Stanford University energy expert Tony Seba predicts that by 2030, solar power will make the fossil fuel-based utilities redundant while electric vehicles will put the oil companies out of business. “Utilities as we know them are over. They are the land line telephone companies of 20, 30 years ago”, he says in an interview with Giles Parkinson, founder and editor of the path-breaking Australian website RenewEconomy.
Photo: dinosaur footprints by dapawprint
Several years ago, Tony Seba, an energy expert from Stanford University, published a book called Solar Trillions, predicting how solar technologies would redefine the world’s energy markets and create an investment opportunity worth tens of trillions of dollars.
Most people looked at him, he says, as if he had three heads. That was possibly because the book was written before the recent plunge in the cost of solar modules had taken effect, and before most incumbent utilities had woken up to the fact that solar – even with minor penetration levels – was turning their business models upside down.
Seba is now working on a new book, with even more dramatic forecasts than his first. His new prediction is that by 2030, solar will make the fossil fuel industry more or less redundant. Even more striking is his forecast that electric vehicles will do the same thing to the oil industry by around the same date.
The working title for the book is “Disrupting energy – how Silicon Valley is making coal, nuclear, oil and gas obsolete”Â
The predictions are made on the basis that the cost of solar and EV batteries will continue to fall, while the cost to consumers of sourcing energy from fossil fuels through the grid or liquid fuels will continue to rise. Before the decade is out, Seba says, both technologies will pass a tipping point that will eventually sweep the incumbents aside, just as technology and cost developments have done in the computer, internet, media, photographic and telecommunications industries.
“I am incredibly optimistic that by 2030, nuclear, coal, gas, big hydro, and oil will be all but obsolete,” Seba told RenewEconomy in an interview in San Francisco last month. “The world will be mostly powered by solar and wind, and most new vehicles will be electric. The architecture of energy markets is going from centralized to distributed – in liquids and the electric market.”
The working title for the book is “Disrupting energy – how Silicon Valley is making coal, nuclear, oil and gas obsolete.” It is pinned on the theme that decentralised generation and storage will replace the centralised, hub and spoke model that has prevailed for the last century. The impact of decentralised generation is already being felt. The striking part of Seba’s prediction is the speed with which it will happen.
“By 2030, when batteries are at $100/kWh, gasoline vehicles will be obsolete. Not on their way out, obsolete”
First, on the technology cost issue. For EVs, Seba says the success of Tesla – in sales and in reputation – has changed the conversation around EVs, particularly after it won the 2013 Car of the Year award. “Basically, EVs were supposed to be expensive and underpowered and weak and 50 years away. Tesla showed all that was wrong. The EV will do to oil what solar will do to coal, nuclear and gas. EVs are a disruptive technology, there is no doubt about that.
“The propaganda says that it is too expensive and has little range. But if you look at the cost curve of batteries, even Detroit is saying that by 2020 lithium-ion batteries will be at $US200/kWh.
“The tipping point for the mass market to move from internal combustion engines to EVs is between $US250 and $US300/kWh. Once it gets to $US100/kWh, it is all over. I think we will get to $US250/kWh by 2020. By 2030, when batteries are at $100/kWh, gasoline vehicles will be obsolete. Not on their way out, obsolete.” Seba thinks that mass migration will start around 2018 to 2020.
“Coal is in pockets, gas is in pockets, oil is in pockets. The sun shines a little bit more in some places than others, but everyone gets sunshine”
On solar it is a similar story. “When I wrote my first book, a lot of people looked at me like I had three heads,” Seba says. “They thought I was way too optimistic because the conversation then was about grid parity for solar in 2060, or 2070. And what you hear is the same thing we heard 20 years ago, that this is not going to happen, that it is difficult, that power needs specialised scale, that it can only be done like this. When in fact, over the last few years, a country like Germany has pioneered the move from a few dozen central power plants to more than a million producers.”
“Australia has done the same thing. Bangladesh has a million solar installations. So the poorest people in one of the poorest countries are adopting solar unsubsidised. Solar is already cheaper than grid – what people are paying for electricity – in dozens of countries already. And that is despite huge fossil fuel subsidies.”
“The sun is more democratic than any other source of energy. Coal is in pockets, gas is in pockets, oil is in pockets. The sun shines a little bit more in some places than others, but everyone gets sunshine. And the thing about solar, is that it can be built on a distributed basis.”
