The coronavirus pandemic has shrunk economies considerably, with two opposing impacts: 1) a critical decline in greenhouse fuel emissions; good for the planet within the short-term; 2) a critical decline in new venture improvement of every type, together with inexperienced vitality and public transit — not so good for the planet.
We’ve additionally seen actual assist for numerous kinds of Inexperienced New Deal insurance policies. Democratic presidential candidate Joe Biden launched a surprisingly bold $2 trillion over 4 years local weather mitigation plan.
As a part of the pandemic restoration, policymakers and the general public are realizing that local weather change mitigation, native vitality independence, self-reliance and resilience, and big job creation, makes a complete lot of sense. I’m optimistic that Democrats will win each Congress and the White Home this fall and shortly implement complete local weather change laws.
Alternatively, 2020 will in all probability be the primary yr that the photo voltaic vitality sector will see a decline globally, down from a report yr in 2019.
How will the upheaval of 2020 have an effect on the world’s lengthy march to a inexperienced vitality economic system? This piece will take a look at the numbers for 2019 and the primary half of 2020, and supply some ideas in regards to the subsequent few years in gentle of the pandemic and its financial impacts.
My “photo voltaic singularity” updates over the previous few years have tried to trace on-the-ground progress on the transition. Right here’s the abstract of this annual replace (my fifth): Whereas I’m nonetheless optimistic in regards to the photo voltaic singularity and the inexperienced vitality transition — as we’ll see under, there have been many very promising developments up to now yr — the double whammy of Trump’s election and the pandemic with its extreme financial impacts might sluggish the transition by just a few years.
This annual replace will give attention to solar energy, battery storage, EVs and self-driving expertise. These are the intertwined revolutions of the brand new inexperienced vitality economic system.
A caveat is so as: many sources cited are forecasts printed earlier than the pandemic, and a few of them will certainly be downgraded within the coming yr.
World photo voltaic progress elevated in 2019 however slowed in 2020
Let’s begin with photo voltaic. World photo voltaic PV installations grew by round 115 gigawatts in 2019, including 22.5 % to the world’s whole, for a cumulative put in base of 627 gigawatts, in response to the annual REN21 world renewables report. That is down considerably from the business’s 10-year common world progress fee of 29 %.
2020 is the yr that photo voltaic will surpass the worldwide wind market on a cumulative put in foundation. Photo voltaic has grown persistently sooner than wind in recent times so it has been obvious for a while that this crossover was coming. Solar energy generated about 2.eight % of the world’s electrical energy final yr, up from 2.Four % the yr prior, in response to REN21.
Determine 1. World cumulative photo voltaic installations. (REN21)
As Determine 1 reveals, China has been the worldwide chief in photo voltaic for years, with the U.S. and Japan vying for a distant second place.
A really encouraging development is the breakdown of whole new electrical energy technology installations, with 75 % of all new world electrical energy technology now coming from renewables — and photo voltaic the dominant expertise.
Determine 2: Renewables as a share of recent world electrical technology additions. (REN21)
Much less encoraging are forecasts for 2020: IHS Markit expects the world so as to add 104 gigawatts of recent photo voltaic capability this yr, whereas Wooden Mackenzie is forecasting 106.Four gigawatts. Both method, that might be a decline from 2019.
However, photo voltaic and different renewables are actually firmly within the “exponential expertise” class, outlined by how shortly what appeared like a slow-growth deployment out of the blue turns into ubiquitous or near-ubiquitous. We are going to possible cross the Four % photo voltaic share of worldwide electrical energy both this yr or subsequent (up from 2.eight % finish of 2019).
Nobody expects or desires photo voltaic to be our solely technology supply. Wind energy, geothermal, hydro and biomass will present substantial energy in coming many years. If we goal 60 % photo voltaic within the world combine, we would want simply six doublings after reaching 1 %. We’ve got two doublings beneath our belt already, or will quickly, leaving simply 4 extra doublings to succeed in 60 %.
