Ron Bousso’s article “The Path to cheap power will be very expensive” is purposefully controversial and contradictory - but ultimately wrong.

As with so much coverage of solar these days, journalists are just itching to jump on a potential negative news story.

I’m not sure exactly why that is. Maybe we should celebrate it - as solar is now the lowest cost fastest growing energy technology in the history of the world. But when there is this persistent negativity and false reporting of data, it dramatically risks eroding the trust the public and the institutions that represent the public have in this low-cost, low-risk, clean, reliable, fast to scale, democratic and incredibly empowering technology.

I feel like I could have a full time job correcting false reporting, so I have to be selective, but this Reuters article is a good representation. Here’s what Bousso’s readers will take away from his Reuters (International acclaimed) branded piece:

- $1.4 Trillion is a vast amount of money that needs to be spent on the grid, to support all this ’theoretically’ low-cost solar and wind

- The cost of this offsets the savings from lower cost, and it’ll take years therefore to benefit from any saving

- Solar looks likely to have triggered the Iberian grid collapse last month, so it’s not just cost, this is going to reduce reliability

- Maybe we just stick to what we know, not change our energy mix and deal with the climate challenge some other way

Reuters is basically branding the message: there’s a whopping $1.4 trillion cost to support renewables - that is too expensive! That’s how you end up with a risk of inaction. Reuters matters.

Let’s now use the data to present the full picture, including insights from the recent official report on the cause of the Iberian blackout.

If you read the actual EU report, it lays out the need for $65-80bn in annual investment required to upgrade the grid to support new power capacity and increasing demand. That does indeed total a big number when summed from 2024 to 2040. It’s $1.2 trillion. The delta vs $1.4tr is because Bousso included $200bn of hydrogen pipeline investment in the grid number, incorrectly.

It’s actually a lot less in today’s dollars because the present value of that cost is lower, but I’ll ignore that…

Putting aside the $200bn overstatement and the present value discount, the biggest information gap is the framing of what that spend is as a % of current grid spend. Is that a big number relative to what we already spend?

Today we already spend $170bn a year in payments to the grid operators (28% of EU’s total $600bn annual electricity bill), which at current electricity price inflation will increase to $589bn per year by 2040, in business as usual case. So the $1.2 trillion investment requirement is just 20% of the $5.7 trillion spend consumers will already pay to the operators of the grid across Europe. And even if that was 100% incremental would only increase spend by 20% which would increase total electricity costs by less than 6% at the consumer bill level.

It might look like a big number, but it’s just 20% of typical spend and not all incremental or driven by renewables.

Firstly, the $1.2tr is grid upgrades that are replacing and enhancing the existing infrastructure so highly likely to come out of the existing budgets of grid spend. For example if you upgrade a transmission line to accommodate more capacity you don't still spend the billions of dollars on that line to maintain it that year.

Secondly, regardless of whether it’s renewables or more big centralised dirty power plants, you will need more grid investment to keep the lights on as electricity demand increases with AI and electrification, so this is not a renewables driven cost, some portion is purely capacity increase or replacement (as opposed to distributed renewable driven capacity investment).

Bousso himself cites that 40-55% of low-voltage lines will exceed their 40 year life by 2030, so this is also just about catching up regardless of where you get your power!!

Thirdly, and more mathematically importantly, Bousso does not complete the math to include the actual savings from solar (and wind) being so much cheaper than the alternative and business as usual mix of energy. The S-curve model shows that, a total $100 trillion of cumulative generation cost savings from 2024 to 2040, based on the existing cost curve and deployment growth of solar, $10tr of this in the EU. That’s the big number we need to be focussing on above all - because solar and storage is just that cheap now, and will carry on getting cheaper!

$100 trillion in lower energy costs - this is the biggest economic opportunity that exists globally.

And lastly, all those millions of solar-storage systems spread across the grid come with "batteries included". Millions of batteries can - if the system is designed right - be used to flex demand and provide grid services that substantially reduce the amount of money you need to spend on the grid, especially in the low-voltage distribution component.

Imagine if I am a customer and say to the grid operator, "sure you can use my battery at 6pm when grid demand spikes”. That act, when 100 homeowners say that, can remove the need for a multi-million euro substation or line upgrade. And that’s where the Electric Protocol comes in. Amidst all this talk of trillions of dollars of spend, for just a bit of policy formation (i.e. near zero cost), the EU can create an open, transparent market mechanism to compensate distributed battery owners for the value they create to all users of the grid.

I wrote the paper on this with Prof Andrew Crossland - it must be one of the highest ROI ideas any government can initiate…and it will help save the planet.

With a well designed home system with batteries sized for your needs, the actual interaction and draw on the grid can be reduced by half or more as you self generate and self consume the majority of your electricity. Distributed batteries could actually mean we need less investment in many elements of the grid, not more. Andrew’s work is a game-changer, showing we can save 20%+ on grid upgrades by maxing out grid-forming batteries and consumer-owned resources.

So here’s the real EU renewables maths, assuming half of that $1.2 trillion is genuinely extra grid cost from renewables being more distributed vs centralised, and on top of normal annual EU grid spend.

-$0.6 tr spend on grid increase due to renewables

+$0.2 tr reduced spend due to batteries and flex systems

+$10 tr savings on generation costs due to renewables

=$9.6 tr savings into consumers pockets by 2040.

When you include the grid savings from distributed flex and batteries, the savings from lower cost generation and the fact that much of the grid investment is inherent in demand increase, renewables will actually deliver a $9.6 trillion saving, not a cost. It will make every EU citizen on average €18,000 richer! And contrary to Bousso’s headline, the savings start for you now - as soon as you or your neighbour install a solar and storage system!

Bousso, how about you and I team up on that article next? Seriously, I know you’re busy and it's complicated - and I don’t blame you for missing the other numbers, let’s get this full picture documented.

So that’s the full cost and savings data (vs the partial analysis). Lastly, what about reliability, which my soon to be friend Bousso inferred (with no sources I note) was an issue with solar.

So now we have the official report, released since his article was published - and despite Bousso’s assertion that solar parks were to blame, it’s officially not the case.

Solar was not the cause of the Iberian blackout.

Please see the Global Solar Council’s response here.

Turns out that solar and storage are actually the best way to stabilise the grid.

We are working on a new Future Grid Report at the Global Solar Council that will lay out how grid-forming batteries and other low-cost, proven technologies, in combination with lots of solar, can create not just the lowest cost grid, but the most reliable source of power for a world that will consume 4x the electricity and ultimately be powered by the sun!

Watch this space!

Thank you for reading,

Birchy