When I was a kid my family upgraded our PC, installing a 100MB hard dive. We’d previously run everything off floppy discs, so to go to 100MB was mind blowing (DOOM ran so fast). That was nearly 30 years ago. Today the hard drive in my phone has over a thousand times more capacity and is a fraction of the size.
The progress of digital technology has driven down the cost of computing so much that we barely consider it any more. Take any enterprise cloud storage provider like AWS or Google Cloud. The cost of renting computing power or storage on these platforms is fractions of a cent. Storage is so cheap that it’s given away with online services like email and social networks. The initial promise of the computer was a paperless office, but we’ve far surpassed that to where businesses have no office and companies are run entirely from the cloud.
Listening to the debate on climate change, I find a parallel here that’s been missed in the broader discussion on clean energy. Although not as drastic as the progress computers have seen, for the last 40 years solar panels have consistently become 20% cheaper with every doubling of panel production. This, along with increasing solar panel efficiency, should be enough to give anyone pause about what lay ahead. Moore’s Law helped drive the cost of computing power and storage to almost zero. What will the world look like as renewable technologies follow a similar path?
In his book Windfall, Ketan Joshi paints an interesting picture of where we’re headed:
Where things get very very interesting is when Australia moves past 100 per cent renewables and into 200 to 400 percent renewables, with the surplus used to create energy stored as hydrogen … Amazingly [the cost of] renewable energy begins to decrease as the you reach renewable percentages above 100 per cent.
The debate right now in Australia rages around the idea that renewables are risky and that the fossil fuel industry is stable and secure. However, when you flip that argument to look at where other ‘secure’ businesses such as Blockbuster and Kodak ended up when faced with the advancement of technology, the risk seems somewhat misplaced.
Is it really so far fetched to believe that as renewable technology continues to improve, the cost of electricity will continue to fall? What possibilities open up when our energy production moves from being powered by limited resources to that of continually advancing technology?
Modern energy companies like Amber Electric are already moving away from traditional utility models towards something a little more adaptable. Instead of on-selling electricity to customers at retail prices, customers pay a monthly fee to access electricity at wholesales prices. The immediate appeal for customers is cheaper electricity bills, but the long term play for Amber is a steady revenue stream, even as the cost of electricity falls.
The initial promise of renewables was replacing polluting resources with clean technology, but I don’t see the transition stopping there. My bet is a future powered by renewable technology will far surpass anything currently possible with fossil fuels, both in terms of reducing emission and energy production.