Demonetizing Everything: A Post Capitalism World | Peter Diamandis – Energy Insights

Energy Insights highlights interesting energy content from around the web.

Previous posts include Getting Wind and Sun onto the Grid and The Complexity of a Zero Carbon Grid.


This post looks at Peter Diamandis’ talk Demonetizing Everything: A Post Capitalism World. The central premise of the talk is demonitization – technology is making utility cheaper.


Diamandis’ highlights demateralization as one driving force behind demonitization. Put simply – technology allows us to use less stuff to deliver more utility, making that utility cheaper.

Diamandis gives a great example of this demateralization leading to demonitization trend using the smart phone. Diamandis estimates that the functionality of a $50 smart phone of today would have cost millions 20 years ago. This is a direct result of the demateralization of functionality from hardware to software.

Yet when Diamandis got to his section on energy I was left quite frustrated. It’s not that I don’t agree with the central premise that demateralization doesn’t lead to demonitization. It does. I’m disagreeing that demateralization is occurring in our transition to renewables.

Because the energy density of renewable resources are so much less than fossil fuels, we actually require more steel, concrete and plastic per unit energy generated from wind & solar.

Table 1 – Range of materials requirements (fuel excluded) for various electricity generation technologies (DoE Quadrennial Technology Review 2015)

I also found talk too positive – Diamandis makes it sound like everything is OK, coal has been defeated and it’s all smooth sailing from here to a clean & decarbonized world. While we are making progress it is too slow – and carbon emissions are still rising.

Below I have a look at a few of the points Diamandis raised in more detail.

2016: Renewables Cheaper Than Coal

World Economic Forum Reports: Solar and wind now the same price or cheaper than new fossil fuel capacity in over 30 countries. Energy experts think coal will not recover.

I find a statement like this frustrating – it makes it seem as if the fight against coal is already won. The report that Diamandis refers to is the World Economic Forum’s Renewable Infrastructure Investment Handbook: A Guide for Institutional Investors.

You only need to look at one of the figures from that exact report (Figure 1 below) to see that it’s still happy days for coal. Coal is still by far the dominant fuel globally – does it really look like wind & solar have dealt a killing blow from which coal will never recover?

Figure 1 – World Energy Matrix (Renewable Infrastructure Investment Handbook)

It also doesn’t matter if wind & solar are cheap if we aren’t installing more capacity. The same WEF report shows that total investment ($USD billion per annum) in renewables has levelled off since 2011.

Due to the price decrease we still will be installing more renewables at the same level of investment, but it’s the combination of price and investment that gives us what we really care about – annual capacity installed.

Figure 2 – Investments in Clean Energy (USD bn) (Renewable Infrastructure Investment Handbook)

I also find the use of ’30 countries’ a misleading use of statistics. Are these 30 small, sunny countries which are perfect for solar? If the lessons learnt in these 30 countries don’t transfer to China, India and the USA then it doesn’t really matter in terms of fighting climate change.

It would be more relevant to look at in how many countries solar was cheaper than coal, then to weight each country by population or total energy consumption. This would give a more accurate picture of how solar is doing in displacing coal.  More accurate still would be to look at Figure 1.

The Global Status Report for Renewables states that renewable energy now accounts for 25% of the world’s power

The problem here is including all renewables together. The distortion comes from including hydropower with all other renewables.

While the statement Diamandis’ makes is true, it’s misleading to put this fact on the image of a solar panel. BP estimate that non-hydro renewables make up around 8% of global electricity generation. Indeed Ramez Naam (who spoke at the same Exponential Finance conference) estimates that wind & solar are around 7% of global electricity generation. This is a far cry from 25%!

The exact numbers here aren’t important – what’s important is that the viewer of the presentation is left thinking that renewables are doing fantastic when in fact wind & solar still make up a very small portion of global generation. The fight is not over – in fact we aren’t even winning.

Costa Rica operating on 100% renewables for over 300 days

I actually already addressed this misconception in an earlier post (Composition, not consumption). Costa Rica is lucky to have a very high penetration of hydroelectricity (around 80%). Hydroelectric dams have free energy storage built in – this allows the grid to easily deal with the intermittency of renewables.

Most countries do not have the luxury of a large hydro resource, so using Costa Rica as an example of how close we are to going 100% renewable globally is misleading.  We require different techniques and technologies to decarbonize the rest of the world.

Thanks for reading!

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