capital. But policy did not change in line with this and that was why the UK offshore winder auction attracted no bidders.
Similar developments were afoot in the US, and there were clear risks of the Offshore Wind Industry collapsing before it had even properly started. But with some intervention from the Biden Administration, combined with the first US offshore wind farm going live and generating electricity to the grid the situation appears to have stabilised.
However, wind power analysts believe that policy needs to be further updated to support the industry and that the current set-up is not fit for purpose. In the meantime, there is a boost to the industry from the Global Wind Energy Council (GWEC) who have forecast increased global offshore wind capacity of 380 gigawatts (GW) by 2032, up from the estimated capacity of around 63GW at the end of 2022.
Of course, some of these challenges would also to some extent hit other renewable energy industries, but the one phased by the offshore wind industry was the most severe.
Across the whole renewable energy industry, many new projects came online in 2023 but many argue that the pace needs to be ramped up significantly to stay within climate targets. As a result, the industry will be encouraged by the pledge to triple renewable energy capacity by 2032.
Many other developments happened across 2023, but these are the ones we believe are the most significant.