The Tesla Gigafactory in Sparks, Nevada in 2021. Here, Tesla Motors manufactures lithium-ion battery and electric vehicle components. Illustration by Nadya Nickels. Photo by JasonDoiy via iStock.
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Scale matters. Let's talk about it.
We need to have better conversations about the energy challenges we face.
LONDON — To understand the scale of the energy transition, it helps to look at Nevada.
In a room packed with global energy and climate technology leaders here, Eric Toone, the chief technology officer of Breakthrough Energy, did just that as he shared a distressing statisticabout the $6 billion Tesla Gigafactory.
“This is the largest battery production facility on Earth in Nevada. Annual output from the Tesla Gigafactory stores three minutes of the U.S. grid. It would take 1,000 years of production from the Tesla Gigafactory to store two days’ worth of U.S. energy. So how is this going to work?”
In a TED-talk style speech to open the first day of Breakthrough Energy’s biennial summit, Toone used the Gigafactory example to illustrate the prodigious need for energy storage to back up the vast amount of variable wind and solar coming online. (Breakthrough Energy also supports Cipher.)
Grasping the enormity of our energy systems and the challenge of transitioning them to clean energy is like trying to imagine how many teaspoons of saltwater make up the ocean or trying to count the number of stars in the sky.
If we don’t do a better job attempting to understand the size and complexity of the energy transition challenge, we won’t be able to meet it, he emphasized.
“It’s important that we have clear eyes and understand the magnitude of the challenge that’s in front of us. There’s no sugar coating this,” Toone said. “There is no easy button to push here. It’s hard work, and it’s going to take a long time.”
Toone is not alone in this thinking.
“We certainly should not become paralyzed,” Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University in New York, told Cipher. “But it doesn't help us meet the climate challenge, either, if we pretend this is easier than it is.”
Low-income countries will require ever more energy as their populations work to emerge from poverty. Rising energy needs worldwide combined with ever-more urgent decarbonization efforts together mean global energy demand is expected to double by the end of the century, Toone said.
The stakes of meeting that need are high.
“There is a clear and relatively unbreakable relationship between GDP growth and growth in energy use,” Bordoff told Cipher.
Understanding the scale of the problem is as important as scaling up the solutions to meet it, said Bill Gates, the founder of Breakthrough Energy, on Wednesday morning in London. “We’ll be measured by scale,” he said.
Bill’s take: Political consensus is critical to moving the energy transition forward, Bill Gates said at the Breakthrough Energy summit. Political headwinds, particularly from conservative parties in the U.S. and EU, have dominated headlines in recent weeks.
Bill Gates on artificial intelligence in London — Cipher’s Breakthrough Energy Summit coverage Bill’s take: At the Breakthrough Energy Summit on Wednesday morning, Bill Gates said artificial intelligence techniques will accelerate understanding of energy system and energy transition challenges. AI’s impact is the hottest topic in energy, from the energy it requires to the contribution it can make to various climate solutions.
Denmark sets first carbon tax on agriculture — POLITICO
Anca’s take: Is Denmark leading the way for the rest of Europe? As I recently wrote in Cipher, Denmark has a history of negotiating with affected parties and it seems to have worked now too. AI is exhausting the power grid. Tech firms are seeking a miracle solution. — The Washington Post Amy’s take: The quote about how Big Tech is thinking more like cement and chemical plants (and cares less about where their power comes from) is interesting, though I suspect tech executives would disagree. The triumph of electromagnetism over thermodynamics — Noahpinion on Substack (subscription) Bill’s take: A long read for a slow day, but one of the best explanations I’ve read of how profound this shift from combustion to electrification really is, touching on so many things we don’t always associate directly with energy use. Canada targets ‘unfair’ Chinese overcapacity with tariff threat — POLITICO Pro (subscription) Amena’s take: Canada has been under pressure after the U.S. and EU imposed tariffs on Chinese electric vehicles, batteries and battery components. For consumers, these moves mean more expensive EVs. Lufthansa to Charge Up to €72 a Flight to Cover Clean Fuel Costs — Bloomberg Cat’s take: The exact surcharge will depend on the specific route and fare. The announcement indicates reducing emissions associated with jet fuel is a very hard task. Europe’s solar power surge hits prices, exposing storage needs — Euractiv Anca’s take: Negative prices? That means producers more frequently have to pay to offload power or stop their plants. Less incentive for solar investments, more incentive for battery investments.
