“The Sun has won”: exponentially growing solar destroys nuclear, fossil fuels on price

Jul 11, 2024
Solar panels under blue sky with world map made of clouds

It’s not known if Peter Dutton reads The Economist but if he does, he must probably think from time to time that it is sometimes dangerously left wing.

In the 22 June issue, it had a special essay on solar power – headlined ‘The Sun Machine’. The sub-head was “An energy source which gets cheaper the more you use it marks a turning-point in industrial history’.

The essay is a total contradiction of almost everything Dutton is claiming about nuclear and renewable energy.

“What makes solar energy revolutionary is the rate of growth which brought it to this just-beyond the marginal state”, the essay says.

They cite a veteran energy analyst, Michael Liebreich, who shows that in 2004 it took a year to install a gigawatt of solar power capacity; in 2010 it took a month; in 2016 a week; and in single days in 2023 there were a gigawatt of installation worldwide.

Current projections are that solar will generate more electricity than all the world’s nuclear plants in 2026; than wind turbines in 2027; dams in 2028; gas-fired plants in 2026; and coal-fired ones in 2032.

All that well before Dutton’s nuclear plants – if at all – start generating power. Moreover, unlike nuclear power which notoriously always takes longer to build than predicted, predictions about the rate of solar power roll-out are consistently under-estimates.

The Economist points out that in in 2009 The International Energy Agency (IEA) predicted solar would increase from 23GW to 244GW by 2030. It hit that milestone in 2016 – less than a third of the predicted time. The world capacity was 1419GW by 2023.

Ironically, one of the few organisations which got their predictions roughly right was Greenpeace – yet even their prediction was an under-estimate.

Given Dutton’s claims about solar power costing more than nuclear are made ridiculous by the fact that solar’s break-even price has fallen by a factor of more than 1000 and the trend is continuing. Meanwhile cost overruns in nuclear are endemic and SMR’s only exist in Dutton’s imagination.

Dutton is stronger on ideology and outrageous claims than economics, but the manufacture of photovoltaics is a classic example of the benefits of mass production – benefits which have always eluded the nuclear power industry.

As The Economist points out solar cells are standardised products all made in basically the same way and “they have no moving parts at all, let alone the fiendish complexity of a modern turbine.”

“Manufacturers compete on cost, by either making cells that make fractionally more electricity, by either making cells that make fractionally out of a given amount of sunshine or which cost less.”

Economics 101 teaches us that a commoditised product does not lead to more and more aggressive competition on the supply side – simply in this case by getting more electricity out of any given amount of sunshine or by costing less.

Rob Carlson, a technology investor, told The Economist: “There is no other energy-generation tech where you can install one million or one of the same thing depending on your application.”

“The Sun has won” he says.

The Economist said: “From the mid-1970 to the early 2020s cumulative shipments of photovoltaics increased by a factor of a million which is 20 doublings. At the same time prices dropped by a factor of 500. That is a 27% decrease in cost of doubling of installed capacity, which means a halving of costs every time installed capacity increases by 360%.

Adair Turner, an eminent economist and financial services executive, was Chair of Britian’s Climate Change Committee which was set up to help transition to zero emissions.

He told The Economist: “We totally failed to see that solar would come down so much.”

BloombergNEF estimated, in 2015, that the cost for solar on a global basis was $122 per MWH – higher than on shore wind and coal.  Today both solar and onshore wind are almost half the cost of coal.

Meanwhile, Dutton has welcomed Keir Starmer’s election win by pointing to his support for nuclear power. Which, given that the UK has already installed nuclear power, the cautious Starmer is unlikely to announce that he is closing it down.

Moreover, Starmer’s major problem with nuclear is managing the spiralling delays in, and cost of, nuclear plants being constructed following typical Tory blunders.

The question which Dutton needs to answer is why he knows more about nuclear and solar power than The Economist reporters, Bloomberg, Adair Turner, Rob Carlson, many major investment funds and the overwhelming majority of Australian scientists?

He might ponder all that while the Murdoch media is becoming a tad critical of him – criticising his policy on supermarket divestment and speculating on who might be the Liberal Party leader if Dutton loses the next election.

Meanwhile, notwithstanding their doubts about Dutton’s chances and policies (other than nuclear) The Australian never totally loses its manic opposition to anything progressive. The inimitable Greg Sheridan opined on The Australian front page (6/7) that Labour had not won but the Tories had lost. Partly true obviously, but his piece was enough to prompt the subs to headline the piece with “Self-described socialist is set to drag Britain far to the left”.

Sheridan also rehearsed his regular hates and speculated how it would all come undone.

Jeremy Corbyn would love that to be the case but Starmer not so.

Perhaps the funniest lines in Sheridan’s’ piece were: “Starmer is brainy and works hard. Too deep immersion in the law has rendered it impossible for Starmer to write felicitous prose or create memorable images.”

From a journalist who year after year simply reproduces the same old opinions on the same old subjects that is, to say the least, a bit much.

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