To Fight Climate Change in the Trump Era, Focus on the States

Summary: Focus on the states. Advocate for clean energy.

(This is a follow-up to my post on pushing for progress at the state level.)

Short Version

If you read nothing else in this post, follow these three steps:

  1. Find your state legislators and the contact info for your Governor’s office.
  2. Contact them: Call them up. Find out when their next town hall meeting is, and show up. Bring friends, or ask your friends to call too.
  3. Tell them you want to see more clean energy in your state. Tell them clean energy creates jobs. Tell them clean energy means cleaner air and water, and a healthier environment for the kids in your state.

Note: Say “Clean Energy” instead of “Climate Change

If you live in a deep blue state, talking climate change may work. But in a purple or red state, or, heck, even in most blue states, “boosting clean energy” is remarkably more popular than “fighting climate change”. Clean energy is popular among both Democrats and Republicans. Fighting climate change isn’t.

That’s why, in the current environment, where Republicans control the White House, the Congress, and the majority of state legislatures, the framing has to shift to “clean energy” if we want to see progress.

Long Version

How Bad Will Trump Be for Climate Change – How Do We Limit Warming – What Policies Should We Push For – What If I’m in a Red State?  

How Bad Will Donald Trump be for Climate Change Efforts?

Donald Trump is the President-Elect. The GOP has majorities in both the House and Senate, and will probably keep them in 2018.

How bad is this for our efforts to fight climate change? Opinions vary.

  1. If you think the most important element in fighting climate change is technology innovation that’s bringing down the cost of clean energy, Trump’s election isn’t great, but ultimately probably doesn’t matter much.
  2. If you think the most important element is policies inside of various nations, Trump’s election is bad. But not fatal.
  3. If you think the most important element is international agreements, Trump’s election is a complete disaster.

Obviously, all three of these are components. I place the most emphasis on 1 and 2. Prices will keep plunging and policies in other countries and in US states won’t change much. Trump will likely instruct the EPA to scrap the Clean Power Plan, but that was never a very ambitious policy.

Trump and the congress could accelerate the end of solar and wind tax credits, which matter more, but purported insiders claim that those bipartisan tax credits will remain. What’s very likely is that the US will stop leading on international climate negotiations. And Trump is highly unlikely to push for a massive acceleration of clean energy as Hilary Clinton proposed to.

This isn’t good news. At best a Trump administration represents a status quo in climate policy in the US, even at a time that US policy wasn’t ambitious enough. More realistically, we’ll see a weakening of clean energy and climate policy both at home and abroad. Meanwhile, 2016 will be a record hot year and we’re already not taking climate change seriously enough.

So what the hell do we do?

Let’s be honest. Limiting climate change to two degrees celsius is, at this point, extremely unlikely.

Even so, our actions matter. 2.1 degrees or 2.2 degrees of warming is far better than 3 degrees.

How Do We Limit Warming?

How do we limit warming? Fundamentally, we need to continue and accelerate the process of making clean energy and clean transportation cheap. Even cheaper than they are now. How cheap?

  • Cheap enough that they account for all or virtually all new electricity and transportation.
  • Cheap enough that nations are willing to decommission existing fossil-fuel based electricity and transportation, and replace them with the cheap clean options.

As I’ve posted before, the private sector is doing an amazing job bringing down the cost of solar power, wind power, energy storage, and electric vehicles. Clean energy can provide the large majority of the world’s power. But it still needs to get even cheaper.

How do we make these technologies cheaper? We scale them. The most fundamental observation in clean technology is that prices drop as the industry grows. No other factor predicts the price of clean energy better than the amount that we’ve installed.

Globally, clean energy will keep on getting deployed, as in many places solar and wind are the cheapest sorts of energy, even without subsidies.

Our Best Tools Are In the States, Now

Inside the US, while federal progress is unlikely, we have tools to drive more deployment of clean energy at the state and sometimes city levels.  So that’s what we’ll have to use.

How do we push for change at the state level? Well, first understand that state legislators hear tremendously less from their constituents than members of Congress. Each state legislators represents fewer people than each federal Representative or Senator. And voters have a way of fixating on national politics and ignoring the local and state level. That makes your voice more powerful. Phone calls, letters, attendance at town hall meetings, even contributions – they all have more power at your state level than they do at the national level.

