Renewable Energy: The Silent Revolution
Wind and solar energy are at the forefront of a silent revolution playing out in the global energy sector. While wind and solar energy generation now account for ten percent of global electricity production, the rise of energy alternatives is even more encouraging on a country level where there is a noticeable move to replace fossil fuels with sustainable sources, particularly in emerging markets.
Today, wind and solar power account for ten percent of China’s energy sources, which is remarkable when you consider that 1.4 billion people reside there. Wind and solar also meet twelve percent of the United States’ energy needs. However, Europe leads in clean energy adoptions -- the UK and Germany are at thirty and forty percent wind and solar power, respectively, and are replacing fossil fuel-based energy production faster than any other nation. But what about emerging markets? Like China, India is home to more than one billion people, and they are serious about renewable energy. In just five years, India has increased the overall contribution of wind and solar from three to ten percent.
To shed light on this silent revolution and the future of solar energy and renewable resources, our founder and CEO, Abe Cambridge, answered a few questions below.
Q1: In your recent interview with Orange Pill Podcast, you referred to the possibilities of solar and wind energy replacing fossil fuels as a ‘silent revolution’. Can you elaborate on this?
If you look at the rate of change of the rollout of wind and solar, just over the last decade, you'll see that this technology is growing exponentially, and most people don't even know it. People often cite statistics about how much energy it takes to create a solar panel, saying it takes more energy to make the panel than it can ever produce. That might have been the case in the 1960s and 70s, but it certainly isn't the case now. In the past two years alone, the technologies and energy efficiency of making solar panels has improved so much that you can't keep track of it unless you're looking at it constantly. It's like the boiling toad analogy – if you put a toad into a pan of water and you heat that water up to boiling point, the toad will boil itself and won't notice that there's change happening until it’s too late. I consider the revolutionary switch from fossil fuels to renewable energy a silent one because it's happening without anybody noticing. People are not aware of it. There's nobody shouting or screaming. It's literally people switching to solar and wind because it's cheaper and more accessible. And that's why it's the silent revolution.
Q2: With fossil fuels currently being the primary source of energy, what will be the catalyst for change for more societies to switch to renewables?
The catalyst for change is that tipping point at which fossil fuels become more expensive on a per kilowatt hour (kWh) basis. This is called grid parity – the point at which the levelized cost of energy (LOCE) from renewables drops below the LOCE of the alternatives. This has already happened in many countries including here in sunlight rich South Africa, despite the country’s abundance of cheap coal. Change will also happen around the timing and the timescale with which new electricity systems can be deployed. For example, in South Africa, gigawatts of solar have now been installed, and in that time practically zero new fossil fuel capacity has been bought online because it takes decades for new fossil fuel capacity to be constructed and delays can be huge. We can get schools or businesses solar powered in a matter of weeks, so it's a completely different paradigm than waiting for a centralised fossil fuel power station to get permitted, built and to start generating. It’s a unique framework because people can act much faster so that the rate of change accelerates.
Q3: In your conversation with Orange Pill Podcast, India came up as a big player in terms of exponential growth in renewable energy. What lessons can we learn from India’s growth and how can other countries adopt that same model?
India has some of the challenges facing all emerging markets, including not enough generation capacity and horrendous air quality as a result of burning coal in power stations near cities. Not only is coal disastrous for health, it’s also an unreliable power source when the generation capacity can’t meet demand. So, the fastest, cleanest and cheapest way of getting additional generation capacity on to a grid is with solar and wind, and India has embraced this. That's how they've grown wind and solar power generation from three to ten percent in only five years. Bear in mind that for the size of the Indian subcontinent, it's a remarkable feat. If South Africa, which has a fraction of the generation capacity of India, can continue to apply the same effort, there's no doubt that equivalent replacements of coal with solar and wind can be achieved. Zimbabwe is heavily reliant on South Africa’s electricity exports as their own generation is extremely strained and limited … often there are outages for more than eight hours a day. As a result, the cost of energy is high, but the cost of the impact of power outages is even higher. Considering Zimbabwe is one of the main food producers in Southern Africa, unreliable electricity will make the cost of food go up even more. When the ability to make food is put under threat, then you’re looking at food security issues. Later this year, we’re launching a project with a major Zimbabwean food producer. They’re currently running diesel generators in combination with the Zimbabwean grid. They’re paying the equivalent of forty U.S. cents per kWh and even then, they have problems sourcing diesel to run their generators. It’s just incredibly unreliable and the cost to their business goes into the hundreds of thousands of dollars per year just on power supply issues resulting in lost operation hours and spoiled produce. Sun Exchange can transform the economics of this food producer by replacing their generator and grid supply with a stand-alone 100% reliable solar power plant with a battery bank which is designed to halve their energy costs.
Q4: You raised a good point about the health impact of coal and why renewable energy is a better clean energy choice. Aside from the obvious, what are the biggest differences between solar energy and wind energy?
