X-Change: Electricity

On track for net zero

Please see attached our latest report on the implications of continued exponential change in the electricity sector. Replies to this Substack email come directly to me, and all feedback is welcome.

Below is a summary of the report:

Solar and wind generation are on an exponential growth path which will lead to disruption of the global electricity sector this decade, but not to 1.5°C — that requires faster change. 

What is the X-change? The X-change isolates and models exponential growth and assumes the rest of the system is forced to adjust. Its conclusions are very different from the orthodox approach, which focuses on barriers, models linear change, and has been consistently wrong. 

The past has been exponential. Solar, wind, and batteries have been following a typical path for new technology. Learning curves led to falling prices, which led to rapid growth in new capacity, which led to change in the generation mix on an S-curve. 

Powerful change drivers are still in place. Learning curves, superior economics, energy security, geopolitical competition, efficiency, climate necessity, and local pollution remain a powerful combination for change. Solar, the cheapest energy source in history, will halve in price by 2030. 

Leading indicators signal continuity. New solar and battery capacity, policy targets, the momentum of change, short-term deployment forecasts, and the logic of S-curves all point to continued exponential growth in solar and wind generation for the rest of this decade at 15–20% a year. 

Solutions are bigger than barriers. There is a conundrum at the heart of renewable growth: Barriers are everywhere, but growth keeps happening. The reason is that barriers are specific and local, but solutions are generic and global, hence likely to overwhelm resistance to change. 

Change is fast or faster. Linear change is no longer credible. Change to the electricity system will take place either fast (on a typical technology S-curve) or faster (continued exponential growth). 

Solar and wind power will grow by 3–4 times by 2030. Fast growth will lead to a tripling in solar and wind generation by 2030 while faster growth will mean a quadrupling in generation, to produce more than 14,000 terawatt hours (TWh) and overtake fossil fuel supply. 

The fossil fuel era is over. Fossil fuel demand in electricity has reached a peak at around 18,000 TWh, will plateau for a few years, and will fall by between 16% and 30% by the end of this decade. 

We have agency. In the same way as Moore’s Law required constant innovation and action to stay on track, so we have to work hard to stay on the exponential path. We need to build out grids, change permitting laws, scale up flexibility solutions, improve regulatory and market systems, and speed up deployment in the Global South. 

There is always room to go faster. We are on the path to net zero by 2050 but we are not on the path to limit warming to 1.5°C. Each death induced from fossil fuel air pollution matters, each dollar spent on importing expensive fossil fuels has an opportunity cost, and each fraction of a degree is a threat multiplier. In this context, there is no such thing as "fast enough." Speed is justice. 

We can do it right this time. Renewable energy is distributed, clean, and universal. Falling costs unlock renewables globally and are a superior tool for more equitable economic development. We need to ensure good mining practices, circularity, and integrative design to fully capture the benefits of the renewables revolution. Most importantly, we can use energy more efficiently and timely, mix optimally with renewables, and displace even more fossil fuel sooner.