So use them! Call your state legislators. Make your voice heard. Show up at their town hall meetings. If you have the means, contribute in close races to get someone who cares about climate policy elected. And call your Governor’s office as well.

Now, what do we push for at the state and local level?

1. Push for a (stronger) Renewable Portfolio Standard in Your State

As I posted last week, 29 states have Renewable Portfolio Standards which mandate a certain percent of electricity must come from renewables by a specific year. Voters in all 50 states can push – via the legislature, and in some states by initiative – to raise those targets, to invest more dollars directly in clean energy, to create taxes or caps on carbon emissions, to boost vehicle fuel efficiency standards, or for other laws that accelerate the deployment of clean energy, electric vehicles, or energy efficiency, or which directly cap or reduce fossil fuels.

Find your state below, or look up the specifics of your state’s policy here.

  • If your state is dark green, it already has a binding target for getting a certain fraction of its electricity from solar and wind. Call up your state legislators (again, you can find them here) and tell them you want a higher target. Then call your Governor’s office, and say the same.
  • If your state is light green, your state has a goal, but it’s voluntary. Call up your state legislators and Governor’s office, and say you want a binding clean energy target.
  • If your state is grey, then shame shame on your state. Call up your state legislators and Governor’s office, tell them that you vote, and that you want your state to move forward with clean energy.

state-renewable-portfolio-standards-from-ncsl

Talking points you can use:

  • Clean Air and Clean Water – Clean energy doesn’t produce smog or air pollution. It doesn’t contaminate ground water. It helps your communities have clean air and clean water.
  • Jobs Clean energy now employs more people in the US than coal. These are good, high-paying, local jobs.
  • Owe it to our kids – In polling, one of the most powerful messages across left and right is that “we owe it to our kids and future generations to leave them a cleaner, healthier world”

But I Live in a Red State!

Red states are no strangers to clean energy. Texas leads the country in wind power. The top 10 wind power counties in the country all have Republican congressmen.

In Florida, which Trump won, voters rejected an initiative that would have hurt rooftop solar.

And clean energy is popular across the political spectrum. It can be pushed for, even in red states.

2. Push for Electric Vehicles & Charging Stations

Clean electricity from solar and wind is getting cheap. But almost all cars run on gasoline, and that accounts for a third of our nation’s carbon emissions. If we want to beat climate change, we must electrify everything.

Fortunately, electric vehicles are plunging in price. But that price is still artificially high. If we included the benefit that electric vehicles bring by reducing carbon emissions, they’d be thousands of dollars cheaper. And charging infrastructure is still an issue. Without enough places to charge, drivers are less likely to opt for electric vehicles. Here again, the states can help.

Look up your state on this map of state-level electric vehicle policies. Find out what incentives exist:

  • Is there a tax credit for buying or leasing an electric vehicle? (To capture the benefit it brings us all be reducing air pollution and climate change.)
  • Can electric vehicles use the HOV lanes?
  • Does the state create incentives for private businesses to create charging stations?

If not, call up your state legislator(s) and your Governor’s office, and ask for those things.

4. Push for Rooftop Solar

Most US states now have some form of “net metering” policy. This is the policy that lets home-owners that have solar panels on their roofs sell excess energy back to the grid. But the quality of these polices varies widely.

Some of the sunniest states in the US, including Nevada and Texas, get an “F” on their net metering policy – either having none, cutting one that existed off, or cutting the amount they pay home owners for the excess electricity to well-below market rates. Find your state below, or at the interactive map at freeingthegrid.

state-net-metering-policy-grades-from-freeingthegrid-dot-org

Don’t like your state’s policy? You know what to do: Call your state legislators and your Governor’s office.

5. Push for Community Solar

Rooftop solar is great if you own a home with a roof that points south or west, and that isn’t blocked by trees. But what if you rent? What if you live in an apartment? What if trees or other buildings block the sunlight from your roof?

“Community Solar” is a new policy that lets you buy into a solar farm in your community, own a set of panels there, but treat it as if its on your roof – using the electricity that comes out of it for free (after the cost of paying for the panels, of course) and selling excess power back to the grid. It’s a leveler of the playing field, allowing often lower-income families who live in apartments or rent their own homes to tap into some of the value of solar.

