Tony Seba, Oct 2020

Seba: Since 2010 alone, solar PV capacity costs have fallen over 80%, onshore wind capacity costs have fallen more than 45%, and lithium-ion battery capacity costs have fallen almost 90%. These technologies will continue to traverse their remarkable experience curves such that by 2030 their costs will have decreased a further 70%, 40%, and 80% respectively.

From Rewiring America: “If we electrify everything, the savings are more than enough to return money to households,” said Adam Zurofsky, executive director of Rewiring America. “Too often we are told doing the right thing for the environment requires sacrifice and costs more. But no one is talking about the upside – we can actually make a better economy and save people money and a byproduct will be to cut emissions from residential buildings.”

Transitioning to 100 percent renewable energy in the U.S. could save households up to $321 billion in energy costs, according to a new report by Rewiring America. The transition would involve electrifying everything from heating to refrigeration and cars, and sourcing the power from clean energy sources like solar and wind. The savings would average roughly $2,500 per household per year, and are mostly derived from reducing the wasted energy associated with fossil fuel-based power. While homeowners would be responsible for the upfront costs of solar panels and electric devices, government financial measures and incentives could make it “dirt cheap” for households to make the switch. (The Guardian)

From RethinkX, Tony Seba and Adam Doerr: Oct 2020 Energy Report

What’s holding us back from rapid evolution? We need to shift our thinking, break up monopolies, change our policies, and embrace change. It’s time for utilities and fossil-fuel giants to adapt.

Independent think tank RethinkX, which “analyzes and forecasts the speed and scale of technology-driven disruption,” has released a report that says that most of the world is technologically capable of achieving 100% wind, solar, and storage electricity grids in 10 years.

RethinkX is led by Stanford University futurist Tony Seba, who, for example, declared at the Swedbank Nordic Energy Summit in Oslo in 2016 that fossil fuels and nuclear would be obsolete by 2030, and that solar will dominate. Check that video out here:

RethinkX’s newest Energy report declares in its executive summary:

We are on the cusp of the fastest, deepest, most profound disruption of the energy sector in over a century. Like most disruptions, this one is being driven by the convergence of several key technologies whose costs and capabilities have been improving on consistent and predictable trajectories — namely, solar photovoltaic power, wind power, and lithium-ion battery energy storage. Our analysis shows that 100% clean electricity from the combination of solar, wind, and batteries (SWB) is both physically possible and economically affordable across the entire continental United States as well as the overwhelming majority of other populated regions of the world by 2030.

Adoption of SWB is growing exponentially worldwide and disruption is now inevitable because by 2030 they will offer the cheapest electricity option for most regions. Coal, gas, and nuclear power assets will become stranded during the 2020s, and no new investment in these technologies is rational from this point forward.

RethinkX also states that we need to make the right choices and that there must be policy support for technological innovation:

We as individuals, communities, industries, regions, and entire nations need to make the right choices today. That process must begin with an understanding of what is possible.

Excess energy = opportunity

Further, the report says that green energy will produce a larger amount of energy overall, which will in turn lower cost and create opportunities for innovation and entrepreneurship. It compares the green energy revolution to the rise of the internet: “What happened in the world of bits is now poised to happen in the world of electrons.”

Australia’s Renew Economy points out that Seba was “one of the few analysts to correctly forecast the plunging cost of solar over the last decade.” Dr. Adam Dorr, a report co-author, says [via Renew Economy]:

There is a misconception that too much solar and wind energy is a problem.

That is looking at the equation through the old fossil fuel system lens, and doesn’t recognize the fundamentals of disruption. Sunlight and wind are free, and it is irrational to curtail the nearly costless clean energy we produce with them. As with other technology disruptions, it is a mistake to ask how the existing system will accommodate SWB.

The grid as we know it will rapidly evolve into a larger, more flexible, diverse, and capable system, just like the landline telephone network evolved into the Internet. Instead we must ask, ‘How can a new energy system based on SWB minimize costs and maximize benefits at every level of society and the economy’?

This disruption approach is pretty exciting stuff.

The internet/landline telephone network comparison is an effective way to convey RethinkX’s message. Who would have thought we’d no longer need landlines or cable television? Or could make international phone calls — by video, no less, Jetsons-style — for free through the internet? AT&T Et al. probably aren’t happy about that, but there’s nothing they can do but adapt — and they have — because most of the world has Wi-Fi now, along with apps that allow us to make those calls and watch those shows. And technology continues to evolve quickly.

