The science of renewable energy is remarkable—the ability to harness nature to magically power our modern world is a seductive vision. And yet, the actual business of renewable energy is late to establish itself as a viable competitor to the petrochemical industry. The problem is rooted in cost parity and the challenges of production, storage, and disposal (Figure 1). To use the industry’s fancier and totally sensible term, it’s the math of levelized cost of energy (LCOE) that we can’t figure out.
LCOE measures the average cost of electricity generation for any power plant—coal, hydro, solar, or thermal—over its lifetime. And it turns out that by the time you harvest the Earth’s minerals to produce, ship, deploy, and maintain a renewable energy plant, it is more expensive to generate power versus burning coal. And that’s too bad because we’re all paying the price.
According to BP’s 2019 Statistical Review of World Energy, annual carbon emissions grew by 2.0%, with China and the U.S. as the largest contributors, and coal took the largest share of all power generation at 38%. No matter where you stand in the debate on climate change, let’s just agree that pollution is bad and coal means a lot of it.
What about renewables? It’s mostly good news, but it’s slow-moving. According to Global Data’s Renewable Energy—Thematic Research, renewable energy will reach a 22.5% share in the global power mix by 2020, up from 18.2% in 2017. Hydro and nuclear grew by 14.5%, and solar generation grew more than 40%. By country, China was the largest contributor to renewables growth, surpassing the entire developed world. Hydroelectric generation increased by an above-average 3.1%, and nuclear generation rose by 2.4%.
Energy Storage Is Key to Success
It gets even more interesting when you take a closer look at the problem on a systemic level. For the most part, you can’t store renewable energy. Lithium-ion batteries or water reservoirs end up costing more than the power that they store. It is arguable that as long as the renewable energy storage dilemma is not solved, we’re never going to get to a 100% renewables-powered world.
Energy storage is insanely expensive. Lithium-ion batteries are seen as the main renewable energy storage technology, but they are even more costly to produce, procure, maintain, and dispose of than burning fossil fuels. When consumers store electricity in a lithium-ion battery in their home, they generally pay at least $0.30/kWh, while neighbors pay a bargain price of $0.10/kWh for coal-generated power.
Creating lithium-ion batteries requires five raw materials—lithium, nickel, manganese, cobalt, and graphite—the sourcing of which entails massive ecological and humanitarian problems, such as toxic black holes and die-off of wildlife, in some of the most beautiful parts of the world, including the Bolivian Andes, Argentina, and Chile. I choose flamingos over batteries (Figure 2).
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