It’s also quite new. Look at the map below. Is your state in the more saturated color of blue? No? Then there’s more work to do. Work you can help make happen by calling your state legislators and your Governor’s office.

community-solar-map-by-state

6. Take Action in Your City

Finally, states aren’t the only level at which action can be taken. More than a dozen cities around the world have signed on to the Carbon Neutral Cities Alliance, pledging to cut their emissions by 80% or more by 2050. Cities also have critical work to do on climate resilience – improving infrastructure to deal with rising seas, increased flooding, prolonged heatwaves, and other threats.

You can organize and act at the city level. Contact your city councilors (modify this search to find them) and your Mayor’s office.

Climate deniers may be in charge of the Federal government. But that’s no reason to give up. Many of the most effective policies in the US exist at a state level. Climate change is a divisive topic, but clean energy is loved across the political spectrum. Use your voice. Contact your state politicians, and tell them you want more clean energy in your state.

 

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Trump Isn’t Hitler. The US isn’t 1930s Germany

Trump isn’t Hitler. And, more importantly, the US is a far different place than Germany in the 1930s. We’re a 240-year-old nation, not a 14-year old republic reeling from WWI. Our institutions are more solid and stable. They can’t be swept away in the way that Hitler was able to sweep away the Weimar Republic’s.

I don’t say this to encourage complacency: The next few years are likely to see a big regression in our laws, and rollback of some significant and important progress we’ve made. Trump’s election is not a good thing. There are darker days ahead. We need to work hard and smart to get the country back on track and headed into the future instead of the past. And we should be prepared for the possibility that things get worse than expected, as well.

But we shouldn’t panic. We shouldn’t give up. We shouldn’t flee.

We should stay here and win our country back.

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We Can Push For Progress at the State Level

Donald Trump won. The GOP has the Senate and the House. They’re likely to retain the Senate in 2018. Trump will get to appoint at least one, and probably multiple Supreme Court justices, with a (presumably) friendly Senate.

Yet we live in a republic. And many of the most important issues can be fought for at the state level.  Here are 6 that come to mind:

  1. Criminal Justice Reform
  2. Ending the War on Drugs
  3. Climate Change and Clean Energy
  4. Education
  5. Responsible Gun Laws
  6. Anti-Poverty Measures

1. Criminal Justice Reform 

90% or so of the over 2 million people locked up in the US are at the state or local level. They’ve been arrested and possibly sentenced based on state laws, not federal laws. Their crimes, their lengths of sentence, their conditions in prison, the educational and reform opportunities they may or may not receive – all of those are set by state law, not federal law.

us-prison-federal-vs-state

Also, by the way, while private prisons are probably the worst 90% of the prisoners held in the US are held in public prisons, not private. The laws that land people in jail and keep them there, and the incentives to keep prisoners rather than turn them into healthy citizens, are the biggest issues.

private-vs-public-prison-populations-from-vox

Want to end mass incarceration in the US? Fight to change the laws, sentences, and prisons in your state. Specifically:

  1. Reduce sentences for crimes, especially first crimes and non-violent crimes.
  2. Push for more programs to train and educate convicts in prison, and to hire them when out of prison.
  3. Push for ex-convicts to regain full voting rights after their sentence has been served.
  4. Push for incentives for public and private prisons based on successful re-integration of ex-prisoners into society.

2. Ending the War on Drugs

More than 300,000 people are in jail in the US for drug crimes. Two thirds of those are in state prisons (see above). If you want to end the drug war, a lot of it has to start – and can start – at the state level.

And it’s happening. Eight states have now decriminalized recreational marijuana. Four of those states joined the list on the same night that Donald Trump was elected.

There’s more to do. Push in the states to turn all drug possession charges (yes, of any drug) into misdemeanors, and to redirect non-violent drug offenders to treatment instead of prison.

And yes – the FBI and DEA, under Trump, may try to enforce Federal drug laws. Those will still not be targeting individual drug users in the large majority of cases. Loosening state laws is the key to ending the war on drugs.

3. Climate Change and Clean Energy

Donald Trump can direct the EPA to eliminate the Clean Power Plan. He plus the GOP congress can, and may, eliminate solar and wind tax credits (which are currently phasing down over a five year period).