“Markets will be redesigned, and there will be huge opportunities for new companies – the Ebays of the electricity world – that can aggregate and trade distributed production, and that can manage the process”
Can solar really be built on a scale that would meet the bulk of the world’s electricity needs? Seba points to the computer industry, where he worked in the 1990s, and to the internet and telecommunications. All three were dominated by huge, centralised technologies. All three industries have been turned upside down by new “distributed”, or hand-held devices. He says the same thing will happen in electricity. “This is not in the future. We are going from big centralised power plants to decentralised generation, to decentralised storage, and to decentralised distribution.”
“It is just a matter of policy makers understanding this and making regulations appropriately. In India, about $30-40 billion goes to subsidise diesel. The grid there is already obsolete. It went down and 500 million people didn’t notice, because they are not on the grid. If they stop subsidising diesel and put it into solar, they could bring 100 million people a year into solar. If all you do is stop subsidising diesel, you can, in five years, bring solar electricity to 500 million people who are not on the grid today.”
The biggest threat from all this radical change is to the traditional utility model, Seba says. “Utilities as we know them are over. They are the land line telephone companies of 20, 30 years ago. We will start using them as back-up, as the world goes distributed and every house has solar, and factories do the same, and they are stuck with these stranded investments.”
“Most consumers don’t trust utilities, but utilities don’t understand this, because they treat consumers like ratepayers”
“What they will try to do is to keep jacking up prices – which makes solar even more affordable. It will be this death spiral. You will see bankruptcies. Finally, it will not make sense.”
He says markets will be redesigned, and there will be huge opportunities for new companies – he dubs them the Ebays of the electricity world – that can aggregate and trade distributed production, and that can manage the process.
“You will need a market, but instead of assuming 10 or 100 producers, you will need market that assumes million or tens of millions of power producers. So you will need some companies that can do that. Markets will get interesting – storing, trading etc. there will be huge opportunities for innovative companies.”
“And then you need to know how to manage energy without thinking about it. Most of us don’t know enough. We don’t know enough about cars. Why ask same of consumers for electricity. So companies will do that – they will do that better than utilities do. The Nests, the Apples, Googles, Sungevity, and Suncity, are getting into the home, and getting trust of consumer.”
“Policy will be critical, and right now the conservative right is lined up against renewable and disruptive technologies, and firmly on the side of the incumbents”
“Most consumers don’t trust utilities, but utilities don’t understand this, because they treat consumers like ratepayers. When you buy a car, or a shirt you are treated well. But in the electricity industry, you are not. The big conversation is about solar panels, and storage and EVs, but that is just beginning of the conversation. We have so many other technologies that will change the way electricity is traded, used, stored. Utilities have no idea about that.”
So, what could possibly go wrong? Well, policy will be critical, and right now the conservative right is lined up against renewable and disruptive technologies, and firmly on the side of the incumbents. Seba, doesn’t understand why. “In ideological terms, there is no more libertarian energy source than solar. Why do libertarians, at least in the US, align themselves with conservative parties? “Why are they supporting coal and big refineries and power generation? Ideologically it makes no sense. Part of what is going on is an information war. $8 trillion can buy you a lot of information, and can help you spread a lot of misinformation.”
Giles Parkinson is the founder of the excellent Australian website RenewEconomy, which discusses the ideas and analyses the trends, the new technologies and the policies that will drive the global energy transformation. Parkinson is a journalist of 30 years’ experience, a former Business Editor and Deputy Editor of the Australian Financial Review, a former columnist for The Bulletin magazine and The Australian, and the founder and former editor of Climate Spectator. This article was first published on RenewEconomy and is republished here with permission from the author. We highly recommend RenewEconomy as a great source of information if you want to follow what is going on in international (renewable) energy markets. You can start with this follow-up article to the interview with Tony Seba. This quotes the head of the US energy regulator saying that “solar is growing so fast it is going to overtake everything”.Â
Boudy Tjho says
I hope we will be able to use only solar energy and other envirementfriendly ones instaed of the fossil oil.
But it will take time.
Dennis Alexander says
This is naive thinking. Not based upon sound scientific principals, nor sound engineering. Solar Vehicles will only work for urban areas, not for most of the country’s counties. They will also cost too much. The VOLT has been a disaster financially. You could electrify the country, run high tension lines down the middle of all highways and connect your train, bus, car to the overhead sliding connections and away you go. It would be a mess. Batteries in cars will never allow you to travel 300 miles between fill ups. And then when you fill up you have to wait 24 hours for the battery to recharge. Give me a break. It will never fly and the public will never buy it.
