THE CARBON WAR

Guilt and disruption 243
happens, can unfold at breathtaking pace. Why is the energy transition going
to be any different to the digital and internet revolutions?
Indeed. And so the discussion begins.
The developments of recent weeks give only small hints as to what is
likely to come. A highlight of energy efficiency, which generally receives so
little media coverage, is in the news. On US electric grids, LED lightbulbs are
outshining solar and wind. Efficiency accounts for more emissions reductions
in the USA than renewables, and LEDs replacing compact fluorescent lightbulbs
constitutes most of that. You would never guess this, from so much of
what there is to read on energy. Yet it is profoundly important: it points to a
potential future where renewables might have to do much less heavy-lifting
when meeting demand, because efficiency is lowering the demand for them.
Hints of the dramatic developments unfolding in energy storage are there
for those following the detail of play. One giant German utility, RWE, invests
in a storage company from Silicon Valley. Another, E.ON, begins construction
of a 5MW modular large-scale battery system at a German university.
Most of the business news focuses on a fresh phase of perturbation in
the capital markets. China has triggered turmoil by devaluing the Yuan. Stocks
are coming under pressure amid fears of a global currency war. Solar panel
manufacturers are among those suffering: Chinese panel makers in particular.
Expansion of the solar industry is coming under threat as investors begin to
perceive that solar companies face too much production capacity, too low profit
margins and potentially crushing debt. The oil, gas and coal industries are not
alone in their problems with conventional capital.
The big downstream solar companies press ahead with the rollout of
their expansion plans as best they can. SolarCity is making good progress with
construction of its its own gigawatt-a-year module factory in New York: the
biggest such facility in the western hemisphere. It will produce its first modules
early in 2016, and be in full production by 2017. SunEdison, meanwhile, has
been replaced as the most valuable US quoted solar company by First Solar. Its
stock has fallen 55% since investors began to fret about its speed of expansion
in late July.
I read about developments like this frustrated that the discussion is always
framed by perceptions of market reality voiced only in terms of the shortterm
value of money. Discussion of solar energy by analysts and journalists
is generally devoid of any sense that we are talking about vital strategic assets
in a mass mobilisation for war. Yet that is what the science of climate change,
and increasingly the politics, demand. A research report just published by the