This stunning new forecast by Bloomberg New Energy Finance (BNEF) ought to be screaming from the headlines. BNEF says that of the “eight massive shifts coming soon to power markets,” the top of the list is “There Will Be No Golden Age of Gas.”
Those days of debate about renewables like solar and wind jeopardizing the reliability of the power grid are over. Just last year Bloomberg Business wrote, “Germany Proves Life With Less Fossil Fuel Getting Easier,” : “Germany experiences just 15 minutes a year of outages, compared with 68 minutes in France and more than four hours in Poland.”
In the new energy/climate reality, we see that the variability and integration issues with solar, wind, EV, battery, and LED have been solved as prices have plummeted because their development and deployment has increased. Energy efficiency is here now. And even though GDP in the US and Canada has risen since the ’08 crash, energy demand is flat, and is expected to stay flat. Even when everyone is driving electric cars, their power will not come from the grid, it will come from distributed solar power and batteries.
Nuclear power, and the great promise of “clean, cheap energy,” has turned out to be a lie. Its environmental threat is permanent (think Fukushima, Chernoble, Hanford), and its cost curve goes in the wrong direction.
For humanity, the organizing principle of the next decade will be Avoiding Catastrophic Climate Change. All great institutions involved in education or water, energy or agriculture, transportation or international relations, will be steered by this rudder, because of what we face if we do not take action.
We keep crushing records for the hottest year, and there is no denying the NASA graphs that record Global Mean Temperatures. The red graph line for 2020 goes straight up. What we face is a world of 10 billion people in this century, and carbon pollution is set to bring to an end the era of stable climate that got us here, through all the good times of stable fish supply, stable rainfall—what we used to call “normal, predictable weather.” To maintain today’s status quo means climate temperatures would soar six degrees above the Paris promise of an under 2 degree increase. This is untenable. People do not adapt to extreme conditions, they move. Humans migrate away from deserts and other uninhabitable zones. They always have.
The coastal property bubble is going to crash. Sea level rise will converge with increased storm events, making insurers reluctant to cover the inevitable damage. At present, in the US alone, there is $1.2 trillion of taxpayer money providing flood insurance to all those homes on the sea margin. But the next Hurricane Sandy or Katrina will mean a hundred billion dollars in claims and bankruptcies. At some point, governments will choose not to bail insurance companies out, because it makes no sense to keep paying people to live in places that are, from now on, going to flood. The literature says that, at the present rate of global warming, by mid-century, the US alone is going to get a Sandy-equivalent storm every other year. Banks are not going to offer 30-year mortgages to home buyers who choose to live by the rising sea. Only very, very rich people would be living on the coast and foregoing house insurance. One day, governments will simply stop properties on the water from being occupied, because the cost of rescuing people and pets from these land-boats will be too high.
The interior of the North American continent, depicted in NASA’s projections for 2095, will suffer from warming-driven Dust-Bowlification. This funny name comes from the experience of the 1930s in which no rain fell for eight years and the winds tore off all the good surface soil which had been ploughed up for farmland, replacing the grasslands that had done such a good job of retaining moisture and nematodes and holding down the soil. In those “dirty thirties,” minus three on the Palmer Drought Severity Index was the average moisture content of the infertile soil that caused people to give up the farm, and go to the cities. A minus three index will be the normal climate for the entire “breadbasket” region of the US, and for the 250 million people who live in Mexico. This is not tenable. No moral society would ever permit it or risk coming near it. Bill Gates has said we need a miracle.
But it is worth zooming in to Bloomberg New Energy Finance home page to see what Chairman Michael Liebreich said in his April keynote speech, in response to Bill Gates’ worry: The price of solar has come down by 150 in a quarter century and deployment of solar has gone up 115,000 times. How much more of a miracle than that do we need!”
Technology just keeps getting better. In ten years, everyone will be using LEDs. In Texas, new installations of wind turbines are supplying power 50% of the year. This trend will continue as we see more and more off-shore arrays, supplying energy night and day. The price will keep coming down.
At this point, worldwide, solar delivers the cheapest electric power compared to any technology, anywhere. The world record, according to Bloomberg, is 3 cents/kWh for wind, and under 4 cents for solar, and these are unsubsidized rates.
Countries around the world are bidding for Green Power at these sorts of rates—better than half the cost for new coal. It is a no-brainer. Coal is toast.
