CleanTechnica is the #1 cleantech-focused
website
 in the world. Subscribe today!


Cars Some rights reserved by USFWS Mountain Prairie

Published on August 26th, 2013 | by Giles Parkinson

27

Solar And Electric Vehicles Will Kill Industry Dinosaurs

Share on Google+Share on RedditShare on StumbleUponTweet about this on TwitterShare on LinkedInShare on FacebookPin on PinterestDigg thisShare on TumblrBuffer this pageEmail this to someone

August 26th, 2013 by  

Originally published on RenewEconomy.

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 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.

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.

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.”

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 world goes distributed and every house has solar, and factories do the same, and they are stuck with these stranded investments.

“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.

“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. “

Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.



Share on Google+Share on RedditShare on StumbleUponTweet about this on TwitterShare on LinkedInShare on FacebookPin on PinterestDigg thisShare on TumblrBuffer this pageEmail this to someone

Tags: , , , , , ,


About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • http://www.clrlight.org/ Thomas Blakeslee

    You might be interested in the tables of land use per mile I created for this article:

    http://www.renewableenergyworld.com/rea/blog/post/2013/08/fueled-vs-electric-cars-the-great-race-begins-10

    • Bob_Wallace

      Did you do this one correctly?

      “Wind power is another approach. The Horse Hollow Wind Energy Center in Texas generates 55,000 kWh/year/acre, enough to drive 165,000 miles/year/acre.”

      Your source is using numbers like 67, 90, 267 acres per turbine. That is wildly incorrect.

      Land use per wind turbine is roughly one quarter acre per turbine. That covers tower footing, access roads, ancillary buildings and transmission. The remainder of that 66.75 to 266.75 acres is not used for wind generation, it is still available for initial use purposes – farming, grazing, wildlife.

      http://www.nrel.gov/analysis/power_databook/calc_wind.php

  • Wonderer

    I wonder if the book’s authors have considered how much energy and fuel is needed to keep continuous heavy industrial processes going and how much more is needed just to start them. I seriously doubt that something so energy-difuse as solar or wind power could come anywhere close to powering an aluminum smelter or float glass plant, both of which tend to be kept running for months or years on end.

    • Bob_Wallace

      There’s a study in which the authors took minute to minute demand for four years from the largest wholesale grid in the US, the PJM Interconnection, a large regional grid that services all or part of 13 states from New Jersey west to Illinois, from Pennsylvania south into Tennessee and North Carolina

      And they used hourly wind and solar data for those same four years to calculate the amount of energy available.

      They used this data to model the feasibility of running a large grid such as this on nothing but wind, solar, storage and a very small amount (0.1%) of natural gas.

      They demonstrated that all the heavy industrial processes in that region would keep on keeping on. They replaced every single kWh of non wind/solar generation with wind and solar on a minute by minute basis. And for about what we are paying for electricity now (all costs included).

      https://docs.google.com/file/d/1NrBZJejkUTRYJv5YE__kBFuecdDL2pDTvKLyBjfCPr_8yR7eCTDhLGm8oEPo/edit

      And keep in mind, their model did not include hydro, tidal, geothermal and biomass/gas generation. It also did not include power sharing with adjacent grids nor load-shifting. And the prices they used for their 2030 projections have already been superseded by lower current wind and solar costs.

  • Marion Meads

    For the commuting public in the tropical and temperate zones where there’s more sunlight, then there would be minimal need for dino fuel. However, the whole world is not the tropics nor temperate zones. In some cases, sun will not shine for 6 months or so. So it may not happen that you can really kill off the industry dinosaurs.

    Another is that there is no sufficient capital to change the mechanized farming from using dino fuel to batteries recharged by solar power. The cost to a farmer would be enormous, considering the amount of energy required for farming operations. That is where biofuels can be used, and the farmers themselves can produce these biofuels. But if the transportation will have less demand for dino fuel, it would become cheaper for the farmers to use dino fuel instead, so the biofuel industry might go dormant once again.

    The main reason why the US economy is so resilient is that we have one of the lowest cost of production of agricultural food, and hence one of the cheapest food relative to the average earnings. If you force the farmers to switch to electric powered tractors, and electric powered agricultural airplanes, it would require huge investments that could dramatically increase food prices relative to average salaries. So the equilibrium could be much later, perhaps beyond 2050 before the industrial dinosaurs go extinct, or it may not go extinct at all.

    • Bob_Wallace

      “In some cases, sun will not shine for 6 months or so. So it may not
      happen that you can really kill off the industry dinosaurs.”

