shovels in the ground and wires in our walls as
soon as possible. We can no longer afford to wait.
RAMPING IT UP
The total electricity we will need to power our
lifestyles is 1.5TW–2TW (1 terawatt = 1 trillion
watts). We’re currently at 0.45TW.How do we
ramp up our infrastructure to provide all our
energy needs?
We can generate 0.25–0.75TW of solar on our
residential roofs alone. If we cover lots of our
parking lots and parking spaces, that’s another
0.5TW of solar energy. Our densest cities can’t
rely on solar in the same way, but covering our
abundant suburbs, rural areas, parking lots, and
commercial buildings will be a big start.
Midwestern farmers are already seeing
economic advantages with the profusion of wind
turbines silently making them money while cattle
graze or crops grow below. More money will be
spent in, and remain in, local communities as we
build out this infrastructure, whether it’s solar on
roofs or wind turbines on farms.
Remember, half the cost of electricity is the
grid. The more energy we generate closer to our
homes and workplaces, the lower our energy
costs will be. Our cars and our home heating
systems will be the biggest batteries we have
when they’re interconnected to our new multitude
of microgrids.We’ll need to place as much solar
as possible where we live to reduce transmission
and distribution costs.
Our farms and suburbs will be the cornerstone
of our new electric infrastructure for both
generation and storage. We’ll be building
infrastructure that guarantees local jobs long
into the future. There are even more jobs in
retrofitting everyone’s basement with a heat
pump and their kitchen with new appliances.
The composition of the future grid will be
determined mostly by geography; the rest will be
hammered out by policy, the market, and people’s
preferences. The good news is that the target is
more than reasonable with known technologies!
In many markets solar is by far the cheapest form
of electricity. With high certainty we can say that
in a decarbonized future, average U.S. families
will pay much less for all their energy bills than
they do today.
Yes, it will take energy to create this new 21st
century decarbonized energy infrastructure.
Solar panels, wind farms, electric cars, and
heat pumps don’t grow on trees. But the return
on investment will be enormous. Reducing the
FIX OUR PLANET: New Power Nation
20th vs. 21st Century Infrastructure
In the 20th century, public infrastructure
was large and centralized — power plants,
transmission lines, bridges, roads, and dams —
and much of it was built to support an economy
run on fossil fuels:
• 8.8 million lane-miles of roads
• 170,000 gas stations
• 500,000 bridges
• 101 nuclear reactors
• 800,000 miles of sewer lines
• 84,000 dams and reservoirs (not all
hydroelectric)
• 200,000 miles of high voltage transmission lines
• 5.5 million miles of local distribution lines
• 4.4 million miles of gas pipelines
• 72,000 miles of oil pipelines
• 130+ oil refineries
Our 21st infrastructure will include more
personal infrastructure connected to the public
infrastructure — climate fixes we can engage in
every day (see Make: Volume 72, “Decarbonization
Begins at Home,” makezine.com/go/fop2) —
almost all of which help us generate or store
clean energy:
• 120 million solar roofs
• 253 million cars
• 16 million trucks
• 90 million furnaces
• 150 million refrigerators
• 100 million hot water heaters
• 1 billion parking spaces
• 120 million new smarter fuseboxes
• Power meters that go both ways
18 make.co
total energy used in our economy by 50% means
that these new investments will be profitable.
They will create new industries, and they will put
millions of people to work.
The main thing standing in our way is how
we’re going to pay for it. If only the wealthiest
people can opt in to paying for climate solutions,
we don’t have a climate solution. We need to think
about finance.
How Do We Pay for It?
You don’t fight a war because you can afford it —
you fight a war because you can’t afford not to.
But the fact is, we can afford it, and decarbonizing
will save all of us a lot of money.How?
First, clean energy is already the cheapest
option, and it’s getting cheaper every day.
Second, we can finance the clean energy future
in order to start the transition today.Finally, we
can and must pay for our fossil fuel past in order
to transition safely to a decarbonized future.
CLEAN ENERGY IS CHEAPEST, AND
GETTING CHEAPER
Up until now, clean energy has been developed
in places where the economic benefits were
obvious. Australia figured out solar because the
grid is so distributed that retail grid electricity is
expensive. South Australia proved out grid-scale
batteries because that was cheaper than new gas
plants. California led the world in electric vehicles
because air pollution in Los Angeles and other
cities made the need clear. Europe and Japan
mastered heat pumps because of their cold
weather and limited domestic natural gas.
