The Cost of a 100% Conversion from Fossil Fuels to Renewable Energy
“A one in ten chance of ending civilization as we know it.” That’s the conclusion of two Harvard economists considering the consequences of ignoring the accelerating climate change that is now underway. It was one of the motivations for Eric Roston of Bloomberg in writing his 30 August 2016 piece titled “The $8 Trillion Fight Over How to Rid America of Fossil Fuel.” The article’s subtitle is “Economists agree it can be done, but differ on how much it will cost.”
Roston’s article is a short, but not so sweet, tour through various calculations intended to describe a “back-of-the-envelope” sort of assessment of the cost to do what I suggested a few days ago in the posting “Yes, We Can! A Path to 100% Renewables.” Roston’s sketch is based mostly on a National Bureau of Economic Research working paper on what it would take — over about three or four decades — to cut U.S. greenhouse gas emissions to 80 percent below their 2005 level.
The calculation didn’t try to go “all the way” to 100% replacement of fossil fuels in the U.S. economy with energy conservation and renewable sources, but to estimate “the economics of replacing 66 percent of U.S. energy output — the coal and gas used for electricity generation — with renewable energy or a combination of renewables and nuclear power.”
Though one option seemed to indicate a useful role of expanded nuclear power in the U.S., I don’t believe that could pan out, due to the very high cost to make nuclear sufficiently safe to stem public dislike of that option while at the same time figuring out (and paying for) the very expensive safe storage of our mounting radioactive fuel wastes.
The scenario split the 66 percent into half wind and half solar, included a major expansion of the U.S. electric grid, plus substantial use of high-voltage (probably also DC) transmission lines for long-distant transport, also including a lot of new substations and interconnections. The temporal variability of wind and solar resources was dealt with by the assumption of massive investment in energy storage facilities, both utility scale and distributed. (The expanded utility grid could probably handle some of the source variability, though not explicitly stated.)
Fortunately, a Bloomberg New Energy Finance chart titled “Lithium Battery Costs Are Set to Fall” showed both conservative and aggressive forecasts, taking the costs from the 2015 value of over 380 dollars per kWh down to $230 and $180 per kWh in 2025, respectively.
The final estimate, assuming substantial conversion of most energy end uses (not already electric) from fossil fuels to electricity, was a cost to the U.S. economy of from $1.28 trillion to $5.28 trillion, over the three-to-four decade period of investment to reach the goal of cutting greenhouse gas emissions by 80% in 2050.
I conclude that something in that range is certainly doable over three decades, if that is fast enough to avoid the worst consequences of climate change (which I doubt), but, of course will require substantial study, effort, and the making of important political decisions to initiate that path quickly. If we get started soon, the rising terrors of accelerating global warming should provide the political and other motivation to continue to the end.
It is somewhat comforting that competent economists are at least considering what will be needed to succeed in “saving civilization as we know it.”
Note: I have posted a critique of the Sierra Club’s announcement that ten U.S. cities have vowed to “lead the way to 100 percent clean energy.” My concern is that the Sierra Club announcement didn’t indicate if they thought it could be even possible to do a 100% complete conversion from fossil fuels to clean renewable sources. There are many obstacles to a complete conversion, notably in the transportation sector. This was also mentioned in Roston’s article, referred to above. However, it is encouraging that Roston’s piece outlines how most of it can be done.