The Program 2020

As in, Get With The Program, or Where the World Economy is Going. An update on my earlier post on the topic.

Muscle power was the only source of mechanical work until the industrial revolution. Steam engines created copious mechanical power to operate pumps, mills, and vehicles that wasn’t derived from mammalian metabolism.

Screenshot from 2020-05-19 22-30-42

From 1948 until 1973, world per capita energy consumption grew at 7% per year. 7% annual energy growth means billions of humans being lifted from the poverty of pre-industrial subsistence agriculture.

Between 1973 and 2013, global investment in energy-intensive industry and commensurate growth of wealth was hampered by oil price instability. I believe that economic stagnation in the 1980s and 1990s was averted only by the coincidental development of consumer-grade computers, which have provided steadily compounding growth in value without substantial growth in resources. Although computers don’t perform mechanical work in any macro sense, their prodigious abilities with logic and calculation have extended the cognitive capacity of humanity in the same way that engines have extended our muscles.

In 2013, solar electricity production reached price parity with fossil fuels in a substantial number of markets. As explained in my blog on the limitations of nuclear power, solar technology has continued to get cheaper by about 10% per year, a trend which shows no signs of slowing down. As a result, markets that are irresistible for solar deployment have continued to spread outwards from the equator at about 200 miles per year. Indeed, as the Lazard report (among others) makes clear, in most markets new solar is now cheaper than just the operating costs of existing coal plants, with gas not far behind.

When we think of 2050, we think of supersonic passenger jets, flying cars, good food, free education, housing, healthcare, and other trappings of a wealthy, prosperous society. Yet even today, in many policy circles energy security is synonymous with oil. It doesn’t have to be that way. Oil is a dirty, messy business that destroys the environment, corrupts governments, ruins our health, and poisons the atmosphere. But for our entire lives we haven’t been able to live without it because it can give anyone the superhero capacity to dispatch one hundred times more work than with their muscles. Given that oil is not only poisonous, it’s also finite, a replacement will have to be found and deployed, and in our lifetime.

I’m not going to talk much here about carbon capture and sequestration, or nuclear power, or the hydrogen economy. All of these are tired, overly complicated ideas reached their “use by” date in about 2005. They have never and will never work in the real world, as the links demonstrate. We are fortunate, however, that there is a compelling, wealth generating alternative that is already being deployed!

Electricity and magnetism are magic. Electricity is so ubiquitous that everyone can get it from outlets in their walls. But while electricity has been the go to for static applications, gasoline has been the traditional energy source in mobile applications, because gasoline had better storage options. But batteries are steadily improving. World battery production is exploding as batteries power ever-larger vehicles. In 1973, battery technology was relatively primitive, but by 2015, a battery-powered plane crossed the English Channel. In short, the shortage of oil that halted the mechanical progress of humans is actively being circumvented.

Containerized battery storage systems are also the future of the grid. Grid stabilization has traditionally required the real time matching of supply and demand. But solar and wind power tend to vary, even while patterns of consumption are very predictable. By storing power for minutes, hours, or even days, batteries can stabilize the grid. Much more importantly, they can make incredible sums of money while they’re at it. Growth of solar and batteries on the grid represents a virtuous cycle as each enables the other to maximize revenue.

And once battery capacity reaches critical mass, they take over pricing control from more traditional spinning generation plants. With an investment measured only in the tens of millions of dollars, battery operators have been able to earn back the investment in less than a year and decisively crush profiteering gas peakers and other polluting power sources. I do not know of a better investment that does as well by doing so good. In an market awash with underperforming capital it is easy to understand why the battery deployment growth rate is about 250% per year!

Nevertheless, The Program does not stop once it has succeeded in crushing fossil fuels. During the day, every square meter of the Earth’s surface receives about a kilowatt of power. It just rains down from space for free. But recall that pre-industrial societies are both solar powered and poverty-stricken! Horses and cows eat solar powered grass and humans eat wheat, corn, cows, and so on. No-one is deriving nutritional value from coal. How can solar power produce enough energy for our civilization?

