I don’t remember exactly how old I was, but I remember the day vividly. My family bought a 28” color TV to replace our old 24” black and white one that sat prominently at the front of our living room. Our new TV was an impressive piece of glass with an almost square screen. I specifically remember my dad telling me, “this is the last tube television we would ever buy.” This is because “soon” all TVs would have flat screens.
Every year for the next 20 years, I heard that “soon” flat screens would be in every living room. Then, suddenly, it happened. Christmas season came and we were bombarded with ads for cheap flat screens. Suddenly, you couldn’t find a tube TV anywhere; RIP Sony Trinitron.
Cost ultimately drives any technology transition, regardless of how much people may “want” the new, new thing. All technology develops on an “S” curve. As we traverse the “S” curve, the cost get cheaper “slowly” and then “all of the sudden”. We experience a tipping point when the resultant costs get cheap enough. That tipping point is here for renewable energy.
Suddenly, renewables–solar, wind, and storage–are the cheapest energy available. Clean energy will now be the only power we put on the grid. But what about all the power generation infrastructure already in place that currently relies on carbon-based power – Coal Plants, Gas Plants, Transmission, etc.?? With the economics so strongly in favor of renewables, there will be relentless pressure to retire older sources and upgrade the transmission grid to accommodate the distribution and management of renewable power sources.
A lot of people think that without government subsidies, renewable energy is more expensive. It’s not true. Even without subsidies, renewables are cheaper. The US Energy Information Administration (EIA) calculates that Solar and Wind are more than 25% cheaper than gas and coal without subsidies. That’s thanks to years and years of continuous innovation, and we owe the green energy sector our gratitude.
Subsidies are needed to help with the upfront costs of deploying new capacity. Current clean energy subsidies come in the form of incentives for capital costs. In decades past, similar subsidies were provided to encourage investment in infrastructure for Coal and Gas to ensure we had enough electricity every time we flipped a switch. To speed the transition to cheaper, cleaner energy, it makes good economic sense to subsidize the capital costs required to support renewables. Our current infrastructure (power plants and transmission lines) is aging and requires significant investment regardless of our transition to clean energy. Investing in new renewable power generation makes a lot more sense than propping up the old now more expensive technology. Targeted subsidies can help overcome the inertia of our current system and counter incumbent vested interests.
The last piece of the renewable puzzle is long-duration energy storage; technology that can store the excess power generated when the sun is shining and use it when it is not. Long duration storage – batteries, pumped hydro, and other technologies – have become commercially viable and available. The cost of storage is included in the EIA calculations that confirm the cost advantages of renewables.
We are now at the tipping point for renewable energy. Just like we no longer watch TV through a cathode ray tube, we will soon, suddenly, find ourselves flipping the light switch and not have a carbon-generated watt on the line.