At a 22 % progress fee within the world put in base of photo voltaic, Four % of the electrical energy combine turns into eight % round 2024, then 16 % round 2027, 32 % by 2030, and greater than 60 % by round 2033.
All else being equal, world photo voltaic progress figures will inevitably sluggish as we transfer steadily towards larger penetration, or such is the traditional knowledge. However many markets around the globe have barely begun to put in photo voltaic. And the political will towards local weather mitigation is rising quickly in lots of locations, even when the U.S. has bucked that development beneath President Trump.
Furthermore, all else is just not equal on the subject of photo voltaic progress. Two key limitations in progress charges thus far have been: 1) the truth that photo voltaic has traditionally price greater than conventional energy sources, and a pair of) photo voltaic has not been dispatchable.
The central assertion of my “photo voltaic singularity” framework is that we’re at or close to the purpose the place photo voltaic in lots of locations around the globe is cheaper than conventional sources. The photo voltaic singularity is outlined as the purpose at which photo voltaic turns into so low cost that it’s the default alternative for brand spanking new energy technology. We are actually reaching that time in an rising variety of markets around the globe. Importantly, photo voltaic is more and more being mixed with large-scale battery storage.
Two main elements which have been holding photo voltaic again from ubiquity — price and dispatchability — are actually for essentially the most half gone. This could end in virtually vertical photo voltaic progress as increasingly more jurisdictions cross over into singularity dynamics. “Vertical” on this context signifies that progress will max out at 100 % of recent annual world vitality demand, no matter that quantity could also be every year.
Determine 2 reveals that we’re already at 75 % of recent demand coming from renewables. It will not be for much longer earlier than we attain 80, 90 % and even larger as wind, photo voltaic and battery storage costs proceed to plummet.
U.S. photo voltaic progress: a brighter image
Nearer to house, U.S. photo voltaic installations continued at a wholesome tempo for 2019, including 13.three gigawatts, up from 10.6 gigawatts in 2018, and bringing the cumulative whole to 76 gigawatts, in response to SEIA/Wooden Mackenzie.
The actually excellent news is that absolutely 40 % of all energy technology put in within the U.S. final yr was photo voltaic, surpassing all different energy sources for simply the second time.
The identical report initially projected 20 gigawatts of recent U.S. photo voltaic in 2020, a record-setting yr. However the pandemic has taken slightly wind out of these sails and Wooden Mackenzie is now projecting round 18 gigawatts of recent installations within the U.S. — which might nonetheless be a record-setting yr for the U.S. if the forecast is correct.
As Determine three reveals, there’s a sturdy correlation between declining costs and elevated installations. It doesn’t take a lot evaluation to see that worth declines drive elevated installations which then drive declining worth, in an ongoing virtuous circle. That is Swanson’s Regulation in a nutshell. Determine three reveals a worth common for all market sectors.
In response to the EIA, U.S. photo voltaic vitality manufacturing grew to 2.6 % of U.S. electrical energy demand in 2019, up from zero.6 % in 2015 simply 4 years earlier.
Determine three: U.S. photo voltaic PV set up and worth traits (SEIA/Wooden Mackenzie).
2020 guarantees to see that 2.6 % soar additional as we add extra whereas in all probability seeing a considerable drop in whole electrical energy demand.
The important thing development for long-term projections, nonetheless, continues to be price, and powerful price reductions continued in 2019 and 2020. All-in prices for utility-scale photo voltaic are as little as 70 cents per watt, in response to the most recent Lawrence Berkeley Lab utility-scale photo voltaic market report.
One greenback per watt for photo voltaic interprets into about 2.5-Four c/kWh in moderately sunny areas, which is cheaper than most conventional sources of energy by a major quantity, even at at present’s comparatively low fossil gasoline costs, and even with storage added as a way to make photo voltaic partially dispatchable.
We are actually seeing long-term photo voltaic contracts signed for lower than 2 c/kWh, which embody numerous tax breaks and in some circumstances native subsidies. Determine Four reveals the PPA costs over time for utility-scale photo voltaic initiatives, which nonetheless dominate the U.S. market (about 60 % of the market in 2018).
