Good News for the Power-Hungry

Ask yourself a simple question: Is your career plugged in, un-plugged, or plugged up?

Why ask? Because the global industrial landscape is about to shift violently as solar power becomes the center of gravity.

Imagine a world where the price of energy falls continuously so that industries and consumers feel free to constantly use more of it. Better yet, the carbon dioxide released by this increased consumption decreases continuously as well. Productivity rises too, as AI rolls out and processes benefit from increased automation powered by ever-cheaper electricity. Some industries will suddenly experience booms, such as desalination of sea water to support agriculture or expanded air conditioning for urban development in previously inhospitable climates. New uses for electricity will also be found, too, including aviation and even defense.

Surprise! This is the world we already inhabit and the future we can expect!

To call solar power’s rise exponential is not hyperbole but a statement of fact. Installed solar capacity doubles roughly every three years, and so grows ten-fold each decade. […] Solar cells will in all likelihood be the single biggest source of electrical power on the planet by the mid 2030s.?[The Economist, June 22, 2024, “The solar age”]

The point is, your industry will likely be savagely affected by this transition. So perhaps you should think more critically about what industry or role you should occupy, and plan ahead by contacting the experts in career change. [Read more .]

Where’s the proof?

True, consumer-relevant electricity prices per kilowatt-hour (kWh) have risen over recent decades by a gross 3% p.a. in the US and 5% p.a. in the EU, coming in at $0.13 in the US and circa €0.28 in the EU. [See?EU source ?and?US source .] However, the forecast for future solar power prices in the US is now just $0.05 by 2030. Similar reductions are expected in the EU and, indeed, worldwide. In fact, the responsible US agency reports that the 2020 price targets for solar power were achieved three years ahead of schedule due to the speed with which capacity is coming on line. [See?source .]

If this all sounds too good to be true, please realize that there will still be winners and losers. Christopher Knittel, an economist at the MIT Sloan School of Management says this about industries affected by the energy transition:?“The impact on jobs of the energy transition is not just going to be where oil and natural gas are drilled, it’s going to be all the way up and down the value chain […]” [See?source .] Another observer of the coming changes summarizes them as follows: “Almost all sectors of activity will experience change, but some more than others. Those sectors that cause the greatest amounts of greenhouse gas emissions will experience the greatest transformation. They include transportation, residential heating, heavy industry, agriculture, electricity generation, and more.” [See?source .]

Pessimists point out that many of the energy transition roles may be short-lived, highlighting the construction end of the business as an example.

Others, see the inevitable structural changes that cheap, clean energy will bring and find it hard not to be enthusiastic. For example, here is one piece of an illuminating conversation with several experts from McKinsey talking about the prospects for electric aviation:

People are ready for flying taxis. Across geographies, more than 15 to 20 percent of survey respondents say they can definitely imagine switching from their current mode of mobility to a flying-taxi service in the future. Passengers are spending more than $400 billion globally for taxi services every year. E-hailing is another $100 billion on top of that. If you now imagine that flying taxis can capture some of this market share and become a real alternative to the taxi by 2030, the market opportunity is in the range of several billion US dollars.?[See?source .]

Earlier, we mentioned the defense industry. Here is just one tidbit from that sector that will also likely boom due to lower-cost electricity: “Israel’s New $1.2 Billion Laser Will Be Nearly Unstoppable […] This air-defense system never runs out of ammunition and can destroy threats up to 4.3 miles away.” [See?source .] At the end of the day, air defense with missiles is effective but very expensive. An efficient laser defense, however, offers profound advantages if it can source enough electricity.

Of course, storage of electricity could have become a major obstacle to solar’s grip on power except for the recent surge of investment and development.

Indeed, the electric vehicle (EV) battery market has already built significant overcapacity. Reportedly, “since 2018 companies around the world have [plowed] more than $520 [billion] into battery-making” so prices for EV batteries have indeed plummeted. [The Economist, July 11, 2024,?“Why most battery-makers struggle to make money”.] Unfortunately, consumer acceptance of EVs lags expectations so that many battery factories remain underutilized. Car makers still expect EVs to fulfill their promise… eventually. Mary Barra of GM, for example, recently acknowledged that “GM would not build 1 million EVs next year “just because the market’s not developing, but it will get there.”” [See?source .]

In spite of which, battery development continues apace with the focus shifting toward new technologies—beyond the current EV-favorite lithium-ion platform to sodium-ion, solid state batteries and fuel cells among other options. Storage for household use helps to drive these trends. “Residential battery deployment is rising quickly. In 2023, over 70% of residential solar systems in Germany and Italy, as well as 20% in Australia and 13% across the US, had batteries attached.” [See?source .] Residential energy storage is forecast to vault from $800 million in annual, global sales (2023) to $4.2 billion (2030), growing at 27.9% CAGR. [See?source .]

AI alone will benefit enormously from this boom in cheap, clean energy. According to one calculation, “by 2027 the AI sector could consume between 85 to 134 terawatt hours each year. That’s about the same as the annual energy demand of […] the Netherlands.” [See?source .] Desalination, aquaculture, artificial intelligence, localized manufacturing, electrification of fleet operations, aviation, transportation… so many sectors will be profoundly stimulated by the volume of solar energy coming our way.

How will your industry and your role fare in the coming sun-storm?

Perhaps you would be wise to make hay while the sun shines and consult the experts on career change now.?Contact The Barrett Group and power up your career so you will never run out of juice.