by I spend a lot of my time thinking about global heating, where it’s often hard to be optimistic about the future. But there are some bright spots. In particular, there’s a good chance that 2023 will be the year that coal use finally begins a sustained decline, and relatedly the year the carbon dioxide emissions from electricity generation start to fall. This is by no means a sure thing. The International Energy Agency predicts a plateau, in which nearly all new electricity demand will be met by solar PV and wind, leaving coal and gas use almost unchanged. But the IEA has a long track record of underestimating carbon-free[1] energy, and there are plenty of reasons to think that this has happened again. Total electricity demand is currently a bit over 25000 TWh (terawatt
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I spend a lot of my time thinking about global heating, where it’s often hard to be optimistic about the future. But there are some bright spots. In particular, there’s a good chance that 2023 will be the year that coal use finally begins a sustained decline, and relatedly the year the carbon dioxide emissions from electricity generation start to fall.
This is by no means a sure thing. The International Energy Agency predicts a plateau, in which nearly all new electricity demand will be met by solar PV and wind, leaving coal and gas use almost unchanged. But the IEA has a long track record of underestimating carbon-free[1] energy, and there are plenty of reasons to think that this has happened again.
Total electricity demand is currently a bit over 25000 TWh (terawatt hours a year), growing at around 3 per cent per year. So, to meet the growing demand, we need to generate an additional 750 TWh from solar and wind ( Other carbon-free sources, such as hydro and nuclear have been essentially static.)
Assuming solar PV generates at full power for 2000 hours per year, meeting additional demand with solar alone requires addition of between 375 GW of solar PV per year, with any shortfall made up by wind.
The good news is, that’s already happening. Bloomberg BNEF estimates 315 GW of solar will be installed in 2023, up from 268GW in 2022. Additions of wind power have been around 100 GW a year recently, which amounts to between 250 and 300 TWh per year.
Assuming the 2022 installations are already connected to global grids, we should see a reduction in carbon-based electricity generation this year, and steadily larger reductions in the future. That will be true even if electricity begins to substitute for oil and gas in transport, heating, cooking and so on.
Underlying this shift is the steadily decreasing cost of wind and, even more, solar power. This trend was interrupted by the supply shocks of the pandemic and Putin’s war, which led to a big increase in the price of polysilicon, as well as those of coal and gas. But while coal and gas prices remain high, the polysilicon price, while still volatile has dropped back to more normal levels. And new investment is raising production capacity even further, heading for 500GW by the end of this year
Meanwhile technological progress continues apace. Commercially available solar cells now routinely exceed 20 per cent efficiency , while new multi-junction technologies are approaching 50 per cent This didn’t happen by chance: it is directly correlated with a massive growth in research, driven originally by public subsidies, but increasingly now by market demand.
As the urgency of ending reliance on coal, gas and oil has become more evident, supportive policies have reduced costs further. The result is that solar panels are expected to become cheaper in 2023 and beyond. In Europe, the need to respond to the cutoff of Russian gas and oil has led to the removal of some of the NIMBY obstacles to wind farms, transmission lines and so on that have delayed the transition.
The big exception to all of this is China, where coal-fired power has made a resurgence. Up to 100 new coal plants have been granted permits in the last year. This doesn’t make economic or geopolitical sense for China. It does, however, make plenty of sense for regional governments desperate to keep up a flow of large projects, both to maintain employment in coal-related industries, and for the corruption opportunities such projects inevitably generate. It seems likely that most of these plants will, if they are completed at all, lose money and face premature closure. But China has enough excess savings to deal with this.
The prospects for stabilising the global climate still don’t look good. But in electricity at least, there has been far more progress than seemed possible ten or even five years ago.
Electricity is only part of the picture of a response to global heating. I’ll try to write about reasons for hope in other aspects of the problem later. That’s more difficult, but there are still some reasons not to be too gloomy.
fn1. I avoid the terms ‘renewables’ and ‘fossil fuels’ which date back to the energy crises of the 1970s, when we were worried about running out of oil and coal. What matters isn’t that solar and wind are renewable, it’s that they are carbon-free.