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The Exponential View of Solar Energy

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The Exponential View of Solar Energy, and Why the Cost of Solar has Plummeted

The Exponential View of Solar Energy

The human brain is terrible at comprehending exponential growth.

Much like the power of compound interest is a magical force for investors, it is also possible for innovations and technological breakthroughs to build off each other in the physical world, creating a similar compounding effect.

In this chart, we look at how solar technology has surpassed all expectations from an economics perspective, including those initially set by the International Energy Agency (IEA). Then later, we’ll also look at a new set of predictions for solar energy economics over the next 30 years.

Solar Energy: The Technological Overachiever

Back in 2010, the cost of utility-scale solar power ranged between $0.25-$0.37 per kWh. This meant it was at least three times as expensive as fossil fuels, and that solar was highly cost-inefficient at the time.

Going forward, most organizations projected a linear path for whittling down the cost of solar.

The IEA, for example, forecast that the global cost of solar would drop to roughly $0.22 per kWh by 2020. In reality, however, the price dropped to about one-fifth of that at $0.04 per kWh.

YearActual (BNEF Global) - $ per kWh2010 Forecast (IEA) - $ per kWh
2010$0.28$0.36
2020$0.04$0.22
Change-85.7%-38.9%

Almost all industry forecasters, including the IEA itself, missed the exponential factors at play.

Wright’s Law

Ramez Naam, the co-chair for energy and the environment at Singularity University, points out in his blog that the exponential decrease in solar costs stem from Wright’s Law:

For most technologies, every doubling of cumulative scale of production will lead to a fixed percentage decline in cost of the technology.
-Wright’s Law

Professor Naam says this occurs through “learning-by-doing”, and more specifically:

  1. Innovation that improves the technology itself
  2. Innovation that reduces the amount of labor, time, energy, and materials needed to produce the tech

Put another way, the more solar panels we make and the more we install—the better we get at the whole process over time. And once we’re making thousands or millions of panels, the costs come down exponentially, much like with lithium-ion batteries.

The Future of Solar Costs

Over the years, Naam has taken his own stab at forecasting the cost of solar energy into the future, leveraging the idea of Wright’s Law.

Here’s what he sees coming, based on using a 30% learning rate* for solar:
Future cost of solar based on 30% learning rate Wright's Law

*The learning rate is the fixed percentage decline that occurs with every doubling of the scale of production.

Based on these projections, even the costliest of solar installations will be more economical than the cheapest of utility-scale fossil fuel plants. This means solar can basically go anywhere, and make sense from a cost perspective.

Underestimate Solar No More?

For fun, here’s a final look at how IEA projections have constantly underestimated solar installations, which are one of the key factors dictating the “learning rate” under Wright’s Law:

missed iea solar capacity forecasts

With solar energy costs plummeting to record lows and global installations continuing to ramp, it’s possible that solar forecasters may no longer forget about the exponential nature of solar production.

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Electrification

Visualizing the World’s Largest Copper Producers

Many new technologies critical to the energy transition rely on copper. Here are the world’s largest copper producers.

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Visualizing the World’s Largest Copper Producers

Man has relied on copper since prehistoric times. It is a major industrial metal with many applications due to its high ductility, malleability, and electrical conductivity.

Many new technologies critical to fighting climate change, like solar panels and wind turbines, rely on the red metal.

But where does the copper we use come from? Using the U.S. Geological Survey’s data, the above infographic lists the world’s largest copper producing countries in 2021.

The Countries Producing the World’s Copper

Many everyday products depend on minerals, including mobile phones, laptops, homes, and automobiles. Incredibly, every American requires 12 pounds of copper each year to maintain their standard of living.

North, South, and Central America dominate copper production, as these regions collectively host 15 of the 20 largest copper mines.

Chile is the top copper producer in the world, with 27% of global copper production. In addition, the country is home to the two largest mines in the world, Escondida and Collahuasi.

Chile is followed by another South American country, Peru, responsible for 10% of global production.

RankCountry2021E Copper Production (Million tonnes)Share
#1🇨🇱 Chile5.627%
#2🇵🇪 Peru2.210%
#3🇨🇳 China1.88%
#4🇨🇩 DRC 1.88%
#5🇺🇸 United States1.26%
#6🇦🇺 Australia0.94%
#7🇷🇺 Russia0.84%
#8🇿🇲 Zambia0.84%
#9🇮🇩 Indonesia0.84%
#10🇲🇽 Mexico0.73%
#11🇨🇦 Canada0.63%
#12🇰🇿 Kazakhstan0.52%
#13🇵🇱 Poland0.42%
🌍 Other countries2.813%
🌐 World total21.0100%

The Democratic Republic of Congo (DRC) and China share third place, with 8% of global production each. Along with being a top producer, China also consumes 54% of the world’s refined copper.

