Adam Czyzewski

Empirical knowledge of innovations can be gained from the IT sector, which abounds in new ideas and innovations. Looking at how quickly tablets and smartphones became commonplace in our daily lives, it seems that in only a decade we may expect to see our roads travelled by electric cars and electricity being generated using wind and solar energy. Let us take a look at photovoltaics. The world’s entire installed solar power capacity rose from less than 1 GW in 2000 to 39 GW in 2010 and 176 GW in 2014, an average exponential growth by nearly 45% annually. Every two years, the capacity is doubled. In accordance with Swanson’s law, photovoltaics are quickly progressing to grid parity, which is believed to open up the way for a massive switch to solar energy. The global capacity of wind turbines, which have a longer history, grew by 22% annually between 2005 and 2014, doubling every three and a half years, and has already achieved grid parity.

However, transposing the experiences of innovation from the sphere of IT to that of new power generation technologies should be done with extreme caution, especially with respect to their time course. The basic difference between the innovation cycles in IT and power generation is the economic life of the devices used. For smartphones, it is two years, whereas for solar panels and wind turbines − 20 or more years. If we wanted to give new phones to all smartphone owners in the world it would take us about two years. That is the time after which people replace their old smartphones with new models, and the industry is tuned to the replacement rate of 50%. However, if we wanted to provide all house owners with a new house, that would obviously take a lot longer − some 50 years. The world’s house-building capacity is set to the replacement rate of 2%. Seen from this perspective, solar panels and wind turbines are more like houses than smartphones, as only several percent of them will be replaced every year. Once they reach maturity, the solar and wind energy industries will also adapt their capacity to appropriate replacement rates. Currently, they are still building the capacities and their (net) contribution to the global energy supply is negative. When can we expect them to reach maturity?

As N.L. Cardozo, G. Lange and G.J. Kramer argue in the essay ‘The cradle of new energy technologies. Why we have solar cells but not yet nuclear fusion?,’ published in December 2015 in ‘The colours of energy. Essays on the future of energy and society’, it may take a while and may coincide with controlled nuclear fusion reaching maturity too. The authors arrived at this conclusion by studying the relatively simple mathematical model of innovative technologies reaching maturity, which uses the S-curve, widely discussed in the literature.

In a nutshell: every new energy technology goes through three phases of development. First is the exponential growth phase, during which installed capacities double every 3 to 4 years. This stage may last for several decades. From the economic point of view, it is an innovation scaling phase, which involves investing heavily in the new technology. In this phase, factories and dedicated machinery and equipment need to be built, infrastructure and supply chains of materials developed, raw materials mined and staff trained. During this time, the technology is brought from the laboratory to materiality. Its global industry becomes a new energy source (net producer) and starts to be visible on the radar of the world energy market.

The authors argue that a new technology with the target energy generation capacity equal to 10% of the global demand materialises when it meets 1% of the demand. By the time such capacity is reached, a significant industry has already been established. To illustrate this point: the worldwide investment in photovoltaics was USD 100bn in 2012, slightly more than 1% of the world’s expenditure on energy. Yet, the total contribution of photovoltaics to the global energy supply was still below 0.1%.

Reaching maturity affects the further trajectory of the new technology development. Its growth is no longer exponential, but linear, with similar capacities added every year. This phase also lasts a few decades and ends when the technology reaches its global capacity. A saturation phase follows and the installed base levels off.

Such a shape and characteristics of the S-curve lead to some interesting conclusions concerning innovative power generation technologies.

  • One consequence of the exponential growth and capacity doubling at more or less regular intervals is that (globally) more energy is consumed than produced by the new technologies in the first growth phase.
  • The (net) consumption of energy in the first phase of renewable energy development (which involves investing heavily) means that, globally, the technologies do not yet reduce carbon dioxide emissions or generate income (they do not reach grid parity).
  • This first phase is entirely financed by the public (taxpayers).
  • It is a necessary and costly investment, which precedes the return by several decades.

