Why Trump and big oil won't win

 This is my chart using data from Our World In Data of the price of PV panels in US$ per watt, in constant 2024 dollars.  In other words, a 5000 kW system, ignoring inverter, grid connections, land, and installation would cost 5000x30 cents, or $1500.  (Of course, this pricing is for wholesale systems with economies of scale; a rooftop solar system would be more expensive.)   This is a 99.8% fall from 1975.

Note logarithmic scale

On its own, this is not enough to show that solar will provide most of our power, inevitably, eventually.  After all, the denialists will gleefully tell you the sun doesn't shine at night (goodness me, who knew?) 

So you've got to add the cost of storage.  And the fact is, battery prices are falling even faster than PV prices. 

This chart shows BNEF's battery costs survey data, also in constant dollars, with my estimates for 2025 and 2026.  If you do the numbers, it turns out that adding 4 hours of storage to a solar farm will add just $12/MWh of electricity generated to the cost.  Adding 8 hours storage would cost $24/MWh, which is still cheaper than new coal, or (outside the US) new gas.

Note log scale

But, I hear the denialists wail, what about dunkeflaute, those periods in high latitudes when there is no wind, and little solar, and it's cold?  Well, until we get long-term storage, we will need gas peaking.  We can make the gas using electrolysis of water, and using the hydrogen produced to make methane via the Sabatier system, which would in effect be long-term storage.  Or we can go on using fossil gas.  But even if we do the latter, we will still have cut emissions from electricity generation by 95%.  

A final chart from Our World in Data.  It shows a classic "learning curve".  A new technology starts.  It's expensive, and has only a few uses out in the wild.   But usage increases.  Manufacturers get a bit better at making it.  Demand increases, costs fall.  Falling costs lead to still more demand, which in turn leads to still lower prices, and so on, until the technology has gained a 100% market share. 

The chart uses a double log scale.  On the vertical axis, each tick mark shows a halving of PV module prices.   On the horizontal axis, each tick mark shows a 10-fold increase in cumulative installations.  So each 10-fold increase in installations leads to a halving of module prices --- and vice versa.

There is probably another 10-fold increase in solar installations in prospect over the next 10 years.  Which will be associated with another halving of the cost of solar.  Meanwhile, the rapid progress of EVS and the need for stationary storage will drive down battery costs, which will continue to halve every four years.

This is irresistible.  The learning curve is being driven by fierce competition, which in turn drives rapid technological advance.  There is nothing Trump or Big Oil or coal miners or the rabid Right can do about this.  They can delay the technological advances in the USA, which will just retard the US economy, but in the rest of the world, the advance of solar plus storage to market dominance in inevitable.  Except in high latitudes.

Battery cell costs to halve again

 Hat tip to Anish Kumar Sinha

Battery pack costs are higher than cell costs, but even so, LFP (Lithium-Iron-Phosphate) battery pack costs could drop from the current $94/kWh to  $60/kWh or below.  And that's before sodium-ion batteries go into mass production.

It's really simple: the market share of EVs is heading inexorably to 100%.  

Even in countries with high import tariffs on imported EVs (US/Europe), the cost of Chinese EVs will fall so fast that domestic EV prices will have to respond, leading to rising EV sales.  Not to mention Chinese EV companies opening new EV plants in S.E. Asia, Latin America and Africa.  

With electricity generation, ultra-cheap batteries will allow 24/7 solar power in sun-belt regions of the globe (35 degrees S to 35 degrees N), and mixed solar/wind in higher latitudes.  Beyond latitude 60 degrees, some form of long-term storage will be needed, prob'ly green hydrogen/green methane/green methanol.  But all this can be done using renewables, not fossil fuels. 

This revolution cannot be stopped by big oil.  Demand for coal and oil will fall progressively.  And global emissions will fall too.

Why Europe never has blackouts

 A most interesting analysis.  He shows that without wind and solar, even with maximum demand in mid-winter, the electrical grid in Europe can still cope.  He discusses storage (pumped hydro, with batteries growing fast) and the trans-Europe grid.

He makes two points.  The first is that solar is never zero during daytime, but wind can be zero for a prolonged period.  This means that Europe will still have to "burn things" to make sure it always has enough power.  This implies long-duration storage, if they are not to use gas. He mentions synthetic gas, but doesn't go into detail.  He may mean green hydrogen, or synthetic "natural" gas (green methane) made from green hydrogen via the Sabatier process.   