So if we apply this thinking to green energy and energy sources, what’s holding us back from rapid evolution? We need to shift our thinking, break up monopolies, change our policies, and embrace change. It’s time for utilities and fossil-fuel giants to adapt — just as BP declared that it’s time to adopt renewables in September — and innovators, keep on innovating. You’re doing great things.

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Rethinking Energy 2020-2030: 100% Solar, Wind, and Batteries is Just the Beginning

Falling costs drive technology disruptions. Solar and wind are already the cheapest new generation options, and cost less than existing coal, gas, and nuclear power plants in many areas. The cost of SWB systems will fall another 70% by 2030, making disruption inevitable.

» We are beyond the rupture point, and the bulk of disruption will unfold rapidly over the next decade.

» Electricity from a 100% SWB system in 2030 will cost less than 3 cents per kilowatt-hour.

» New investments in coal, gas, or nuclear power is financially unviable.

The disruption of the energy sector during the 2020s will be driven by the convergence of three clean energy technologies: solar photovoltaics, onshore wind power, and lithium-ion batteries (SWB). The costs and capabilities of each of these technologies have been consistently improving for several decades. Since 2010 alone, solar PV capacity costs have fallen over 80%, onshore wind capacity costs have fallen more than 45%, and lithium-ion battery capacity costs have fallen almost 90%. These technologies will continue to traverse their remarkable experience curves such that by 2030 their costs will have decreased a further 70%, 40%, and 80% respectively. The incumbent coal, gas, and nuclear power technologies are already unable to compete with new solar and wind installations for generating capacity additions, and by 2030 they will be unable to compete with battery-firmed capacity that makes electricity from solar and wind dispatchable all day, all night, all year round. This means that the disruption of the conventional technologies is now inevitable, and that no new investment in coal, gas, or nuclear power generating assets is rational from this point forward. It also means that we are not facing a slow energy transition where new solar and wind installations gradually substitute for old coal, gas, and nuclear power plants. We are instead facing a disruption that will completely transform electric power and the energy sector over the next decade.

Policymakers, investors, civic leaders, and the general public are under the false impression that it is impossible for solar photovoltaics and wind power to supply 100% of the electricity in the United States without weeks’ worth of battery energy storage. This widespread misconception has been created by the failure of conventional models and forecasts to understand that future solar and wind generating capacity will greatly exceed the total electricity generating capacity installed today.

Our analysis shows that there is a fundamental tradeoff relationship between generation capacity and energy storage capacity that follows a convex cost function, which we call the Clean Energy U-Curve. When costs are optimized correctly according to the clean energy U-curve, it becomes clear that 100% SWB systems are not only achievable but are in fact the cheapest available option for new power generation on a timeframe to 2030 – and in many cases will be less expensive than continuing to operate existing conventional power plants as well.

Today, when solar and wind installations produce a surplus of energy, the incumbent system views this as a problem that must be addressed with curtailment. But wasting nearly-free clean energy is irrational, and such behaviors are a clear indication that the old system is failing to successfully integrate these new technologies.

A 100% SWB system will not operate by the traditional rules of extractive, depletable, and polluting resources that have governed humanity’s relationship with energy for over a century. It is therefore a mistake to ask how the existing grid will accommodate solar, wind, and batteries. Instead, the correct question for decision makers to ask is: how can a new energy system based on SWB minimize costs and maximize benefits at every level of society and the economy? It follows that regions which choose to embrace and lead the disruption will be the first to capture the extraordinary social, economic, political, and environmental benefits that 100% SWB systems have to offer.

Energy                                                                                                                          9

Conventional clean energy scenarios make the common error of misunderstanding that disruptive new technologies do not simply replace old ones on a 1-to-1 basis. Instead, disruptions tend to disproportionately replace the old system with a new system that has dramatically different architecture, boundaries, and capabilities. History also shows that in most instances the new system is much larger than the old one it displaces, and the SWB disruption of the energy sector will be no exception.

