November 12, 2014

A surprise deal with China

CaptureI generally adhere to trying to stick my foot in my mouth only when it comes to writing, but occasionally I diversify and try to stick my foot in my mouth on other topics. One of which is energy and climate.

I’m a bit of a climate hawk and, like anyone interested in science-fiction, am also interested in how technology will shape the future, so I was pretty surprised last night to find out the White House has cooperated with China and announced some extremely ambitious goals for reducing carbon emissions, with the US targeting a 26-28% reduction by 2025, and China targeting to peak in its carbon emissions by 2030, if not before, with a 20% renewable mix.

This article here has a really good analysis of what this all means. What’s really astounding here is China’s commitment. China’s always been trying to be more unilateral in nearly everything, particularly climate change, refusing to set any limit on anything – so to cooperate with the US in any fashion on this and to announce any limit is a big deal.

But even more, it’s the amount of energy we’re talking about here. 20% of China’s energy use is 800-1000 GW. The US alone has about 1,000 GW of installed energy capacity. That means that if China’s going to meet its goals, it would need to install enough renewables by 2030 to power America.

But, as author Ramez Naam points out, China was forecast in 2013 to add 1,500 GW by 2030, the equivalent of Britain’s existing capacity every year, and that was forecast to be 1/2 renewables. So that’s feasible. Totally crazy, sure – but then again, China doesn’t do anything small. It’s go big or go home.

How does the US fair? The US has hit 50/50 installed renewables in the first quarter of this year. So it’s doable. We do now have a congress that is likely going to be hostile to renewables as well as any restriction on fossil fuel consumption (one wonders what Republicans imagine to be China’s motives for accepting what is, on the surface, a restricting, expensive agreement) but progress is being made, even in conservative regions, and even without politics. We’d definitely need ambitious new laws to hit that goal, but it’s possible.

But here’s what’s important: China is in the catbird seat in a lot of ways. And that’s going to prompt the US to make changes in the next two decades, likely moving into renewables in a big way – whether politicians want to or not.

Why? Well, consider that the IEA forecasts that solar is going to grow in big, huge ways in the next 30-50 years, possibly becoming 50% of all worldwide generation by 2050. (Consider, also, that the IEA usually underestimates renewables. It’s a conservative forecaster – not in ideology, but in predictions. For example, I’m not totally sure why the IEA is betting so heavily on Concentrated Solar Power, since photovoltaics are rapidly making that large, hot, expensive, centralized method of using the sun to be obsolete. My suspicion is that CSP is the main solar power source that can store energy, so the IEA just assumes that’ll be what we use, assuming that batteries or other energy storage methods won’t ever be feasible.)


So, solar is set to grow hugely, probably more than any energy source we’re using right now.

Now, listen to this podcast with Brad Mattson, CEO of Siva Solar. The whole thing is worth a listen – especially how Mattson expects thin film solar, which flamed out in 2011, to eventually make a comeback – but if you skip to the 29:00 mark, Mattson makes an interesting point.

We’re always moaning about how the US is dependant on Saudi oil. But the Kingdom of Saudi Arabia only exports about 30% of our oil. We “only” get about a third of it from the KSA.

Now imagine if we got 90% of our oil from them. That is, to put it bluntly, 90% of our balls in someone else’s hands.

Mattson points out that that’s how things could be with China. China currently has 90% of the solar market – the energy market that is not only forecast to have exponential growth, but is also crucial to meeting not only these particular climate goals, but any of them.

China has had a lot of reasons to invest in solar – among them their horrible smog issues – but one key reason is that China, unlike the US, has accepted that climate change is real and invested accordingly, aware that if they do it right, then all the nations of the world would have to buy from them in extremely large quantities.

In other words, China’s played their cards right. Us? Not so much.

So that’s what could happen. But I think that at some point before the end of this decade, our country will see the writing on the wall, and return to investing in domestic renewable manufacturing, with a big emphasis on solar power. The reasons being:

  1. We don’t have a choice, or we don’t if we care about energy security. We can’t be that dependent on another country, and solar and other renewables are getting so cheap that they will eventually replace conventional energy generation. (Not at the speed we need to combat climate change, though – we’d need ambitious legislation to do that.)
  2. This isn’t a fuel situation. China/solar isn’t the KSA/oil. Wind and solar are technologies, not a rival resource, and technologies – with development – can be made by anyone. In essence, there’s no reason not to.

Will that be enough? Will market pressures alone stop climate change? Probably not. But market pressures indicate this energy shift is going to happen eventually – but it’s really a matter of when it happens. The clock is ticking. We need CO2 emissions to globally peak in the early 2020s, then rapidly decline to almost nothing by the middle of the century. That’s a tall order.

But, the more you go, the better it gets. There’s only a finite amount of oil in the world, for example – maybe a lot, but a finite amount. That means that for every barrel you burn, it drives up the value of the next barrel – maybe only a fraction, but the value still goes up. On a long enough timeline, this gets significant. That’s how nearly all fuels work.

But technology is the opposite. For every cell phone or computer sold, the next one gets cheaper, because you learn how to do it better, and supply lines and distribution methods and financial mechanisms get finalized. The price of the next one may only go down a little bit, just like the value of a barrel of oil only goes up a little bit, but with a large enough scale – as we’ve seen with phones and computers – they eventually get extremely cheap.

What we’re talking about here is a significant, significant scaling up of renewable technologies. Prices have fallen, and they will continue to fall. And the more difficult, longterm, multi-step fuel sources – like coal, or oil – will become less and less financially wise. Why try to drill in the North Seas when you can have a factory yearly spitting out 1 or 2 or even 4 or 5 GW of generation capacity back at home?

This agreement alone won’t save us from climate change (or the worst of climate change, at least – the goal is to keep us below 2C, which is still plenty problematic, but not a complete doomsday scenario). We’ll need laws and ambitious action just to meet these goals, and what we plan to do in 2030 isn’t what will happen in 2030. Things could get better, or they could get worse.

And we need to look beyond 2030 – remember, we have to essentially phase out fossil fuels by the middle of this century. From the view right now, between 2030 and 2050 we’re going to need significant technological innovation not just in energy generation, but storage, distribution, and alternate fuels.

Do I think this is possible? I do. I’m an optimist, but some of these trends are really encouraging. And the fact that the two biggest nations in the world are even talking about changing is a really big step.