But that doesn’t mean we’re helpless. 29 states have Renewable Portfolio Standards which mandate a certain percent of electricity must come from renewables by a specific year. Voters in all 50 states can push – via the legislature, and in some states by initiative – to raise those targets, to invest more dollars directly in clean energy, to create taxes or caps on carbon emissions, to boost vehicle fuel efficiency standards, or for other laws that accelerate the deployment of clean energy, electric vehicles, or energy efficiency, or which directly cap or reduce fossil fuels.

state-renewable-portfolio-standards-from-ncsl

Even in Florida, which Trump won, voters rejected an initiative that would have hurt rooftop solar.

And clean energy is popular across the political spectrum. It can be pushed for, even in red states.

4. Education

K-12 education in the US is driven primarily by the states, not the federal government. Roughly 90% of spending is done by states and local communities.

Care about education? Work in your state, or in your county, or on your local school board.

One of the greatest injustices in education is that in many states, students in more affluent counties get more spent on them than students from lower-income counties (despite plenty of evidence that the latter are the ones who need more help in school).  Want to fix that? Go to work in your state.

5. Responsible Gun Laws

The 2nd Amendment leaves considerable wiggle room for the 50 states to enact responsible gun laws, including mandatory registration or licensing to purchase guns, background checks, waiting periods, restrictions on sales at gun shows and by private gun dealers, requirements for locking devices, and more.

Gun laws vary significantly by state. The corollary to that is: You can work in your state to improve those gun laws.

gun-laws-by-state-from-the-guardian

6. Anti-Poverty Measures

The Federal government runs multiple social safety net programs, but nothing prevents the states from running their own or augmenting those of the Federal government.

Are you a fan of a basic income? We don’t have one in the US, but we have a distant cousin – the Federal Earned Income Tax Credit. And a number of states boost the Federal Earned Income Tax Credit locally.

Think a higher minimum wage is a good idea? More than 20 states set a minimum wage higher than the federal level. Four states raised their state minimum wages the night Donald Trump was elected. Some cities, like Seattle, have their own, higher minimum wage. (For the record, I’m a fan of experimenting here – getting the data from states and cities on what happens when minimum wages go up is invaluable.)

This is a short, partial list. Not everything can be done at the state level or local. And many initiatives will only succeed in blue states, leaving behind the vulnerable in red states. This isn’t an ideal situation, by any means. The Federal government is an important tool for moving the country forward.

But liberals aren’t powerless, either. If we can’t get things done in Washington, D.C., we can still get things done in Washington State, or New York State, or California, or elsewhere.

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New Record Low Solar Price in Abu Dhabi – Costs Plunging Faster Than Expected

The price of solar power – in the very sunniest locations in particular – is plunging faster than I expected. I’ve been talking for years now about the exponential decline of solar power prices. I’ve often been called a wide-eyed optimist. Here’s what those projections (based on historical learning rates) look like.

Future Solar Cost Projections - PPA LCOE

In fact, if anything, my forecasts were too conservative. The solar prices I expected have been smashed by bids in the Middle East and in Latin America. I will need to update the model above in a future post.

The latest record is an incredibly low bid of 2.42 cents / kwh solar electricity in Abu Dhabi. That is an unsubsidized price.

Let me put that in perspective. The cost of electricity from a new natural gas powerplant in the US is now estimated at 5.6 cents / kwh.  (pdf link) That is with historically low natural gas prices in the US, which are far lower than the price of natural gas in the rest of the world.

This new bid in Abu Dhabi is less than half the price of electricity from a new natural gas plant.

What’s more, it’s less than the cost of the fuel burned in a natural gas plant to make electricity – without even considering the cost of building the plant in the first place.

The solar bid in Abu Dhabi is not just the cheapest solar power contract ever signed – it’s the cheapest contract for electricity ever signed, anywhere on planet earth, using any technology.

Nor is this bid a fluke. Three other bids in Abu Dhabi’s latest power auction came in at less than 3 cents / kwh:

Bidder Bid per MWh (in USD)
Masdar, EDF, PAL Technology 25.4
Tenaga, Phelan Energy 25.9
RWE, Belectric 29.1

Nor is it limited to just Abu Dhabi.

In Chile, just a month ago, a new record low price for solar was set, at 2.91 cents / kwh.  That record lasted less than 5 weeks.

In Mexico, the average price of new solar bids in April was 5.1 cents per kwh, and the cheapest solar bid in Mexico was 3.5 cents per kwh.

