Environmental Engineering Reference
In-Depth Information
ingmoremaynotbethatexpensivebecausetheup-frontcostofsolariscomingdownso
fast. The IEA notes that solar photovoltaics are already competitive with “bulk power”
in many areas, particularly islands, off-grid locations, and places where solar-produced
electricity is competing with oil.
When faced with these price realities, fossil-fuel execs' blood should run cold. How
long can they possibly compete? What losses will they take? Big banks like HSBC, the
“world's local bank,” are starting to put red circles around a lot of fossil-fuel-based en-
ergy infrastructures because they may be stranded assets in the not-too-distant future.
Thismeansthattheirelectricityproductionwon'tbeabletopayfortheminaseaofsolar
panels that generate electricity for less. HSBC analysts point to legislation in Australia
and China that's likely to force fossil-fuel assets to retire early or operate below capa-
city. “We expect the reality of stranded assets to become more noticeable as the decade
progresses,” said an HSBC report. Forced closures are a scary prospect for bankers, but
these will happen, and investors will get burned.
Climate Spectator
'sGilesParkinson,oneofmyfavoritebusinesswritersonthisstuff,
summarized HSBC's analysis of the speed at which clean energy can provide economic
solutions. It notes, in particular, the impending arrival of wholesale prices for electricity
from solar panels in India that are at or below the price per kilowatt-hour of coal-based
electricity. This is a country that has to import hundreds of millions of metric tons of
coal at prices well north of $100 per metric ton. HSBC and anyone else paying attention
knows that at that price you can eliminate all subsidies for solar and it will still compete,
knocking out a huge market for coal. The game is on as India ramps up its energy pro-
duction: coal versus solar.
Those in the diesel-based electricity space must already be feeling that the industry's
days are numbered—a bit like the people who purveyed dial-up modems when broad-
band came around. But so what? You may ask, How much diesel-powered electricity is
there? How about almost all of Hawaii. That's right—more than 90 percent of Hawaii's
electricity comes from burning oil! This is the state where the Obamas go for holidays,
and 1 percent of our whole country's power comes from oil costing more than $100 per
barrel!MuchofthisextremelyexpensivejuiceisboughtbyHawaii.Worldwidethereare
even more easy wins to be had replacing more than 10 percent of global electricity cur-
rently coming from burning high-cost diesel fuel.
This competitiveness is why renewable electricity is growing rapidly and will contin-
ue to grow. The time is fast approaching when energy that comes from no fuel or free
fuel will beat fossil fuels. Remember that about 20 percent of global electricity markets
are paying more than $0.20 per kilowatt-hour, which is more than it cost Sungevity to
serve electricity from a US rooftop in 2011 with a solar lease. I think that history will
look back on this period and see that the tide turned in 2010 when fully half of new elec-