Vish says
Definitely a big revolution is required. There will always be skeptics around. How can one expect a white elephant like GM to come up with a profitable model. Irony is that TESLA bought GM’s abandoned facility and came up with a successful fully electric luxury models from scratch (No preconceived inertia). They are coming up with mass production model soon. As Shai Agassi suggests, why can’t the rest of the auto industry learn from the TESLA’s successful learning. It’s just the matter of time. Revolution prevails around skeptics. – Vish
Jack says
Hi Dennis,
First; the Volt is not an electric car…..but a poor attempt to outsmart Toyota’s hybrid marketing machine. It is also a reflection of the fact that GM can not let go of the internal combustion engine… (both idiotic)
Secondly; check http://www.tesla.com and see why your numbers on range and charging time don’t reflect current reality.
Jack
Webuchadnezzar says
I am a strong believer in electric cars. I love Tesla Motors and have invested in the company in the past.
However, I do not think the oil companies are nearing a death spiral. Far from it. By 2020, the US may be producing more petroleum than Saudi Arabia. Very few Americans I talk to have ever heard of the Bakken Formation of North Dakota, the Green River Formation of Colorado, or the Permian Basin in Texas. They would be shocked to find out just how vast our newfound oil deposits really are….we may have more oil than the rest of the world put together.
I believe we will be very hard pressed not to develop this oil once average Americans find out about it.
I actually think we will need all the energy we can get our hands on. Fossil fuel will still be great for heating and/or power plants — you can easily install scrubbers on buildings that don’t move. I believe electric cars will be very popular, just because they are so much simpler, cleaner and quieter. And potentially MUCH faster.
Electric car range limitations are almost a thing of the past. A Tesla Model S85 already goes 45 miles further than my 2004 Ford Motor Company product. And we will soon see many new innovations with battery packs…..indoor battery swap stations, high capacity rapid charging battery packs, or both. We may see ultracapacitors that make today’s strongest, lightest batteries seem like a bad joke.
Future electric vehicles will have ranges so long, their owners may bash drive fossil vehicles range. “You can only drive them like, 400 miles, and then you have to buy GAS or they STOP….ewww!”
I think the future is looking very bright.
Dan says
Do you still have the same opinion today? All you said in 2013 is COMPLETELY obsolete today !!!!!
Karel Beckman says
It isn’t 2030 yet, Dan!
T Santa says
This is a nice thought but there is no supporting documentation offered. How many square feet of solar panels per person would be required to displace all fossil fuels for power, heat and transportation? And how many KWH of storage per person to get us through the night, cloudy days, etc.?
Ben says
I don’t have documentation for their story but:
How many square feet of solar panels per person would be required to displace all fossil fuels for power, heat and transportation?
For a well designed, energy efficient house the answer is (what are your habits, where are you located, how far do you commute, etc. etc.?) Average in the USA, probably somewhere around 500 kWh’s/month with the right technology. Average elsewhere in the world probably around 100 kWh/month. This would be about 6.4 modules/person on average currently or approximately 115 ft^2 in collector area for everything.
Double or triple that if you want enough for storage (depends on where you are) and you have a reasonably close estimation to go completely off-grid with an energy efficient house and lifestyle.
Philip D'Angelo says
Every atom in the universe is in a constant state of change and eventually and for very short periods of time, the change will be very good. Gas, Nuclear, Solar, Wind, Wave, etc… are rising and coal and oil are slowly sinking. It is the rate of change that different people with different agendas want to control. Those looking for short term profits want the change to be quick. Those considering the near-tern and long term future of our socio-economic system consider sustainability of the infrastructure to be a priority. Those long-term planners usually possess the technical expertise to ask the correct questions and understand the technical hurdles without the myopic need for instantaneous gratification. Listen to them rather than the salesmen looking for near term profits and a back door so he can retreat when the solution doesn’t match the promises. As many have said, Life on the blue marble is a marathon and not a sprint. Plan for the future and carefully question everything and allow the best possible answers to appear. Remember to live in the present because nothing is as good as you think it is going to be and as soon as achieved the clouds of change will once again rain on your parade.
Jim F says
In order for a distributed grid to work as an open marketplace for energy, don’t you need to have ubiquitous interconnection? And if that is true then who will be supplying that infrastructure? The bankrupt utilities? It seems as though the only logical way forward under the premise presented in the article is for a nationalized grid. We certainly can’t expect all businesses, homeowners, and service providers, to generate all the power they need from their own rooftops. What about the global phenomenon of urban migration?
Jon says
As long as the USA has a non-working democracy, it does not matter which political party one is aligned with; citizens will have the same bill of fare. Fossil fuel interests will still be in control of General Motors and the USA.
