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It's pretty short-sighted to point to latest market trends and infer that the hydrocarbon fuels are on their way out and renewables are there to replace them.

It's pretty short-sighted to point to latest market trends and infer that the hydrocarbon fuels are on their way out and renewables are there to replace them. Yes, fossil fuels are down. Commodities are down. Companies benefiting from government spending are up, and government spending is at record highs. Not only that, pretty much any asset that you would expect to outperform in a bull market is way up. No surprises there, this is a decade-old bull market fueled by trillions of worldwide cheap debt and quantitative easing. Yet, despite a supposedly roaring economy, the money-machine that is supposed to be "for emergency use only" just keeps on running. It's been working so well that "more spending" is the only valid political platform for both parties. What could possibly go wrong?

rossdavidh 7y ago
The central issue, is that fossil fuels are a commodity, and solar and wind are technologies. Both, of course, have physical components (coal, sand, metal, etc.), and both involve technological progress (fracking is a particularly important example), but the long-term trend of commodities is, at best, up and down and up and down, whereas the long-term trend of technologies is down. This means that, because both solar and wind electricity have prices that decline at an exponential rate (different from Moore's Law in the %/year, but not in their shape), the fact that they are competitive now, means that they will be far, far cheaper in the future. No matter how much of a head start you give a linear process over an exponential one, eventually the exponential one wins. Commodity prices are worse than linear; they are more similar to sinusoidal. The real issue now, which is not widely discussed, is how to prepare the world for a time, within a decade, when every fossil-fuel dependent economy goes the way of Venezuela. I don't think we are remotely ready to handle the fallout from that.
- gridlockd 7y ago
  This idea that technology improves exponentially ad infinitum is bogus. Nothing in nature can grow exponentially in the long run. There are plenty of technologies that have almost plateaued, passenger airplanes for instance. In the past, people envisioned an era of free electricity because surely nuclear energy would improve exponentially. It did not. Neither will renewables.
  - rossdavidh 7y ago
    Sure, and Moore's Law for semiconductor transistors didn't last forever, either. But, it lasted from the mid-20th century well into the 21st, over several orders of magnitude reduction in cost. The current exponential decline in the cost/kWh of solar and wind generated electricity is not as steep, but it is exponential, and it has been going on for decades. If it continues for even one more decade (and that seems quite likely, as the amount of R&D going into it is increasing), then it will drive all fossil fuels off the market. I don't think we're ready for that.

rossdavidh 7y ago

The central issue, is that fossil fuels are a commodity, and solar and wind are technologies. Both, of course, have physical components (coal, sand, metal, etc.), and both involve technological progress (fracking is a particularly important example), but the long-term trend of commodities is, at best, up and down and up and down, whereas the long-term trend of technologies is down. This means that, because both solar and wind electricity have prices that decline at an exponential rate (different from Moore's Law in the %/year, but not in their shape), the fact that they are competitive now, means that they will be far, far cheaper in the future. No matter how much of a head start you give a linear process over an exponential one, eventually the exponential one wins. Commodity prices are worse than linear; they are more similar to sinusoidal. The real issue now, which is not widely discussed, is how to prepare the world for a time, within a decade, when every fossil-fuel dependent economy goes the way of Venezuela. I don't think we are remotely ready to handle the fallout from that.

gridlockd 7y ago
This idea that technology improves exponentially ad infinitum is bogus. Nothing in nature can grow exponentially in the long run. There are plenty of technologies that have almost plateaued, passenger airplanes for instance. In the past, people envisioned an era of free electricity because surely nuclear energy would improve exponentially. It did not. Neither will renewables.
- rossdavidh 7y ago
  Sure, and Moore's Law for semiconductor transistors didn't last forever, either. But, it lasted from the mid-20th century well into the 21st, over several orders of magnitude reduction in cost. The current exponential decline in the cost/kWh of solar and wind generated electricity is not as steep, but it is exponential, and it has been going on for decades. If it continues for even one more decade (and that seems quite likely, as the amount of R&D going into it is increasing), then it will drive all fossil fuels off the market. I don't think we're ready for that.