The survival-investment gap and the Berlin Wall: a thought for Solarcentury’s 21st birthday (+ our history updated)


The survival-investment gap and the Berlin Wall: a thought for Solarcentury’s 21st birthday, to accompany an updated slideshow of our history

As concern spreads in the world about the implications should humankind fail to cut carbon emissions, realisation that the threat of global heating is existential has become increasingly commonplace. Perhaps most notably of late, it is expressed in the name of one of the most impactful protest groups yet to emerge, Extinction Rebellion.

The good news is that the route to surviving the threat is clear. As set out by international expert groups including the Intergovernmental Panel on Climate Change, it is to restructure the global economy for net zero carbon emissions before 2050. The even better news, as set out by expert groups including the Global Commission on the Economy and Climate, is that this can be done at far lower cost than business-as-usual, saving literally trillions of dollars over the course of the transition: trillions that can be spent improving society in many ways. It seems almost counter-intuitive, if one listens to the many fossil-fuel diehard naysayers, but it is true.

In early May the International Energy Agency (IEA) summarised progress in the energy sector. To hit the survival trajectory, as expressed in Paris Agreement targets, the agency calculates that the world needs to be adding over 300 gigawatts (GW) of renewable energy capacity per year on average through 2030. How much did we install in 2018? 180 GW, 60% of what we need. Well over half of that was solar.

Far from hopeless, you might say. But that would ignore the fact that the total renewable capacity installed was the same in 2017. Last year was the first stall in two decades of strong annual renewables expansion.

In another recent IEA report, the setback can be seen in energy-investment trends. Renewables investment was down for the second year running in 2018, to $304bn. Meanwhile fossil-fuel investment was up – despite everything we know about the fueling by coal, oil and gas of climate chaos and killer air pollution – to $1.2 trillion.

Viewing this, a justifiable reaction might be to wonder if we are collectively mad. Our citizens are now protesting their anguish over climate chaos on the streets in their millions. Our schoolchildren are going on strike in multiple countries. Our learned bodies are telling us the very survival of our species is at stake, not to mention countless other species. Yet we invest four times more in fossil fuels than we do in survival technologies. We permit our pension funds, banks and other financial institutions essentially to bankroll collective suicide and ecocide.

All true, I would argue, but that is a glass-half-empty way to view it. There is a glass-half-full view of the same situation, and it strikes me like this. I have exactly the same feeling today that I had in Berlin in October 1989, looking at the Berlin Wall from a hundred yards away. I remember thinking that in the context of those times – glasnost rampant in Moscow and east-west arms-control negotiations in the news every day – “this is crazy. It cannot last. The pressure in society is just too great.”

I have not always been right in my big-picture thinking, over the years. But I was on that occasion. The Berlin Wall fell a few weeks later.

I believe the survival-investment gap, where energy is concerned, will close in similar vein during the next few years. It is impossible to identify a specific trigger or triggers that will topple this particular metaphorical wall. But it is easy to see the buildup of pressure across society, just as it was at the end of the Cold War. And given the propensity of investors to act as a crowd, once their collective sentiment tips, we may well find that the investment-gap wall can fall almost as quickly as the Berlin Wall did.

For me, Solarcentury embodies the hope that the gap can close, and quickly. We are a very international team of 210, busy riding the survival-pressure that I have described in society. Indeed, we capture it in our DNA. Our mission is to make as big a difference as we can in fighting climate chaos [See Footnote 1]. And we are well positioned for a useful contribution: an international pipeline of solar projects now in excess of 5 GW. Those projects will be delivered over perhaps 5 years, so let us think in round numbers and assume we deliver an average of 1 GW a year. (That figure is conservative: it can easily be higher as the team finds more projects). How many Solarcenturys would the world need, on this basis, to be on a survival trajectory?

The answer is somewhere not far from 300.

There are caveats to that back-of-envelope calculation, which I explore in Footnote 2. But let us stick with the IEA’s numbers for now, as so many do. How difficult is it to imagine 300 or so Solarcenturys around the world?

Not very difficult at all, from where I sit, watching the 210 current Solarcenturians hard at work today. On top of this there are the 670 Solarcentury alumni, many of whom now work in fellow solar- and other clean-energy companies. Knowing many of these people and their companies as I do, the vision becomes even easier to conjure up.

Today is Solarcentury’s 21st birthday. I have updated the summary of our history, in pictures and charts, that I compiled with the help of colleagues a year ago. You can view it above.

On our birthday, I want to extend a grateful founder’s heartfelt thanks to every member of the current Solarcentury team, all our alumni, and all our partners and customers present and past. Together, may we be granted the chance to keep riding the extinction rebellion now underway in global society, all the way to the tantalisingly tangible point of success.


NOTES

[1] From the start of our history, we have specified “to fight climate change” as our raison d’etre. We decided to change this to “to fight climate chaos” this week, to reflect evolving international appreciation of the problem.

[2] The IEA’s figure for the renewables-capacity additions needed per year on average through 2030 is “over 300 GW”, based on its Sustainable Development Scenario. This obviously includes a mix of solar and wind. These technologies have different capacity factors, so my estimate of 300 Solarcenturys for delivery of a Paris trajectory would mean companies working not just in solar but other clean energy technologies.

Additionally, the IEA scenarios have been criticised as far too unambitious with respect to renewables, and too fossil-fuel friendly. The most ambitious scenario to date, when it comes to renewables, is the LUT EnergyWatch scenario for 100%-renewable global energy, published in April. That sees an average of 700 GW of solar alone installed per year through 2030. Using the same assumptions – conservative to point of silliness in that they assume the companies do not grow beyond Solrcentury’s current 1 GW per year pipeline – that is 700 Solarcenturys.

Combining the two scenarios, the point is that we need hundreds of Solarcentury-scale companies to deliver the Paris survival trajectory, not thousands. Doable, for sure.

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