As a new Oxford paper shows, the incredibly rapid fall in the cost of renewables offers hope–but only if movements can push banks and politicians hard enough

Bill McKibben – Sep 19, 2021

So far in the global warming era, we’ve caught precious few breaks. Certainly not from physics: the temperature has increased at the alarming pace that scientists predicted thirty years ago, and the effects of that warming have increased even faster than expected. (“Faster Than Expected” is probably the right title for a history of climate change so far; if you’re a connoisseur of disaster, there is already a blog by that name). The Arctic is melting decades ahead of schedule, and the sea rising on an accelerated schedule, and the forest fires of the science fiction future are burning this autumn. And we haven’t caught any breaks from our politics either: it’s moved with the lumbering defensiveness one would expect from a system ruled by inertia and vested interest. And so it is easy, and completely plausible, to despair: we are on the bleeding edge of existential destruction.

            But one trend is, finally, breaking in the right direction, and perhaps decisively. The price of renewable energy is now falling nearly as fast as heat and rainfall records, and in the process perhaps offering us one possible way out. The public debate hasn’t caught up to the new reality—Bill Gates, in his recent bestseller on energy and climate, laments the “green premium” that must be paid for clean energy. But he (and virtually every other mainstream energy observer) is already wrong—and they’re all about to be spectacularly wrong, if the latest evidence turns out to be right.

            Last Wednesday, a team at Oxford University released a fascinating paper that I haven’t seen covered anywhere. Stirringly titled “Empirically grounded technology forecasts and the energy transition,” it makes the following argument: “compared to continuing with a fossil-fuel-based system, a rapid green energy transition will likely result in overall net savings of many trillions of dollars–even without accounting for climate damages or co-benefits of climate policy.” Short and muscular, the paper begins by pointing out that at the moment most energy technologies, from gas to solar, have converged on a price point of about $100 per megawatt hour. In the case of coal, gas, and oil, however, “after adjusting for inflation, prices now are very similar to what they were 140 years ago, and there is no obvious long-range trend.” Sun, wind, and batteries, however, have dropped exponentially at roughly ten percent a year for three decades. Solar power didn’t exist until the late 1950s; since that time it has dropped in price about three orders of magnitude.

            They note that all the forecasts over those years about how fast prices would drop were uniformly wrong, invariably underestimating by almost comic margins the drop in costs for renewable energy. This is a massive problem: “failing to appreciate cost improvement trajectories of renewables relative to fossil fuels not only leads to under-investment in critical emission reduction technologies, it also locks in higher cost energy infrastructure for decades to come.” That is, if economists don’t figure out that solar is going to get steadily cheaper, you’re going to waste big bucks building gas plants designed to last for decades. And indeed we have (and of course the cost of them is not the biggest problem; that would be the destruction of the planet.)

            Happily, the Oxford team demonstrates that there’s a much easier and more effective way to estimate future costs than the complicated calculations used in the past: basically, if you just figure out the historic rates of fall in the costs of renewable energy, you can project them forward into the future because the learning curve seems to keep on going. In their model, validated by thousands of runs using past data, by far the cheapest path for the future is a very fast transition to renewable energy: if you replace almost all fossil fuel use over the next twenty years, you save tens of trillions of dollars. (They also model the costs of using lots of nuclear power: it’s low in carbon but high in price).

            To repeat: the cost of fossil fuels is not falling; any technological learning curve for oil and gas is offset by the fact that we’ve already found the easy stuff, and now you must dig deeper. But the more solar and windpower you build, the more the price falls—because the price is only the cost of setting up the equipment, which we get better at all the time. The actual energy arrives every morning when the sun rises. This doesn’t mean it’s a miracle: you have to mine lithium and cobalt, you have to site windmills, and you have to try and do those things with as little damage as possible. But if it’s not a miracle, it’s something like a deus ex machina—and the point is that these machines are cheap.

            If we made policy with this fact in mind—if we pushed, as the new $3.5 trillion Senate bill does, for dramatic increases in renewable usage in short order, then we would not only be saving the planet, we’d be saving tons of money. That money would end up in our pockets—but it would be removed from the wallets of people who own oil wells and coal mines, which is precisely why the fossil fuel industry is working so hard to gum up the works, trying to slow down everything from electric cars to induction cooktops and using all their economic and political muscle to prolong the transition. Their economically outmoded system of energy generation can only be saved by political corruption, which sadly is the fossil fuel industry’s remaining specialty. So far the learning curve of their influence-peddling has been steep enough to keep carbon levels climbing.

            That’s why we need to pay attention to the only other piece of good news, the only other virtuous thing that’s happened faster than expected. And that’s been the growth of movements to take on the fossil fuel industry and push for change. If those keep growing—if enough of us divest and boycott and vote and march and go to jail—we may be able to push our politicians and our banks hard enough that they actually let us benefit from the remarkable fall in the price of renewable energy. Activists and engineers are often very different kinds of people—but their mostly unconscious alliance offers the only hope of even beginning to catch up with the runaway pace of global warming.

So if you’re a solar engineer working to drop the price of power ten percent a year, don’t you dare leave the lab—the rest of us will chip in to get you pizza and caffeine so you can keep on working. But if you’re not a solar engineer, then see you in the streets (perhaps at October’s ‘People vs Fossil Fuels’ demonstrations in DC). Because you’re the other half of this equation.