Is Spain's day in the sun dawning?

A solar tower plant outside Seville. Credit: Denis Doyle / Getty

Energy Forecasting Renewable energy UnPacked

Peter Franklin

January 10, 2019 3 mins

The ‘technological singularity’ is the idea that as computers get smarter they’ll reach a tipping point at which they become smart enough to design smarter versions of themselves. The smarter versions will in turn design even smarter versions and so on and so forth. The godlike artificial intelligence that emerges from this self-sustaining process will then proceed to obliterate us, ignore us or solve all our problems as the fancy takes it.

Anyway, that’s the theory, about which I have my doubts – for reasons I’ve explained before.

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However, the general sense in which ‘singularity’ is used here is a useful one. Sometimes a technology reaches a tipping point not only in its own development, but in the development of everything around it – i.e. it doesn’t just ‘go mainstream’ it redefines the mainstream.

On LinkedIn, Michael Liebreich envisages what he calls the ‘solar singularity’ – a credible scenario in which solar photovoltaic technology doesn’t just find its place in the ‘energy mix’, but basically takes over – rewriting the rules not just of energy economics, but of all economic activity that depends on energy (i.e. ultimately everything):

“Most ‘sensible’ forecasts suggest solar meeting 10% (IEA NPS) to 25% (BNEF NEO) of current forecast global power demand by 2050. But it is entirely possible to imagine scenarios in which sustained growth delivers multiples of that, with cheap solar driving accelerated electrification.”

What makes him think that solar could so spectacularly exceed the sensible forecasts?

For a start, there’s solar’s performance to date – “since the year 2000, solar PV has delivered eight ‘doublings’ [in capacity]”. Granted, that’s from a low base, but each doubling has produced big advances in affordability. Solar’s ‘experience curve’ – i.e. the reduction in costs with every doubling of capacity – is a “fearsome 24-28%”.

Liebreich argues that we will see further cost reductions:

“Assuming the capital markets continue to deliver cheap money, my bet is that we will see record unsubsidised solar power prices – somewhere in the world – hit 1c/kWh by 2030… The current world record unsubsidised solar power price (from Mexico) is 1.97 c/kWh – so prices only have to halve once more, after falling 99.8% in the past 42 years to cut the record price to 1c/kWh. Of course the median price would remain higher, say 2-3 c/kWh, down from the current 4-6 c/kWh.”

The competitive economics of solar (and wind) are already disrupting the energy sector – further improvements in affordability will mean that the expansion of renewables will be driven by cost alone, irrespective of environmental policy. Indeed, it’s new coal and nuclear capacity that needs the subsidies now.

As for the intermittency of the wind and sunshine, remember that all forms of power generation need backing up. Furthermore, the increasingly competitive construction costs (and zero fuel costs) of renewables are driving investment not only in generation but also storage. (And mass-manufactured, modular storage technologies like batteries are subject to much the same downward pressures on cost as are solar panels.)

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With the roll-out of any game-changing technology there are uncertainties. But compared to the huge, one-off, time-consuming investments involved in the building of a new nuclear power station or coal plant, the deployment of new renewable capacity is modular, flexible and has a short turnaround time – meaning that the risks, from a commercial point of view, are manageable.

Therefore, expect to see the disciplines of the market-place drive investment into the ongoing expansion and improvement of clean energy, not just the promises of policy-makers.

For all of these reasons and others, I think that Michael Liebriech is right to explore the possibility of a solar singularity in which the global economy reorganises around the availability of the least polluting and most affordable sources of energy:

“You would… need to see energy-intensive industries shift around the world to take advantage of cheap solar power. Imagine the demand for solar power if most heavy manufacturing were to move to the sunbelt.”

For instance, Spain, with its vast, sunbaked and largely uninhabited interior (and geographical proximity to Western European markets) would be well-placed to benefit from a solar-driven manufacturing revolution. A shift in Europe’s industrial heartland from Germany to the Mediterranean would upset a lot of apfel carts – but when the economics of energy undergo a fundamental change, many other things are bound to change with it.