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It seems like good news is difficult to come by in the U.S. these days, what with democracy on the verge of crumbling and the last big chance to address climate change held in the fickle and ill-informed hands of the Senate’s most conservative Democrat, who lives on a yacht and literally makes money off of coal plants.
As it happens, I have a stash of good news I’ve been holding in reserve — a guest I’ve been meaning to talk to forever but have been treating like a break-glass-in-case-of-emergency thing. I felt grim enough last week that I finally called him up.
His name is Bond. Kingsmill Bond. (Sorry, had to do it.) He’s an energy strategist at the think tank Carbon Tracker, where he arrived after decades of doing market analysis and strategy for big financial institutions like Deutsche Bank and Citibank.
Bond’s experience and research have led him to the conclusion that the shift to clean energy has become unstoppable and that it will be the dominant force shaping financial markets and geopolitics in the 21st century. He argues that we are on the front end of a massive, precipitous wave of change to rival the Industrial Revolution — one that will unfold even if policy support is weak and erratic, purely on the strengths of economics and innovation.
There are no fundamental limits to the spread of zero-carbon energy. There’s more than enough renewable energy, accessible with today’s technology, to supply the world’s energy needs.
Not only do we know how to get there, it is where we are headed, based on current market and technology trends. The key to succeeding on climate change is simply accelerating what is already underway, pushing a rolling boulder a little faster.
Like I said, I’m in need of good news like this, so I was excited to talk to Bond about the inevitability of a 100 percent clean-energy system.
Here’s an excerpt from our conversation, condensed and lightly edited.
David Roberts: Kingsmill Bond, welcome. I’ve been wanting to talk to you forever, but I thought I would wait and hold you in reserve until I was feeling really down.
I’ve been following you for years, and you’ve been a reliable source of good news. You recently published an article arguing that we need to flip our story and update our mental model of climate mitigation. It’s not about pain, about how to distribute extra costs and who will be the most altruistic. It’s about gain, about which countries will benefit most and fastest from the tapping of almost limitless new markets and opportunities for growth.
Before we dive into the specifics, give me an elevator-pitch version of why people confronting the daunting task of addressing climate change should feel better than they generally do.
Kingsmill Bond: I think the point here is that we have got this new enormous, cheap energy resource in solar and wind that we’ve unlocked with technology, and we’re just starting to be able to apply it, and as we apply it, it gets cheaper because it’s on learning curves.
Roberts: You single out four different technologies that are on steep learning curves that, if we just project out continuing, are all kinds of good news. So tell us what those technologies are and what the curves look like right now.
Bond: The four technologies which are on established learning curves are solar PV, wind, battery storage and electrolyzers to convert electricity into hydrogen. A recent paper by Oxford University found that their costs have dropped for every doubling in deployment between 16 percent and 34 percent, which was already known — but the additional point that’s made by this paper is that when technologies get onto learning curves, they tend to stay on them for very long periods.
When you’re trying to project the future costs of these technologies, the most logical assumption is that those learning curves will continue, and this is extremely significant because if you assume that growth continues, then these technologies will get incredibly cheap.
Actually, this is kind of an academic debate because we’re already getting solar PV being produced between $10 and $20 per megawatt-hour in certain favored locations, so it is, in fact, already incredibly cheap. But the point is that this cheap energy source is going to get cheaper and bigger and spread globally. And when it’s followed up by these other technologies that are also on learning curves, it will provide us with the energy that we need at much lower cost.
Roberts: The electrolyzer seemed like the newest of those four. How confident are we in that particular learning curve? What’s the state of our electrolyzer knowledge?
Bond: In the paper, the team looked at about 500 or 600 different technologies over long periods and noted that very few of them get onto learning curves. And yes, the electrolyzer data set is shorter, but it still goes back a couple of decades. From their analysis, it seems to be already exhibiting the same learning characteristics that we’ve witnessed in some of the batteries.
What’s special about this technology is that it’s granular and discrete. That is to say, you can have very small pieces of equipment, and they’re easily replicated and can be built at any size. People are innovating, and we see huge amounts of capital flowing into hydrogen strategies.
Roberts: Let’s tackle intermittency because I think it’s a No. 1 mental block that people have about this stuff. The conventional wisdom is that the closer you get to variable energy providing the majority of your energy, the higher the cost of that variability and the more difficult it is to address. How confident are you that the gap from 80 percent to 100 percent is bridgeable at a reasonable cost?
Bond: This is an absolutely academic debate. Today, solar and wind are 10 percent of the global electricity supply, and, therefore, to worry in 2021 about how we go from 80 percent to 100 percent? It’s like sending my daughter to kindergarten, aged 5, and worrying about how she’s going to pass a university math final. She’s going to have to get there eventually, but there’s an awfully long way between now and then.
There are certain countries and regions which today have penetration of variable renewables of over 50 percent, most notably Denmark, South Australia, northern Germany and, as in the case of California, are aspiring to 100 percent renewable energy systems. What’s been notable throughout this debate for the last 20 years is that the ceiling of the possible is constantly rising.