These price improvements are not coming primarily from the price of panels dropping. They’re coming from reductions in the total cost to deploy solar, increases in solar capacity factor, ever-lower operating costs, and fierce competition to win bids in the solar industry.

The solar industry is learning faster than expected.

Now, let’s watch and see if energy storage prices can drop as fast as solar.

 

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Wind Power Blowing More Reliably Than Ever

New wind turbines produce power more steadily – with less up and down intermittency – than ever before.

As I wrote in August of last year, NREL believes that next-generation wind turbines can reach a capacity factor of 60%. That is up from a capacity factor of 30% just a few years ago. And it means, roughly, that these turbines would be producing wind power around 60% of the time – making them more and more viable as a substitute for ‘baseload’ power from coal or natural gas plants. That’s even more true when combined with the plunging price of energy storage.

New data from NREL shows that wind power has been continuously rising in its capacity factor (and thus, its stability) for the last 15 years. In 1998, capacity factors for new wind turbines were around 25%. In 2014, capacity factor for new turbines averages over 40%, or two thirds better.

In an absolute sense, wind turbine capacity factor in the US is rising around 1% per year. That implies that we’ll reach 60% capacity factor for average wind turbines by around 2035.

And the best wind turbine deployments in 2014 are already at 50% capacity factor. The best sites, such as those in the great plains, will reach 60% capacity factors for wind as soon as 2025.

Wind Capacity Factor Rising

High capacity factor wind power + transmission to get it the right sites + increasingly cheap solar (which complements wind) + increasingly cheap storage. That’s a formula for reaching a non-carbon grid in the coming decades.

More in this series:

Part 1 looked at how cheap solar can get (very cheap indeed).
Part 2 looked at the declining cost and rising reliability of wind power.
Part 3 looked at how cheap energy storage can get (pretty darn cheap).
Part 4 looked at how far renewables can go.
Part 5 looked at how cheap electric vehicles can get. 

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How Cheap Can Electric Vehicles Get?

This is part 5 of a series looking at the economic trends of new energy technologies. Part 1 looked at how cheap solar can get (very cheap indeed). Part 2 looked at the declining cost and rising reliability of wind power. Part 3 looked at how cheap energy storage can get (pretty darn cheap). Part 4 looked at how far renewables can go. Now let’s talk about electric vehicles.

EVs are a Disruptive Technology

If current trends hold, EVs will, within a decade or two, be the cheapest vehicles on the market. And that, if it happens, will lead to market dominance. Electric Vehicles are a disruptive technology.

The Plunging Price of Electric Vehicles

The past four parts of this series have all covered electricity generation. But electricity is only perhaps a quarter of worldwide carbon emissions. What about transportation, where oil-burning cars dominate?

Electric Vehicles, like virtually all other manufactured goods, are likely to have a learning curve, meaning that greater production will mean reduced price. Batteries, a large fraction of the cost of EVs, appear to have a learning rate of around 21%, meaning that every doubling of scale will reduce costs by 21%.

What about whole vehicles? The Ford Model T had a learning rate of around 16%. Let’s use that for the entire vehicle, including the battery. That gives us a conservative estimate of the cost improvement rate.

Last year, EVs grew at around 60% annually, to around 1 million total EVs ever sold. Sources in China tell me they expect several hundred thousand EVs to be sold there in 2016 alone. Growth could easily be 60% again in 2016. Even so, growth will eventually slow. Bloomberg New Energy Finance expects 30% long term growth. Let’s use that for now, to be conservative.

Those assumptions lead to a world where, by roughly 2030, EVs with a 200 mile range are cheaper than the cheapest car sold in the US in 2015.

Electric Vehicle Learning Curve - EVs Dropping Below Cost of Gas Cars - 30percent CAGR - 16percent LR

Is this plausible? Yes. EVs are simpler devices than gasoline-powered vehicles. They have a smaller number of parts, making them easier to assemble. At similar scale to gas vehicles, electric vehicles should indeed be lower cost to built.

In addition, EVs have many fewer moving parts (in the engine and drivetrain in particular) than internal combustion vehicles. That further means lower construction cost for the most complex and costly part of a vehicle, and far lower maintenance cost.

