Lovins: The Myth of Baseload, Moore’s Law and the Renewable Advantage
November 2, 2011
The video above from Bloomberg shows the best and worst of energy/economics communications.
First you’ve got a next-quarter obsessed wall street wonk, incapable of stepping out of market-speak, or group-think, even for a microsecond. Then you’ve got a time pressed journalist who allows an outrageous unsupported talking point to go by unanswered at the end, as time runs out. (if time is short, cut to the chase at 7:25)
Fortunately, Amory Lovins uploaded a correction to the misinformation the same day, which I’ve spliced in at the end.
Although I quibble about the 3 cent/kw figure Lovins gives for new wind contracts, – there is a spread there that goes up to (still very competitive) 9 or 10 cents – Lovins is correct about the overwhelmingly favorable logic of renewables, as Moore’s law like price drops on key components of solar materials continue to drive down prices faster than anyone would have predicted.
Over the last 30 years, researchers have watched as the price of capturing solar energy has dropped exponentially. There’s now frequent talk of a “Moore’s law” in solar energy. In computing, Moore’s law dictates that the number of components that can be placed on a chip doubles every 18 months. More practically speaking, the amount of computing power you can buy for a dollar has roughly doubled every 18 months, for decades. That’s the reason that the phone in your pocket has thousands of times as much memory and ten times as much processing power as a famed Cray 1 supercomputer, while weighing ounces compared to the Cray’s 10,000 lb bulk, fitting in your pocket rather than a large room, and costing tens or hundreds of dollars rather than tens of millions.
If similar dynamics worked in solar power technology, then we would eventually have the solar equivalent of an iPhone – incredibly cheap, mass distributed energy technology that was many times more effective than the giant and centralized technologies it was born from.
So is there such a phenomenon?
The cost of solar, in the average location in the U.S., will cross the current average retail electricity price of 12 cents per kilowatt hour in around 2020, or 9 years from now. In fact, given that retail electricity prices are currently rising by a few percent per year, prices will probably cross earlier, around 2018 for the country as a whole, and as early as 2015 for the sunniest parts of America.
10 years later, in 2030, solar electricity is likely to cost half what coal electricity does today. Solar capacity is being built out at an exponential pace already. When the prices become so much more favorable than those of alternate energy sources, that pace will only accelerate.
We should always be careful of extrapolating trends out, of course. Natural processes have limits. Phenomena that look exponential eventually level off or become linear at a certain point. Yet physicists and engineers in the solar world are optimistic about their roadmaps for the coming decade. The cheapest solar modules, not yet on the market, have manufacturing costs under $1 per watt, making them contenders – when they reach the market – for breaking the 12 cents per Kwh mark.
The exponential trend in solar watts per dollar has been going on for at least 31 years now. If it continues for another 8-10, which looks extremely likely, we’ll have a power source which is as cheap as coal for electricity, with virtually no carbon emissions. If it continues for 20 years, which is also well within the realm of scientific and technical possibility, then we’ll have a green power source which is half the price of coal for electricity.