There are competing ideas on the best technologies to rapidly decarbonise the energy system. Some scenarios emphasise the role of carbon capture and storage to render coal- and gas-fired power plants more climate-friendly. Others point to nuclear energy and a third group is more optimistic on renewable sources. But it’s plausible that even these more optimistic outlooks have greatly underestimated the potential of solar power, writes Dr Felix Creutzig of the Technical University Berlin. Article courtesy Carbon Brief.
In an analysis, just published in Nature Energy, my colleagues and I ask why this has happened and how much solar could contribute to climate mitigation.
Solar scenarios
There is huge variability in renewables’ expected contribution to the future energy mix. A scenario comparison study that fed into the Intergovernmental Panel on Climate Change (IPCC) found global solar electricity generation ranging from 8–35 exajoules (EJ) per year in 2050, in scenarios consistent with keeping temperatures below 2C.
This corresponds to around 5–17% of global electricity supply. In contrast, the same study projects biomass-based energy supplying 50–90EJ per year in 2050.
Energy futures are typically analysed in scenarios from the International Energy Agency(IEA) and energy system models deployed to inform the IPCC. Importantly, IEA scenarios are often used to calibrate the IPCC scenarios. The resulting projections indicate a large role for coal, coupled with capturing and storing CO2 underground, nuclear and biomass.
But historically, these studies seem biased against solar. In our Nature Energy analysis, my colleagues and I show that projections by both the IEA (black lines in the chart, below) and Greenpeace (green lines) – which is certainly not guilty of an aversion to solar – consistently underestimated the real rate of deployment (red line).
Consumers proved willing to pay a premium for green technology on their own rooftops
Real growth of solar PV capacity (gigawatts, red line) has consistently outperformed projections from the IEA (black lines), the German Advisory Council on Global Change (WGBU, blue line) and even Greenpeace (green lines). Source: Creutzig 2017.
The IEA, a key reference for all modellers, predicted growth rates of 16-32% per year between 1998 and 2010. In fact, real growth ranged from 20-72%, with the annual average at 38%. This difference caused huge under-predictions of how much solar would be installed.
While an average growth rate of 19% leads to 470% growth over 10 years, a growth rate of 38% can produce a 2,500% increase in capacity in a decade. Even the most optimistic scenarios, published by Greenpeace from 2007–2010, underestimated solar growth. Initially high growth rates were expected to fall to 24-32% per year, a rate that has been surpassed by real-world development.
Models and scenarios have underestimated the growth of solar capacity not once, but repeatedly, so that the gap between prediction and reality fails to narrow down.
Missing models
Why is there such a gap between expectation and reality? Admittedly, solar’s growth, starting from a miniscule base, has been spectacular. Few technologies have taken hold so fast.
Consumers proved willing to pay a premium for green technology on their own rooftops, while ambitious policy instruments like Germany’s Feed-in-Tariff and California’s Renewable Portfolio Standard pushed renewables much faster than anticipated.
These dynamics have so far been poorly captured by energy system models, which tended to represent the complex mix of different climate policies in a simplified and stylised way – for example, as a single, economy-wide carbon price. These models also assume that society will always seek to minimise costs, ignoring the potential role of personal preferences.
Our results were remarkable. By 2050, solar supplies 30% of electricity in competitive markets (without subsidy) worldwide, under pessimistic assumptions on floor costs and up to 50% under more optimistic assumptions
Most importantly, faster initial deployment caused costs to decline rapidly and consistently. In fact, solar module costs decreased by around 23% with each doubling in installed capacity, a phenomenon dubbed “technological learning“. Traditionally, technological learning has been inadequately reflected in many models.
The levelised costs of solar are now undercutting fossil fuels in competitive markets. In locations as diverse as Dubai, Mexico, and Chile, the best solar PV projects are selling power at less than $0.03 per kilowatt hour (kWh). In India or Zambia, some PV projects are producing power at or below $0.06/kWh, outcompeting coal.
One final factor explaining why models have underestimated solar is their cost projections for other technologies. As a result, they have not only overestimated the costs of solar, they have also been too optimistic about cost reductions for the alternatives or even failed to foresee cost increases.
Realistic potential
In our analysis, we came up with new estimates of solar’s realistic potential using a global model of the energy system, economy and climate, called REMIND, from the Potsdam Institute for Climate Impact Research.
We plugged into this model the observed development of solar capacity and its costs, along with a revised approach to estimating technological learning rates. A crucial parameter in this is the floor cost, in other words the cost at which technological learning in PV levels off.
