Solar 1/3 of World Energy Supply in 2060? Conservative IEA Thinks So

This article was originally published on Climate Progress and has been republished with permission.

The International Energy Agency is notoriously conservative on projections for renewable energy. The agency has embraced the need for more clean electricity and fuels to address climate change and peak oil, but its outlook for the future is usually far more conservative than how reality plays out.

So when an official at the IEA says we could get up to one third of our global energy supply from solar photovoltaics, concentrating solar power, and solar hot water by 2060, that’s a fairly big piece of news. But even that projection may be conservative.

Speaking to Bloomberg News, the head of IEA’s renewable energy unit explained said he thought the target is feasible:

“The strength of solar is the incredible variety and flexibility of applications, from small scale to big scale,” Paolo Frankl, the agency’s head of renewable energy, said in a telephone interview yesterday.

Economic activity will shift toward the sunnier zones around the equator by 2050, making solar energy a viable power source for most of the global economy, the report said. Those regions will be home to almost 80 percent of the human race by the middle of the century, compared with about 70 percent today, and their energy needs will be higher as living standards in countries such as Brazil and India approach those of the U.S. and Europe.

The IEA is clearly responding to the fast-changing world of solar energy. It has released a new publication, Solar Energy Perspectives, that mirrors one of its flagship research products, Energy Technology Perspectives.

But in its recent World Energy Outlook, IEA barely gave solar much attention. The organization predicted fairly modest growth in the solar PV and CSP sector through 2035, with a projection that it would only make up 4.5% of electricity supply.

While solar only makes up a fraction of the global electricity supply today, the downward cost curve of technologies is pushing it toward a breaking point. By sometime in 2012, the installed cost of a crystalline-silicon solar PV system over 1 MW in the U.S. could dip to around $2.50 a watt. At around 2$ a watt we could cost-competitively meet around 30% of global electricity supply, says solar expert and Carbon War Room CEO Jigar Shah.

Shah believes solar can reach a 5% penetration level in the U.S. by 2020, with cost reductions coming mostly from innovations in hardware and installation, not dramatic improvements in the lab.

While the IEA is far less ambitious in its projections, the agency seems to agree that a “systems-based approach” to manufacturing and installation will be the key driver to reaching high penetration levels of different solar technologies. And rather than focus on specific subsidies for solar in the long-term, IEA says the most important incentive will be a price on carbon.

Solar is clearly proving itself without a price on carbon. With an effective pricing regime in place, a 30% penetration would almost certainly be low.

JR: I’m not quite sure I agree with the IEA that “Economic activity will shift toward the sunnier zones around the equator by 2050.” They seem to have forgotten global warming, which is going to make many of those sunny areas increasingly uninhabitable by mid-century (see “An Illustrated Guide to the Science of Global Warming Impacts: How We Know Inaction Is the Gravest Threat Humanity Faces“). Fortunately, you can string high-voltage DC power lines from the deserts.