      Those areas do have wind, geothermal, hydro, tidal, biomass and the ability to import electricity by wire.

      ” there is no sufficient capital to change the mechanized farming from using dino fuel to batteries recharged by solar power.”

      Farmers find the capital to purchase new equipment constantly. If a new battery powered tractor that would work for them turns up in the dealer’s lot they can purchase it just like they do any new tractor, with a loan. And the fuel savings will help make the loan payments.

      It may be that some portion of our farming will not lend itself to electricity, just as long distance flight probably won’t. (At least with any battery we can now imagine.) For those uses we may need liquid fuel.

      That liquid fuel does not have to be dino juice. We have technologies under develop which could give us liquid fuels from biological or renewable electricity driven chemical processes.

      • Marion Meads

        “Farmers find the capital to purchase new equipment constantly.”

        Perhaps the corporate farming sector does this constantly, and I have no disagreement with that.

        Most of my farmer friends having small to medium sized farms in the valley hold on to their old equipments until they literally rust away. Purchasing new equipment, especially the most expensive model is just a dream. There are government agriculutral loans with small interests to help them out but I don’t think the EV type tractor would make financial sense or be affordable even with loans.

        • Bob_Wallace

          Tractors are something that can be converted over by jerking out the ICE and putting in batteries.

          As EVs bring down the cost of traction batteries the math will work.

          We’ve got small scale farmers around here already working their crops with electric conversions. They can work about an acre per charge, which is fine for someone growing for more select markets.

          If you’re mono-cropping you need more hours per day of equipment use with a lot more days of sitting idle.

  • Doug

    I think we could see total annual EV sales in the US at 1 million by 2020, or about 10% of total sales. People in my area are buying them like crazy – and solar and EVs go hand in hand. I agree with the assessment that a revolution is coming – and it does appear very difficult to stop.

    • Bob_Wallace

      There are two milestones that, when reached, could mark greater rates in EV sales.

      The first is a solid “worst case” 100 mile range. Really cold, nasty weather with the heater going full blast, heavy stop and go traffic with a lead-foot behind the wheel. No pre-warming of the car. There’s something magical about moving on to that next digit, 100 is so very much bigger than 99 in some sort of psychological sense.

      People would say “Yeah, no matter what I could drive 100 miles. And I almost never drive 100 miles.”

      The next is a solid ~180 mile highway range so that people could drive all day with only two <20 minute recharge stops.

      At that point people wouldn't feel like an ICEV had any great advantage, if any at all. Driving a gasmobile they'd stop once for fuel and once to eat. Stop twice with an EV, get a little break from the road, grab some food, walk the dog. Same-same.

      An EV with that range would be fully functional for the one car household. We hit that point with an EV a few thou under $30k and it's all over for gasoline.

  • http://jpwhitehome.wordpress.com JP White

    Isn’t it interesting that Tony Seba predicts the combination of Solar and EV’s will change the world. What makes this interesting for me is that Elon Musk agrees with him owning Tesla and Solar City.

    • agelbert

      The Aussies seem to agree as well.

      Aussies Could Switch to Renewables by 2030, at Fossil Fuel Prices 08/28/2013

      Modeling by the Australian Energy Market Operator shows sourcing 100 per cent of power from solar, wind and other clean sources would be technically viable by 2030, with the cost ranging from $219 billion to $252 billion.

      Sydney Morning Herald

      http://www.cleanedge.com/Resources/news/Aussies-Could-Switch-to-Renewables-by-2030%2C-at-Fossil-Fuel-Prices

      Please note that they are talking about ALL power, not just the electrical grid so this entails TOTAL EV transportation and trucking.
      Throw in the savings from NOT doing overhauls on giant ship diesel engines because they have, instead of internal combustion engines, electric motors and you only have aviation to transform.
      It’s going to happen because it’s cheaper as well as sane environmentally.

  • agelbert

    [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. "]

    True, unless the ideology is a scam and a con artist front pretending to be against war and immigration controls when all they really are about is greed love, regulation hate and the environment be damned to keep the profits of predatory capitalist corporations and the centralized power rapacious business model intact.

    In other words, they define the word “Liberty” to mean:
    1. Greed is good
    2. Environmental responsibility is bad.
    3. Irresponsible behavior is okay for those with money and lots of private property.
    4. Everyone else ‘deserves’ slave wages, a police state and a toxic environment.

    Libertarianism will go the way of fossil fuel industry by 2030 as well. The two are linked by a massively selfish market cornering monopoly love and conscience free attitudes.

