Climate scientists in government and universities run simulations of future climate that show a very sobering piece of arithmetic. If we are to avoid tipping the planet over the widely accepted danger threshold of 450 parts per million of atmospheric carbon dioxide, we can only afford to burn fossil fuels in a quantity measured in low hundreds of billions of tonnes of carbon. However, coal resources are measured in thousands of billions of tonnes, according to the energy industry. It is clear that the great majority of remaining coal has to stay in the ground if we are to avoid climate catastrophe. Technologies for mass capture and storage of carbon dioxide from coal-burning power plants are more than a decade away from production and deployment on the scale we would need to countenance anything but deep cuts in burning. So we have to retreat from coal, unless we want to gamble that climate scientists have got their dire warnings wrong.
Meanwhile, there are problems of a different kind with oil and gas. Proponents of an imminent peak in oil production, like me, argue that there is much less oil and gas available than is generally assumed, and that, as a consequence, a global energy crisis is just around the corner. As big a problem as a global energy crisis would be, oil and gas are not as material to global warming as coal, should we ‘early peakers’ prove correct.
The collective human challenge is to keep coal in the ground, while digging our way out of the global energy crisis teed up by our unrealistic optimism about oil and gas resources. To do this, we need to fast-track the clean-energy family. We need to mobilise them as though for war, and to innovate as fast as we can while doing so.
I believe the day we begin seriously mobilising is not far off. I think it will happen when the shortfall of oil and gas supply against general expectation becomes clear to a critical mass of people. Watching the Middle East and Russia begin keeping their oil and gas to develop their own economies – turning the export taps off, often quite literally – will have a galvanising effect on the search for alternatives.
How might we fare thereafter? I firmly believe that renewables and energy efficiency can replace coal completely within the few decades it needs to head off the worst impacts of global warming. They can’t head off the energy crisis, but then no combination of energy technologies can do that, given how late we have left it. I do not have the space here to defend my argument about the p ower of renewables to run the world. But let me make a concise case for the role of one member of the family, solar photovoltaics (PV), in the future, and the importance of innovation in that role.
The PV business is one of the fastest-growing global industries today. Over the last two years many billions of investment dollars have flowed into it. I witness this close to, both in my day job in British solar company Solarcentury, and also because I serve as a director of the first private equity fund in the world set up to invest in solar. This surge of investment exists because innovation is flowering in the labs of the solar companies. Much of it has to do with cost reduction. Manufacturing costs of solar cells are coming down at nearly 20% every time the global industry doubles in capacity, and at present that is happening every two years. Solar PV manufacturing costs are in fact cheaper today than retail electricity in some markets, and by 2010 will be lower than today’s electricity price in most developed-country markets. Meanwhile, of course, the price of polluting electricity is on the way up. As a result, the trend lines of installed price for solar electricity and the retail electricity price will cross over within a few years in most places in the world. At that point, a mass market for solar will emerge. People will be amazed at how rapidly solar and its sister low-carbon technologies can invade traditional energy markets at that point. The sister technologies to solar are taking off too, and they will include storage technologies and, via plug-in hybrids, transport technologies.
The long-term future can be bright, after we weather the now inevitable global energy crisis. However, the jury is very much out on whether we are collectively smart enough to navigate our way to this bright future. Much will depend on how innovative the clean-energy industries like solar are, going forward, and how well they design and market products. We need to show people credibly that there is light at the end of the tunnel. The UK is well known for design, innovation and marketing. We can – in principle – play a big role in triggering the global-warming survival reflex, and the renaissance beyond the coming energy crisis.