Volts podcast: the good news about clean energy, with Kingsmill Bond

In this episode, longtime carbon market analyst and strategist Kingsmill Bond explains why he is so optimistic about the future of renewable energy. Though it remains a small portion of total global energy, its rate of growth and declining costs indicate that it is on the precipice of enormous, rapid expansion. Markets and geopolitics will be transformed by it. (There is also an abridged version of our conversation available on Canary.)

Full transcript of Volts podcast featuring Kingsmill Bond, October 11, 2021

(PDF version)

David Roberts:

It seems like good news is difficult to come by in the US these days, what with democracy on the verge of crumbling and the last big chance to address climate change held in the fickle and ill-informed hands of the Senate’s most conservative Democrat, who lives on a yacht and literally makes money off of coal plants.

As it happens, I have a stash of good news I’ve holding in reserve — a guest I’ve been meaning to talk to forever, but have been treating like a break-glass-in-case-of-emergency thing. I felt grim enough this week that I finally called him up.

His name is Bond. Kingsmill Bond. (Sorry, had to do it.) He’s an energy strategist at the think tank Carbon Tracker, where he arrived after decades of doing market analysis and strategy for big financial institutions like Deutsche Bank and Citibank.

Bond’s experience and research have led him to the conclusion that the shift to clean energy has become unstoppable and that it will be the dominant force shaping financial markets and geopolitics in the 21st century. He argues that we are on the front end of a massive, precipitous wave of change to rival the industrial revolution — one that will unfold even if policy support is weak and erratic, purely on the strengths of economics and innovation.

We need to update our mental model of climate mitigation, he says. It’s not about pain, about how to distribute extra costs and who will be the most altruistic. It’s about gain, about which countries will benefit most and fastest from the tapping of almost limitless new markets and opportunities for growth.

There are no fundamental limits to the spread of zero-carbon energy. There’s more than enough renewable energy, accessible with today’s technology, to supply the world’s energy needs. Not only do we know how to get there, it is where we are headed, based on current market and technology trends. The key to succeeding on climate change is simply accelerating what is already underway, pushing a rolling boulder a little faster.

Like I said, I’m in need of good news like this, so I was excited to talk to Bond about the cost of renewable energy, the peak in fossil fuel demand, and the inevitability of a 100 percent clean-energy system.

Without further ado, Kingsmill Bond, welcome to Volts.

Kingsmill Bond:

Thank you for having me on the show, David.

David Roberts:

Kingsmill, I've been following you for years and you've been a reliable source of good news. You recently published an article arguing that we need to flip our story on climate change mitigation: It's not one of pain, about distributing costs and sacrifice and who's going to be more altruistic; it's about gain, about who's going to claim the giant rewards that are waiting. So before we dive into the specifics, give me the elevator-pitch version of why people confronting the daunting task of addressing climate change should feel better than they generally do.

Kingsmill Bond:

Well, thanks very much for putting it in those terms. The point here simply is that we have got this new, enormous, cheap energy resource in solar and wind that we've unlocked with technology, and we're just starting to be able to apply it.

As we apply it, it gets cheaper, because it's on learning curves. Therefore, we've unlocked an enormous cheap source of energy that can be used to provide all of our current energy demands and, indeed, the energy demands of those who have very limited amounts of energy. It's an exciting opportunity and moment to do that.

David Roberts:

The center of that story is the learning curves for renewable energy. You single out four different technologies on steep learning curves that, if we project them continuing, bear all kinds of good news. Tell us what those technologies are and what the curves look like right now.

Kingsmill Bond:

The four most clear technologies which are on established learning curves are solar PV for producing electricity; wind for producing electricity; batteries for storage; and electrolyzers to convert that electricity into hydrogen. All four of them have been the subject of a recent paper by Oxford University looking at their learning curves, that is to say, the amount that their costs drop for every doubling in deployment. All of their learning curves are between 16 and 34 percent, which was already fairly well known.

But the additional point that's being made by this paper is that when technologies get onto learning curves, they tend to stay on them for very long periods. When you're trying to project future costs of these technologies, the most logical assumption is that those learning curves will continue. This is extremely significant, because we all know that they are growing very quickly, and if you assume that that growth continues — and there's no reason why it shouldn't — these technologies will get incredibly cheap.

This is kind of an academic debate, because you're already getting solar PV being produced between $10 and $20 per megawatt hour in certain favored locations, so it is, in fact, already incredibly cheap. That cheap energy source is a) going to get cheaper, b) going to spread globally, and then c) be followed up by these other technologies, also on learning curves, which will then provide us with the energy that we need at much lower cost.

David Roberts:

The electrolyzers seem like the newest of those four technologies. Solar and wind and batteries are pretty established, but electrolyzers have just recently come in for a lot of innovation. How confident are we in that particular learning curve? What's the state of our knowledge there?

Kingsmill Bond:

In the paper that the Oxford team did, they looked at about 500 or 600 different technologies over long periods and they noted that, actually, very few of them get onto learning curves. As you say, the electrolyzer data set is shorter, but it still goes back a couple of decades, I believe. This is, from their analysis, another technology also on learning curves, and it seems to be already exhibiting the same learning characteristics that we've witnessed in solar, wind, and batteries.