A New World of Renewable Energy Beckons

Anthony DeLorenzo / CC BY 2.0

Historically, the transition from one energy system to another, as from wood to coal or coal to oil, has proven an enormously complicated process, requiring decades to complete. In similar fashion, it will undoubtedly be many years before renewable forms of energy — wind, solar, tidal, geothermal, and others still in development — replace fossil fuels as the world’s leading energy providers. Nonetheless, 2015 can be viewed as the year in which the epochal transition from one set of fuels to another took off, with renewables making such significant strides that, for the first time in centuries, the beginning of the end of the Fossil Fuel Era has come into sight.

This shift will take place no matter how well or poorly the deal just achieved at the U.N. climate summit in Paris is carried out. Although a robust commitment by participating nations to curb future carbon emissions will certainly help speed the transition, the necessary preconditions — political will, investment capital, and technological momentum — are already in place to drive the renewable revolution forward. Lending a hand to this transformation will be a sharp and continuing reduction in the cost of renewable energy, making it increasingly competitive with fossil fuels. According to the Paris-based International Energy Agency (IEA), between now and 2040 global investments in renewable power capacity will total $7 trillion, accounting for 60% of all power plant investment.

Fossil fuels will not, of course, disappear during this period.  Too much existing infrastructure — refineries, distribution networks, transportation systems, power plants, and the like — are dependent on oil, coal, and natural gas, which means, unfortunately, that these fuels will continue to play a prominent role for decades.  But the primary thrust of new policies, new investment, and new technology will be in the advancement of renewables.

Breakthrough Initiatives

Two events on the periphery of the Paris climate summit were especially noteworthy in terms of the renewable revolution: the announcement of an International Solar Alliance by India and France, and the launching of the Breakthrough Energy Coalition by Bill Gates of Microsoft, Jeff Bezos of Amazon, and a host of other billionaires.

As described by Indian Prime Minister Narendra Modi, the International Solar Alliance is meant to mobilize private and public funds for the development and installation of affordable solar systems on a global scale, especially in developing countries.  “We intend making joint efforts through innovative policies, projects, programs, capacity-building measures, and financial instruments to mobilize more than 1,000 billion U.S. dollars of investments that are needed by 2030 for the massive deployment of affordable solar energy,” Modi and French President François Hollande indicated in a joint statement on November 30th.

According to its sponsors, the aim of this program is to pool financing from both public and private sources in order to bring down the costs of solar systems even further and speed their utilization, especially in poor tropical countries.  “The vast majority of humans are blessed with sunlight throughout the year,” Modi explained.  “We want to bring solar energy into their lives.”

To get the alliance off the ground, the Indian government will commit some $30 billion for the establishment of the alliance’s headquarters in New Delhi.  Modi has also pledged to increase solar power generation in India by 2,500% over the next seven years, expanding output from 4 to 100 gigawatts — thereby creating a vast new market for solar technology and devices.  “This day is the sunrise of new hope, not just for clean energy, but for villages and homes still in darkness,” he said in Paris, adding that the solar alliance would create “unlimited economic opportunities” for green energy entrepreneurs.

The Breakthrough Energy Coalition, reportedly the brainchild of Bill Gates, will seek to channel private and public funds into the development of advanced green-energy technologies to speed the transition from fossil fuels to renewables.  “Technology will help solve our energy issues,” the project’s website states.  “Scientists, engineers, and entrepreneurs can invent and scale the innovative technologies that will limit the impact of climate change while providing affordable and reliable energy to everyone.”

As Gates imagines it, the new venture will seek to bundle funds from wealthy investors in order to move innovative energy breakthroughs from the laboratory — where they often languish — to full-scale development and production.  “Experience indicates that even the most promising ideas face daunting commercialization challenges and a nearly impassable Valley of Death between promising concept and viable product,” the project notes.  “This collective failure can be addressed, in part, by a dramatically scaled-up public research pipeline, linked to a different kind of private investor with a long-term commitment to new technologies who is willing to put truly patient flexible risk capital to work.”

Joining Gates and Bezos in this venture are a host of super-rich investors, including Jack Ma, founder and executive chairman of Alibaba, the Chinese internet giant; Mark Zuckerberg, the founder and chairman of Facebook; George Soros, chairman of Soros Fund Management; and Ratan Tata, chairman emeritus of India’s giant Tata Sons conglomerate.  While seeking to speed the progress of green technology, these investors also see a huge potential for future profits in this field and, as the venture claims, “will certainly be motivated partly by the possibility of making big returns over the long-term, but also by the criticality of an energy transition.”