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April 1, 2021
Chris Goodall is an economist, world-leading expert on new energy technologies. He does a superb job researching and explaining the potential impact of new solutions, and in particular on how solar energy can be profoundly transformational. He lives in England, is involved in several innovative green economy ventures. He publishes Carbon Commentary, a website and newsletter on energy efficiency and advances in renewable solutions, that is part of the Guardian Environment Network. Chris has a college degree from Cambridge and an MBA from Harvard Business School. We are delighted to have the chance to ask him a few questions, right as we launch our iClima Earth platform in the summer of 2020.
Gabriela: Your three books are prominently displayed in our office library. The Switch has been my Christmas gift to friends since 2017. The “10 technologies” was published in 2008 and in the book you listed wind energy, solar energy, electricity from the oceans, combined heat and power plants, supper efficient homes, electric vehicles (EVs), motor fuels from cellulose, carbon capturing, biochar and soil & forests as the solutions for climate change.
I thought we could start with EVs, as Tesla’s extraordinary share performance this year is very much on our radar screen. Tesla was founded in 2003, a few years before your book was first published. By the end of 2020 approximately 1% of all cars in the world will already be EVs. An incredible change in less than 20 years. I presume you did not expect that a new player would solve the battery equation, make a car so cool that users would get over their “range anxiety”, and drive battery prices down so fast? What do you think will be the trajectory forward for EVs?
Chris: Oh, I thought electric cars would take off much faster than they have done. I wrongly assumed that the large OEMs would see that EVs were the future and begin large R&D programmes. By 2020 I would have guessed that every single manufacturer would have a significant portfolio of battery cars. As usual, I under-estimated the inertia of well-established companies watching the growth of a tiny sector of their market and taking time to react. Human beings have an extraordinary inability to understand how compound growth, even slow compound growth – such as we were seeing in electric vehicles – and projecting forward a few years. EVs have grown by roughly 40% a year over the last decade. At this rate, they will have 100% share within about 12 years. Where is the planning for that?
The last few months have seen an unprecedented growth in the market share of EVs across Europe. Even as the total market has collapsed, EV sales have been stable, or even risen across the continent. Hybrids and pure EVs represented over 8% of European sales in May, if I remember correctly. As the fully competitive ranges of EVs arrive on the market, led by VW’s iD.3, I think we’ll see a continued sharp rise in sales. A couple of weeks ago the head of Citroen said that the share of EVs could rise to 20% much rapidly than anybody predicts. This wouldn’t surprise me at all.
Gabriela: In the book you also talked about EVs and the grid. I find it incredible that you already had the vision for what is now called V2G (vehicle to grid). You described how “car batteries linked to the grid with intelligent communications that could stop charging when supply falls, and even feed energy back into the grid when necessary”. Is the finite number of the batteries charging cycles the reason why V2G is not yet so developed? How do you see the application evolving – V2H (vehicles to home), V2B (vehicles to building) or V2X (vehicles to everything) will become a prevalent solution in the next 5 or 10 years? Will Tesla be again the company taking the lead?
Chris: V2G is one of the most critical technologies for the future of the energy transition. My view, for what it is worth, is that EVs will provide almost all the short-term storage a country needs. Properly controlled and managed, car batteries are an extraordinary resource. A 2021 car might well have 50 kWh of storage and the home it is attached too might typically use less than 10 kWh a day. The flexibility that widespread V2G will bring will be of huge benefit to energy companies. Why hasn’t it taken off faster? Well, it is only really the Leaf that has been able to handle V2G. Other brands have been joining it but, once again have been slow and ponderous. If utilities want to maintain their position they will need to drive V2G. Otherwise their market will be eroded by OEMs becoming energy suppliers. It is no accident that Tesla has just acquired the right to be a full utility in the UK.
Gabriela: As we talk about V2G, I immediately think about the broader context of the future of distributed generation. With smart grids, V2G, smart meters, P2P solutions (using existing blockchain technology) and solar modules with better & cheaper battery storage. We may see a tremendous growth in distributed generation models in the next decade. Would you expect to see a change in market dynamics if governments increase support of different models of distributed generation, or we are pass that point and market dynamics in more liberalised economies already have the foundation needed for the distributed generation boom?
How do you see the growing opportunities for utility scale solar PV projects vis-à-vis the growth in the decentralized solar generation? Is the old model of CCGTs connected to long transmission lines, then connected into the network of energy distribution companies doomed? How much disruption will incumbent utilities face in the next decade?
