“Solar is a technology, not a fuel”: Why the Transition to a Clean Energy Economy Could Be Faster than Expected

Two recent articles on the transition to a clean energy economy are well worth amplification. First, see Bloomberg’s “The World Nears Peak Fossil Fuels for Electricity,” which discusses the New Energy Outlook 2016 by Bloomberg New Energy Finance. A few key points from that report include:

  • “There will be no golden age of gas.” “The costs of wind and solar power are falling too quickly for gas ever to dominate on a global scale, according to BNEF.”
  • Investment in clean energy will dwarf dirty energy through 2040. That includes “$3.4 trillion for solar, $3.1 trillion for wind, and $911 billion for hydro power.”
  • Solar and Wind Prices Plummet: “Solar is a technology, not a fuel, and as such it gets cheaper and more efficient over time. This is the formula that’s driving the energy revolution. Wind-power prices are also falling fast—19 percent for every doubling. Wind and solar will be the cheapest forms of producing electricity in most of the world by the 2030s, according to BNEF.”
  • “Capacity Factors Go Wild”: “As technologies continue to improve and as project designers get smarter about their placement, the capacity factors of renewables are increasing…Some wind farms in Texas are now achieving capacity factors of 50 percent, according to BNEF.”

Note in particular the comment about solar power being a “technology, not a fuel,” and how that means solar “gets cheaper and more efficient over time.” That point segues nicely into the second article that caught our eye, by David Roberts of Vox, entitled “Energy transitions are usually slow. Here’s why the clean energy transition might be faster.” Roberts’ key points echo and reinforce BNEF on the plummeting costs of clean energy.

  • “[P]hysical commodities (like silicon and steel) have a tendency to get more expensive over time, while computing power just keeps getting cheaper. To the extent that you can substitute the latter for the former — intelligence for stuff — you save money in the long run….computing power and software can help dematerialize and accelerate the transition to clean energy.”
  • “This blossoming of energy technologies means that where previous energy transitions (e.g., the substitution of coal for oil, or oil for biomass) were almost entirely infrastructure problems, with a few big players mustering huge, long-term investments, the current energy transition is taking the form, at least in large part, of a technology market. And technology markets move much faster than infrastructure.”
  • “Much of what’s going on in the energy world today is genuinely novel, without historical precedent. Small, smart, nimble technologies are swarming up around big, dumb, slow ones, a process Michael Liebreich, head of Bloomberg New Energy Finance, likens to mammals overrunning dinosaurs.”
  • “It’s tough to predict exactly how it will play out. But there’s good reason to think it will happen faster than any previous energy transition.”

In sum, the transition to a clean energy economy could happen a great deal faster than anyone has been thinking, because the very nature of clean energy – a technology, not a fuel; “small, smart, nimble” and distributed – is radically different, and clearly much better, than what came before. And that’s great news for everyone, other than perhaps the fossil fuel industry.

 

 

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