More of what we're reading:
China Floats Perks for German Carmakers to Prevent EV Levies — Bloomberg
Report documents growing local pushback on renewables — E&E News (subscription)
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Elections highlight the missing energy transition narrative
Climate laws need public backing — but one doesn’t necessarily follow the other.
To effectively address climate change, governments need to both enact the right laws and ensure their populations support those laws, so they stick around long enough to make a dent in our planet’s warming.
It’s this second half of the equation that politicians in Europe and the United States are starting to realize has been overlooked — or missing, some would argue.
The recent results of the European parliamentary elections, with green groups losing ground, are a testament to that fact.
Social narrative, while hard to define, in broad strokes refers to the story politicians tell to encourage people to embrace the energy transition complemented by socially-minded policies that compensate workers who might lose their decades-long fossil-heavy jobs and need to retrain to work in a cleaner industry.
“People have begun to realize they've really got to change, and then they feel insecure, and then the right is tapping into that insecurity in pursuit of power,” said Tom Burke, chairman and co-founder of the climate think tank E3G.
The Achilles heel of the European Green Deal is the lack of a proper social framework, said Judith Kirton-Darling, general secretary of industriAll European Trade Union, a federation of European trade unions representing workers from various sectors, including energy, mining and chemicals. The social framework won’t take care of itself, she said.
To some conservatives, the problem isn’t about social narratives, it’s about money. Getting people to adopt new technology comes down to affordability, said Emily Domenech, senior vice president at the Washington, DC-based Boundary Stone Partners.
One way to tackle the social acceptance issue is by boosting the role of local governments in communicating and delivering the changes needed for the energy transition “street by street,” Burke said.
“The more you can use public policy to empower local people to take control of their own energy into their own hands ... the more participation you get,” Burke said. “People believe what they do.”
Despite unprecedented clean energy growth, it’s still a fossil fuel world
Source: Energy Institute Statistical Review of World Energy 2024, J.P. Morgan Asset and Wealth Management • Chart shows primary energy, or raw energy, and does not account for energy losses.
The percentage of energy the world is getting from fossil fuels has been decreasing gradually over the last half a century or so.
And yet.
The total quantity of fossil fuels being consumed across most of the globe keeps marching higher.
Source: Energy Institute Statistical Review of World Energy 2024, J.P. Morgan Asset and Wealth Management • BTUs = British thermal units.
These two data sets, shown in two charts above, demonstrate the stark challenge of moving away from these greenhouse gas-emitting energy sources at the same time that demand for energy keeps going up: “What’s falling is the share of primary energy from fossil fuels, not their level,” writes Michael Cembalest, chairman of market and investment strategy for J.P. Morgan Asset and Wealth Management, in his 14th annual paper on the energy markets, published in March.
The charts are based on J.P. Morgan's updated analysis of Energy Institute data released last week.
To be sure, clean energy has been growing rapidly and non-profit energy think tank RMI projects such technologies, like wind and solar, will ultimately undercut fossil fuels due to dropping costs.
It’s a testament to the exponential growth of renewables that fossil fuels’ share of global energy consumption has not risen in recent decades even as the demand for energy around the globe has continued to climb.
The energy transition is also happening at different paces in different parts of the world.
“The progress of the transition is slow, but the big picture masks diverse energy stories playing out across different geographies,” CEO of the Energy Institute Nick Wayth said in a written statement published last week alongside the organization’s annual energy review. In wealthier economies, fossil fuel consumption may be slowing, whereas use of these fuels continues to grow in low- and middle-income economies.
AND FINALLY... Summit solutions
Anca Gurzu took these photos at the Breakthrough Energy Summit in London during a walkthrough of cleantech companies showcasing their proposed climate solutions. The photos reflect several major decarbonization challenges: transportation (mini cars, trains and planes), agriculture (a life-sized toy cow), electricity (power cables) and manufacturing (a psychedelic cement mixer).
Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.
Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.