    They represent everything destructive about the twisted view of humanity entrenched in Wall Street and Madison Avenue by followers of Freudian Social Darwinism/game theory that rejects cooperation and altruism as the most important traits necessary for species survival while it wildly distorts the importance of predation and selfish behavior in nature.

    Guilt is about to make a comeback in human affairs. Good!

    • Doug

      Libertarians were corrupted by bad leadership. The concept in principle is not flawed.

    • A Real Libertarian

      Libertarianism is actually about to make a roaring comeback, real Libertarianism that is, not this Orwellian “all power to the Capitalist” redefinition that Murray Rothbard cooked up back in the 50s. No, the Libertarianism of Emma Goldman, Peter Kropotkin and Joseph Déjacque is coming back from near death as Capitalism starts its fatal decline.

  • Kevin McKinney

    “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?”

    Maybe that was what was behind the recent Tea Party-Green solar alliance in Georgia that pushed the PUC into cracking the door for solar a bit wider open.

  • JamesWimberley

    The one thing wrong with Seba´s analysis is his local Bay patriotism in attributing the revolution to Silicon Valley. GE, Siemens, Vestas, Yingli, Trina, First Solar, and ARM aren´t headquartered anywhere near there. Tesla and NEST are, along with a lot of hopeful startups; Silicon Valley has a stake, but it´s not a critical one.

    • addicted4444

      You are missi g that a lot of the research in battery technology has come as a result of consumer computers like laptops and cell phones.

      Additionally, decentralization will require smart appliances and a lot of the brains powering those appliances will be designed in SV.

      • JamesWimberley

        Why do you think I mentioned ARM, which utterly dominates the embedded processor market? Do you think it´s in SV?

  • Senlac
  • Deep Time

    “…by 2030, solar will make the fossil fuel industry more or less redundant.”

    Redundant? How so? Did you mean “irrelevant” or “obsolete”?

    • Bob_Wallace

      When I typed Redundant into my GooBox here’s what popped up…

      “not or no longer needed or useful; superfluous.
      “an appropriate use for a redundant church”synonyms:unnecessary, not required, inessential, unessential, needless, unneeded, uncalled for”

      I think Brits commonly use redundant for “you’ve lost your job”.

      • mike_dyke

        Almost Bob – Brits use “redundant” to mean that the job you were doing doesn’t exist any more (site closure/department closure etc.) so you’re surplus to requirements.
        “You’ve lost your job” = “You’re fired” = the job still exists, but you’re not doing it.

    • bicfj

      Might you mean extinct because all the fossil fuel will be gone?
      Gone too will be the pharmaceuticals and plastics and fertilizers and chemicals that were made from fossil fuel.
      All will be wasted out the exhaust pipe.

      • agelbert

        Is this a joke? All products made from hydrocarbons can now be made cheaper from plant based carbohydrates. That includes plastics fertilizer, pesticides, pharmaceuticals, ethyl alcohols heavy to light duty lubricants and fuels.

        When did this happen? The moment crude oil went above $72 a barrel for large scale Lemna minor refineries and $82 a barrel for small scale Lemna mnor processing refineries.

        Lemna minor is duckweed, the fastest growing angiosperm on the planet (doubles its mass every 24 hours).

        Fossil fuel crude oil will never get below $82 a barrel so it has effectively priced itself out of the energy and oil products market.

        Money talks (and a healthy biosphere too!).

        Here’s the numbers:

        China-US team concludes duckweed biorefineries can be cost-competitive with petroleum-based processes

        7 March 2013

        Researchers from the US and China have determined that a duckweed biorefinery producing a range of gasoline, diesel and kerosene products can be economically competitive with petroleum-based processes, even in some cases without environmental legislation that penalizes greenhouse gas emissions.

        A paper describing their analysis of four different scenarios for duckweed biorefineries is published in the ACS journal Industrial & Engineering Chemistry Research.

        Duckweed, an aquatic plant that floats on or near the surface of still or slow-moving freshwater, is attractive as a raw material for biofuel production. It grows fast, thrives in wastewater that has no other use, does not impact the food supply and can be harvested more easily than algae and other aquatic plants. However, few studies have been done on the use of duckweed as a raw material for biofuel production.

        The team, comprising researchers from Princeton University; Peking University; Institute of Process Engineering, Chinese Academy of Sciences; and PetroChina company, investigated four different thermochemical pathways for the production of gasoline, diesel, and kerosene from gasified duckweed synthesis gas as the intermediate:

        Low-temperature and high-temperature Fischer−Tropsch processes (LTFT and HTFT) using both iron and cobalt based catalysts. Clean syngas is converted to hydrocarbons via cobalt or iron-based catalysts operating at either low or high temperature. The residue/wax produced from FT synthesis is directed to a hydrocracker, and the vapor phase C3−C22 hydrocarbons are sent for further upgrading.

