Its attention consumed by pandemics and politics, the world has overlooked an undeniable silver lining: the arrival of the green future. Almost without exception, renewable energy is now cheaper than that produced from fossil fuels. Prices of battery packs for electric vehicles and solar panels continue to plunge, and adoption is increasing exponentially. The 2020s will be the decade in which the planet finally closes the chapter on destruction and pollution by fossil fuels and enters a new realm of clean and nearly free energy. And this changes everything.
The evidence of a great green wave is now overwhelming. According to BloomergNEF, in 2020 the world spent half a trillion dollars on renewable power, electric vehicles, and other clean technologies and got a lot more for this investment than it ever used to. The average cost of lithium-ion battery packs, critical to electric vehicles, plunged from more than $1,100 per kilowatt-hour a decade ago to below $140 in 2020. Some factories in China dropped their prices below $100. Although lithium-ion battery prices are not on a Moore’s Law curve of decline, they are dropping at an inflation-adjusted rate of roughly 13 percent per year—halving over four years.
As the expanding market enables economies of scale, prices will continue to fall, and renewable energy adoption will increase. This will also accelerate the move to electric and hybrid vehicles, as is already occurring in China, Europe, and the United States. In Germany, the share of vehicles that use electricity (hybrids, plug-in hybrids, and fully electric vehicles) soared from less than 3 percent in 2016 to nearly 25 percent in 2020. To be sure, this exponential adoption is still driven by generous government subsidies, but as the market continues to expand, that will soon no longer be necessary.
Electric vehicle prices are falling by other means, too. Tesla, for instance, says it is planning to integrate battery cells into its vehicles, dispensing with the weight and cost of battery packs.
The shift to electric vehicles will dramatically clean our air. Fossil fuel-burning engines—diesel engines especially—remain some of the primary emitters of harmful chemicals. A 2020 report by the American Lung Association found that a complete switchover to electric vehicles by 2040 would, in the next decade, contribute to “$72 billion in avoided health harms, saving approximately 6,300 lives and avoiding more than 93,000 asthma attacks and 416,000 lost work days annually due to significant reductions in transportation-related pollution” in the United States alone. In more highly polluted countries, the benefit will be even more significant.
That switch will also reduce the world’s carbon emissions through use of renewable energy sources. Unlike petroleum, which necessarily comes from petroleum oil, an electron is an electron and can come from anywhere. (And, yes, you can manufacture fossil fuels in a greener way, by using algae, for example, but electric propulsion can eliminate the carbon emission problem entirely.) The declining price of battery packs has now made electric and hybrid cars cheaper to own and operate than traditional cars.
This is logical. Not only do you pay a lot less for electricity than for gas, but hybrid and electric vehicles also tend to have lower maintenance costs. They are essentially a battery pack attached to an electric motor, with vastly fewer moving parts and fewer complex systems.
Powering these cars and their batteries is an electricity supply that includes a rapidly growing share generated from renewable sources, primarily solar and wind. Both energy modes now undercut even natural gas energy prices given equivalent conditions. The cost of solar energy has declined by a whopping 99 percent over the past four decades. Solar panels are, essentially, semiconductors, so their cost curves are basically the same as those that apply to computers. The end state of the solar energy price decline will be energy so cheap that its major cost will be that of transmitting it over wires to our homes and businesses.
Once this happens, many power-intensive industries will be disrupted. For example, at present, the production of glass, concrete, and steel mostly relies on high-temperature fossil fuel furnaces. As electricity prices fall and those industries make the switch to electrical furnaces, the cost of the required equipment and industrial plants should fall, and production will become environmentally far cleaner. Concrete production, to name one example, is responsible for roughly 8 percent of all carbon emitted each year, according to Chatham House.
Perhaps even more crucial to the green future is water. Many regions of the world lack sufficient fresh water, and international conflicts over water are already bubbling up in South Asia, the Middle East, Africa, and North America. But cheap electricity can readily solve the problem. The primary barrier to purification of seawater using reverse osmosis at scale is its energy intensity. Seawater is abundant and readily available, and low-cost electrical energy will turn it into potable water. The ubiquity of solar-generated electricity will also enable water purification projects even in tiny communities that are far from any power grid.
Combining cheaper renewables and cheaper batteries is leading to other breakthroughs. Until recently, power generation from natural gas and other fossil fuels had an edge in that it could supply energy even when renewables could not: when the sun didn’t shine or the air was still. But batteries’ rapid price decline has finally made the combination of renewable energy and battery storage cheap and efficient enough to provide a cost-effective alternative to baseload generation using fossil fuels.
The international implications of clean energy are likewise promising. Just as wireless communication technology allowed the developing world to quickly catch up with and even leapfrog rich nations in telecommunications infrastructure, green energy will serve as a great economic leveler. Green energy’s falling cost and the inherent flexibility of its production modes will soon allow India and Africa to match the West in energy generation. The consequent regional benefits will not be merely economic. The burden of unhealthy air falls more heavily on China, India, and the developing world than on the West. By helping to clean up the skies of New Delhi, for example, green energy will make the air more breathable, reduce health burdens, and add years to the lives of the city’s inhabitants. And incidentally, it will enable students to attend school who otherwise couldn’t due to pulmonary disorders.
This transformation has only just begun. Larger economic and infrastructure changes may be on the horizon. California, for example, could well fracture energy generation and storage into numerous smaller installations to make the electricity system more resilient—less reliant on distant facilities and high-maintenance transmission infrastructure—in the face of wildfires and other catastrophes. Alternatively, we may see extensive solar energy farms in vast dusty deserts such as the Mojave and the Sahara that dwarf today’s power plants. Because storage and generation needn’t coincide geographically, these farms could supply to distributed networks of backup battery facilities or to schemes using other storage mechanisms, such as compressed air or water pumped uphill for later hydroelectric generation. Though such energy backups may initially be limited to richer nations, their steeply falling costs bode well for mass adoption by all, just as happened with smartphones and online storage.
In our lifetimes, fossil fuel vehicles will become extinct, and the smokestacks of electricity plants powered by coal or gas will cease to emit their filth. When we talk to our future grandchildren, we will be able to refer to this decade as the one in which the switch flipped and the planet adopted a tremendously promising green future.