Chris: As I said, I think there is a real possibility that today’s utilities will disappear. After smart meters are fully implemented, what value do they add? My vision is a return of traditional municipal supply of all infrastructure services, based upon the same idea as a German stadtwerke. Bodies like this will make more and more electricity locally and run, or try to run, district heating. They will encourage local balancing services as well as peer-to peer trading. In the long run, this will push out the traditional functions of the Big Six and erode the staggeringly under-regulated DNOs. The experiment to watch is SSE’s Project LEO in Oxfordshire, which is looking to localise generation and consumption inside a specific area. It won’t work, and SSE will eventually abandon it, saying that the UK still needs DNOs and conventional retailers. It is a way of justifying their continued bloated existence. But the reality is that their market will be captured by people who find ways of making localisation of supply work financially.
Gabriela: What do you see as the biggest challenge faced by the solar industry today, in particular in Western Europe? There are a lot of investors, from retail to the largest institutional ones interested in putting capital to work into utility scale renewable projects. In the Switch, you talk about how much capital is available for funding solar projects. In OECD countries it is already a popular “asset class”. Is the problem the cost of capital and amount of long-term financing available in emerging markets? Do you think in emerging markets utility scale battery storage costs need to go further down so that solar is the winner solution and will displace capital from going into fossil fuel based energy?
Chris: The biggest challenge is undoubtedly persuading policy-makers that continued solar expansion is compatible with a stable electricity supply. Faced with entrenched fossil fuel interests at the centre of most political systems, this has proved a demanding task. But the experience of the last few months, which have demonstrated around the world that solar and wind can provide the majority of electricity with no significant stability problems, should give us new confidence that a 100% renewables future, backed by batteries and hydrogen is not only possible, but deeply desirable from a financial as well as environmental point of view.
Gabriela: With solar energy, together with onshore and offshore wind energy, becoming so price competitive, what is your current prediction for when grids will become 90% renewable energy based?
Chris: Oh gosh, I don’t know. We need to really push hydrogen as a storage medium to get to reliable 90% figures. I’ve tried to suggest that countries will be best advised to overdevelop renewables by huge amounts and then use the almost constant surpluses to make hydrogen, which is then available for reuse in making electricity and for making synthetic fuels to replace fossil products in hard-to-decarbonise sectors, such as aviation.
Gabriela: Moving into the “What we need to do now”, your most recent book. You talk about the need for a plant food revolution, if the world were to adopt a Lancet diet. It requires that we eat more locally, more seasonably, and also a way to reward farmers for being better climate stewards. Do you expect a combination of more conscious consumers (all of us) with more stringent regulations to make us transition to such diet? Is Beyond Meat instrumental in showcasing that such transition is doable?
Chris: Personally, I actually doubt that plant-based meat substitutes are going to be ultimately successful. I accept I could well be wrong about this. Impossible Foods et al are pushing highly manufactured products – what I call ‘industrial food’ – and I think consumer tastes are likely to move away from these foodstuffs and towards less processed products. (i.e. the Lancet diet). Many cultures for many centuries have lived with low levels of meat intake and this is what I suspect we need to go back to. Good for health, good for pollution, good for animal welfare as well as necessary for the planet.
Gabriela: Reforesting the UK is a solution that you advocate. I learned in your book that the UK is the largest importer of wood in the world, except for China. You refer to a national tree planting plan, replacing sheep farming on the UK’s poorest soils with the growing of wood. What about in other countries and continents? What could be a doable way to stimulate reforestation?
Chris: I think the UK is probably an outlier here, along with Ireland, and possibly the Netherlands. It is in these places that the opportunity for carbon capture in newly reforested areas is most obvious. The UK puts £1bn a year into sheep farming on low quality land. This is near-madness. We should try to rebuild a viable forest products industry that provides income and quality employment in areas that have been destroyed by hugely destructive sheep farming. I’ve suggested that one of the best things that government might do is organise some trips to productively wooded areas such as the South Tyrol for impoverished sheep farmers to show how rural economies could be rebuilt around wood.
Gabriela: It has been a privilege to be able to get your views on the topics that we have been researching and following, as iClima Earth attempts to showcase that some listed companies are providers of solutions in line with your views on decarbonisation answers you so thoughtfully explain. Thank you.
If you would like to buy Chris Goodall’s books, you can find them here:
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