Our results were remarkable. By 2050, solar supplies 30% of electricity in competitive markets (without subsidy) worldwide, under pessimistic assumptions on floor costs and up to 50% under more optimistic assumptions.
In other words, our electricity systems will be transformed from relying on consistent “baseload” coal to variable solar. This offers a somewhat bright outlook for climate change mitigation, but would also change the landscape of, and demands on, global electricity markets.
Battery costs are declining even faster than those of solar power. That is a fortunate coincidence
Realising this solar potential will depend on crucial policy planks and support. Coal and other fossil fuels are deeply entrenched and have considerable political power behind them. Moreover, fossil fuels can provide power whenever it is demanded, whereas the sun may not shine at the moment consumers demand electricity.
As solar becomes more central to energy supplies, battery systems and storage become increasingly important. Some states like Vermont already deploy Tesla’s home battery systems to help stabilise the grid. And in Minnesota, a study suggests solar power together with battery storage is a more cost effective way to balance the grid than natural gas.
Battery costs are declining even faster than those of solar power. That is a fortunate coincidence, as storage costs rather than photovoltaic costs will be the determining factor for solar investments. Another new study, also just published in Nature Energy, finds that a combination of solar, wind and battery storage can plausibly directly compete with fossil-fuel based electricity options.
Of course, effective climate mitigation is not assured even if the use of solar and wind power rise. In the absence of solid measures to remove coal, gas and oil from the energy system, fossil fuels could co-exist in an infelicitous equilibrium with renewable energies for decades to come. Pricing out polluting coal through carbon taxation would complement policy designed to boost solar’s share of the global electricity mix.
Editor’s Note
Dr Felix Creutzig is chair of sustainability economics of human settlements at the Technical University Berlin and is head of a working group on land use, infrastructure and transport at the Mercator Research Institute on Global Commons and Climate Change, Berlin.
This article was first published on the website Carbon Brief and is republished here under a Creative Commons licence.
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Bob Wallace says
“Consumers proved willing to pay a premium for green technology on their own rooftops”
So close. Have a cigar….
A major factor that I’ve seen no model incorporate is the desire of people to do something about fighting climate change. The majority – of all of us – understand that climate change is happening, what it means for us as the planet continues to warm, and how humans are the cause.
The majority of us want to turn this mess around before it takes us off the cliff.
It’s not just people paying extra to put solar on their roofs, it’s also people spending money to switch from fossil fuel to heat pumps, paying a premium for an electric vehicle. And conserving. And comparing energy use when buying a new appliance.
But that’s the ‘individual citizen’ personal life stuff.
What I also expect is happening is within many private businesses, public institutions, and governments there are people, either openly or slyly, pushing their organization in green directions.
There are people pointing out to their boss how much the business could save by switching to efficient lighting. People looking for more energy efficient solutions for the project on which they are working. Talking to management about if the company did ‘X’ then they could advertise themselves as green company.
I think the models are missing something akin to the “invisible hand”. A force that might not be as strong as some economic drivers, but all the drivers are additive.
Jeff says
Too late, Bob. Climate change has already happened and is irreversible. There is also enough co2 in the atmosphere to effect climate change for many more years to come.
Meanwhile solar is around 1% of electricity generation and about 0.4% of total primary energy consumption. [censored inappropriate language]. Way too little and way too late to have any measurable effect.
Karel Beckman says
Maybe check out the previous article on Energy Post, Jeff: https://energypost.eu/iea-underreports-contribution-solar-wind-factor-three-compared-fossil-fuels/
Jeff says
Thanks but im well aware of that and its a moot point. The point that matters is a climate change solution, right? Solar was proposed as a solution for decades. Decades later… Too little too late. It didn’t work. Solar made literally no difference in terms of,mitigating the warming that has already happened. We’ll have reached to point of no return on 2C of warming very soon and there is solar still around 1%. If solar was your solution to warming climate then it already failed.
Karel Beckman says
So what do you suggest. We don’t do anything?
Try this article: https://energypost.eu/100-renewable-energy-for-139-nations-detailed-in-stanford-report/
You will see there is plenty still to do and plenty to contribute for solar power. But somehow I feel you just want to make the same oid point that critics of solar power have been making and that has now been shown to be wrong.
Helmut Frik says
The world needs today something like 22PWh. Solar installation this year looks ike being just short of 100GW, which menas solar power production this year might rise by 120-150 TWh. Which means that solar power rises its share of power production something like 0,6-0,7% this year.
This is not enough, but gives a completely different virw than “1% in many decades”, implying a growth aound 0,02% per year.
