"We're fifteen to twenty years out of date in how we think about renewables," said Dr. Eric Martinot to an audience at the first Pathways to 100% Renewables Conference held April 16 in San Francisco. "It's not 1990 anymore."
Dr. Martinot and his team recently compiled their 2013 Renewables Global Futures report from two years of research in which they conducted interviews with 170 experts and policymakers from fifteen countries, including local city officials and stakeholders from more than twenty cities. They also reviewed more than 50 recently published scenarios by credible international organizations, energy companies, and research institutes, along with government policy targets for renewable energy, and various corporate reports and energy literature.
The report observes that "[t]he history of energy scenarios is full of similar projections for renewable energy that proved too low by a factor of 10, or were achieved a decade earlier than expected." For example, the International Energy Agency's 2000 estimate for wind power in 2010 was 34 gigawatts, while the actual level was 200 gigawatts. The World Bank's 1996 estimate for China was 9 gigawatts of wind and 0.5 gigawatts for solar PV by 2020, but by 2011 the country had already achieved 62 gigawatts of wind and 3 gigawatts of PV.
Dr. Martinot's conclusion from this exhaustive survey? "The conservative scenarios are simply no longer credible."
There is now a yawning gap between "conservative" scenarios and more optimistic ones, as illustrated in this chart contrasting scenarios published in 2012 by entities like the IEA and ExxonMobil with those offered by groups like the International Institute for Applied Systems Analysis (an international scientific policy research organization), Greenpeace, and the World Wildlife Fund.
At the low end, ExxonMobil expects renewable energy to have just a 16 percent share of electricity by 2040, while BP projects a 25 percent share. At the high end, groups like Greenpeace and WWF/Ecofys think renewables could nearly or completely overtake electricity production by 2050.
Renewable generation targets in the OECD far surpass the more modest outlooks, with the European Union, Germany, and Brazil reaching for at least 60 percent renewable electricity by 2030, while Denmark and Munich aim to hit 100 percent by 2030.
And those targets might actually be achievable. For the past seven to eight years, the annual growth rate of global wind capacity has been 25 percent to 30 percent, while that of solar has been 50 percent to 60 percent, Dr. Martinot notes. Collectively, renewables are growing at rates of more than 20 percent. More money has been invested globally in renewable capacity than in fossil-fueled generation capacity since 2010, led by China, the U.S., Germany, Italy, and India.
Martinot hastened to banish another point of conventional wisdom: that the grid can't handle high penetration rates of renewables. "It's not a question of technology or economics," Martinot asserted. "It's finance, business models, [and] market development. We have all the technology we need already. The economics are there, or coming soon."
Further innovation would help, but isn't necessary. "Research and development (both public and private) for new technologies, especially driven by new materials, will certainly make the future come easier and faster," Martinot wrote in the report. "But we don’t need to wait for those breakthroughs -- we have enough at our disposal already."
Commercial battery storage is arriving faster than most people realize, and pumped hydro can be greatly expanded to buffer the grid. Even so, Martinot dismissed as more conventional wisdom the notion that we need to wait for better storage options, because there are now numerous ways to manage grid variability, such as demand response and better forecasting software. "Storage is just a small part of it," he told the conference. "An 80 percent share [from renewables] is possible in most scenarios without large amounts of storage."
Before 2020, renewables will become economically competitive. With the cost of solar PV now under $1 per watt, and grid parity within reach over the next five years in much of the developed world, it's just a matter of time. Indeed, Martinot noted that in Germany, the feed-in tariff (FIT) incentive price is already below the grid price, so they could eliminate the FIT now and just proceed with net metering.
Then the conversation will turn to how integration can be managed, not whether it will happen. "A new generation of policy is ahead," Martinot told the conference. "It's a question of how, not cost- or price-related anymore." New business models, including third-party players, will be needed -- a point that Rob Day made last month.
Building the new capacity will take significant amounts of capital, but here again things are turning in favor of renewables. In an environment of low -- even negative -- interest rates, many wealth managers are looking to new sources of finance. Pension funds, insurance funds, securities funds like mortgage-backed securities, community funds, and sovereign wealth funds are discovering that renewable energy is the lowest-risk option, even lower than other conventional power sources.
In his personal observations at the end of the report, Martinot says that the prospects are excellent for the world to be 80 percent to 90 percent fueled by renewable energy by 2040-2050. Getting to 100 percent might be a useful social and political aspiration, but in practice it's probably best to meet some remnant transportation needs with conventional liquid fossil fuels, and use some natural gas to balance out grid variability.
The demand for petroleum fuels will fall as better transportation options -- vehicle-to-grid technology, biofuels, different vehicle sizes and types, and different modes of ownership and operation -- are integrated. Likewise, the demand for energy in the built environment will fall with increasing integration of technologies like passive and zero-energy design, solar thermal (for cooling and heating), and geothermal energy.
Martinot's vision for the renewable-powered grid is hugely bullish. "In the coming years, there will be an explosion of solar PV rooftops across the world, big and small," Martinot wrote. "Fifteen or twenty years from now, a 'bare' rooftop will seem very strange to us, and most new construction will include PV as routine practice. This will lead to a parallel explosion in micro-grids (both residential and commercial), community-scale power systems, and autonomous-home systems. The grid will become a much more complex hybrid of centralized and distributed power, with a much greater variety of contractual models between suppliers and consumers. For bulk power supply and industry, the 'big grid' resources -- wind, solar thermal power (CSP), and geothermal -- will predominate."
This may be an unwelcome prospect to the private utility incumbents in the U.S., as I have discussed previously in pieces published by Greentech Media (see "Can the Utility Industry Survive the Energy Transition?" and "Adapt or Die? Private Utilities and the Distributed Energy Juggernaut"). Or perhaps the utility industry will seize the opportunity to lead that transition, as Peter Kind asserted in his response to my article.
Martinot definitely sees big industry playing important roles, including utilities, oil companies, automakers, IT companies, and industrial giants.