Dr Matthew Ives is lead author of the report ‘A new perspective on decarbonising the global energy system’. He is a Senior Researcher at the Oxford Martin Post-Carbon Transition Programme, the Institute for New Economic Thinking at the Oxford Martin School, and the Smith School of Enterprise and the Environment, University of Oxford.
Professor Cameron Hepburn is a co-author of the report, Professor of Economics and the Environment and Director of Smith School of Enterprise and the Environment, University of Oxford.
Dr Ives and Professor Hepburn will be presenting this research as part of the Climate Exp0 Mitigation Solutions Day on 19 May.
We are in the midst of an energy revolution. Every year solar panels have become cheaper — they are now 1,000 times cheaper than they were 50 years ago. The International Energy Agency recently declared that solar PV is now ‘the cheapest source of electricity in history’ in many locations around the world. Those who work in renewables will have felt how fast the tide is flowing in terms of scientific advances. Technology that was once only cost effective in remote locations like outer space will soon be powering much of our industry, homes, and cars. In our report, A new perspective on decarbonising the global energy system we show how harnessing this technological revolution can put us on track to keep global warming well below 2 degrees.
Similar trends can be found in other key clean energy technologies, such as wind, batteries, and hydrogen generating electrolysers. Like solar, the costs of these technologies have declined exponentially since their first commercial applications. In contrast, fossil fuel prices have remained roughly constant for more than a century.
These trends have been consistent and observable for a long while now. However, as is widely known, models produced for the IPCC and the International Energy Agency (IEA) have for decades consistently underestimated the rate of deployment and decline in costs of key renewable technologies such as solar and wind.
To address this shortfall, we draw on over a decade of research on the predictability of technological trends and look at what this might mean for the clean energy transition. By applying well-known empirical relationships, such as that defined by Wright’s Law, which links declines in costs of technologies with their cumulative production, we produce empirically tested forecasts for how the costs of these technologies decline with deployment.
Applying this research to the clean energy transition we construct a transparent, empirically tested energy system model that factors in this relationship between these technologies’ costs and their deployment rates. Using this model, we show that properly accounting for renewables’ technological cost trends flips common assumptions about how quickly we should aim to transition to clean energy.
By building a new model that takes this positive feedback in energy technologies’ costs into account, we have found that a decisive clean energy transition — one in which current growth rates in renewable and storage deployment continue for the next decade — can achieve almost all the emissions reductions needed to match the ambition of the Paris Agreement.
Remarkably — and counter to much current thinking around the costs of transitioning to a Paris-compliant energy system — we also find that this decisive green transition:
- is likely to be much less expensive to engineer than continuing with the current fossil-fuels based system;
- need not result in a reduction in energy reliability;
- will likely lead to significantly lower electricity prices and need not require any reduction in economic growth;
- and does not rely on currently unproven or potentially controversial technologies like carbon capture, second-generation biofuels, or new nuclear energy designs.
A decisive green transition like this is makes sound economic sense and, with resolute policy and investment action, is perfectly feasible. Such a transition would be mutually beneficial for all countries — it can bring about cheap, secure energy, cleaner air, a healthy economy, and a safer world. But there’s no guarantee it will happen on its own.
This report sets out key assumptions in energy transition policy that bear re-examining. What is needed is another Paris-style global collaboration, but this time not just on ambition, but on action. At Glasgow COP26 all countries need to commit to continuing the current high deployment growth rates for clean energy technologies like solar, wind, and energy storage for the next decade.
We cannot afford to drag our feet over this, nor pin our hopes entirely on technologies that have no clear track record of cost declines. As our report shows, a decisive clean energy transition is socially beneficial, economically sensible, and environmentally responsible.
Find out more and read the full report ‘A new perspective on decarbonising the global energy system’.
Climate Exp0 is the first virtual conference from the COP26 Universities Network and the Italian University Network for Sustainable Development (RUS), sponsored by UK Research and Innovation (UKRI), Cambridge University Press, the Conference of Italian University Rectors (CRUI), and the 2021 UN Climate Change Summit (COP26).
Running from 17–21 May 2021, it takes place at a critical juncture in the COP26 pre-meetings and negotiations, and is part of the All4Climate Italy 2021 official pre-COP26 initiatives. Learn more and register your place via https://www.climateexp0.org.