Clean energy technologies tend to obey Wright’s Law, which states that the rate of progress is dependent on the cumulative production volume of the underlying technology. In other words, price is a function of the knowledge accumulated through working with a technology and installed capacity. This is different to Moore’s Law, where price is a function of time.
It is for this reason that the news of China’s record addition of wind power capacity in 2020 is so critical. China added in one year (72GW) almost all the capacity it was forecast to add over three years by the IEA (79GW).
This could force large revisions (faster declines) to the anticipated price reductions for green energy over the next five years.
This will not be a surprise given the IEA’s consistent underestimation of LCOE declines for renewables. Forecasts for net renewable energy capacity additions over the next five years will have to be revised up.
The current ‘speculation’ in renewables, combined with rapidly falling costs for batteries, solar and wind, could accelerate the transformation of the world’s energy supply by triggering ‘tipping’ points sooner. These tipping points reflect non-linear shifts. Profound changes in the primary supply of energy could occur much faster than is currently anticipated.