The majority of nuclear power plants in North America are “negatively profitable.” Such plants are “losing money at an astonishing rate.” It would be ludicrous, in such light, to even consider building new nuclear power plants in countries that have market economies, where price determines everything. But some people are otherwise committed. The French, for example, could not build an affordable, on-schedule next generation nuclear power plant even in their own nuclear-friendly country. BNEF notes, “Initially expected to cost €3bn and start operations in 2012, it will not start until 2018 at a cost of €10.5bn.” What board of directors would take the risk on such an investment, outside of China or India?
For the International Atomic Energy Agency (IAEA), renewables will be the primary energy source by 2030. Why wasn’t this official projection leaping from headlines everywhere? The winner in the energy supply game has been determined. The question is: Will this happen fast enough to avoid catastrophe? The answer is, alas, up to political policy-makers.
But the transition away from fossil fuels is happening, because 190 countries made commitments in Paris to ensure that global warming does not exceed two degrees C, but to try even harder to keep it at 1.5.
Both GM and Tesla have announced their battery-powered electric vehicles will be priced in the $30,000 range in the next decade. Since we are really just at the beginning of the learning curve on battery development, we can look forward to prices only coming down. In China right now, there is a 60% EV subsidy. China has tripled the US rate in production of EVs. In a place like Bejing, where it is very hard to get a permit for a new car, it is very easy to get one for an electric vehicle. Permits are a powerful incentive, anywhere.
There is no longer any need to fuel city buses with diesel. Proterra has become the largest producer of electric buses in the US. They have comparable initial costs with gas buses, but much lower operating costs, seldom break down, they are quiet, and produce no CO2. In the next decade, they will be cheaper than gas buses.
By 2025, you will likely have a 50 kW battery with a 10 year warranty in your house for solar power. This battery will probably be a second-use battery, retired from its demanding up-cycle in a bus, but still guaranteed to hold its charge and provide power in a less demanding context, like a house. Nissan Leaf is already doing this. Super-fast charging is about to be unveiled by Tesla. Eventually, it will be free while you shop. You will get an 80% charge in 20 minutes—just enough time to pick up a few things for dinner on the way home.
The world has changed.
We have to leave two-thirds of the fossil fuels in the ground to achieve the Paris goal of “keeping it under 2.” We can do this, thanks to Germany and China. Germany made huge initial investments in solar in the early days when it was not very cost-effective. It also took a clear stand on nuclear power. China has invested in all the renewable technologies and brought us down the learning curve, so that now, capitalists can take advantage of the consequent lower costs and easy distribution of these technologies. We just have to install them.
The climate is not going to get better. As conditions get worse, desperation will be a powerful motivator for change. Even the present-day investors in the fossil fuel industry, and their political partners, will face the irrevocable decline of oil demand by 2020. They will be trapped in one of Colorado’s 1000-year floods, which now happen every four or five years. Or they will be trapped somewhere else. But they will be trapped.
Al Gore has described this transition as the combination of the scale of the industrial revolution and the speed of the digital information revolution. Twenty-five years is one generation. Investing in the future for the future of humanity is the new helmet light.
Consider lighting. In reference to “Exhibit 54” on its projections for LED lighting, Goldman Sachs Global Investment Research expects it will be “the whole market by 2025.” We have come a long way from whale oil.
Consider classrooms, and cockpits. Harvard School of Public Health has done cognitive tests to see how CO2 levels affect human brain function. The results are published on the website of climateprogress.org. Outdoor concentrations in a relatively clean environment are about 400 ppm. In average classrooms, and in the cabins and cockpits of planes, it is as high as 1500-2000 ppm. Buildings constructed before CO2 was widely understood to be a pollutant even indoors, vary considerably. Some places have laws restricting building interiors to 1000 ppm. But now that the effects on performance are better understood, there is going to be a revolution in Green Building design, worldwide.
Before Paris, we were headed for an atmosphere of 910 ppm by 2100. Current indications are undergoing a slow-down to 675 ppm by a world participating actively in the commitments made in Paris. But the commitments only go to 2030, and the US constraints only go to 2025.
The only way to achieve the ceiling of 2 degrees is with a CO2 concentration in our atmosphere of 480 ppm by 2050. The Paris agreement recognized that countries would have to come together every five years to ratchet down these levels. Because levels must go to zero by the middle of the second half of this century if this One Shot experiment being done on all humanity is to produce results we can live with.
Publisher’s Note: Judith Stapleton is a writer in the fields of science and medicine.