Manufacturing capacity for solar power is growing fast, so in some year we will most likely see more than 1% of global power production shifting to solar power. When the shift reaches 3% per year, things start to become interesting. As far as I can see this is not out of reach, most machnines to reach this production rate are already in place.
Bob Wallace says
“Solar was proposed as a solution for decades. Decades later… Too little too late. It didn’t work.”
Solar was not installed in large quantities due to its cost at the time. In general, the world is more concerned about present cost of electricity than about climate change.
Now that the price of solar is much lower (and still falling) the installation rate of solar is increasing. 51 GW in 2015, 75 GW in 2016, and now almost 100 GW this year. That’s close to a doubling in only two years.
Jeff says
Bob and Helmut
I don’t disagree with what you’ve written in those two comments. But the fact remains that Earth’s climate has not waited for solar power to gain market share. Let’s optimistically assume solar power installed capacity achieves a doubling then another doubling in coming years. Sounds great in an internet article. But when run through climate models the result is still the same amount of warming. 2 degrees above pre-industrial levels within about 20-25 years and still rising towards 3.7 degrees by 2100.
My basic point is that relying on (and waiting on) solar power is a very poor choice for climate change mitigation. If EVERYTHING in the Paris agreement is achieved (solar plus everything else for all countries) we’re talking about just one tenth of a degree mitigation through 2100. That’s why I’m not on board with the solar advocates.
Bob Wallace says
Why are we “waiting” for solar? The price has become cheap and is getting cheaper. Same for wind.
Solar is the fastest way to bring new clean electricity to our grids. (Wind is second fastest.) I have no idea what you mean by “waiting on solar”.
What we are waiting on is for more countries to install low carbon generation faster. Whatever best fits their energy resources and budget.
Like a large ship, global behavior first has to slow, then stop, and then go into reverse. At first reverse speed is very slow but over time it accelerates.
We seem to have reached peak global CO2 emissions and we seem to have reached peak coal use.
That’s “stop”.
Now we slowly back away, picking up speed as we go.
Jeff says
Waiting for solar means deployment hasn’t happened fast enough to have a measurable mitigating effect on warming. We’ve already seen 1.2 degrees above pre-industrial levels. 2 degrees is certain. 2016 MIT study (and many others) say 3.7 C by year 2100.
Mitigating climate change was the primary goal of solar power advocates. Deadlines passed and carbon budgets got used up while solar achieved about one percent in the electricity sector. Literally no effect (according to climate models) on the trajectory of warming or future temps. Solar has been a complete policy failure in terms of climate change.
Helmut Frik says
Write the words in another way round: policy has been a cmplete policy filure in case of solar. Research and start of deployment happened in too small amounts until recently.
And in case of deployment it’s a ongoing process. There are still piles of red tape which can be removed to speed up deployment in many countries. Grid expansions to balance power productions is buried under mountains of red tape in most countries.
The 10GWp installed in China in july alone tells that production and installation is not the problem any more. Costs also. Sleeping politics in earlier times can not be corrected today any more. Future politics is correctable.
CO2 pricing would help to speed up things.
Bob Wallace says
I’m sure you think you have an important point, Jeff….
Hans says
It would be nice if you could reference which promises were made when and which deadlines were set for solar energy. Because the reality is that solar energy has grown much faster than anybody had expected:
https://c1cleantechnicacom-wpengine.netdna-ssl.com/files/2015/03/Global-cum-inst-solar-PV.png
With the logic you are using you could say all climate mitigating technologies have failed, and are thus not worth pursuing, but the reality is that governments have failed to take more drastic climate action, for example by putting a proper price on carbon-dioxide emissions.
Nigel West says
Solar’s contribution can only be estimated. Much is embedded in distribution systems and is not metered centrally. It depresses demand. National Grid is working with Sheffield University on a model to estimate solar generation. Solar output is effectively negative demand so has to be taken into account by TSOs when forecasting demand to be met by grid connected generators.
Bob Wallace says
The US DOE (EIA) began estimating behind the grid solar in 2014 and added it to utility solar in their monthly and annual reports.
Perhaps they don’t have the best model, but it’s a start.
Bob Wallace says
Jeff, climate change is already impacting us. But we can reduce the amount of hurt we will experience. Wouldn’t it be better to live in a +1.5C world than a +4C world?
And forget replacing primary energy. Over half the primary energy the world consumes serves absolutely no purpose.
