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March 5, 2021

Climate talks may not matter because coal and oil will be redundant

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Tony Seba. Photo supplied
Plunging costs of technology will sweep away political inertia: Tony Seba. Photo supplied

Giles Parkinson, editor RenewEconomy

There is considerable concern in Paris – and elsewhere – about whether the deal negotiated at the UN climate change conference will be strong enough to drive the global decarbonisation effort that everyone recognises is needed.

Tony Seba, a leading academic from Stanford University, says it doesn’t matter.

He says the plunging costs of technology will sweep away political inertia and the resistance of vested interests. So much so that by 2030, he believes coal, oil and gas generation and usage will be all but obsolete.

Seba’s claims are not new. We reported on them last year, and more recently when he talked about God Parity and the decline of centralised generation, but 18 months after completing his book, Clean Disruption, Seba is now more convinced than ever that he is right.

‘It’s happening,’ he told RenewEconomy on the sidelines of the Paris climate talks.

‘When you look at the industry from a technology cost curve and the adoption of the market of technologies such as solar and electric vehicles, and energy storage, and the astonishing progress in self driving cars, it’s actually happening more quickly than I predicted.’

Seba’s predictions are based around observations of what has occurred in other major technology breakthroughs – such as digital photos, the internet, mobile phones and then smart phones. Once costs fall below a certain point, the growth is both exponential and unstoppable.

‘In technology, those kind of adoption curves are not unusual,’ Seba says. ’We went from film cameras to digital photos in a couple of years. What the resource-based industries don’t get is that technology adoption happens in an exponential manner. It never happens in linear fashion.

‘So it may take a long time to get to a critical point. But once it does, it happens so quickly.’

Which is why Seba is not that concerned with the outcome in Paris, and the fact that it will likely fall short of the ultimate goal – a binding agreement to limit global warming to well below 2°C.

His views contrast with those of Elon Musk, the founder of electric vehicle and battery storage developer Tesla, who said this week that he wants a global carbon price, because without it the transition may take twice as long.

Both agree that the transition to renewable energy and battery storage could happen within 15 to 20 years, they just disagree on what would drive that transition. And Musk is a lot more conservative on the shift to clean transport.

One thing that Seba and Musk do agree on is the need to remove fossil fuel subsidies, which some would suggest includes the lack of a carbon price.

‘If they achieve that, that is a huge goal,’ Seba says. ‘Some of these targets will be pretty irrelevant. 2°C is not a target. Zero emissions is a target. We cannot control 2°C, but we can control zero carbon.’

Seba notes that many critics of renewable energy dismiss the technologies because they contribute so little on a global scale right now, just a few per cent of total electricity in the case of wind or solar.

‘You’ll get mainstream media and politicians and even well-meaning folks complaining that it has taken solar so long to get to 1 per cent. What they don’t see is that getting to 1 per cent is the hard part.

‘Solar has been doubling installed capacity for years. But it started from a small base, so you ask yourself how many more doublings do you need to get to 100 per cent?

‘In the case of solar, all we need is 7 more doublings – and that could happen in 13 or 14 years.

Clearly, though, many vested interests see this as a threat, which is why they are, with the help of regulators, pushing back on policies – removing carbon prices, cutting renewable energy targets, reducing feed-in tariffs, raising fixed charges, and other means designed to slow the uptake.

‘It is called regulatory capture, and the fossil fuel industry has perfected it,’ Seba says. ‘Because of this regulatory capture, governments and regulatory bodies will push back, but they can’t stop it.’

That’s because the regulators and the vested interests will lose control. For more than a century, energy generation has been centralised and all the decisions were made by big banks and regulatory agencies. Consumers had no input.

That is now changing. The uptake of solar PV is consumer driven, and it will be the same with electric vehicles and battery storage.

‘When something is consumer driven and distributed, it is different. The conventional industry either doesn’t understand that, or doesn’t want to understand that,’ Seba says.

But some people are listening. Seba is now in hot demand from large super funds – including some in Australia – who are seeking his advice about the changes that will take place.

This, says Seba, is underlying some of the major divestment decisions. ‘Getting out of fossils is not a moral decision, it is a smart decision. Any money you put into a new plant you will lose, because it is not going to last 40 years.’

Seba says that the unsubsidised cost of solar PV on the rooftops of Ikea, WalMart and malls and factories is going to fall below the cost of transmission very quickly, in every single market in the world.

‘That means that you can generate coal, gas or nuclear, and invest in fusion. If you can do that for zero, you will still not compete with rooftop solar.’

Still, Seba says that a grid will survive, even if the economics of solar and storage will make it very cheap for those who want to leave the grid to do so.

‘I don’t think most people will. There is resilience in the network. For instance, 80 per cent of us live in cities. But that means that networks also need to be valued appropriately, because as the technology costs fall, consumers will make an economic choice, and the existing business model will be obsolete.

‘You cannot compete with zero marginal cost technologies. That is what killed Kodak.’

So, why doesn’t this register with mainstream media, and why is there such demonisation of wind and solar technologies? At RenewEconomy, we can’t remember mainstream media defending fixed landlines and film cameras with quite the same vigour.

Seba points to the fossil fuel industry revenues of some $8 trillion a year. ‘That buys you a lot of advertising, and a lot of PR. In the US, it can buy elections. But it is just noise and propaganda. That is not unlike what the tobacco industry did.’

This article was first published in RenewEconomy. Giles Parkinson is in Paris for the COP21 climate talks.


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2 COMMENTS

  1. He’s right – with animal agriculture responsible for over 50% of greenhouse emissions and the rate of meat consumption set to double by 2030, the power generation question is becoming irrelevant.

    • Sober up Des !
      I have no argument with your assertion, that it doesn’t matter what happens after 2030 because the damage will have already been done. However the nonsensical argument that the planet is doomed due to bovine gas is laughable. Have you any idea how many animals once lived on the Serengeti or the numbers of bison that far out numbered the stock tortured in the hideous intensive factory farms of today’s true-blue aussie battlers trying to pay off their Lear jet, private school fees in the south of France, while employing a team of accountants to ensure they pay no tax and can claim the massive handouts from Federal, State and local government.
      None of the above matters though as the climate is already on a trajectory to render Homo sapiens extinct in the next couple of decades.

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