Here is a story to cheer us all up. Wuxi Suntech Power expects the cost of electricity from solar modules match to coal-powered stations in China as soon as 2016. If so, we are entering a dramatically different world.
“We are sure that by 2016 – or at the latest 2017 – the levellised cost of solar PV will be the same as coal-fired generation. It is going to completely transform the energy market in China,” Suntech Power CEO Eric Luo said. Coal makes up 69pc of China’s energy supply. It is the biggest single cause of Airpocalypse, the suffocation of Chinese cities in perma-smog. The Communist Party is hell-bent on cutting reliance before the middle classes rise up in fury.
The International Energy Agency had assumed that China would soon be burning more than half the world’s coal each year, dooming any chance of capping greenhouse gases at safe levels. “Like it or not, coal is here to stay for a long time to come. Coal is abundant and geopolitically secure, and coal-fired plants are easily integrated into existing power systems. But it is equally important to emphasise that coal in its current form is simply unsustainable,” it said in its December report.
Yet technology may have played another of its great tricks. The cost of extraction for fossils is ratcheting upwards (punctuated by cyclical bursts of supply, of course) as the easy reserves are exhausted.
Solar cost are coming down and down as the technology keeps getting better, right now helped by the US military and energy department. The US National Renewable Energy Laboratory says scientists can already capture 31.1pc of the sun’s energy with a 111-V Solar Cell, though records keep being beaten.
Cheap energy storage from flow-batteries (a Harvard research project funded by the US Advanced Research Projects Agency) will soon overcome the curse of intermittency, letting us absorb the sun’s rays by day and release them again as heating and light overnight.
As I reported recently, Sanford Bernstein’s Michael Parker and Flora Chang say we have achieved a virtuous circle of “global energy deflation” that will erode the viability of oil, gas and the fossil fuel nexus over time. But even they would probably not have imagined that solar could match Chinese coal within two years.
The fossil industry seems strangely uninterested in the existential threat straight ahead. In almost three days of talks about oil, gas, and coal at the St Petersburg Economic Forum last week I never heard anybody mention solar as a possible factor in the global mix, not even half a century ahead.
There was much talk about the deal (or MoU to be precise) for Russia to supply China with natural gas for 30 years from 2018. There was talk too about the coming showdown between gas and coal. Nobody seemed aware that solar might intrude on these calculations.
This is typical at inflexion points. The energy industry was ambushed by shale fracking. It woke up late to realise that wildcat explorers had stolen their profit margins, and shaken up the whole global energy system as excess US coal was dumped on the EU market.
But cheap shale is a stopgap for a few years, and it is not that cheap at a break-even cost of nearly $80 a barrel. Solar is for keeps. The more it expands, the cheaper it gets as economies of scale kick in. It becomes ever more dangerous for the petro-powers and rentier carbo-states with time.
It is of course true that solar makes up just 0.17pc of the world’s $5 trillion energy market at the moment, or 3pc of its electricity. But once costs are consistently below coal without any subsidy, the switch becomes an avalanche.
Suntech’s Eric Luo predicted that the annual rate of solar installations in China would reach 25 Gigawatts by the end of the decade.
By then it may be unstoppable. The 2020s look like the decade of sweet vindication for solar idealists, just in the nick of time. Providential.
Source: Suntech Power