J. Doyne Farmer is the director of the complexity economics program at the Institute for New Economic Thinking in Oxford's research and policy unit. And he reminds us that solar and wind energy "are very likely to get even less expensive and grow quickly," pointing out that "the rate at which a given kind of technology improves is remarkably predictable." The best-known example is Moore's Law... Like computer chips, many other technologies also get exponentially more affordable, though at different rates. Some of the best examples are renewable energy technologies such as solar panels, lithium batteries and wind turbines. The cost of solar panels has dropped an average of 10% a year, making them about 10,000 times cheaper than they were in 1958, the year of their pioneering use to power the Vanguard 1 satellite. Lithium batteries have cheapened at a comparable pace, and the cost of wind turbines has dropped steadily too, albeit at a slower rate. Not all technologies follow this course, however. Fossil fuels cost roughly what they did a century ago, adjusted for inflation, and nuclear power is no cheaper than it was in 1958. (In fact, partly due to heightened safety concerns, it's somewhat more expensive.) The global deployment of technologies follows another pattern, called an S curve, increasing exponentially at first and then leveling out. Careful analysis of the spread of many technologies, from canals to the internet, makes it possible to predict the pace of technological adoption. When a technology is new, predictions are difficult, but as it develops, they get easier. Applying these ideas to the energy transition indicates that key technologies such as solar, wind, batteries and green-hydrogen-based fuels are likely to grow rapidly, dominating the energy system within the next two decades. And they will continue to get cheaper and cheaper, making energy far more affordable than it has ever been. This will happen in electricity generation first and then in sectors that are harder to decarbonize, including aviation and long-range shipping. And in addition, "The future savings more than offset present investments to the extent that the transition would make sense from a purely economic standpoint even if we weren't worried about climate change. "The sooner we make investments and adopt policies that enable the transition, the sooner we will realize the long-term savings."