Baby Boomers have been set up as the highest fee paying demographic since the beginning of time; they will also be the first generation to be subjected to “Right to Life” screenings based upon the “Quality of Life” standards set forth in the Affordable Health Care legislation. Euthanasia hospices will soon be sending out invitations for appropriate “End of Life Management”. Please excuse us if we don’t get exited to vote for liars who simply have their own profit building fossil fuel hidden agendas.
I would purchase an EV without compunction if Excel Energy put metering stations in our work parking lot. Our State offsets the cost of doing such projects. If the metering stations were put in there would be fighting over who gets to use them. It is not the political party in charge keeping the taxpayer provided metering stations from being implemented.
Since EV’s and other clean forms of personal transportation vehicles have and still are being withheld from Baby Boomers by fossil fuel profiteering designs, they must continue to use fossil fuel vehicles the rest of their lives; each one in their own SUV/truck as manufactured by General Motors with all other automobile manufacturers following suite.
DON’T BLAME CONSUMERS FOR SWALLOWING WHAT IS BEING FOCE FED TO THEM!
Mario Orosa says
I wish Tony Serba is right in his prediction. But batteries for EV and solar panels are no slam dunk. Why did so many battery makers file for bankruptcy even after generous subsidies? Solar power is only available half the day. The current EV darling Tesla costs 3 times an average car. Sales of EV’s are still minuscule even with $7500 Fed credit.
Leo Kerr says
Of course he is right – this is disruptive technology – my power bills from my utility continue to rise and solar continues to fall in price. EV batteries continue to fall in price while energy density continues to increase. It will not be that long before I can charge my car from solar and if necessary run my home from the energy in the car when required – battery storage will be the killer for the utilities and that is now beginning to happen – every EV is a battery storage device as well as being a vehicle. I can’t wait to wave goodbye to big oil and the ‘got you by the balls’ utilities who are now beginning to realise that solar is already redefining and making redundant their business model. Bring it on.
Don Watt says
Tony Serba offers some interesting ideas. We all know the cost solar panels are dropping dramatically in price .The other side of the equation is the lithium battery. Unless lithium acts like a catalyst and can be recycled, I suspect we will not have sufficient supplies of it to meet the storage needs of solar panel users.
Germany apparently feels that if solar panels are widely distributed, then some place will have sufficient sunshine to make the grid reliable, but I am unsure what happens after dark, if lithium is in short supply !
D C Srivastava says
There is no doubt that solar energy has a very bright future
vis-a-vis fossil fuels. If we compare technological growth, efficiency improvements and cost reduction in computer and telecom technologies with solar power technologies over about last half a century, we find a big gap, though all the three fall in the same technology domain, if we exclude the energy storage systems requirements. It appears that technologies for solar power generation was purposely held back to serve the interests of few interest group at individual level as at nation level. Thanks to china for making cheap solar power panels that has already made solar power cheaper than diesel generator based electric power.Prominence of solar power may change the geo-political situation around the world as many covertly and overtly conflicts and war has taken place for fossil fuel especially oil. Moreover, development of solar power will also save us from scourge of global warming and climate change.
brian nelson says
I am a part of the conservative right, work for an oil company, and take exception to being “lined up against renewables.” I would actually argue the exact opposite position. If renewables in the next 20-30 years become more economic than fossil fuels in supplying our energy needs, I will embrace such technologies and adjust my career path accordingly.
solar says
Solar Savings America is an organization dedicated to promoting the message that solar power is indeed both a clean and
cost saving solution for most consumers and businesses.
We believe that solar energy plays a large role in our future as economic
and political uncertainties impact the cost of energy.
Carl Massaro says
We need the oil for the big work horses, and Tesla type cars will carry us, our 2.5 kids and a dog around.. I had my doubts until I drove a Hydrogen Fuel Cell viehical last week . It had lots of power .. and Charged fast
Jeff Hafer says
I agree that solar, wind and other technologies will continue to grow as a source of electric power. Electric vehicles will become more practical as capacity increases and recharge times decrease. One thing that I have not seen anything about is storage of electricity to be used at night when neither solar nor wind is practical. It’s going to take a lot of batteries or another power storage technology or we will have to go to bed at dark.
Lili Francklyn says
Very much look forward to this new Seba book. He should definitely change the title however!! It’s not Silicon Valley doing the disrupting – it’s cities and towns all over the country that are taking control of their energy choices. This is the important thing.
My city, Boulder Colorado, is trying to create a municipal utility because our IOU Xcel Energy, invested heavily in coal, and refuses adopt RE at the rate we want. We are tired of fighting them every step of the way for 10 years now, so we want a divorce. Xcel is prepared to spend millions to prevent our defection, and using every dirty trick in the book to stop us. Visit http://www.boulderenergyfuture.com