Once adopted, the economic benefits of clean
energy are clear. The average electricity price
in the U.S. is 13¢/kWh, but rooftop solar hits 6¢/
kWh with the right regulations. Right now, if you
drive a 25mpg vehicle at $3/gallon, it costs 12¢/
mile; a 300Wh/mile electric vehicle using 6¢/kWh
electricity will cost only 2¢/mile.At the average
natural gas prices in the U.S., heating your home
costs $11.20/MBTU. With a heat pump of COP 3
and an electricity price of 6¢/kWh, heat will cost
you $5.86/MBTU instead.
And renewable technologies are just getting
cheaper thanks to innovations in technology.The
solar and wind industries are learning, getting
cheaper as production
ramps up and innovations
overtake the field. These
trends can be quantified
into a learning rate, or the
amount the unit cost of
a technology is reduced
when investment is
doubled.For instance,
solar is learning at 23%
and wind at 12% — as
fast or faster than fossil
fuels during their 20th-
century heyday. Lithium
ion batteries are learning
at a rate of 17%, dropping
from over $1,000/kWh in
2010 to $150/kWh today,
with projections to hit $60/
kWh by 2030.
Energy will be cheap, and we can save more
money by creating a bidirectional grid, allowing
energy to flow both to and from the consumer.
The fact that our new infrastructure will be closer
to home, where more energy is generated and
used locally, will make energy even cheaper; our
own cars and homes can be used as batteries to
store and transmit energy.
So, we’ve figured out the cheapest sources
of clean energy. Why haven’t we implemented
them? Themain reasons are regulations and
incentives that favor fossil fuels, and financing.
Regulations are a serious impediment to the
market penetration of clean technologies.When
you buy solar on your rooftop in Australia it
costs $1.20/W, but for reasons of regulations,
permitting, and high sales cost, that price is $3/W
in the U.S. The underlying hardware is incredibly
cheap, with solar modules selling internationally
at 35¢/W and believable pathways to 25¢/W.
We must update regulations and permitting
processes that stand in the way of converting to
clean energy.
Likewise, the system of subsidies to support
fossil fuels gives these old technologies an
unfair advantage. We have to minimize the cost
of solar and wind with the right incentives and
regulations, while eliminating supports that
unfairly discount fossil fuels.
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HOW DO WE PAY FOR THE FUTURE?
We’ve seen that with proper regulation, clean
energy is already cheaper than fossil, but
financing remains a major barrier to adoption.
Solar, wind, electric vehicles, and heat pumps all
cost you more up front, but save you money later.
The key to transitioning quickly to renewables
will be creating the same kind of public-private
partnerships and innovative capital financing
strategies that have long underpinned America’s
economic engine: loans. We must invent the
climate loan, a low-interest financing option to
help consumers afford the capital investments for
21st century decarbonized infrastructure.
America’s lifestyle was built on loans; the car
loan and home mortgage were both 20th-century
American innovations. The modern mortgage
market was shaped by the federal government’s
intervention in another time of crisis: the Great
Depression, when property values plummeted
and about 10% of all homeowners faced
foreclosure. The government stepped in during
Franklin Delano Roosevelt’s New Deal, when
Congress passed the Home Owners’ Loan Act of
1933 to provide low-interest loans for families at
risk of default.As a result, hundreds of thousands
of homeowners were able to pay their mortgages,
and the program actually turned a slight
profit.This program gave rise to Fannie Mae in
1938, and then Freddie Mac in 1968, creating the
lowest-cost debt pool the world had ever seen.
To win climate stability and a more robust
energy infrastructure, the U.S. government
must be just as audacious in financing zero
carbon capital. Tomorrow’s infrastructure will
necessarily be more personal and distributed,
so it’s time to help consumers get the same low
interest rates the utilities get. Today, an energy
utility can get interest rates below 4% to build
yesterday’s infrastructure, but a consumer gets
stiffed with 9%–12% when they buy solar panels,
heat pumps, electric vehicles, and batteries.
As I write this sentence, 3.45% is the U.S. 30-
year mortgage rate.If we finance solar panels at
this rate, their electricity will cost just 4.5¢/kWh.