On Cost-Per-Mile, EVs Win Even More

Electric vehicles, today, have lower total costs per mile than equivalent gasoline-powered vehicles, due to lower energy costs of electricity and the lower maintenance costs. At 30% growth rate, EVs will have roughly half the up-front cost of gasoline-powered vehicles in roughly 10-12 years, around 2027 or 2028. At that point, the total cost per-mile-driven of EVs will also be roughly half the cost of gasoline powered vehicles.

That, in turn, means that to the extent that transportation becomes a service, with people increasingly paying for rides (ala Uber) instead of paying to purchase cars, the cheapest rides will be in electric vehicles. If you call an Uber, or its future equivalent, it will almost certainly be electric.

Put it all together: Electric vehicles are already cheaper to own and operate than gasoline vehicles. At current rate, within a decade, they’ll be markedly cheaper to purchase up-front, and half the total price to own and operate. And within 20 years, if trends hold, 200-mile-range 4-seater EVs, with awesome acceleration and modern amenities, will be cheaper than the cheapest cars sold in the US today.

That is a coming disruption.

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APEX Wins the Philip K. Dick Award!

PKD Award

Tonight, in Seattle, I was in the crowd when my novel Apex won the Philip. K Dick Award.

 

Apex is the third and final book of the Nexus Trilogy. Those books have now collectively won the Prometheus Award, the Endeavor Award, been listed on NPR’s list of Best Books of the Year, and been shortlisted for the Arthur C. Clarke Award and the Kitchies Golden Tentacle Award. They also earned me a nomination for the Campbell Award for Best New Author in 2014.

To say I’m pleased would be an understatement.  The PKD is a juried award, meaning that a panel of 5 judges picked Apex as the most deserving paperback-original science fiction novel of the year, out of the more than 100 titles that were submitted.

I’m also pleased because Philip K. Dick wrote about topics that I care about: Identity, memory, surveillance, the inner workings of the mind and the structure of society. Those are the very same topics I tried to touch on in the Nexus books.

My fellow nominees (Marguerite Reed, Adam Rakunas, PJ Manney, Douglas Lain, and Brenda Cooper) are all awesome. Brenda was one of the first professional writers to take the time to read Nexus and to give me advice and encouragement on publishing. PJ and Adam are both old friends. And I look forward to becoming friends with Marguerite and Doug.

The six of us teamed up to give away copies of all six finalist books. It’s too late to enter that giveaway (almost 4,000 people did), but you can still visit the site to learn more about all six books.

Here’s all of us hanging out before the award.

PKD Nominees - Black and White

Thank you everyone who helped make Apex and the Nexus books great, including Molly (who read every page of each of those books, usually on the day I wrote it), my agent Lucienne Diver, my editor Lee Harris and publisher Marc Gascoigne, the almost 60 beta readers who read one or more drafts of those three books (sometimes many more than one draft) and gave feedback to make them better, and especially the fans who bought them, shared them, and told everyone else to go read them.

Onward and upward.

APEX (1)

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Why I’m Starting the First AngelList Cleantech Syndicate

I’ve been writing and speaking about the incredible pace of solar, wind, and storage for years. I’ve been quietly investing in startups in that space as well.

Today I’m taking a new step: I’m launching an AngelList Syndicate specifically focused on investing in clean energy technology. If you’re an angel investor, I invite you to come join me.

Why am I doing this, and why now?

1. Clean Energy is a Disruptive Technology

The word “disruption” gets thrown around a lot. Clean energy is a technology that truly is disruptive. The cost of solar power has plunged by a factor of four in the last five years, with more reduction to come. Batteries are poised to follow a similar price decline. Wind power, electric vehicles, IoT, and software platforms that manage and accelerate clean energy are all booming in capabilities and plunging in price.

Allance Bernstein Welcome to The Terrordome Solar Price Disruptive - Header Removed

We’ve coupled the price of energy to the ever-decreasing price of technology. There’s no going back.

2. The Transition Will Be Trillions

We will transition to clean energy. The world has no choice. The trajectory of policy is towards ever more downward pressure on fossil fuels. And every unit of renewables deployed brings down their price, making them more competitive.

That transition will involve tens of trillions of dollars of investment.

Today we’re only 1% of the way into that transition. Solar just hit 1% of world electricity. Wind power is a few percent. Energy storage and clean transportation are both closer to one tenth of one percent of the scale they need to be at.