If you go back to debates held about 20 years ago, you’ll see these very fancy letters from the Irish and German grid operators saying that variable renewables can never be more than 2 percent of the capacity for all sorts of technical reasons, but actually what’s happened continuously is that people have come up with new solutions, be they demand-side management or supply-side management or batteries or interconnectors or better software or digitalization or smart meters and so forth.
The point we really want to make is that that ceiling is a rising ceiling.
Roberts: This depends on cost curves continuing. You can look at history and say cost curves tend to continue once they start, but then there’s all sorts of stories about things that might impede or slow these cost curves: materials shortages, lithium becoming problematic, mining becoming more problematic, supply-chain problems, space constraints, NIMBYs who want to stop construction.
Bond: If I can answer this very specific question about mineral shortage — it’s an absolutely bogus problem. People will say you need, for example, 200 kilograms extra of minerals in order to have an electric vehicle, much more than an ICE [internal combustion engine] car, and that sounds quite scary. Actually, an average ICE car uses 15,000 kilograms of oil over its lifetime, and those 200 kilograms extra you require of minerals by definition can be recycled, while fossil fuels, obviously, you burn them once and you never use them again.
There is enough lithium, for example, in known reserves today to be able to satisfy over a century of current demand. There’s enough cobalt in the world for 1,000 million cars. As demand increases, prices go up, people build new mines and reserves increase. These are absolutely fake problems.
Roberts: This new Oxford paper, is it really the first model that projected cost curves simply continuing in the shape that they currently exhibit? I know that the modelers have gotten these cost projections so wrong in such a consistent way over and over again for I guess 20 years now, since the early 2000s. What do we make of this? What’s going on there?
Bond: You’re right, it’s absolutely shocking. And it’s not just the IEA [International Energy Agency] but it’s almost all modeling…
Roberts: It’s almost universal in the field.
Bond: One reason why incumbent models have been so reluctant to incorporate these learning curves is that so many of them are, in fact, made by fossil fuel incumbents. There’s no incentive if you’re working for Exxon or Shell for you to say that battery costs might fall a little bit faster than we think, and EV growth might be a lot faster than we think, and therefore maybe I might not have a job. I mean, people don’t forecast that stuff.
Roberts: The other area that people tend to cite as a limit are these so-called “difficult-to-abate” sectors: heavy transportation; industrial processes like steel and concrete. Is the story the same? Is clean energy going to get so cheap that it’s just going to bulldoze through those problems?
Bond: It’s been a very lively debate, and the argument people make is, “Well, you can’t get renewable energy into airplanes and cement and steel and shipping, and therefore, there will be no energy transition.”
There are two problems with this argument. The first is that this is the final area that needs to be solved. This is a very long-term problem, which we will need to solve, but there’s quite a long way in the future before we actually have to solve it.
For example, the steel sector three years ago seemed to be a completely impossible hard-to-abate sector. Now you have people like Andrew Forrest in Australia talking about taking his iron ore, putting up solar panels and wind turbines in the Australian desert, using that to create hydrogen, using the hydrogen to make steel out of the iron ore, and then shipping that steel all around the world.
In the same way, the shipping industry is now talking about using ammonia as a shipping fuel, which is basically a hydrogen-based solution. This is why we’re so excited about electrolyzers being on cost curves.
Ultimately, the way that we — humanity — are going to solve this problem is we’re going to decarbonize electricity. We have solutions where we can electrify whenever we can, and new solutions materialize every day, and for the stuff that we can’t, we’ll use some variant of hydrogen. I think very clearly that that’s becoming the answer.
When hydrogen also gets onto cost curves and people are starting to think about how to put hydrogen into steel and shipping and airlines and so forth, you can see the contours of the new world that will emerge.
Roberts: I want to bring it back to one concrete point for my U.S. listeners, something for them to take away from this: Biden’s goals to decarbonize electricity by 2035 and for the U.S. to be at net-zero carbon by 2050 — do you think those are within reach, given the amount of policy that’s likely to be devoted to them?
Bond: I think that if they’re not achieved, the U.S. will be buried by China. It’s as simple as that. If the U.S. wants to continue to be a serious player in the modern world and wants to remain a superpower, then it has to embrace superior, cheaper technologies.
Over the last decade, China has leapt ahead and is dominating all of these new technologies. How can that be when the U.S. has got all of that incredible industrial, intellectual base? If the United States wishes to remain a serious player, then it has to do it. If not, then like the U.K. before it, it will kind of descend into irrelevance.
The cost of transition, just in purely financial terms, is cheaper than the cost of business as usual, and as many others have pointed out, technically all of this stuff is completely feasible. But you do need very powerful political action to break through the logjams of the incumbents and the inertia of the current system. I salute Biden and his team because that seems to be exactly what they are trying to do.
Roberts: All right, that sounds like a great place to wrap up. Thanks for taking all this time and for cheering me up. It seems pretty clear to me that you’re making bold, short-term predictions. Maybe in a decade we can do another podcast and check your numbers.