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We are in the midst of the most profound disruption of the energy sector in over a century

Like most disruptions, this one is being driven by the convergence of several improving technologies: solar photovoltaics, wind power, and electro-chemical batteries and the resulting superabundance of energy they create, which we call SWB Superpower.

By 2030, solar, wind and battery installations will disrupt our conventional energy systems

Why? The combined cost of solar, wind and batteries fell over 80% between 2010 and 2020.

It will decline over 70% from 2020 to 2030—signaling the disruption of our current energy systems.

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This disruption will lead to superabundant, near-zero marginal cost energy for all.

We call this SWB Superpower.

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The disruption of energy

The disruption of the energy sector will be driven by solar photovoltaics, onshore wind power and lithium-ion batteries (SWB).

These already outcompete conventional power generation and will displace fossil fuels and conventional nuclear power during the 2020s. These cost improvements are consistent and predictable, and each of the technologies will continue to progress throughout the 2020s.

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Race to the top

Near-zero marginal cost and superabundant energy will enable any nation or first mover to create an upward spiral of prosperity.

First movers who implement SWB superpower will be able to remove the costs of electricity for their populations, creating great social benefit. Any nation could be the first to reap these incredible rewards. It is a race to the top.

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Witness the transformation

The economics of energy, currently based on expensive and scarce resources will soon resemble information economics, with superabundant kilowatt hours approaching the marginal cost of photons: zero.

As our electric power system are flipped from centralized, scarce and expensive resources to decentralized, superabundant and cheap resources, the ripple effects across our economies and societies will be even bigger than the disruption of energy itself...

Energy In Depth

Explore these topics to learn more about the Disruption of Energy

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Rethinking Energy 2020-2030: 100% Solar, Wind and Batteries is Just the Beginning (2020)

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Energy Reports

ENERGY REPORT

Rethinking Energy 2020-2030

In Rethinking Energy 2020-2030 (published 2020) our analysis shows that 100% clean electricity from the combination of solar, wind and batteries (SWB) is physically possible and economically affordable across the entire continental United States as well as across most populated regions of the world by 2030.

Solar and wind are already the cheapest new generation options, and cost less than existing coal, gas and nuclear power plants in many areas.

The cost of SWB systems will decline over 70% from 2020 to 2030, making disruption inevitable. Electricity from a 100% SWB system in 2030 will cost less than 3 cents per kilowatt-hour.

New investments in coal, gas or nuclear power are financially unviable.

Coal, gas and nuclear power assets will become stranded during the 2020s, and no new investment in these technologies is rational from this point forward.

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STRANDED ASSETS ENERGY REPORT

Rethinking Energy: The Great Stranding

In our Rethinking Energy: The Great Stranding report (published 2021), we explain how a large and rapidly expanding global financial bubble now exists around conventional coal, gas, nuclear and hydropower energy assets.

Conventional energy assets are severely mispriced, and their overvaluation is creating a growing asset valuation bubble in the conventional energy sector.

Coal, gas, nuclear and hydropower are no longer competitive with the combination of SWB, even using inaccurate mainstream levelized cost of energy (LCOE) calculations.

Solar and wind power reached cost parity and became cheaper than coal, gas, nuclear and hydropower several years sooner than mainstream analysts reported.

The widening gap between increasing conventional energy LCOE and decreasing SWB costs means that the SWB disruption will proceed faster than expected.

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REGIONAL ENERGY PRIMER

Rethinking Energy: Germany's Path to 'Freedom Energy' by 2030

In our Policy Primer for German Energy Sector & Decision Makers (published 2022) we discuss how Germany is facing an unprecedented energy supply crisis as it rethinks dependence on Russian oil and gas imports. But this crisis also poses a unique opportunity...

Within the next decade, Germany can lead the world by creating a fully self-sufficient, zero-cost, clean energy system for less than the country’s current annual fossil fuel spending.

Germany could lay the foundations for a bold new era of long-term energy security and economic prosperity unlike anything seen before.

Our research shows that many different combinations of solar power, wind power and batteries can meet 100% of Germany’s roughly 500 terawatt-hours of electricity demand.

The key to meeting the current challenge is to fully understand technology disruption, its geopolitical implications and its race-to-the-top consequences.

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“Just as the Internet disrupted many incumbent industries but facilitated the emergence of many more—and created trillions of dollars of new value—by reducing the marginal cost of information to near zero, the SWB disruption will have a similar impact by reducing the marginal cost of energy to near-zero for a substantial portion of the year.”
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Energy News

Frequently asked questions

Is it impossible to have a 100% renewable grid, because it is too inefficient to build solar, wind or battery capacity that we only use for a small fraction of the time?
No. Our research has shown that 100% SWB-based energy systems are not only feasible, they are also by far the most affordable energy systems going forward.

Since publishing our landmark findings in 2020, many other research teams around the world have reached similar conclusions, that 100% SWB based systems are possible, and are by far the most affordable energy system for our future.

Beyond the findings of our core analysis, it is also worth recognizing that the critique of solar and wind power on the basis of their utilization rate has never been valid. The validity of investments in energy assets, like any other asset class, are determined by their economic value, not by arbitrary standards of physical efficiency. If a low utilization rate invalidated the use of an energy asset, that would apply to conventional technologies as well as SWB—and we already have hundreds of billions of dollars in conventional generating assets that are only utilized a small fraction of the time.

For example, California already only uses its full electric power generating capacity about 50% of the time. 'Peakers', or power plants that are only used during periods of peak demand, are typically utilized less than 10% of the time, yet the low utilization rate of gas-powered peakers did not prevent society from investing in them.