As adoption of SWB grows, these technologies will produce an increasingly large surplus of energy at near-zero marginal cost that we call Clean Energy Super Power – or simply super power for short. This is because the system’s capacities must be designed to fully meet electricity demand during the most challenging times of year such as the cloudy weeks of winter when the days are shortest, and as a result they are able to produce much more power throughout the rest of the year. A 100% SWB system will therefore produce a surprisingly large amount of super power – in sunny areas, more than twice total electricity demand. The resulting superabundance of clean energy will open the door to extraordinary new possibilities for society, the economy, and the environment. Super power will be plentiful enough to displace a large portion of other energy use outside of the electricity sector alone, such as in water desalination and filtration, road transportation, heating, waste management, and industrial and chemical processes – with associated reductions in greenhouse gas emissions as fossil fuels in these applications are displaced.

As with previous disruptions, entirely new business models will emerge to seize opportunities and create value within the new system architecture.

Electric lighting, for example, did not simply replace candles and oil lamps on a 1-to-1 basis, but instead opened up entirely new residential, commercial, industrial, artistic, and scientific applications. Refrigeration did not just replace ice boxes on a 1-to-1 basis, but instead found new applications ranging from air conditioning and dehumidification to cryogenic industrial processing and ice skating. The smartphone did not simply replace flip phones on a 1-to-1 basis, but instead created an entirely new and much larger communication and information system that extends far beyond telephony alone to touch virtually every aspect of our lives. These disruptive technologies, like hundreds of others throughout history, wiped out their incumbent predecessors within just a few years of becoming cost competitive, and the new industries and markets were much larger than the ones they replaced.

Clean energy super power from a 100% SWB system will dramatically expand the societal capability frontier of regions in the same way.

Going even further, super power returns on investment are not linear, and so regions may choose to make an additional investment in order to disproportionately increase the quantity of super power that their clean energy system produces.

In sunny locations, an additional 20% investment can more than double super power output.

Regions that choose to make these additional investments will further enhance the economic and social benefits that arise from energy superabundance. It also follows that the extraordinary but unexpected benefits of super power do not fully materialize in conventional clean energy scenarios that limit SWB to 90% or less of electricity supply. These scenarios explicitly – and erroneously – aim to minimize rather than maximize surplus energy production. Businesses, industries, regions, and countries that avoid this mistake and instead recognize super power as an opportunity to be seized rather than as a problem to be curtailed will stand to realize billions or even trillions of dollars in new value creation.

In this report, we present 100% SWB case studies of California, Texas, and New England. We have chosen these regions because they possess a representative range of the combined solar and wind resources in the continental United States.

As such, the findings of our analysis generalize to nearly all other populated areas of the world as well.

In the last two decades we have seen similar disruptions of traditional information-based industries by the Internet, digital media, smartphones, and cloud computing that deliver products and services at near-zero marginal cost. The resulting superabundance of information and communication has created trillions of dollars of new value, dozens of new industries, and tens of millions of new jobs, which together have had a dramatic impact on the economy and society at large. These information technologies transformed the world of bits, and SWB will transform the world of electrons in a similar way.

The analysis we present here is not a forecast, but rather an illustrative “limit scenario” that makes very conservative and severely constraining assumptions:

» No electricity imports

» No distributed energy resources

» No electric vehicles

» No energy arbitrage

» No conventional reserve capacity

» No technological breakthroughs

» No geothermal or other technologies that will reduce the HVAC load of buildings

» No demand side management

» No energy efficiency or building automation technologies that reduce electricity use

» No bundling of additional services

» No subsidies or carbon taxes

We intentionally constrain the scenario this way in order to establish the upper boundary for what is possible. The actual real-world cost of achieving a 100% clean electricity system will thus be substantially lower than the upper boundary we establish here.

Extrapolating our results from California, Texas, and New England to the entire country, we find that the continental United States as a whole could achieve a 100% SWB system by 2030 for less than $2 trillion, with an average cost of electricity nationwide of under 3 cents per kilowatt-hour if 50% or more of the system’s super power is utilized.

It is no longer a matter of if the SWB disruption of energy will happen, it is only a matter of when. But the timing matters, and the social, economic, political, environmental stakes could not be higher. The actual outcomes in any given locality, region, or country over the course of the 2020s depend on the choices we make today, and the benefits that accrue to those who lead the disruption rather than follow or resist it will be profound.