It seems to me that Europe needs to add more solar from sites in Southern Europe (Spain, Italy, Greece, etc), as solar's winter lows can be compensated for by excess capacity and its nighttime absence by storage.  

Renewables costs rise .....

 .... but so do coal and gas costs. 

It seemed as if Lazard had stopped producing their famous LCOE (levelised cost of electricity) calculations when they released no estimates in 2021 and 2022.  This was a great pity, because although there are others (e.g., BNEF, IRENA) who produce estimates of the cost of electricity from renewables, Lazard has been doing it on a consistent basis for 15 years.  But all at once they came out with their latest estimates a few weeks ago.  There have been some small changes in format and some additional data.  For example, they now release the LCOEs of wind and solar with and without four hours of storage.  Four hours storage is enough to take us to 80-90% renewables on a mixed grid with a blend of wind and solar.  

To reach 100% requires seasonal storage for times when it is windless, cloudy, and cold, called (who knows why?) "dunkelflaute" (pronounced doonkelflowta, which is, mysteriously, German for "dark flute")  To put it differently, there are rare occasions (10 to 20 days a year) when renewables output, even with 4 hours of storage, will not keep the grid going in the face of high demand and low renewables output.  We might only need a couple of weeks of long-term storage and only use it a few times a year, but that is prodigiously expensive using li-ion batteries (it may be much cheaper using vanadium-flow batteries, which don't suffer from "vampire drain").  

Michael Liebreich here mentions green ammonia as a fuel for long-duration storage.  I've talked about using the Sabatier process before to produce green methane, for the same purpose.  But making green ammonia is easier, because it is much easier and cheaper to extract nitrogen from the atmosphere than to extract carbon dioxide.  Lazard does not cost green ammonia for long-duration storage, so I haven't included it.  I have however estimated a wind+solar system with 10% peaking gas, in effect using natural gas as long-term storage.  Actual green methane (synthetic natural gas) or ammonia would be at least twice as expensive.   On the other hand, most of the cost of peaking gas is capital cost, because the plant and equipment has to be ready to go at all times, but it's only used for 10% (or less) of the time.  In that context, fuel cost is less important.

Lazard no longer provides an estimate of the cost of CSP (concentrated solar power), presumably because the company now developing it is in Australia.  That company, Vast Solar, is cagey about the plant’s LCOE, but describes it as "competitive".  It will provide 10 hours+ of storage, which means it's not competing directly with wind and solar with just 4 hours of storage, but with long-duration storage, which is more expensive.  $140/MWh? That's what Lazard was estimated for CSP 5 years ago.  

In addition, I have added a column for NuScale's small modular reactor, assuming 80% wind and solar and 20% SMR nuclear, and using the most recent data for its LCOE.    As the percentage of wind and solar increases in the grid, the need for long-term storage increases, especially at high latitudes, so that's where nuclear may be needed to reach 100% carbon-free generation.   Unlike the giant old-fashioned nuclear plants, the NuScale SMR can be ramped up and down (by 40% per hour), which would make it easily fit in with a mostly renewable grid.  Given the costs of long-duration storage, the NuScale SMR would be cost-effective, provided NuScale can prevent any further rise in its LCOE, which like all other LCOEs has risen sharply in response to supply chain difficulties.

As always, Lazard covers only the US.  But these markets are global, except for gas, which is much cheaper in the US than in the rest of the world.

The rise in LCOEs of renewables is mostly due to supply chain difficulties, caused by Covid and the war on Ukraine.   I suppose we can assume that these difficulties will gradually disappear, and the trend of steady declines in costs will continue.  Even as they stand, however, new-build wind and solar, with 4 hours of storage, remain cheaper than new-build coal, and comparable to new-build baseload gas (remembering that gas is a lot cheaper in the US than in Europe)  Lazard also comments that a large gap has opened up between large and small projects, with larger projects located at the bottom of the costing columns in the chart below.

All these data are before tax and subsidy and also a price on carbon emissions.

Observe that even the marginal costs (i.e., ignoring capital costs, depreciation, debt repayment and interest rates)  of coal are on average above the total costs of brand-new wind and solar farms.   A mere 10% fall in the costs of new-build wind and solar with 4 hours of storage would make them cheaper than new-build baseload gas, even in the US.  

The rise in the renewable percentage is likely to continue, even though costs have temporarily risen,