        Methanol to hydrocarbons via the methanol-to-gasoline (MTG) or methanol-to-olefins (MTO) processes. The hydrocarbons are refined into the final liquid products using ZSM-5 catalytic conversion, oligomerization, alkylation, isomerization, hydrotreating, reforming, and hydrocracking.

        The team developed a process synthesis framework to select the refining pathway that will produce the liquid fuels at the lowest possible cost. The used the synthesis framework to determine the effect of refinery capacity and liquid fuel composition on the overall system cost, the refinery topological design, the process material/energy balances, and the lifecycle greenhouse gas emissions.

        The researchers used four case studies focused on two target capacities (i.e., 1,000 and 5,000 bpd) and two product compositions (i.e., unrestricted and US demand ratios of gasoline, diesel, and kerosene) to demonstrate the capability of the process synthesis framework and determine the process design that has the lowest overall cost.

        The price of crude oil for which the duckweed BTL refineries will be competitive is

        $100/bbl for the 1 kBD unrestricted study,

        $69/bbl for the 5 kBD unrestricted study,

        $105/bbl for the 1 kBD US ratio study, and

        $72/bbl for the 5 kBD US ratio study.

        An important highlight for these four studies is the strong use of methanol synthesis opposed to FT synthesis. The lack of inert production during methanol synthesis allows for the use of a large internal synthesis gas loop and less complex synthesis gas conversion design within the refinery. The methanol can be readily converted to gasoline, diesel, and kerosene using a ZSM- 5 catalyst.

        A parametric analysis on the duckweed purchase price indicates that there exists a threshold price of duckweed above which the refinery will no longer be economically competitive with crude oil refining. This threshold level for duckweed purchase depends on the desired refinery capacity and will decrease as the capacity decreases.

        If crude oil was priced around $105/bbl, then the 1 kBD refineries would be economically competitive with a duckweed purchase price of $50/dry metric ton. A reduction in the duckweed purchase price to $30/dry metric ton will make the 1 kBD duckweed refineries competitive at crude prices above $95/bbl. For the 5 kBD refineries, the process synthesis framework demonstrates the economic viability at a crude price above $72/bbl for duckweed purchase prices at $50/dry metric ton. If this purchase price was raised to $70/dry metric ton, the refineries would remain competitive at crude priced above $82/bbl.

        —Baliban et al.

        The US National Science Foundation and the Chinese Academy of Sciences provided funding for the research.

        Resources

        Richard C. Baliban, Josephine A. Elia, Christodoulos A. Floudas, Xin Xiao, Zhijian Zhang, Jie Li, Hongbin Cao, Jiong Ma, Yong Qiao, and Xuteng Hu (2013) Thermochemical Conversion of Duckweed Biomass to Gasoline, Diesel, and Jet Fuel: Process Synthesis and Global Optimization. Industrial & Engineering Chemistry Research doi: 10.1021/ie3034703

        http://www.greencarcongress.com/2013/03/duckweed-20130307.html

  • Russell

    It could happen, also “$US250/kWh by 2020″ isn’t it already at about $200/kWh for Tesla?

    http://www.greencarreports.com/news/1084682_what-goes-into-a-tesla-model-s-battery–and-what-it-may-cost

    These kind of optimistic predictions always divide people because it can be used as an excuse then not to do anything about climate change because it will be solved soon anyway. Many ways it could take longer of course too. Self driving cars will speed up the transition to electric if they happen in a reasonable time also.

    This is the kind of solar tech that could become available well before 2030 or whenever and completely wipe the floor with everything else

    http://spectrum.ieee.org/nanoclast/semiconductors/nanotechnology/nanoantenna-arrays-may-yield-ultraefficient-solar-devices

    However there will always be some demand for seasonal storage or longer term storage than can’t be supplied by batteries I think, especially if you are near the arctic circle. Not so sure what would happen there, I can’t see Russia stopping using their gas especially if it is worth practically nothing to everyone else but still quite useful to them in the winter.

    • agelbert

      It all comes down to cost. When proper, subsidy free, cost accounting of fossil fuels is compared (including environmental bioremediation costs) with renewable energy technologies, it is clear that fossil fuels have never been competitive with renewable energy from the start!

Back to Top ↑