We stand on the cusp of the biggest transformation of our lives.
Humanity is in a horse race against catastrophe. The bad news is all around us from loss of species to global warming, social fragmentation, and growing inequality. The good news is that we’re in the race.
And we might just be winning. The speed with which renewable energy, especially solar, is growing means we can solve the climate crisis, create jobs, reinvigorate manufacturing and buy the time needed to do the more fundamental work of implementing the Regenerative Economy – an economy in service to life
In the last year, the chronology of change has been inspiring. In June 2014, Citi Group released its “Energy Darwinism” report, warning of the “alarming fall in the price of solar.” Alarming to whom? Citi stated that this was now the Era of Renewables, predicting that within 10 years solar, even without subsidies, would be the cheapest way to generate electricity.
The September 2014 report by the Carbon Disclosure Project reaffirmed the business case for sustainability that Natural Capitalism Solutions pioneered. Its “Climate Action and Profitability” study showed that companies that integrate sustainability into their business strategies outperform those who fail to show such leadership. Companies that are managing their carbon emissions and are planning for climate change enjoy 18% higher returns on their investment than companies that aren’t, and 67% higher than companies that refuse to disclose their emissions.
In January 2015, Deutsche Bank analyst, Vishal Shah, predicted that rooftop solar will be the cheapest electricity option for everyone in the US by 2016.
Only one month later Agora Energiewende, a German think-tank, reported that solar electricity was already a low-cost renewable energy technology in many regions of the world and stated that by 2026 it will be the cheapest form of electricity everywhere. It described how large-scale photovoltaic installations in Germany fell from over 40 cents per kilowatt-hour (c/kWh) in 2005 to 9 c/kWh in 2014, with even lower prices reported in sunnier regions of the world.
Even with no technological breakthroughs, the report concluded that there is no end to cost reduction, with costs of 4-6 c/kWh (competitive with just the running cost of a natural gas plant) expected by 2025, and 2-4 c/kWh by 2050. At that price, solar will compete with energy efficiency. The study warned, “Most scenarios underestimate the role of solar power in future energy systems.”
That price was achieved for utility scale solar four months later when Austin, Texas, announced that the utility had “received offers for 7,976 megawatts of projects after issuing a request for bids in April. Out of those bids, 1,295 megawatts of projects were priced below 4 cents per kilowatt-hour.”
Change is happening fast
In March 2015, Bloomberg Business reported that from 2013 to 2014, California went from utility-scale solar installations, supplying 1.9% of its electricity to 5%. The National Bank of Abu Dhabi issued a report stating that solar energy is on track to achieve grid parity in 80% of countries within the next two years.
In April 2015, Michael Liebreich of Bloomberg New Energy announced, “Fossil fuel just lost the race with renewables….The world is now adding more capacity for renewable power each year than coal, natural gas, and oil combined. And there’s no going back.”
In June, 2015, The Institute for Energy Economics and Financial Analysis warned of slowing demand for coal and rapidly rising investment in renewables. Tim Buckley, the Institute’s Director of Energy Finance stated, “Globally, 2014 was the year of the renewable energy installation juggernaut….Wherever you look around the globe, be it China, India, Europe or the U.S., the trend of a rapidly-expanding renewable energy industry is the same. 2015 will inevitably see this gather pace.”
He’s right. South Africa is using solar and wind to meet its capacity shortfalls cheaper and faster than new coal or nuclear facilities could. This saved the country $69 million in 2014, created jobs and local industrial capacity. With proposed coal plants on hold because of soaring costs, South Africa commissioned 79 renewable energy projects, totaling more than 1GW. That is roughly a nuclear power plant-sized chunk of capacity, but a new nuclear plant would take 10 years to build and cost $6 per watt according to one recent estimate. Coal, long thought of as dirt cheap, comes at $2.30 per watt. Top Chinese manufacturers are producing solar panels for 42 cents per Watt.
South Africa’s renewable capacity will hit 5.24GW in 2015, up from nothing in 2012, with another 6.3GW to be commissioned in 2015. No fossil technology can scale this quickly.
Across the Atlantic, Brazil’s commitment to biofuels and hydroelectricity made it independent of imported oil in 2006. Since 2009, Brazil has added solar and wind energy, contracting 14GW of wind power at prices below any other option. In 2014, at prices only a bit higher, Brazil also brought on almost 1GW of solar energy. As a severe drought drives Brazil’s electricity prices higher, industries eager for access to reliable and affordable power are turning to renewables that do not require dams and abundant rainfall.
Renewable energy could economically provide China the majority of its energy by 2050.
The biggest user of energy, China, is becoming the world’s renewable energy powerhouse. Growing its installed solar capacity by twenty fold within only four years, China went from a capacity of 0.3GW in 2009 to 13GW by 2013 and is now preparing to install 17.8GW of new solar energy for 2015.
China burns a lot of coal, but its Green Horizons program has committed to clean the air in its cities and cut carbon intensity by 40 to 45% from 2005 levels within the next five years.
The IEEFA study agrees: “While real economic growth in China exceeded 7%, electricity demand grew by less than 4%.” Rapid supply diversification saw China’s coal consumption decline 2% and coal imports fall by 11% in 2014. China’s coal demand will permanently peak by 2016 and decline thereafter, the report predicts. In the first three months of 2015, Chinese coal imports fell by 42% from a year before.
Profound global transformation
The transformation has only begun. The 2015 “China 2050 High Renewable Energy Penetration Scenario and Roadmap Study” found that renewable energy could economically provide China the majority of its energy by 2050. In July 2015, Wang Yimin, representing the State Grid Corporation of China, told the United Nations Global Compact meeting on pricing carbon that by 2050 China would be 80% renewable.
Tesla is now valued at half the market capitalization of General Motors, despite selling 300 times fewer cars. Why? Tesla is not a car company, it’s a battery company. With cheap ubiquitous batteries, solar and wind become firm power and can replace all fossil power plants. This is, in part, why over 100 companies have already committed to go 100% renewably powered.
Press link for more: L. Hunter Lovins | unreasonable.is