The answer rests in efficiency. A modern commercial solar panel is about 20% efficient. Combined with a 80% efficient power transmission system, a 90% efficient battery charger and a 75% efficient cordless drill, about 10% of that kilowatt of solar power, or 100 watts, makes it to the work piece.

Contrast this with agriculture, which additionally requires arable land, fertilizer, pesticide, and irrigation. Plants spend most of their energy transpiring water to keep cool in the sun, and are less than 0.1% efficient at converting solar energy into digestible starch. Cows or yeasts are about the same. Then the human metabolism is about 5% efficient at converting consumed energy to mechanical work.

So while a solar powered electric system is 10% efficient, an agricultural system is 0.000005% efficient. This is the main reason that farms are really big. To create value, they have to capture a lot of sunlight, which is rather dispersed. This is also the reason why biofuels can never scale to completely replace gasoline. Their end-to-end efficiency is thousands of times lower than solar and batteries, and there isn’t enough arable land to produce enough ethanol. Not even close.

How many solar panels are needed? For a rough estimate, recall that solar is about 2000 times as efficient as non-meat food production, but that per capita energy consumption is only 1% food in industrial societies. Therefore, about 5% of the area devoted to agriculture is necessary to meet foreseeable electricity needs. About 11% of Earth’s land surface is used for crops, so we’re talking ~0.5%.

These can go anywhere – mountains, deserts, above roads and roofs. In fact, coal mines are a pretty good place. A solar farm operating for 20 years will generate more power (and more cheaply!) than a coal seam 10 feet thick! Even if all that coal is at the surface, it generates more power and revenue to form the foundation of a solar power plant. A similar calculation shows that the dollar for dollar returns for offshore wind are now at least 10 times better than offshore oil drilling.

So how cheap can power get? There’s no physical limit on the cost of solar power. Plants make it for free. Despite continuing surprises for the EIA, solar costs continue to drop about 10% a year while deployments grow around 30% a year.

What to do with all this cheap power? For most purposes, electricity is already too cheap to meter. The exceptions are thermodynamically intense processes like heat pumps and electrochemical operations. Smelting aluminium or magnesium. Recycling everything. Reverse osmosis desalination of enough water to artificially refill rivers parched by global warming. Air conditioning. Data center cooling. Antimatter synthesis. Zero impact mining. If I was in the business of producing decadal plans in these industries I’d be looking closely at places that are likely to have crazy cheap power in the near future.

What is The Program? The Program is a vision for the mass deployment of solar power, smart grid technology, grid storage, and electric vehicles. Ten years ago this bright future seemed uncertain. Now it is happening whether we like it or not.

7 thoughts on “The Program 2020

  1. ‘The Program’ is too general a name to inspire or avoid confusion. Ecotricity would be more memorable, and easier to search on but some company has already grabbed it.


  2. I think we need carbon capture and sequestration. Not to keep burning coal that’s not competitive with solar even while we pretend that CO2 emissions are cost-free. We need it for the coal we already burned. The ice caps are already melting, and raising sea level. The permafrost is already thawing, and putting more methane into the air. The cost of adjusting to a post-cryosphere world will be in the trillions. Lost real estate alone is enough to make cheaper to keep Antarctica icy.


      1. They did, but so what? They’re not selling it any more, mostly. Coal producers are going out of business anyway (at least as coal producers). Trying to make them pay now would be pointless. They would just go out of business completely, whatever businesses they’re in now, and sell off their assets to other firms. We would probably extract less than the cost of the bankruptcy process.

        The past customers of coal burners, on the other hand, are everyone. We can make ourselves pay, the same way we make ourselves pay for everything else: borrow, tax ourselves later to pay part of the interest, keep borrowing to pay most of it, and hope that the economy grows faster than the debt.

        The erstwhile coal is already in the air (and dissolved in the ocean above the thermocline, where it’s more or less in equilibrium with the air). How it got there doesn’t really matter all that much.


  3. I suppose I should also point out the minor quibble that nautical propulsion is mechanical work, and wind has been used for that since antiquity.


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