Extraordinary possibilities demand bold decisions. By showing what is possible in clean energy, our goal with this report is to help policymakers, investors, and other decision makers act immediately to reposition the electric power sector for the sweeping transformation that will occur worldwide during the 2020s.

Key Findings

» It is both physically possible and economically affordable to meet 100% of electricity demand with the combination of solar, wind, and batteries (SWB) by 2030 across the entire continental United States as well as the overwhelming majority of other populated regions of the world.

» The Clean Energy U-Curve captures the tradeoff relationship between electricity generation and energy storage, and is a valuable tool for both understanding how 100% SWB is achievable as well as identifying the optimal mix of generation and storage capacity in any given region.

» Lowest cost 100% SWB systems will typically require just 35-90 average demand hours of battery energy storage, depending on regional climate and geography.

» 100% SWB will provide the cheapest possible electricity system by 2030 – far less expensive than new conventional power plants, and in many cases less expensive than continuing to operate existing coal, gas, or nuclear power plants.

» While both solar power and wind power are necessary, these generation technologies are not equal because solar is becoming cheaper more quickly. The lowest cost 100% SWB systems will comprise up to 10x more solar than wind in most locations.

» SWB will not merely replace conventional power generation technologies as a proportional 1-to-1 substitution, but will instead create a much larger electricity system based on an entirely new architecture that operates according to a different set of rules and metrics.

» Just as the Internet disrupted many incumbent industries but facilitated the emergence of many more – and created trillions of dollars of new value – by reducing the marginal cost of information to near zero, the SWB disruption will have a similar impact by reducing the marginal cost of energy to near-zero for a substantial portion of the year.

» 100% SWB systems will produce a very large amount of surplus power output,

or Clean Energy Super Power, on most days of the year. In California, for example, super power from the lowest cost SWB system combination of SWB of

309 terawatt-hours is greater than the state’s total existing electricity demand of 285 terawatt-hours.

» Clean energy superabundance from near-zero marginal cost SWB super power will create a new possibility space for novel business models, products, services, and markets across dozens of industries, with dramatic increases in societal capabilities and economic prosperity for regions that adopt a 100% SWB system.

» Examples of super power applications include electrification of road transportation and heating, water desalination and treatment, waste processing and recycling, metal smelting and refining, chemical processing and manufacturing, cryptocurrency mining, cloud computing and communications, and carbon removal.

» At national scale, super power in the United States would create trillions of dollars of economic value and millions of jobs across the wider economy.

» Super power can help repatriate industries, particularly in heavy industry, that stand to benefit from superabundant near-zero marginal cost clean energy.

» SWB can be autocatalytic by dedicating a portion of super power to the manufacture of solar panels, wind turbines, and batteries themselves.

» The clean energy U-curve shows that incremental investments in additional

solar generation capacity beyond the lowest cost combination of SWB capacities will yield disproportionally large increases in super power. For example, a 20% incremental investment in California would increase super power output

by over 190% from 309 terawatt-hours to 592 terawatt-hours.

» The construction of a 100% SWB system in the continental United States would cost less than $2 trillion over the course of the 2020s – just 1% of GDP – and would support millions of new jobs during that time.

» The amount of super power produced by 100% SWB systems is so large that it could displace up to half of all fossil fuel energy use outside of the existing electric power sector.

» 100% SWB systems will not only eliminate virtually all greenhouse gas emissions from the existing electric power sector but will also reduce emissions by displacing fossil fuel energy use in other sectors – residential, commercial, industrial, transportation, and agriculture – as well.

» Combined with electric vehicles, a 100% SWB system could eliminate all fossil fuel use and greenhouse gas emissions in both the electricity sector and road transportation sector simultaneously, thereby mitigating half of the country’s total carbon footprint.

» Efficiency in the new system will mean maximizing output and utilization because there is no fuel or waste to minimize.

» Conservation in the new system will mean maximizing rather than minimizing energy use, because it is not harmful to utilize electricity generated from sunshine and wind but rather it is harmful to let it go to waste.

