How Renewable Energy Will Destroy Fossil Fuels
There’s an energy revolution taking place before our eyes, but it doesn’t seem to be getting a lot of attention from the media or investors. Over the past decade, energy from wind and solar has become so cheap that it’s making new fossil fuel plants nearly obsolete. This isn’t just happening in the U.S. but in China and India as well, where coal plants are being shut down in favor of wind and solar energy.
Close behind renewable energy is improving battery technology that’s making electric vehicles and energy storage viable options for consumers and businesses. As this combination of technologies improves and grows, it will slowly but surely replace fossil fuel use as we know it today. Let me be clear about what I’m saying: The conditions for the demise of fossil fuels are already in place and a massive disruption of the fossil fuel industry is on the horizon.
Electric grid disruption has already begun
Renewable energy changes the energy paradigm for the electric grid, and there will be a lot of casualties in the old world of energy. For example, ever since Thomas Edison invented the light bulb, people have relied on electricity from their electric grid to power their homes and any electric devices they own. For the first time ever, over a million homes are now their own mini-power plants with solar panels on their roofs.
Given another year or two, energy storage will begin to be commonplace and removing yourself from the grid altogether will be a viable option for consumers. Utilities, power generators, and companies supplying fuel will all be disrupted in the process.
Gasoline will go the way of the horse and buggy
Rapid advances in battery technology are likely to make gasoline vehicles all but obsolete in a decade or two. Electric vehicles are already cheaper to fuel and maintain than traditional vehicles. The obstacle to a complete takeover of the auto market is the vehicle’s range and the lifecycle of batteries.
Tesla (NASDAQ:TSLA) has made the biggest strides in range and lifecycle, offering a 337-mile range for the 100D model. Its warranty also runs for eight years and unlimited miles for new vehicles.
As battery technology advances and scale is built out around the world, I think all current deficiencies in EVs (cost, range, charge time) will fall by the wayside. A Model S can already be fully charged in about an hour with a Supercharger and Porsche, ABB, and others are already testing 350 kW chargers, which could add about 300 miles of range in just 15 minutes. Battery costs are already creeping toward $100 per kWh, which will make it possible for EVs to be sold at or below $30,000.
Slowly but surely, EVs are taking over the auto industry as well, which will push gasoline out. Volkswagen plans to spend $40 billion developing electric vehicles in the next five years, anticipating 80 new electric models by 2025. General Motors (NYSE:GM) was the first to launch a long-range, affordable EV in the Bolt and plans to launch 20 new EVs by 2023. Ford (NYSE:F) has said it will electrify 13 vehicles, including pickup trucks. Those are just a few of the big automakers betting their future on electric vehicles. As EVs take up a bigger percentage of the showroom floor, how do we expect gasoline vehicles or the oil they burn to fare long term?
Renewable energy becomes fuel
Where the real energy disruption takes place is when it becomes possible to directly power our vehicles with renewable energy. Distributed energy production allows for energy produced at home to (for example) charge up an electric car, and utilities across the country are now allowing customers to buy renewable energy specifically. Combine energy storage into the mix and renewables are no longer an intermittent energy source but a cost-effective one 24/7.