About this time last year I wrote a post based on Bloomberg's (bnef) reporting on global clean energy financing. The theme was the lack of growth in clean energy investment. This time last year the Chinese market was in turmoil after the government lowered its FIT subsidies and a bust seemed imminent. As I discussed in a recent post, China proved resilient and installed way more PV than was predicted taking the 2017 total to possibly over 100GW vs. the 85 GW predicted. Bloomberg’s Q3 2017 investment survey illustrated in the chart above shows that 2017 overall world investment is set to about match 2016 and China’s overall clean energy investment is about the same for 2017 as 2016. So lower PV panel prices have increased the GW of PV installed but within the constraint of a similar overall level of money investment.

This demonstrates that the clean energy market is constrained by the amount of investment which is set by a government subsidy constraint. If PV was market competitive without subsidy, investment should be growing.

Examining the quarterly investment chart above shows overall global clean energy investment has been within a narrow range for the last seven years (2011-2017) after ramping up during the previous seven years (2004-2010). Over the last seven years US investment has fluctuated within a narrow range. European investment has fallen significantly, and Chinese investment has grown to offset the European decline. This means that the  growth in GW installed of wind and solar has been due to reducing $/W capital costs, not increasing investment. The looming prospect of US tariffs on PV panels is likely to reduce US investment in PV, and the ITC subsidy is phasing out. The prospects are not good for PV investment growth in the US. From the chart, China’s clean energy investment peaked in Q3 2015 and has been steadily declining since. Europe seems set to continue its decline. Overall there does not seem to be much prospect of global growth in clean energy investment.

This gets me back to my familiar theme. This latest Bloomberg survey is continuing evidence that the world is not on a track for clean energy to grow at a rate to replace fossil fuels before the end of the 21st century. As I also discuss regularly, there are many impediments beyond just lowering generation costs (like backup, storage and transmission) that will become more significant and must also be overcome. The issue is fundamentally about money as these Bloomberg surveys illustrate.

What is needed is a clean energy system solution that beats the current fossil fuel system in cost of energy to the customer. The problem is not just about electricity generation but a complete fossil fuel free energy solution. Stratosolar is such a solution and the web site covers many of the details of why Stratosolar is such a solution in detail. Energy is a complex multi faceted problem that is hard to understand. Deep throat’s advice to “follow the money” gets to the heart of difficult problems when lots of noise gets in the way of understanding as is the case with clean energy.

By Edmund Kelly

Five years ago, I produced this chart based on 2011 EIA world energy use projections out to 2050. It showed the scale of fossil fuel energy to other energy and the projected growth of fossil fuels and green energy. The central message this chart illustrated then was we were not on a path to reduce fossil fuel consumption.
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The EIA recently came out with their 2017 projections. Its interesting to compare what has changed over six years. Since 2011 solar PV has reduced dramatically in price and grown significantly, so we would expect this to show up. Significantly, growth in solar and wind barely changes the EIA projections to 2050.

This chart shows the new 2017 projection out to 2050. The 2017 projected overall energy use falls to 27 TWy from the 2011 33 TWy projection. This stems mostly from a reduction in coal consumption with a small contribution from a reduction in nuclear. Significantly, despite significantly lower costs since 2011, renewables are about the same for the 2017 projection as for 2011. The overall situation is little changed with fossil fuel still dominating.

The EIA projections are generally disparaged by clean energy advocates as being inaccurate about clean energy. This criticism is correct, but because clean wind and solar are small overall contributors, the overall EIA world projections are accurate. The reductions in coal and nuclear are the most significant changes since 2011 and going forward. The EIA projected growth in renewables is still significant if probably underestimated. Hydro is still larger than wind and solar in 2107 but most of the growth in renewables is wind and solar so their EIA projected growth rates are significant, though from a low base.

While solar and wind have reduced significantly in cost, the unfortunate reality is they have yet to become competitive without subsidies in any market. There is no magic threshold where they suddenly become competitive without subsidies. It will start slowly in the markets with the best resources and expand to less endowed markets as costs reduce. As growth occurs new impediments like backup, storage and transmission/distribution will rear their ugly heads and act as a brake on growth, as is being illustrated by early adopters like California and Germany. Nothing in this scenario allows for sudden and exponential growth to occur as happened with computers, cell phones and other mass market products.

The EIA projections are in line with other world energy projections from IEA, BP, Shell etc. Even boosters like Bloomberg and Lazard don’t project renewables as the dominant provider of energy, only electricity. The trends point to renewables perhaps replacing fossil fuels by the turn of the century, fifty years too late for CO2 stabilization at below 450ppm. 

The StratoSolar message has been that economics matter and current solar PV has many economic problems that will keep it from becoming a replacement for fossil fuels for a long time to come. StratoSolar solves all these problems. Time is marching on.
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By Edmund Kelly