Energy transitions are huge undertakings. That means both a need for investment in R&D and an opportunity for the companies that create the new innovations that power the world, and the investors who back them.

3. Investment is Growing

Clean energy spending around the world hit a new record of $329 billion in 2015, topping the previous record of 2011, and nearly 6 times the amount the world spent in 2004.

2015 Record Cleantech Spending - BNEF

And for the first time in history, the world installed more peak capacity of clean electricity generation than fossil electricity generation, as the chart below shows, in GW of new capacity per year. Fossil fuels still produce more total new energy each year, due to the intermittency of renewables. But the point where renewables amount to more total new energy on the grid each year than fossil fuels is now in sight.

Clean Electricity and Renewables New Nameplate Capacity Passes Fossil Fuel Electricity - BNEF

4. R&D Funding Is Poised to Grow Again

Venture funding in cleantech has been low in recent years. But that’s poised to change with Bill Gates, Jeff Bezos, Mark Zukerberg, and a coalition of governments and large investors aiming to boost cleantech R&D funding to $20 Billion per year.

Some of that funding will come as early-stage government R&D funding. Some of it will come as venture funding. Both are good for angel investors.

5. AngelList is the Right Platform

AngelList itself is a disruptive innovation for startup investing. It turns a process (raising money for your startup / investing in startups) that was previously shrouded in mystery, hugely time consuming, and heavily dependent on knowing the right people, and flattens that process. It’s a landscape-leveler for startups and investors alike. And through the ability of investors to join syndicates, they can draft on the knowledge and expertise of others.

I’ve been investing on Angel List for two years now, joining the syndicates of others. It’s given me access to investment opportunities that I never would have had, previously. And it’s allowed me to back startups that I think have the opportunity to change the world for the better.

There’s no place better or easier to do this than on Angel List.

(I’ll also remain a part of other angel networks, specifically Element 8 in Seattle.)

6. We Have a Moral Responsibility 

The CO2 we emit into the atmosphere lingers there for a century. The warming it causes may last a millennium. The scars in our biosphere may last millions of years. We are leaving the natural world, and all the future generations who’ll live in it, impoverished.

I believe strongly in leaving a better world for our kids, their kids, and for all the generations to come. That’s why I focus on this sector in particular. And in the process of investing in clean technology, I see an opportunity for a triple bottom line: A return in financial gain, a return in a better world, and a return for billions of people who’ll get to enjoy that world.

If this interests you, and you’re an angel investor, I invite you to come join me.

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My Carbon Price Presentation to the Washington Legislature

On Friday Feb 19th I testified before the Washington House Environment Committee on the topic of carbon pricing, both from the point of view of a member of the executive committee of CarbonWA (I-732) and as a concerned citizen.

You can watch the full testimony (including other witnesses) at TVW:

My full slides are here (5MB PPTX). They include a number of appendix slides with more details.

Mez WA Legislature House Environment Committee Carbon Pricing Testimony Screenshot

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Renewables are Disruptive to Fossil Fuels

A shorter version of this post first appeared at the Marginal Revolution blog.

Cleantech, and specifically renewables like solar and wind (and their fellow traveler energy storage) are disruptive to fossil fuels.

Over the last 5 years, the price of new wind power in the US has dropped 58% and the price of new solar power has dropped 78%. That’s the conclusion of investment firm Lazard Capital. The key graph is here (below is a version with US grid prices marked). Lazard’s full report is here.

Solar and Wind Price Reduction 2009-2014 Lazard - With National Grid Costs

Utility-scale solar in the West and Southwest is now at times cheaper than new natural gas plants. In Feb 2016, the City of Palo Alto announced a solar deal signed at an incredible 3.676 / kWh. Even after removing the federal solar Investment Tax Credit of 30%, the Palo Alto solar deal is priced at 5.25 cents / kwh. By contrast, new natural gas electricity plants have costs between 6.4 to 9 cents per kwh, according to the EIA.

(Note that the same EIA report from April 2014 expects the lowest price solar power purchases in 2019 to be $91 / MWh, or 9.1 cents / kwh before subsidy. Solar prices are below that today.)

