Around the world, solar and wind energy are coming online at an unprecedented rate. The impact on energy systems — and economies — is transformational.
Last month we hinted at the upcoming International Energy Agency (IEA) revised renewable energy share of the energy market predictions. They are now out and up: The forecast share of the energy market occupied by renewables this decade is up 30% since a year ago. Well done, Vladimir, for putting some shine on the sun! So now, renewable energy — mainly solar and wind — will add as much in the next five years (2022-2027) as was added so far this century (2001-2021). I know oil and gas companies are profiteering from Russia’s war, but that doesn’t change the result. I also know some cool experiments happened with fusion in California, but that doesn’t mean we’ll be using any nuclear reactor other than the one light-years away for most of our power in 2050.
Global electricity generation by technology, 2015, 2021 and 2027
Source: IEA. Licence: CC BY 4.0
Third energy transition
This is the third historic energy transition in the making — on speed. Think about how much the world has changed vis a vis renewables since the year 2001. Do you recall when you saw your first wind turbine? Or the first solar installation on a home near you? And how many more do you see nowadays? And how many people you hear are employed in the wind and solar industry? Well, the ramp-up we experienced is about to happen again — in the next five years! Get ready for disruptive change in all the countries on the graph below — and their economies if they don’t plan to transition.
Largest fossil fuel exporters in 2021
In order to displace all this, very different kinds of businesses are needed. Installing terawatts of wind and solar in a span of years from now is hard. It’s no longer new startups doing cool things but scaled enterprises. Folks in the industry — and investors — are starting to realize this. Gigaton Throwdown theorist and industry vet Sunil Paul is calling for VC investments in “scale tech.” Suncast’s Nico Johnson is highlighting companies for how they scaled. In Australia, where states are running on up to 80% rooftop solar some days, the push from the government is to take advantage of their unfair sunshine to create ultra-low-cost solar with scale. In Chile, ten people now install a megawatt a day — that is scalable unlike any power plant! This is what next year and the one after that and the one after that will be about. As Climate & Capital outlined in a special report last week, U.S. President Joe Biden’s IRA climate bill is supercharging the scaling of solar and EVs.
This brings me to my startup of the month:
In early December, on the 82nd floor of Freedom Tower, the new building at New York’s One World Trade Center, I learned about the Lenape tribe of Manahatta and nearby territories. That’s right, I was introduced for the first time in my life (over half of which I’ve spent visiting the Big Apple often) to the first iteration of that place.
The reason we were up there looking over the 9/11 memorial and the New York City skyline was a battery company opening. Nobel Prize Winner Stan Whittingham, was there, an inventor of Lithium-ion battery chemistry. Australia’s Deputy Prime Minister Mearles was there. Major General Mark Schwartz, formally commander of U.S. Joint Special Operations Command was there. So were all sorts from the big end of town, Goldman Sachs and such, plus little old me. Why? Batteries. We’re going to need lots of them to electrify everything with these renewables.
Recharge Industries, soon to be Australia’s biggest battery manufacturer, was the debutante celebrating along with its parent. Recharge has an intriguing crew I met in Australia a month ago, somewhat a subsidiary of a larger company, called Scale Facilitation. It is also new, having just taken the keys to their fancy new suite on the first of the month. The company is the brainchild of a former PWC partner, David Collard. He and his team are bringing together the elements needed to more easily scale hard tech manufacturing like making batteries. In this case, those elements included IP licensed from New York’s brightest at the State University of New York at Binghamton, and a company called C4V, which has a production line in the original IBM factory in Endicott, New York. And they are going to replicate it down under in Australia.
We’re going to need a lot of battery factories. And many mines to feed them.
But bigger. The factory in New York produces cells that provide less than 2 Gigawatt hours (GWh) per annum. In Australia, the plan is to start at 6 GWh and ramp up to 30 GWh per year. The companies will learn together, sharing data on the production line performance and all sorts of information supposedly to be optimized by artificial intelligence introduced by Scale Facilitation. This Gigafactory is a bet that there’ll be economic benefits in locating so close to the largest supplier of Lithium in the world: Western Australia.
The way I learned of the Lenape I credit to the company. Recharge. It invited an Aboriginal woman from Geelong, Australia, where they’re building their battery factory to their office opening in America. She had said she could not accept unless there was a “welcome to country” first, from the first people of that place. This sent David and his team on a search for the rightful indigenous folk of that part of what is now known as New York, which they called Manahatta. It was wonderful to see the first 30 minutes of the corporate ribbon-cutting, involving ambassadors, government officials, investors and CEOs kicking off with a celebration of indigenous peoples and the growing acknowledgment of them and their country, which creates awareness of first peoples.
Focus on the injustices of extractive economies
Still, more needs to be done. Not just to redress my ignorance but to address the injustices of extractive economies everywhere. We’re going to need a lot of battery factories. And many mines to feed them. There is hope, however, that we won’t need an endless line of new mines because we can recycle all the metals in batteries (whereas with fossil fuels it’s literally endless because once burnt you start again). Forecasters say there’ll be 50 to 100 more lithium mines needed in the following decades unless we bring forward low-impact mining innovations. Many will be in North America and Australia and most will be on or near native lands. Gaining indigenous people’s buy-in – and partial ownership – may be the greatest challenge to scaling up mining needed for this lynchpin climate solution.
No mining on sacred land and prior consent is a start
For all of this to happen, we need to work respectfully with First Nations people from the start. Some mines simply shouldn’t be attempted — on sacred land for example. And they should all pursue full prior informed consent as some do. But we have to also rethink the whole process of pre-development, prospecting and mining in the 21st century for battery minerals to be different from the mining of the 20th century, mostly for fossil fuels — especially with regard to the places and the first peoples of those places. There are good efforts afoot, like the Initiative for Responsible Mining Assurance (IRMA) and Resolve but we’ll have to work hard on these inputs to our renewables revolution or else we will not make the scale needed in time.
Much to do in 2023 and beyond. Charge on!