Moreover, virtually all regions worldwide require by law that power plant utilities maintain a significant 'operating reserve', meaning a legally-mandated excess of capacity, just in case there is unexpectedly more demand than ever before. Some of this operating reserve is required to be 'spinning reserve' (i.e. the generators are actively spinning) which can be deployed near-instantly if needed. A portion of power plant (typically gas) hours are dedicated to providing spinning reserves, meaning that they literally sit there burning fuel just in case it is ever needed on a moment’s notice! So, in addition to a low utilization rate, spinning reserves based on fossil fuels are also very costly and wasteful—unlike equivalent reserves of SWB which do not burn fuels when in standby mode.

Read the full answer here
Myth: Solar, wind and batteries cannot support the entire global population.
False. 100% SWB is possible in every region on earth that has access to sunshine or wind resources and is willing to invest in the infrastructure needed to harvest and store it. This includes the high-latitude regions.

In the past, global advantages in energy production lay with the regions that have natural endowments of fossil fuels, and the distribution of these resources is starkly uneven. In the future, however, the energy advantage will tend to lie with the tropical and equatorial regions with the most abundant sunshine. More importantly, no single region will possess an overwhelming energy advantage or disadvantage, because unlike fossil fuels sunshine and wind are everywhere.

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Myth: It is impossible to build enough battery storage to power our civilization with clean energy.
False. Our previous research has shown that long-term seasonal energy storage is not required in order to meet 100% of existing electricity demand.

Our current research confirms that weeks or months of energy storage is not a requirement for the electrification of transportation and heating. Most geographic regions need only a few days' worth of battery energy storage.

Several days' worth of energy storage for the entire planet is still an extremely large quantity of batteries, but it is well within the range of what is feasible to produce over the next two decades as the disruptions proceed. Once the batteries are produced, their stock can largely be recycled over time. This means the raw materials requirement for battery stock will exhibit a large one-time pulse during the initial build out, followed by a much lower requirement for ongoing upkeep.

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Does the scarcity of raw materials needed to make lithium-ion batteries mean that we won’t be able to build enough batteries for our energy demands?
No. There is no fundamental shortage of raw materials. Lithium, cobalt, manganese, nickel and other metals are relatively abundant on the Earth's crust. History shows that there are virtually no examples where supply failed to meet demand.

The highest-quality ores are of course finite, but mining can target lower-quality ores as economic incentives necessitate.

Proven reserves (commonly cited as the limiting quantity) only reflect exploration and production to date. Actual materials in place are vastly larger, and recoverability depends on technological and economic factors—both of which change dramatically in favor of production when demand creates the necessary incentive.

There are no historical examples of supply failing to meet demand for materials that are not scarce. Gold, platinum, and gemstones are fundamentally scarce in a way that the metal ingredients in lithium-ion batteries are not. Cobalt, for example, is at least 10,000 times more abundant than gold, but only 50 times more cobalt is produced each year (about 123,000 tonnes) than gold (about 3,200 tonnes) at present.

Temporary supply shortages around material bottlenecks do occur. These shortages spark additional investment in exploration and production whenever market demand signals that additional supply is needed.

Grid storage applications don’t require high-performance lithium-ion batteries, and can instead use types of batteries that use only abundant materials. There are six major lithium-ion battery chemistries in commercial production today; lithium cobalt oxide, lithium manganese oxide, lithium iron phosphate, lithium nickel manganese cobalt oxide, lithium nickel cobalt aluminium oxide and lithium titanate. Lithium itself actually comprises only a small fraction of the battery’s mass–typically less than 5%. Cobalt, manganese, and nickel types are the highest-performance chemistries at the moment, and these are also the least-abundant metals. Iron, phosphorus, aluminum and titanium are abundant. 

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Can we build batteries fast enough to maintain exponential growth of renewables and EVs?
Yes. Battery supply will be the limiting factor to deployment of renewables and EVs. However, the demand from these sectors will create massive incentive to ramp up battery supply.

Tesla decided to build the first gigafactory when it realized there wasn’t enough global capacity to meet their own demand for batteries. Since starting Gigafactory 1 in Nevada in 2016, dozens of other major factories have been built, and more are in the pipeline. The planned capacity for battery production is approaching the TWh/year scale.

Battery supply will be the limiting factor, or bottleneck, for the deployment of renewables and EVs. But by the same token, the enormous demand from those sectors will create massive incentives to ramp up battery supply. This bottleneck will therefore constrain but not prevent the disruption.

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Myth: Switching to clean technologies will be expensive, and the cost of converting to an electrified civilization is more than the cost of maintaining the current system.
False. Switching to clean technologies will save money.

The reason why disruptions happen in the first place is because the new technologies outperform the older ones in terms of cost and capability, and therefore outcompete them on a purely economic basis. (Watch this video to learn more about Disruptions from Adam Dorr, Director of Research at RethinkX)

Disruptions would not occur if the new technologies were not overwhelmingly cost-competitive. It therefore follows that adopting the new technologies will cost less, not more, than continuing with older technologies. And this is purely in economic terms, without including the environmental, social, health and other externalized costs of fossil fuels and combustion engine vehicles.

The costs and capabilities of SWB have been consistently improving for several decades. Since 2010, solar PV capacity costs have fallen nearly 90%%, onshore wind capacity costs have fallen more than 50% and lithium-ion battery capacity costs have fallen over 90%.

These cost improvements are consistent and predictable, and each of the technologies will continue to traverse a remarkable experience curve throughout the 2020s. SWB will be overwhelmingly competitive on a purely economic basis in all regions by 2030.

Read the full answer here

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