Determine Four: U.S. utility-scale photo voltaic PPA costs over time (Lawrence Berkeley Nationwide Lab )
As a result of this steadily falling price for photo voltaic we’re lastly beginning to see extra research come out exhibiting price financial savings from switching over to a inexperienced vitality grid. A 2020 examine from UC Berkeley’s Goldman Faculty of Public Coverage calculated that photo voltaic might provide 90 % of the U.S. energy at a considerable price financial savings by 2035, down 15 years from the earlier timeline of 2050. And this transition would save some huge cash (13 % in comparison with enterprise as normal), the examine says.
One other fascinating set of research comes from Wärtsila, a Finnish firm, which finds that in lots of locations over-building photo voltaic or wind by an element of 2x to 4x, and backing it up with vitality storage, could be the most affordable set of options for energy provision. In different phrases, relatively than including quite a lot of storage to climate durations when the solar doesn’t shine or the wind doesn’t blow, if we merely over-build photo voltaic or wind, as a result of photo voltaic and wind have turn into so low cost, it’s nonetheless cheaper in lots of circumstances than the established order.
Battery storage progress and value declines are very promising
2019 was a comparatively dangerous yr for stationary battery storage market progress, with about 5.three gigawatt-hours of recent capability added, down from 6.2 gigawatt-hours in 2018, in response to Wooden Mackenzie. However it was a a lot better yr by way of quite a lot of really huge initiatives coming on-line or being contracted.
Solely this week, GTM reported that LS Energy has energized the world’s largest battery, at 62.5 megawatts with the flexibility to cost or discharge 230 megawatt-hours for one hour. That may be adopted quickly by the large 400 megawatt/1,600 megawatt-hour Moss Touchdown battery facility that may change the outdated fuel powered plant there. 2020 is wanting a lot better for storage than 2019, even with the pandemic.
A standard criticism of stationary battery storage is that it simply isn’t as much as the duty of backing up all the variable/intermittent photo voltaic and wind energy the world might want to change fossil fuels. These critiques are actually being contradicted with precise numbers and precise initiatives.
The 400-megawatt Moss Touchdown facility is on the scale the place it is vitally simple to see battery storage changing fuel peaking vegetation across the nation and the globe within the subsequent decade or two, whereas backing up variable renewables.
Wooden Mackenzie initiatives a 13-fold enhance in world storage by 2025, to 230 gigawatt-hours whole, even because the market takes successful in 2020 as a result of virus.A 13-fold enhance is sort of 4 doublings (16-fold), so WoodMac is projecting a doubling of the market each 1.25-1.5 years. That’s the ability of exponential progress.
Stationary battery costs have proceed to fall, reaching $102-139 per kilowatt-hour in 2019 for solar-plus-storage purposes within the 50MW/200MWh vary, in response to Lazard’s 2019 price of storage report. BloombergNEF initiatives the worldwide lithium-ion battery storage market to develop by an element of 4 by 2030, to nearly $120 billion yearly.
The battery storage revolution is seeing some hiccups, however continues to be wanting superb for the subsequent decade. The pandemic and slower financial progress, momentary seizing up of capital markets, and different knock-on results might sluggish storage progress in 2020 from it might have been in any other case, however as the worldwide economic system recovers it’s possible that the market will get better and develop even sooner due to the magic that outcomes from the Kammen Curve’s declining prices.
Swanson’s Regulation and the Kammen Curve add as much as a sustainable and low cost energy future, which must be a major a part of the approaching financial restoration. The Inexperienced New Deal motion acknowledges these financial details and the “details on the bottom” of steadily rising photo voltaic and battery storage installations, and rightly highlights these applied sciences as ripe for serving to world economies get better from the pandemic.
Keep tuned for the second half of this yr’s Photo voltaic Singularity replace, referring to electrical automobiles and self-driving vehicles.
Tam Hunt is a lawyer and proprietor of Group Renewable Options, a renewable vitality venture improvement and coverage advocacy agency. He’s the writer of the guide, Photo voltaic: Why Our Vitality Future Is So Shiny.