By Robert Bryce, National Review Online
“the incredible recent decline in the cost of renewable energy, solar power in particular.” He used to dismiss the claim that renewable energy would be a major source of global energy “as hippie-dippy wishful thinking.” But now, he says, thanks to the falling price of renewable energy, the process of decarbonization can be accelerated and “drastic cuts in greenhouse gas emissions are now within fairly easy reach.”
Solar is getting cheaper. And solar capacity is growing rapidly. But Krugman is still wrong. Solar won’t result in “drastic cuts” in greenhouse-gas emissions for two simple reasons: scale and cost.
Austin Energy paid two-thirds of the cost of my $23,000 system, and those panels now provide about 30 percent of the electricity my family and I consume. I will also gladly stipulate that Krugman is right about the plummeting cost of solar. In 1980, the average global cost of a solar photovoltaic module (which converts sunlight into electricity) was about $23 per watt.
Today, it’s less than $1 per watt. Those falling costs are helping accelerate solar deployment. Between 2007 and 2012, according to BP, global solar capacity grew ten-fold and now stands at about 100,000 megawatts.
But that torrid growth doesn’t spell the end of hydrocarbons. Even if we forget the incurable intermittency of solar energy — which requires grid operators to have stand-by conventional generation capacity (from natural gas, coal, or nuclear) available for periods when the sun isn’t shining — the reason why cheaper solar panels won’t lead to major cuts in global carbon dioxide emissions is that solar’s contribution remains infinitesimally small.
Between 2007 and 2012, the same period during which solar capacity grew tenfold, global coal consumption rose by the equivalent of more than 10 million barrels of oil per day. Meanwhile, in 2012, the contribution of global solar production was equivalent to roughly 400,000 barrels of oil a day. Put another way, over the past half decade or so, just the growth in coal use is equal to about 25 times the contribution now being made by all of the world’s solar projects. And the coal-fired power plants that have been built over the past few years are likely to run for decades.
Why is coal use soaring around the world? Because demand for electricity is soaring. Since 1985, global electricity production has been growing by an average of about 450 terawatt-hours per year. The International Energy Agency expects global electricity use to continue growing by about that same amount every year through 2035.
Germany has more installed solar-energy capacity that any other country, with about 33,000 megawatts of installed photovoltaic panels. In 2012, those panels produced 28 terawatt-hours of electricity. Just to keep pace with the growth in global electricity demand by using solar energy alone would require installing 16 times as much photovoltaic capacity as all of Germany’s existing capacity — every year.
Despite the math, Krugman has been hyping solar for years. Back in 2011, Krugman claimed that we are
“on the cusp of an energy transformation driven by the rapidly falling cost of solar power.”
Sure, the costs of solar are falling, but it still remains far more expensive than coal, natural gas, or nuclear. Last week, the Energy Information Administration released its latest estimates for the cost of new electricity-generation capacity. By 2019, the agency projects, the cost of one megawatt-hour of electricity produced from solar photovoltaics will be $130. The same amount of electricity produced from natural gas will cost about half as much, $66, while a megawatt-hour of energy produced from a conventional coal-fired plant will cost $96. Nuclear, at $96 per megawatt-hour, will also remain less expensive than solar.
To bolster his claim that solar can save the world from global warming, Krugman cites the latest report from the Intergovernmental Panel on Climate Change, saying that the new document “asserts that the economic impact” of drastically overhauling our energy and power systems would “be surprisingly small” and would “basically amount to a rounding error, around 0.06 percent per year.” But Krugman neglects to mention the outlandish assumptions the IPCC made in making its cost estimate. Those assumptions: “All of the countries of the world begin mitigation immediately, there is a single global carbon price, and all key technologies are available.”
A single global carbon price? If there’s one clear message from the last decade or so of climate-change meetings in places like Copenhagen, Bonn, Durbin, and elsewhere, it’s this: The countries of the world will not agree to a carbon tax. Hell, we can’t even get universal agreement to ban land mines, and yet the IPCC is making cost projections based on a universal price on carbon! If Krugman and the IPCC scientists think that the transition to an economy based on renewable energy will be cheap, they haven’t been paying attention to what’s happening in Europe.
In Spain, subsidies for renewables have resulted in some $35 billion in governmental debt that must now be retired. Since 2000, Germany alone has spent about $100 billion on renewable energy, and Germany’s environment minister recently estimated that the country may have to spend as much as $1.3 trillion over the next 25 years as it attempts to reach its targets of producing 35 percent of its electricity from renewables by 2020 and 80 percent by 2050.
Krugman may not want to admit it, but here’s the truth: For all of its merits and rapidly declining cost, solar energy cannot even keep pace with the growth in global electricity demand, much less replace significant amounts of hydrocarbons or allow “drastic cuts” in carbon dioxide emissions.
Climate change is among the most difficult issues of our time. If we are going to be serious about it addressing it, we have to be serious about the low-carbon sources that can provide the vast quantities of energy that the world demands at prices consumers can afford. Yes, solar will play a role in the years ahead. But the fuels of the future are N2N: natural gas to nuclear.
— Robert Bryce is a senior fellow at the Manhattan Institute. His fifth book, Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong, will be published May 13.