How big an investment are we talking about? The authors point out that for a new technology to reach 1% share in the global energy supply, between EUR 900bn and EUR 1,800bn need to be invested over a period of several decades. The above is true both for photovoltaics and nuclear fusion. The only difference is temporal distribution. Whereas the prototype solar cell was operational more than 60 years ago, the 500 MW ITER reactor is still under construction. If it develops successfully, nuclear fusion will come in a few big steps, entailing a huge risk of failure. Photovoltaics, on the other hand, will continue to develop in many small steps, each involving a relatively small and manageable risk. It is this risk profile rather than anything else that gives photovoltaics an advantage over nuclear fusion.

How long can the exponential growth phase (with large public investment) last? The authors calculated that a new energy technology that leaves the lab with the capacity of 10 MW of effective, year-averaged power must grow by a factor of 20,000 to reach the 1% of world demand mark. That corresponds to more than 14 doublings. Even when the capacity is doubled every three years, that still requires 40 years of exponential growth before the world can reap any rewards from this technology.

Can this period be shortened? The authors say it can. The mathematical property of exponential growth is that 50% of capacity is installed in the last few years before materiality is reached, and the process consumes 50% of the entire investment. Therefore, it is a good idea to speed up the earlier phase, when investment is still at a much lower level. The earlier in the development, the more time can be gained at a lower cost. There really is no good reason not to leapfrog a few development generations by taking higher risks. Those risks are tiny compared with the social and economic gains that can be achieved by reaching the productive phase earlier.

Even more effective, though less controllable, would be acceleration in the research phase prior to exponential growth. Research budgets are but fractions of the turnover in the industrial implementation phase.

 

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  1. Your comments are exceedingly interesting Mr Adam Czyzewski and thoughtful.

    How about the new developments we are instigating to develop a research programme to completion of production by 2021/2022 wherein we can use a modified general biomass to become the Poto_Voltaic cell as a spray-applied, paint film thick, P_V material with equivalent receptor power generation use per square metre at an application rate of a quarter of the current P_V solid plate system, added to which there is the advantages of applying this to any surface such as:-
    the Eiffel Tower, or the Millau Viaduct (or other bridge and the likes,) or the face of a Dam, or any roof and side of a building or other construction from a standard house, through to an industrial premise, or a railway/motorway/canal cutting and an airport canopy or parliamentary building/government establishment and others etc.,
    as well as also having the ability to store electricity for over 96 hours for use at a later time.

    Imagine thus the potential in some countries to be able provide a permanent source of electricity without the need for being connected to a main supply grid!

    This is the potential being viewed for the future upon which we must go forward with the interests we see in the current use of future electronics (as you cite is being swallowed up with replacement portable telephony!)

    Such is the potential here that there are queues of Learned Higher Establishments becoming interested but the development costs are being shrouded out by the mega electrical P_V and solar players as well as the distribution systems who all see this as a threat to their existence. Such an issue of being drummed out by existing players in other industries was the death-knell of the original Internal Combustion Engine under the development of Samuel Morey (1820s by the rail road bankers in the USA) and by others in more recent time such as the universal use of MDPE pipes instead of ductile iron and cast iron before-hand and the many other developments over the past 50 years that have not been adequately followed through. The similar issue in P_V systems is an equal of the attempts by the newer developments of wind energy devices which are twice as efficient as the current turbines using blades and which can be built at a lower height (maximum 20 metres) for the equivalent of the same power generation for a quarter of the installed costs.

    This issue is not therefore solely about “How are new power generation technologies being developed?” as in your outline statement but also the industrial reluctance to invest in that which is so obviously needed when there are existing process-companies that want to protect their existing interests before departing to newer issues. It is thus a surprise that the Chinese Brazilian Korean Japanese and Indian developers are after this issue already – way in front of Europe?

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