Climate change may have inspired the clean-energy revolution, but price has made it inevitable, Secretary of Energy Ernest Moniz said Thursday, citing plunging prices in solar, wind and efficient innovations like LED lighting.
"The discussion about climate and climate science and mitigation and adaptation is very important, but the fact is that clean energy, the clean energy scaling, has an inevitability about it following Paris,” Moniz said at the close of the 7th Clean Energy Ministerial, a San Francisco gathering of 24 energy ministers.
"This is becoming inevitable. This is the direction we’re going."
Michael Liebreich, the founder of Bloomberg New Energy Finance, has been calling the clean-energy transition inevitable for years, saying in 2013, for example, that "the inevitable conclusion is that at some point there will be a phase change, and clean energy will be the norm, not the exception."
Liebreich said it again Thursday in San Francisco, and Moniz adopted it. But a few things had to happen before Moniz would acknowledge the "phase change." The first was the Paris Agreement and climate conference last December that brought together an unprecedented international coalition of nations, innovators, and financiers. Secondly, the cost of clean energy and certain energy efficient products has fallen so fast that even the plummeting oil price has been unable to halt its growth.
Moniz reviewed a few indicators he had noticed at the Ministerial:
• Power Purchase Agreements (PPAs) in the range of 3¢ to 4¢ per kilowatt hour for wind and solar energy, which have made renewables competitive. PPAs are the long-term sales contracts that set the price at which utilities buy power from energy producers. In its most recent analysis of the levelized cost of energy, last September, Lazard had wind starting at 3.2¢, solar at 4.3¢, natural gas at 5.2¢ and coal at 6.5¢. "I think we may become almost expectant about this," Moniz said, "but if you think back a short time, this kind of development would have been viewed as completely remarkable—because it is."
• Plunging prices for energy efficient products like LED lights. Moniz praised India's success in reducing the price and increasing the efficiency of LEDs. The Indian government has distributed more than 50 million LEDs, using its purchasing power to drive down the price as it seeks to replace the country's 770 million incandescent bulbs. Led lights cost about $35 just four years ago. In India, the price has fallen to about 80¢ for a 9-watt LED, Moniz said, "and the implications of that are pretty incredible." Among those implications, low-energy LED bulbs demand less power from solar panels, extending the panels' usefulness.
• Commitments by companies to power their operations using renewable energy, spurred in some cases by a campaign of the Clean Energy Ministerial led by Germany and Denmark.
"All 3 of those elements, I think, point to the way we are seeing a scaling in this clean energy realm," Moniz said.
Just 15 minutes after the Clean Energy Ministerial adjourned, a meeting came to order of Mission Innovation, a coalition of 21 countries (and Bill Gates) that have pledged to double financing for energy research and development. The first panel at that meeting included an inventor, a venture capitalist, a utility-workers union representative and a utility executive—Southern Company CEO Tom Fanning.
Fanning extolled an all-of-the-above energy portfolio but acknowledged the "explosive growth" of renewables.
As that meeting too adjourned, Moniz said he was moving beyond Liebreich's "inevitability" to a new phase uttered by Fanning:
"His words were 'Can’t keep the waves off the beach,'" Moniz said. "I think that’s much better stated."
