The Crossover Point
May 4th, 2008 by AndrewThe cost of oil is skyrocketing. The price of renewables is plummeting. I don’t think it’s just idle hopefulness to expect that one day in the not-too-distant future, we will reach the crossover point where clean energy ends up being cheaper than fossil fuels.
While neoclassical economics still regard ecology as an externality (and thus its hard to count on businesses adopting sustainability if its not profitable), when the amortized costs of renewables become equivalent to fossil fuels, there’s really no reason to choose the latter. The economic perspective begins to look even better when the true costs of unsustainable systems are considered (as some modern metrics are beginning to explore), and the dramatically reduced deployment time of solar and wind compared to coal plants is taken into account. And of course, any sort of carbon tax would instantly wipe out the slim price advantage that fossil fuels might have. While depressed demand for fossil fuels will inevitably decrease costs, once the macro-level shifts towards sustainable infrastructure begin (and the real price of maintaining the fossil fuel infrastructure becomes more apparent by contrast), there’s no reason to expect that economies of scale won’t continue to push the advantage even further in the favour of renewables.
The one remaining technical challenge that remains for this scenario to truly be realized is in the area of inexpensive storage. While a complementary blend of hydroelectric, PV, solar thermal, wind, geothermal, and certain biofuels should be able to operate successfully in most situations, some kind of storage is still important to ensure that the base load can always be met. Compressed air or molten salts may provide a solution, but I think this will become an important area of research for sustainable energy companies in the coming years. It hasn’t been solved yet, but with the incredible pace of development renewable energy has seen, it certainly isn’t an impossibility.
The ramifications of cheap renewables are pretty staggering. More distributed power systems and smart control systems will ensure a more robust grid than was possible before (as fun as blackouts are). Urban densification is bound to continue, yet air quality is bound to improve. The developing world in particular stands to benefit tremendously - in many cases, renewables are already the best option in rural areas in the Global South, simply because there is no distribution infrastructure for centralized power systems, and the overheads costs to put it in place are prohibitive. If clean energy is cheap, it might also make feasible more widespread adoption of desalinization plants, as fresh water is the other huge, emerging issue of the century.
Optimism need not always lead to disappointment. The crossover point will happen eventually, and with social momentum and political will, it will happen sooner rather than later.
May 5th, 2008 at 3:58 pm
And yet - war is the least economically feasible project in human history, and it keeps going strong.
I don’t see it slowing down any time soon, either. We’ve already got a new cold war underway. (Chinachinachinachina.)
But hell, I hope you’re right. I also hope that the growing pains are not as painful as I expect they will be.
(A thoroughly disheartening blog is http://jameshowardkunstler.typepad.com/ - Clusterfuck Nation. Linked from Worldchanging, incidentally.)
May 6th, 2008 at 10:02 am
we are not in a cold war with china - it is not underway. Realistically it is more defensible to say we’re in another one with Russia than China these days, tbh.
Also I thought this was kind of funny:
“And of course, any sort of carbon tax would instantly wipe out the slim price advantage that fossil fuels might have.” oh rly? when you arbitrarily control the calculus you can make it a better deal? who knew!
May 6th, 2008 at 2:38 pm
Wind is already cheaper than coal in several states. Nanosolar, Xunlight, Sunrgi, and dozens of other start-ups will be able to produce solar power (either photovoltaic thin film, concentrated PV, or solar thermal) for <$0.10/kWh. I’m not saying a substantial carbon tax will level the playing field, I’m saying ANY carbon tax will.
May 6th, 2008 at 3:20 pm
“any” carbon tax is still artificial and moot. Yesterday I saw Obama call U.S.A. the “Saudi Arabia of coal”, saying that with their economic advantage they have to make clean coal a huge part of their future.
They’re stockpiling their coal + oil while they can exploit the rest of the worlds at a much cheaper price. A carbon tax in the states can’t happen if they’re the #1 exporter of the crap.
May 6th, 2008 at 3:59 pm
Okay, I take back the cold war comment. At any rate, the ‘one superpower’ thing is being increasingly challenged.
Also, argh on Obama.
May 6th, 2008 at 7:09 pm
Hypocrisy in policy is nothing new. They can tax the emissions as much as they want as long as they’re not the ones burning it. (”It’s not us, it’s communist China’s fault!)
So-called “clean coal” (that is, carbon capture & sequestration) still looks to be 10 years away, at best. And it will increase the price of coal-fired generation by 50%. Politics aside, neither of those look to be attractive options in the face of renewables.
Why would a growing India or China build more coal-fired plants if the overhead costs are similar to renewables, they take 10-15 times longer to deploy, and they need to keep importing fuel?
May 6th, 2008 at 8:16 pm
Also, it’s not like fossil fuels aren’t subsidized for tens of billions of dollars a year, anyway. Making the price of gas artificial and moot.
May 7th, 2008 at 6:20 pm
More importantly, when is china gonna be so big that WE’RE the third world…
http://www.boingboing.net/2008/05/07/some-china-firms-out.html
guhhh
May 25th, 2008 at 2:36 pm
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