The coming cheap electricity boom

 A comment by Jilles van Gurp, on Electrek's Solar and wind are covering all new power demand in 2025. 

Basically the penny that hasn't dropped yet with a lot of people is that there are going to be two types of countries. 1) the type of country that covers all their power needs with self-generated, cheap, clean power 2) the type of country that are hopelessly dependent for most of their power needs on both expensive fossil fuel imports and domestic fossil fuel companies taking huge chunks of their GDP out of the economy.

One of those will do really well in competing with the other. That's China vs. the US right now. Everything the US does, China can do cheaper, faster, and better. That really matters when you are selling to the rest of the world like China is and the US seems to be struggling to do. It really is that simple. If the US wants to have an export market in the future, it needs to let go of fossil fuel. The sooner it figures that out the better it's chances.

China is on a track to go cold turkey on fossil fuel by the 2060s. Yes they are building coal plants. But those are not running at full capacity anymore. They are hitting peak coal even as they build more plants. Solar/wind are growing faster. Compound growth curves mean all that coal capacity is rapidly becoming less relevant. Just like the Chinese have been planning. If anything, that's speeding up because they are doing unexpectedly well with solar and battery.

After WWII, the world entered a period of sustained high growth, with declining inequality, low unemployment, and a belief that their children would be better off.  In retrospect, a golden age. 

It was driven by three forces:

• High taxes on the rich, which were used to boost education, science, transport and economic progress.
• Keynesian economics, which advised governments to increase spending during recessions, instead of embracing austerity, which is the current failing orthodoxy.
• Cheap energy.  The global oil price was controlled by the Texas Railroad Commission, and remained stable until the oil crisis.

These three drivers of prosperity failed with the Vietnam War; the surge in the oil price as US supply declined and OPEC flexed its muscles and instituted an oil embargo; and the rise of neo-liberalism.

Today, solar and battery costs continue to decline, battery costs precipitously.   This means that the cost of energy will once again be low, and even better than stable---it will be falling.   Countries which embrace renewables will have low and falling energy costs.  Countries which don't, will reduce their growth rate and standard of living.  As Jilles van Gurp says, it's obvious.  

As an aside, the countries which will benefit the most from cheap solar are in the sunbelt, between latitudes 30 North and South, and they're mostly developing countries, which have hitherto been held back by poor access to electricity.  That is all changing.  Since they are so far inside their production possibility frontier, these poorer countries embracing renewables could achieve very high growth rates.  China sees this.  The US, blinded by racism and arrogance, calls them "shithole" countries, and completely missed the point.

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