I'd say the biggest difference between these two renewable energy types is predictability. We can predict exactly when a solar panel is going to produce energy because we know when the sun rises and when it sets, and we know what the maximum solar radiation is. On the other hand, wind generation is less predictable but can offer greater capacity output than solar. Even if the capacity output from a wind farm is greater than solar, wind is more sporadic and represents an entirely different energy profile. For example, if a storm pops up wind turbines generate huge output. So, the main differences between solar and wind are predictability and capacity output – there is a limit on how much solar you can generate but it’s predictable. The two work well in combination. Typically, on a cloudy day, the chances are that there's going to be some baseload from your wind farms coming out. Likewise, on a calm and sunny day, your wind may be low, but you've got your solar power. Fortunately, South Africa experiences clear and windy weather at the same time and is well-positioned to harness both wind and solar energy. Another major difference is that wind power, unlike solar, is only suitable for injecting into the transmission network of the grid; it’s really not suited to embedded generation (providing power at the point of use). This is one of the advantages solar energy has over wind. For example, solar panels can be installed on the roof of a school and start generating power. You can’t just put a wind turbine next to a school because the building will generate turbulence around the building which spoils the consistent airflow needed to get stable power output. In addition, the noise pollution from a wind turbine makes it impractical and unfeasible in settings where there are lots of people. With solar panels, you’re going to harvest the same amount of energy irrespective of it being placed in a populated urban area or isolated desert. In this context, solar is a lot more flexible and scalable than wind.
Sun Exchange’s solar projects at a school in Cape Town.
Q5: You touched on the sustainable properties of solar and wind energy in comparison to fossil fuels which are exhausted over time. As renewables gain traction, what will the future of economies that rely on fossil fuels look like?
I believe fossil fuel economies will transition to renewables. It’s already happening. Take Saudi Arabia; even though they are a major fossil fuel player they have one of the most ambitious solar power agendas in the world. Whether they use fossil fuels internally or for export, it’s in their interest to adopt renewable energy because it’s a finite resource. Dubai is another example; early on, the Emiratis understood the importance of reducing dependence on fossil fuels. They’ve positioned the city as a business hub and today, Dubai’s population is mostly expats who have built thriving businesses in every industry you can think of. The U.A.E. is also about to bring on line the worlds largest solar power plant that will supply electricity at a lower cost per kWh than their oil and gas powered power stations, in a country that was literally built from it’s wealth of oil reserves. So, the future is inevitable. As more nuclear and fossil fuel power stations are taken offline and retired, they are being replaced with modern alternatives that are cheaper. Economies stuck on fossil fuels have to start transitioning to alternatives.
Q6: What about the jobs and livelihoods attached to coal production?
Coal mining operations have vastly reduced their dependence on human intervention – today, many of the giant excavation machines are robotic and operated remotely from overseas. That’s the reality of large-scale coal mining operations today. Then there’s the informal coal mining sector where you have guys digging in old tunnels that are close to collapsing and countless fatalities. The health consequences of coal mining are burning coal are terrifying. An alarming number of premature deaths are being recorded as a direct result of populations living in proximity to coal operations inhaling contaminants in the air. Solar installations are a manual job and every rooftop where electricity is used is an opportunity to create healthier jobs for displaced mine workers.
Q7: I imagine the solar power supply chain offers new opportunities for SMEs?
Absolutely. Each time a solar installation is deployed, the economies of local towns are supported as you have installation teams staying in local B&Bs, eating in restaurants, and using the shops and services in those towns. When you look at the supply chain, you're bringing in solar panels and components from abroad, which also means new transportation jobs all over the country. It creates an entirely new supply chain.
Q8: Blockchain plays a pivotal role in Sun Exchange’s business model. Do you see it becoming even more important as smart grids increase?
Yes, because it simplifies the process of billing massively even when sources are decentralised. For example, if you're producing solar power and you're storing it in a battery, then the smart grid could instantly call upon that energy that you've harvested. Then you would receive payment for that energy and a blockchain system would increase the efficiency of monitoring and billing. And it will increase the certainty of you receiving payment as a blockchain transaction smart contract is immutable.
Q9: As the founder of the world’s first peer-to-peer solar cell leasing platform, how do you see the future of incumbent electricity utilities?
Energy utilities are going to have to reinvent themselves and come up with new business models, as many have already done in Western Europe. They have to start realising that they can't be the end-to-end owners of electricity production, distribution, and generation. But they still need to make revenue and they still need to cover the cost of maintaining an efficient grid. In countries like Germany and the U.S.A. where you have the most advanced utilities, the means of generation and distribution are already being divided.The utility is there to manage things like ensuring the grid is balanced and that solar generators aren’t over-producing in the daytime, and paying the producers of solar energy precisely according to the value of the energy they are able to supply to the grid on demand.
Q10: What developing technologies are you interested in other than the growth of solar and wind?
People often say that solar and wind will never take over because of their intermittency problem. But that can be solved with an energy storage system and those technologies are starting to become more available and affordable. As you know, I’m excited about graphene supercapacitors especially as a promising energy storage solution. In the UK, a country not known for its sunshine, they’ve just built a solar with storage plant that is cost competitive with the grid. If you were to bring that technology to somewhere like South Africa where there's an abundance of materials required to make storage systems, then you're basically going to transform the grid overnight. You just need to scale up the storage production and that's where technologies like graphene are going to come into their own as they are ultra low cost to manufacture on a kWh basis. If you can build a solar energy with storage system which can deliver dispatchable energy at a much lower price point than the fossil fuel network, then coal, oil and gas powered electricity is history.
Q11: Certainly an exciting future for wind and solar! Are there any other technologies that you see on the horizon that could potentially add to renewable grids in the future?
As wider adoption of these renewable energy technologies takes hold, it pushes the status quo in other spheres of utility production. In the next episode of the Orange Pill Podcast, I’ll be talking about some exciting developments in this space. Stay tuned!