A 40% efficient coal plant wastes 60% of the coal-energy it burns. Put in 100 kWh in coal-energy and you get out 40 kWh in electricity. Our job is to replace the 40 kWh, we can ignore the 60 kWh wasted.
Gas powered cars are about 20% efficient. Put in 100 kWh of gasoline-energy and only 20 kWh is turned into kinetic energy that moves you down the road. We only need to replace the 20 kWh we actually use.
(And there’s a lot of energy used in drilling, pumping, refining, transporting and dispensing oil. More primary energy that doesn’t need replacing.)
Go to this page –
https://flowcharts.llnl.gov/commodities/energy
You can look at how primary energy has fared in the years 2010 through 2016 in the US and some years for some other countries.
Or this link will take you straight to US 2016.
In 2016 the US used 97.3 quads of energy. Out of the 97.3 only 30.8 were actually used. The other 66.4 quads were discarded as (mostly) waste heat.
The US needs to replace only 32% of the primary electricity used in 2016.
About 60% global energy from fossil fuels. The global problem is about half what one would think if they looked at primary energy use.
Bob Wallace says
Unfortunately, Jeff, we can’t post graphs in comments on this site. If we could I’d show you how the global rate of solar and wind installations are growing.
Remember, solar has been inexpensive for only a very few years. Many countries are just now catching on the fact that they can use wind and solar to bring new generation to their grids and cut their fossil fuel use, saving them money.
And improving air quality which means fewer health problems for their people.
Hans says
Climate Change is not a binary thing. Every tenth of a degree of further temperature increase we can prevent saves lives and money.
Solar energy, especially PV, has developed much much faster than anybody expected. Reality leaves even the most optimistic Greenpeace scenario in the dust.
In 2015 solar energy was responsible for 1.05% of the worlds power production. But in 2004 it was only 0.01%. If the same exponential growth rate can be sustained we will have 11% of solar power around 2026 not in 2050.
Solar energy has reached a state were it is cheaper than written off coal power plants in many places in the world. We are very close or already at the breaking point were solar and other renewables will take over the market in a self-propelling way. The last things standing in its’ way is the intertwinement of vested fossil fuel interests and government, and fear of change. It would really be silly to give up now.
Jeff says
You’re right global warming its not a binary things but it is quantifiable. That quantification has been done and solar has not prevented a tenth of a degree as you claim. It has prevented zero degrees of warming and will prevent far less than a tenth even when projected through year 2100.
In other words a focus on solar power as a mitigating policy to prevent or reduce climate change is a failing policy. This is not just my opinion it is quantifiable scientific fact. See articles by James Hansen Kerry Emanuel on this as well as studies by MIT and others that project future warming and include quantification of mitigation policies.
Bob Wallace says
Jeff, you’re trying to make a point but you don’t have a valid point.
Solar was not going to replace fossil fuels when solar panels cost multiple dollars per watt. The average price paid for panels purchased in quantity is now $0.36/watt.
You are making a claim similar to claiming that penicillin did not cure infections before penicillin was discovered.
” will prevent far less than a tenth (of a degree temperature rise) even when projected through year 2100.”
You’re basing that on what? How much fossil fuel consumption has to be replaced with low carbon generation in order to prevent a tenth of a degree?
Give us the number you used and we can evaluate your claim.
Hans says
The comment I reacted to suggested you wanted to give up fighting against climate change, hence my remark that every tenth of degree is worth fighting for. It was not a claim about how much climate change has been prevented by the currently installed solar power installations.
That the contribution of solar is still small does not mean it cannot contribute more in the future. The current growth rates and cost declines of solar and other renewables suggest that you are too pessimistic. It would be nice too know on which studies you base your pessimism, because now it looks like you are just waving your hands.
Nuclear and fossil fuel interests still have a strong grip on governments and international institutions. A one sided focus on solar (and/or other renewables) is still far from reality.
Bob Wallace says
I’d like to highlight this sentence –
“The last things standing in its’ way is the intertwinement of vested fossil fuel interests and government, and fear of change.”
Last night I ran some numbers to see the cost of adding wind to a grid and turning off gas plants when the wind was blowing. Someone had argued that since the gas plant would run less it would have to raise its price to cover fixed costs (paying off the plant, staff, etc.) making adding wind a bad decision.
The short version: Use wind 50% of the time and gas 50% of the time. Double the fixed costs of the gas plant to cover its idle time. Electricity costs would drop by more than $0.01/kWh.
Money will override the political influence of the fossil fuel industry on government. Renewables are creating huge amounts of jobs and producing tax revenue as well as bringing income. The last wall is crumbling which means that installation rates will increase faster.