Table 1. Summary of Findings

CALIFORNIA	Lowest Cost 100% SWB System	Lowest Cost 100% SWB System + 10% Investment	Lowest Cost 100% SWB System + 20% Investment
Capital cost	$115 billion	$127 billion	$139 billion
Solar PV capacity	213 gigawatts	278 gigawatts	328 gigawatts
Wind capacity	25 gigawatts	25 gigawatts	25 gigawatts
Generation capacity	3.8x	4.8x	5.6x
Battery capacity	1194 gigawatt-hours	945 gigawatt-hours	833 gigawatt-hours
Battery average demand hours	37 hours	29 hours	26 hours
Annual super power	309 terawatt-hours	466 terawatt-hours	592 terawatt-hours
Fraction of days with super power	93%	98%	98%
Electricity cost (0% of super power utilized)	3.1 cents/kilowatt-hour	3.4 cents/kilowatt-hour	3.8 cents/kilowatt-hour
Electricity cost (50% of super power utilized)	2.0 cents/kilowatt-hour	1.9 cents/kilowatt-hour	1.8 cents/kilowatt-hour
Electricity cost (100% of super power utilized)	1.5 cents/kilowatt-hour	1.3 cents/kilowatt-hour	1.2 cents/kilowatt-hour

Source: RethinkX

TEXAS	Lowest Cost 100% SWB System	Lowest Cost 100% SWB System + 10% Investment	Lowest Cost 100% SWB System + 20% Investment
Capital cost	$197 billion	$218 billion	$239 billion
Solar PV capacity	362 gigawatts	505 gigawatts	583 gigawatts
Wind capacity	40 gigawatts	40 gigawatts	40 gigawatts
Generation capacity	4.9x	6.7x	7.6x
Battery capacity	2325 gigawatt-hours	1610 gigawatt-hours	1498 gigawatt-hours
Battery average demand hours	49 hours	34 hours	32 hours
Annual super power	504 terawatt-hours	814 terawatt-hours	983 terawatt-hours
Fraction of days with super power	93%	96%	97%
Electricity cost (0% of super power utilized)	3.5 cents/kilowatt-hour	3.9 cents/kilowatt-hour	4.0 cents/kilowatt-hour
Electricity cost (50% of super power utilized)	2.2 cents/kilowatt-hour	2.0 cents/kilowatt-hour	1.9 cents/kilowatt-hour
Electricity cost (100% of super power utilized)	1.6 cents/kilowatt-hour	1.3 cents/kilowatt-hour	1.3 cents/kilowatt-hour

Source: RethinkX

NEW ENGLAND	Lowest Cost 100% SWB System	Lowest Cost 100% SWB System + 10% Investment	Lowest Cost 100% SWB System + 20% Investment
Capital cost	$91 billion	$100 billion	$109 billion
Solar PV capacity	87 gigawatts	158 gigawatts	197 gigawatts
Wind capacity	27 gigawatts	27 gigawatts	27 gigawatts
Generation capacity	3.8x	7.3x	10.8x
Battery capacity	1232 gigawatt-hours	835 gigawatt-hours	729 gigawatt-hours
Battery average demand hours	89 hours	58 hours	43 hours
Annual super power	61 terawatt-hours	143 terawatt-hours	189 terawatt-hours
Fraction of days with super power	64%	84%	91%
Electricity cost (0% of super power utilized)	6.1 cents/kilowatt-hour	6.6 cents/kilowatt-hour	7.2 cents/kilowatt-hour
Electricity cost (50% of super power utilized)	4.9 cents/kilowatt-hour	4.2 cents/kilowatt-hour	4.1 cents/kilowatt-hour
Electricity cost (100% of super power utilized)	4.0 cents/kilowatt-hour	3.1 cents/kilowatt-hour	2.8 cents/kilowatt-hour

Source: RethinkX

The disruption of the energy sector by 100% solar, wind, and batteries (SWB) electricity systems is inevitable and has already begun because these technologies are now cost-competitive with coal, natural gas, and nuclear power incumbents.

Cost improvements in solar PV, onshore wind power, and lithium-ion battery technologies have been consistent and predictable for over two decades. Moreover, for solar PV and lithium-ion batteries these improvements have been nothing short of spectacular. The combination of incremental improvements in the underlying technology together with scaling of manufacturing creates a strong correlation between unit cost and production volume, as is common across technologies of many kinds. Solar PV, onshore wind power, and lithium- ion batteries are thus each tracing their own experience curve.a Ongoing adoption growth of these technologies will continue worldwide from now until at least 2030, and we will continue to see costs improve accordingly.