Copper’s Role in the Green Economy

Technologies critical to the energy transition, such as EVs, batteries, solar panels, and wind turbines require much more copper than conventional fossil fuel based counterparts.

For example, copper usage in EVs is up to four times more than in conventional cars. According to the Copper Alliance, renewable energy systems can require up to 12x more copper compared to traditional energy systems.

Technology2020 Installed Capacity (megawatts)Copper Content (2020, tonnes)2050p Installed Capacity (megawatts)Copper Content (2050p, tonnes)
Solar PV126,735 MW633,675372,000 MW1,860,000
Onshore Wind105,015 MW451,565202,000 MW868,600
Offshore Wind6,013 MW57,72545,000 MW432,000

With these technologies’ rapid and large-scale deployment, copper demand from the energy transition is expected to increase by nearly 600% by 2030.

As the transition to renewable energy and electrification speeds up, so will the pressure for more copper mines to come online.

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Electrification

Visualizing the World’s Largest Hydroelectric Dams

Hydroelectric dams generate 40% of the world’s renewable energy, the largest of any type. View this infographic to learn more.

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Visualizing the World’s Largest Hydroelectric Dams

Did you know that hydroelectricity is the world’s biggest source of renewable energy? According to recent figures from the International Renewable Energy Agency (IRENA), it represents 40% of total capacity, ahead of solar (28%) and wind (27%).

This type of energy is generated by hydroelectric power stations, which are essentially large dams that use the water flow to spin a turbine. They can also serve secondary functions such as flow monitoring and flood control.

To help you learn more about hydropower, we’ve visualized the five largest hydroelectric dams in the world, ranked by their maximum output.

Overview of the Data

The following table lists key information about the five dams shown in this graphic, as of 2021. Installed capacity is the maximum amount of power that a plant can generate under full load.

CountryDamRiverInstalled Capacity
(gigawatts)
Dimensions
(meters)
🇨🇳 ChinaThree Gorges DamYangtze River22.5181 x 2,335
🇧🇷 Brazil / 🇵🇾 ParaguayItaipu DamParana River14.0196 x 7,919
🇨🇳 ChinaXiluodu DamJinsha River13.9286 x 700
🇧🇷 BrazilBelo Monte DamXingu River11.290 X 3,545
🇻🇪 VenezuelaGuri DamCaroni River10.2162 x 7,426

At the top of the list is China’s Three Gorges Dam, which opened in 2003. It has an installed capacity of 22.5 gigawatts (GW), which is close to double the second-place Itaipu Dam.

In terms of annual output, the Itaipu Dam actually produces about the same amount of electricity. This is because the Parana River has a low seasonal variance, meaning the flow rate changes very little throughout the year. On the other hand, the Yangtze River has a significant drop in flow for several months of the year.

For a point of comparison, here is the installed capacity of the world’s three largest solar power plants, also as of 2021:

  • Bhadla Solar Park, India: 2.2 GW
  • Hainan Solar Park, China: 2.2 GW
  • Pavagada Solar Park, India: 2.1 GW

Compared to our largest dams, solar plants have a much lower installed capacity. However, in terms of cost (cents per kilowatt-hour), the two are actually quite even.

Closer Look: Three Gorges Dam

The Three Gorges Dam is an engineering marvel, costing over $32 billion to construct. To wrap your head around its massive scale, consider the following facts:

  • The Three Gorges Reservoir (which feeds the dam) contains 39 trillion kg of water (42 billion tons)
  • In terms of area, the reservoir spans 400 square miles (1,045 square km)
  • The mass of this reservoir is large enough to slow the Earth’s rotation by 0.06 microseconds

Of course, any man-made structure this large is bound to have a profound impact on the environment. In a 2010 study, it was found that the dam has triggered over 3,000 earthquakes and landslides since 2003.

The Consequences of Hydroelectric Dams

While hydropower can be cost-effective, there are some legitimate concerns about its long-term sustainability.

For starters, hydroelectric dams require large upstream reservoirs to ensure a consistent supply of water. Flooding new areas of land can disrupt wildlife, degrade water quality, and even cause natural disasters like earthquakes.

Dams can also disrupt the natural flow of rivers. Other studies have found that millions of people living downstream from large dams suffer from food insecurity and flooding.

Whereas the benefits have generally been delivered to urban centers or industrial-scale agricultural developments, river-dependent populations located downstream of dams have experienced a difficult upheaval of their livelihoods.
– Richter, B.D. et al. (2010)

Perhaps the greatest risk to hydropower is climate change itself. For example, due to the rising frequency of droughts, hydroelectric dams in places like California are becoming significantly less economical.

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