The Palo Alto solar purchase is the latest in a string of ever-cheaper solar deals, including:

  • NV Energy buying 100MW from First Solar at 3.87 cents / kWh.
  • Xcel signing a PPA with NextEra at 4.155 cents / kWh.
  • Austin Energy (Texas) signed a PPA for less than 5 cents / kWh for 150 MW.
  • Salt River Project (Arizona) signed a PPA for roughly 5.3 cents / kWh.

These are prices that undercut natural gas, and would even without subsidies. They’re limited to extremely sunny areas, but that zone will grow over time.

Wind prices are also at all-time lows. Here’s Lawrence Berkeley National Laboratory on the declining price of wind power (full report here):

After topping out at nearly $70/MWh in 2009, the average levelized long-term price from wind power sales agreements signed in 2013 fell to around $25/MWh.

In 2014 it fell even further, to around $20/MWh, or 2 cents per kWh.

Wind PPA Prices 2014 Wind Technologies Market Report

After adding in the wind Production Tax Credit, that is still substantially below the price of new coal or natural gas.

Wind and solar compensate for each other’s variability, with solar providing power during the day, and wind primarily at dusk, dawn, and night. Wind power is also becoming more reliable as new technology is developed and deployed.

Energy storage is also reaching disruptive prices at utility scale. The Tesla battery is cheap enough to replace natural gas ‘peaker’ plants. And much cheaper energy storage is on the way.

How Cheap Can Energy Storage Get

Renewable prices are not static, and generally head only in one direction: Down. Cost reductions are driven primarily by the learning curve. Solar and wind power prices improve reasonably predictably following a power law. Every doubling of cumulative solar production drives module prices down by 20%. Similar phenomena are observed in numerous manufactured goods and industrial activities,  dating back to the Ford Model T. Subsidies are a clumsy policy (I’d prefer a tax on carbon) but they’ve scaled deployment, which in turn has dropped present and future costs.

By the way, the common refrain that solar prices are so low primarily because of Chinese dumping exaggerates the impact of Chinese manufacturing. Solar modules from the US, Japan, and SE Asia are all similar in price to those from China.

Fossil fuel technologies, by contrast to renewables, have a slower learning curve, and also compete with resource depletion curves as deposits are drawn down and new deposits must be found and accessed.  From a 2007 paper by Farmer and Trancik, at the Santa Fe Institute, Dynamics of Technology Development in the Energy Sector :

Fossil fuel energy costs follow a complicated trajectory because they are influenced both by trends relating to resource scarcity and those relating to technology improvement. Technology improvement drives resource costs down, but the finite nature of deposits ultimately drives them up. […] Extrapolations suggest that if these trends continue as they have in the past, the costs of reaching parity between photovoltaics and current electricity prices are on the order of $200 billion

Renewable electricity prices are likely to continue to drop, particularly for solar, which has a faster learning curve and is earlier in its development than wind. The IEA expects utility scale solar prices to average 4 cents per kwh around the world by mid century, and that solar will be the number 1 source of electricity worldwide. (Full report here.)

Bear in mind that the IEA has also underestimated the growth of solar in every projection made over the last decade.

Germany’s Fraunhofer Institute expects solar in southern and central Europe (similar in sunlight to the bulk of the US) to drop below 4 cents per kwh in the next decade, and to reach 2 cents per kwh by mid century. (Their report is here. If you want to understand the trends in solar costs, read this link in particular.)

Analysts at wealth management firm Alliance Bernstein put this drop in prices into a long term context in their infamous “Welcome to the Terrordome” graph, which shows the cost of solar energy plunging from more than 10 times the cost of coal and natural gas to near parity.

Welcome to the Terrordome

The full report outlines their reason for invoking terror. The key quote:

At the point where solar is displacing a material share of incremental oil and gas supply, global energy deflation will become inevitable: technology (with a falling cost structure) would be driving prices in the energy space.

They estimate that solar must grow by an order of magnitude, a point they see as a decade away. For oil, it may in fact be further away. Solar and wind are used to create electricity, and today, do not substantially compete with oil, until electric vehicles are a substantial fraction of transport. For coal and natural gas, the point may be sooner.

Unless solar, wind, and energy storage innovations suddenly and unexpectedly falter, the technology-based falling cost structure of renewable electricity will eventually outprice fossil fuel electricity across most of the world. The question appears to be less “if” and more “when”.

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