Free markets are killing fossil fuels with the exponential growth of solar energy

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Free markets are killing fossil fuels with the exponential growth of solar energy

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The future is now: the solar fate of oil and gas

Late last July, we were all feeling very blue about a hellish summer of fires, heat, and floods. (It has only gotten worse, with more than 10,000 Libyans dead or missing from yet another climate-influenced flood.) I was even getting comments from readers asking if I was okay, given the rising level of pessimism of the column. 

Meet Danny Kennedy

I then met our old friend and columnist Danny Kennedy for lunch at the Pershing Square diner across from Grand Central Terminal in midtown Manhattan. What a difference a meal makes. Danny is a vibrant Australian who has been championing clean energy and climate protection for 30+ years, with a laser-focus for mankind to achieve a 700-fold increase in solar photovoltaic installations by 2054. If humanity achieves Kennedy’s bold, but doable vision, we will have overcome perhaps the most significant challenge to our species since we arrived on the scene 300,000 years ago. 

We have been waiting for Climate Week in New York this week to publish Danny’s fantastic take on the very bright future of solar and renewable energy. It’s a bitch slap to the insidious fossil fuel narrative that preaches that the only practical way forward on supplying much-needed energy is to drag out the use of oil and gas as long as possible and offset all that carbon pollution with Rube Goldberg–like schemes to “capture carbon.” 

Free free markets! 

Here is the irony: The core of Danny’s argument is also a core tenet of capitalism — free markets. The growth of solar power is so exponential — why even Gordon Moore would be impressed — that there may be a time in our lifetime when solar and battery-powered energy will be as cheap as the internet (remember the days when you paid for a phone call!).  

The fossil fuel industry knows this, and they are terrified. No other fossil fuel or nuclear alternative will be able to compete with the coming price of solar. Even wind power will be challenged. This is a profound threat to the world’s largest petro states: the  United Arab Emirates, Saudi Arabia, Qatar, Russia, and the United States. Their only hope is to force massive free-market-distorting, Soviet -style market policies — all  wrapped in an unrelenting propaganda  campaign to undermine renewable energy,

Danny’s argument

Danny believes nothing is going to stop the exponential growth of solar energy and battery power. Did the buggy whip industry block Henry Ford? Did AT&T protect its monopoly on telephone calls? Did the Soviet Union’s grandiose visions of industrial communes prevail? Of course not. Trading between humans and the unrelenting acceleration of technology is unstoppable, like it or not. The power of Exxon, Saudi Arabia, and the UAE’s Sheikh Mohammed bin Rashid Al Maktoum pale in the power of free markets. It’s nothing personal. It’s business.

The unprecedented solar surge

Kennedy’s argument is that solar energy growth continues to defy expectations, outpacing even the boldest projections and rapidly asserting itself as a dominant player in the global energy landscape. BloombergNEF’s prediction of adding 392 gigawatts of solar power in 2023 alone highlights the immense momentum of this industry. One gigawatt of solar power can power 750,000 homes, underlining the transformative potential of solar energy.

The exponential growth of solar installations in the Eurozone and other regions is a testament to the increasing attractiveness of solar power. The consistent year-on-year growth rates, ranging from 40% to 79%, is staggering. 

China’s pioneering role in solar growth

Leading the charge is China, as it scrambles for energy independence without having to use coal. (China has no significant deposits of oil and gas). China’s 79% annual increase in solar cell production is propelling global solar growth as it builds the solar cell equivalent of two coal-fired power units a day. 

Global solar cell capacity is creating the equivalent power of two coal-fired power units a day.

The speed and scale of solar growth: a challenge to fossil fuels

This growth trajectory is fast and overwhelming. The price of solar power is dropping fast (0.15, and prices per kilowatt-hour dropping to as low as 3 or 4 cents.) The force multiplier is battery technology. The growing integration of batteries in solar installations now makes up 93% of hybrid power plants in the U.S. Batteries are evolving, becoming more efficient and cost-effective, further catalyzing the shift toward renewables.

Bye bye, fossil fuels 

The big, fat loser? The fossil fuel industry. It will find itself increasingly unable to compete, stranding oil and gas fields and conventional power plants — much to investor dismay. It’s no surprise that conservative politicians in the United States want to outlaw solar energy.

Danny’s message is a ray of hope in an otherwise depressing climate landscape. “The tools we have at our disposal—abundant and low-cost solar energy coupled with advancing battery technologies—threaten to eclipse traditional energy sources,” he says. As CEO of New Energy Nexus, he is scouring the Earth seeking to fund the ventures of young solar entrepreneurs. “Even more action is needed to accelerate the transition to renewable energy, not only to combat climate change but also to ensure a sustainable future and reduce the stranglehold of the fossil fuel industry.”

As he ends every column, “Shine on,” Danny, “Shine on.”


Written by

Peter McKillop

Peter McKillop is the founder of Climate & Capital Media, a mission-driven information platform exploring the business and finance of climate change.