Japan, Nukes, and Solar

At Green Alpha ® Advisors, we believe the three best long-term sources of renewable energy are solar, wind and geothermal.  We've written about this before, and folks who follow us on Facebook or Twitter already know our opinion, because we're constantly posting updates like:

1. NYT is reporting on the rally in wind and solar stocks as a result of Japan's nuclear scare.
2. it's crazy to us that it takes an event like this to make the world at large realize we need more sources of zero carbon energy;
3. we would add geothermal to their  list. Wind, solar, and geothermal represent the best sources of indefinitely renewable, zero carbon energy, and the source material for all three is free.

Yet people keep comparing the Japan nuclear accident with Chernobyl, trying to get me to believe that this too will fade in the popular consciousness and no real progress will be made on renewable energy. "France gets almost all its energy from nuclear power and that didn't change after Chernobyl," seems to be a popular thing to say. I reply with something like, "okay, two things: first, no one believed Chernobyl was safe in the first place, so it was easy to assume the developed world's reactors were much safer and wouldn't likely experience a similar event.  Second, the zero-carbon alternatives to nuclear have gotten much cheaper and better since Chernobyl in 1986." This usually kicks off a discussion about nukes and Mark I containment or something, so I never get to really spell out why solar (which, of the three great renewables, is my personal favorite) is so vastly superior.  Fortunately, Green Alpha has a blog for that.  So, briefly, here goes:

The sun is bombarding us with a stunning amount of energy - far more than is popularly imagined.  According to the Union of Concerned Scientists solar topic page, "[a]ll the energy stored in Earth's reserves of coal, oil, and natural gas is matched by the energy from just 20 days of sunshine." It's worth remembering that the sun itself is a gigantic nuclear reactor; essentially it's a hydrogen bomb going off, but it's so massive that its own gravity keeps it more-or-less contained as a sphere. So, solar can be viewed as a way of collecting juice from this reactor, but with solar power, the nuclear fusion takes place 93 million miles away, which is a lot safer than, say, having it on the quake fault at Diablo Canyon, California, or near any other fault in the US (cool map of these).  When people ask "well, what about small reactors, aren't those okay?" I like to quote a Tweet by David Roberts (@drgrist) "nonexistent things safer than extant things."

"But coal is so cheap, won't we just revert back to that?" Yeah, we could.  But why would we when solar, once at scale, will be very inexpensive, even compared to coal? As I said in my rant about so-called clean coal:  "Why would we submit to the huge expenses (and dangers!) of locating, mining, transporting and burning coal, and then either having to pay for [clean carbon technology] or to remediate all the problems it causes (and likely both!)?  The source material to make electricity at solar plants literally falls from the sky for free.  We'd rather bet on electricity that's converted from free sunlight than from burned, expensive coal.  Especially in a carbon-constrained world."

But back to solar. First, how can I claim that it will become much cheaper than coal? Remember, photovoltaic cells are made from silicon wafers, just like computer chips, and something like Moore's law (which says efficiency per dollar will double every 18 months) applies: "price per Watt of solar modules (not counting installation) [have] drop[ed] from $22 dollars in 1980 down to under $3 today," according to Ramez Naam, in a great piece for Scientific American, and, as this continues, " in 2030, solar electricity is likely to cost half what coal electricity does today."  So it seems clear that, as it comes into its full potential, solar will become so cheap and plentiful that any type of fossil fuel will seem foolishly expensive by comparison, at least where electricity is the energy of choice.

Second, what makes me think, as an industry, solar is going to grow rapidly? At present, solar power is providing less than two percent of the US electric grid, yet is the fastest growing industry in the energy sector, expanding by 67 percent in 2010 alone.  From an investment management point of view, this combination is very attractive.  Considering the size, maturity and limitations of competing energy sources such as coal (dirty, dangerous, increasingly expensive), nuclear (expensive, unpopular, dangerous) and oil (expensive, limited, dirty) it's difficult to imagine a scenario where any of these industries will ever again grow at anything like solar's rate in the future. Yet with so much market share remaining to capture, solar's run may go on for some time.  Yes, like company shares in many energy industries, solar's equities may prove volatile day-to-day; but given the realities of a polluted, hot, dangerous, insecure, populous, carbon-constrained world, we don't really see that civilization has too many other choices. Except, of course, wind and geothermal; more on those soon. 

Garvin Jabusch is the cofounder of Green Alpha Advisors, LLC and manages The Sierra Club Green Alpha Portfolio -- a unique blend of Green Alpha Advisors' Next Economy universe and the Sierra Club's proprietary green-investment guidelines.

Comments

[jake]

Are you not excited about waves? They go 24/7, something like 90% of the worlds population lives on coastline, and are pretty darn predictable. It has it's challenges, but so does everything else.

I love solar, I'm OK with wind (it's just only reliable a few places), and I'm hot for geothermal (pun fully intended). Also, hopefully you've slated some further blogs on the massively important but often overlooked technologies for energy sequestration, ie what do you do with all that solar energy so you can use it at night? Or perhaps even more importantly, how do you harness all that energy to get a plane to fly? Cars have batteries, but even cars drive at night, so solar recharging stations won't always cut the mustard (really big capacitors?). This is mostly rhetorical since I know you already think about these things, but I'm interested to read about them.

[jake]

PS: How do you feel about Thorium nuclear for low/no radiation and waste fission power?