Energy harnessed from the sun is predicted to displace fossil fuels by 2050 as the cost of solar cells plummets
Solar power will reach commercial “take-off” within a decade and displace fossil fuels to become the world’s biggest source of electricity by 2050, according to stunning new forecasts from the International Energy Agency.
The IEA said the cost of photovoltaic panels would continue to plummet, falling by a further 60 per cent for household rooftops and 70 per cent for power companies even after the dramatic gains of the recent years.
Solar has already achieved “socket parity” for consumers in a string of countries, including Australia, Germany, Italy, and Holland, chiefly due to a fall in the price of solar cells to US80c ($1) a watt from US$4 in 2008. The agency expects prices to reach US30c by 2050, though what increasingly matters is the rapid fall in “soft costs” for installation as solar goes mainstream.
The gains will happen just as carbon pricing pushes up costs for fossil fuels, creating a scissor action in the global energy market. “The take-off is around 2025 to 2030. By then the cost of solar will be US$100 per megawatt/hour and will compete with fuels facing carbon prices of US$50 a tonne,” said the agency.
The IEA expects carbon prices to climb as high as US$150 by mid-century. The key powers agreed last week in New York to draft a new treaty to cut greenhouse gases, to be completed next year.
China is already drawing up its own carbon pricing scheme in a drive to clean up toxic smog in its largest cities.
The IEA said the stock of installed solar power worldwide will reach 200 gigawatts (GW) next year as China and Japan add vast amounts of new capacity, five years earlier than expected.
“Things have changed very rapidly,” said the agency’s director Maria van der Hoeven.
The pace will then accelerate, reaching a crescendo of 200GW of extra capacity each year from 2025 onwards. This annual addition would be five times Britain’s current electricity use from all energy sources.
This assumes that the world can come up with US$44 trillion of fresh investment on plans to “carbonise the planet” by then. These are staggering sums. Spending on the entire fossil fuels industry is currently US$900 billion a year.
Van der Hoeven said it will take “clear, credible and consistent signals” from government to crank up the two forms of solar power. “Both technologies are very capital intensive: almost all expenditures are made upfront. Lowering the cost of capital is thus of primary importance,” she said.
The agency said “transitional policy support mechanisms” would be needed for a while to ensure that solar reaches critical mass in most markets.
If it all comes together, solar will provide 27 per cent of the world’s power by 2050, with the fastest catch-up in the Middle East, Africa, and Asia.
The biggest gains will be in off-grid regions covering 1.3 billion people, which will leapfrog the 20th century model of grid infrastructure just as mobile telephones have swept regions with no fixed lines.
The agency said the best zones for capturing solar rays is between latitudes of 15 to 40 degrees on either side of the equator, and best at higher elevations. Tropical regions tend to be cloudier.
Van der Hoeven said there would be “massive deployment” of solar thermal power after 2025 as utilities take advantage of in-built thermal storage which allows them to store electricity during peak sunshine and release it later at night.
These are typically huge arrays of solar panels in arid areas that concentrate the sun on to receivers. Spain is the world number one, led by Abengoa’s Solaben park in Extremadura.
A new trend is towards “solar-fossil hybridisation” under way in North Africa, Iran, and the US where a solar field is built around a coal plant, with surges of solar output used for steam pressure extraction. These “solar boosters” can cut costs and CO2 emissions at the same time.
The agency said growth of rooftop solar will start to peak once it has saturated power grids and driven down wholesale electricity prices. This assumes that there is no major breakthrough in battery storage costs, yet fresh research in the US and Japan suggests that this too could change very fast.
Organic flow batteries using quinones — abundant in rhubarb — may ultimately displace the current generation of high-cost batteries requiring rare metals.
Any such shift could lead to total self-sufficiency for households in warm dry climates, triggering a general stampede away from the grid.