If, however, the same installation is financed at
10%, as is common today, the same electricity
costs 8¢/kWh, nearly twice as much.
If done right, innovative low-cost financing can
be one of the most effective ways to ensure equity
and universal access to cheap, reliable energy in
the 21st century.
HOW DO WE PAY FOR THE PAST?
We must also think carefully about the economic
ramifications of the transition away from fossil
fuels.
Digging holes in the ground costs money.
Finding the one with oil in it costs more money.
Fossil fuel companies spend a lot to find fossil
fuels, and only recoup those investments
slowly over time. This business model requires
borrowing money to dig the holes, and when they
write that mortgage to the bank, the asset they
pledge to the mortgage is the oil coming out of
their last well.
In the context of decarbonization, lingering
debts like these are called stranded assets,
and they’re a big problem.Stranded assets are
resources that once had value but no longer do,
usually because of a change in technologies,
markets, or social habits —like railroad tracks
abandoned due to a shift to automobiles.
Currently, it’s estimated that the total debt
attributed to fossil fuels that aren’t even dug up
yet is $135 trillion. Despite the fact that no human
has laid eyes on these fossil fuels, they appear
as assets on energy companies’ ledgers.Climate
scientists agree that burning those reserves
would compromise the 1.5°C warming limit;
indeed, to stay under that target, we must not
burn a third of the oil, half of the gas, and 80% of
the coal in that asset pool. Because these fuels
are already financed, however, they appear as
assets on energy companies’ ledgers, and they’re
already traded like any other form of money. If
you had $135 trillion in the bank, would you
relinquish it without a fight?
A 2018 study in Nature Climate Change
estimated that as much as $4 trillion would be
wiped off the global economy by stranding fossil
fuel assets. By comparison, a loss of only $250
billion triggered the crash of 2008. The rippling
effects of such an event could be catastrophic.
In navigating this precarious scenario, the
best strategy may be to treat the owners of
these assets, the fossil fuel industry, as friends
rather than enemies. Rather than make deniers
FIX OUR PLANET: New Power Nation
20 make.co
Stand with the Children
The planet is cooking and it’s 2020 already —
we’re going to have to fix this ourselves. This
is essay #3 on how to decarbonize our world.
Read the series, find hands-on projects to
make a difference, and share your ideas at
make.co/fix-our-planet.
Adobe Stock - tribalium81 and cienpiesnf
and fighters out of these companies, what if
we engage them as the best allies to build the
decarbonized future? They’re extremely good at
financing capital-intensive businesses. They have
enormous teams of smart and competent people
who are good with shovels. Those people could
be just as happily — probably more happily —
employed building decarbonization infrastructure.
Why don’t we invite them to be a driving force in
World War Zero?
The only roadblock is the stranded assets,
so what if we buy them out? They would only
ever make a slim profit margin (around 6.5%)
anyway.Let’s round it up to 10% to be generous:
10% of 135 trillion dollars is $13.5 trillion, a
small fraction of our $100 trillion global GDP.
The fossil fuel companies would have a huge
amount of capital they could invest in the new
energy economy and the new infrastructure of the
21st century, generating jobs and building new
businesses with valuations far exceeding that of
the stranded assets.
This may sound like a crazy idea, but it’s
the type of thinking we must embrace to solve
our climate problems with the biggest energy
infrastructure buildout ever to occur.
How to Finance
World War Zero
»
Minimize the cost of solar and
wind with the right incentives and
regulations. This means detailed local
regulatory and building code work, as
well as reform of National Electrical
Codes (NEC) and FERC.
»
Eliminate all fossil fuel subsidies to
even the playing field.
»
Minimize grid costs by allowing
energy to flow both to and from the
consumer. This will require utility
reform.
»
Finance industrial manufacturing
infrastructure to lower the costs of
EVs, batteries, solar, heat pumps, and
smart grid components, similar to
how the U.S. government underwrote
the Arsenal of Democracy.
»
Climate loans — Create a federal
government-guaranteed, low-interest
consumer financing instrument
similar to Fannie Mae for the package
of decarbonizing infrastructure that
decarbonizes a home.
»
Buy the proven reserves of fossil
fuel companies to bring them into the
green future as allies, not enemies.
We Want
YOU
!
21
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FEATURES: Diné Maker Faire
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Optimization
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Maker Faire on the Navajo Nation
Written by Keith Hammond
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