Global solar market in 2020 - McKinsey

Picture 1: Global Solar Market 2005-2020, McKinsey Quarterly, The economics of solar power, June 2008; picture 2: DESERTEC Concept, TREC

SIGNAL: NEW SOLAR POWER REPORT

The economics of solar power, June 2008 (McKinsey Quarterly)

“By 2020, hundreds of billions of dollars of investment capital will probably boost global solar-generating capacity 20 to 40 times higher than its current level.”

CONTEXT: PAIN OF TRANSFORMATIONS TO THE POST FOSSIL WORLD ECONOMY

The magazine Technology Review (german edition) published a provocative title in June: “Solar Energy – No Thanks”. This title was intended to have an impact especially for the German audience, where the energy feed-in law (Energieeinspeisungsgesetz, EEG) is discussed. And the extent and structure of the subsidies have to be discussed of course, tax payers don’t want their billions of euros being wasted for symbol politics. But think about some scattered facts:

  • Today fourty countries have a law for energy feed-in of solar power
  • Mega projects for solar energy grids are envisioned – like the TREC initiative (Trans-Mediterranean Renewable Energy Cooperation)
  • Anti-poverty group Oxfam International on Tuesday urged the world’s poorest nations to think twice before jumping on a biofuel boom that could drive farmers off their land and hit food supplies (IHT)

It is becoming clearer every day that bioful is not the best candidate to save the world. Oxfam spokesman Robert Bailey: “Biofuels currently provide a solution neither to the oil nor to the climate crisis, and are now contributing to a third: the food crisis” (IHT). Are you a believer in the renaissance of nuclear power and the progress in carbon sequestration (WP)? Even in this scenario solar power will have a prominent place.

RELEVANCE: DISRUPTION, SHAKE-OUT OF INDUSTRIES AND GEOPOLITICAL CHANGE

So expect some radical transformation of the production patterns and infrastructure of world energy. For convenience I simply call the guiding vision “solar society”.

As with project initiatives like TREC the geopolitical impact comes in sight. The OPEC of today is a club of yesterday, the survival of a power like saudi arabia will depend on radical transformation. The political leaders will change from thinking about production capacities in million barrels a day (Jeddah oil summit) to thinking about the newest photovoltaic nano technologies. Now the question is, who is first to read the signs and will be the “next OPEC”.

(2008-07-03: this post has been edited due to changes in style rules for text and layout)