Monday 4 September 2023
How much progress are we making towards global decarbonization? One way to hear that signal more clearly is to set combined wind and solar generation against all the energy the world uses. Yes, there are other clean sources of energy: hydro mainly, but also nuclear. The latter has stagnated for twenty years. The former has become increasingly variable, a victim itself of climate change. Many accountings of renewables also include biofuels, but that is a bad category: unsustainable, and not really clean. Wind and solar have another quality in their favor, as a measuring stick. They are growing quickly and reliably, and are doing so from a higher base. They replace coal and (some) oil in global powergrids, and now provide new energy to electrified transport. Increasingly therefore they sit at the nexus of a cleaned up grid, and help apply downward pressure on oil growth. Let’s see how they’re doing:
Ouch? Combined wind and solar accounted for 36.17 exajoules (EJ) out of total global energy consumption of 604.04 EJ, or 5.63%.*** After a decade of strong growth, that’s the kind of small market share that naysayers will no doubt love to cite. But it’s also the case that the two technologies have crossed above the key 5% threshold—an achievement they unlocked as early as 2016, within global power. The question: will wind+solar in total global energy make the kind of progress they’ve made already, within the global power sector, where they now have a 12.00% share? They will. Let’s talk through it.
Notice what happened during the pandemic year, 2020. Wind+solar increased share surely on the back of a collapse in global oil consumption, which reduced the base, and made for an easy, layup gain. But then notice that in 2021, as all energy consumption rebounded strongly, wind+solar not only kept up with the rebound but actually gained another half percentage point of share. The Gregor Letter has flagged this dynamic for a long while: new energy technology, because it’s cheap and fast to market, behaves like a ratchet, hoisting itself higher whether the economy is doing well or not. Indeed, new energy technology tends to thrive on chaos in the legacy energy system, powering ahead through its own intrinsic speed. This is not only true for wind+solar, but for devices too like EV or heat pumps. Europe just permanently killed a chunk of natural gas consumption, for example, which will never return.
If you haven’t spotted it already though, there’s one more development to highlight here, and it matters quite alot: energy consumption ex wind+solar has moved very little since 2019. For sure, that can be partly laid at the feet of the pandemic. But not all of it. When wind+solar started really intruding on global power, we saw the same phenomenon: they did not, and still are not, covering all marginal growth. But, they are competing well for marginal growth, and we should expect the same fight to now be engaged on a total system basis.
The price of gasoline is without question connected to human happiness—in the United States. Ha. Would you expect anything less from the most automobile dependent economy in the world? One doesn’t want to be too narrow here, but gasoline affordability has long been a decent proxy for consumer sentiment in the US. Over the decades, the relationship of its cost to American purchasing power has passed through multiple regimes, and there may be an identifiable tipping point, above which, Americans turn grumpy. What we need is a long term chart depicting this evolution, so that we can make general points about the good times, and the bad times.
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