Global capital spending on EVs, fuel cell vehicles, and charging infrastructure rose 36% last year to $634 billion. Spending on energy storage has increased five times in two years. There is currently enough investment in solar power, batteries and mining production pipelines to meet the world’s immediate CO2 targets by 2030.
All these stories heralding shortages of critical minerals seem to assume that miners are sitting on their hands and technology is static. More likely is oversupply.
There are already as many solar panel factories as will be needed in this decade. Therefore, the price of solar power will fall significantly. In the Global South, panels are currently priced at $120 per kWp, which equates to free electricity. Try selling a new coal-fired power plant without bribes.
We should not read too much into Labor’s withdrawal from the £28bn Green Plan. The plan remains. The party still has a goal of 100% clean electricity by 2030, but if China’s CATL is believed, it promises to cut grid storage costs by two-thirds (40kWh by 2026) Given the advent of sodium-ion batteries, it seems easier than ever.
The UK still needs carbon capture gas and green hydrogen to back up wind power. dunkel flute No wind. But it’s doable.
Rishi Sunak has damaged Britain’s reputation by breaking bipartisan agreement on climate policy. He derailed the city’s ambitions to become the world’s green finance hub. The Tories’ reliance on the anti-Green pub-bore metaphor as a “wedge problem” is terrible.
However, nothing essential has changed. The five-year delay in banning the sale of petrol and diesel is irrelevant. The UK’s ZEV obligation still exists, requiring 22% of cars sold this year to be zero-emission vehicles, rising gradually to 80% by 2030.
Mr Sunak increased the heat pump grant to £7,500. He lifted the de facto ban on onshore wind power generation. He still aims for 50 GW of offshore wind power and 95% clean electricity by 2030.
Both countries know that it would be suicidal for Britain to close itself off from the biggest economic growth story since the Industrial Revolution. They intend to support their flank until the election is over and the anger over the fuel bill subsides.
I’m betting that Labor’s plans will exceed £28bn a year, as China’s excess savings will once again flood the world with capital and bring borrowing costs down to pre-corona levels. This would create an extra £50bn of ‘headroom’ under the UK’s flat earth budget framework.
Things will change within 18 months. By then, the long-awaited “20,000 euro EVs” will flood the European mass market, just in time to fend off an existential challenge from China’s BYD. Even before solid-state batteries change everything again in the late 2020s, the technology will add 160 miles to range.