How much for the sustainable energy transition? A "back of the envelope" calculation

The world's economy can be seen as a giant heat engine. It consumes energy, mainly in the form of fossil fuels, and uses it to produce services and goods. No matter how fine-tuned and efficient the engine is, it still needs energy to run. So, if we want to do the big switch that we call the "energy transition" from fossil fuels to renewables, we can't rely just on efficiency and on energy saving. We need to feed the big beast with something it can run on, energy produced by renewable sources such as photovoltaics (PV) and wind in the form of electric power.

Let's start: first of all, the average power generation worldwide is estimated as around 18 TW in terms of primary energy. Of these, about 81% is the fraction generated by fossil fuels, that is 14.5 TW. This can be taken as the power that we need to replace using renewable sources, assuming to leave everything else as it is.

We need, however, also to take into account that these 14.5 TW are the result of primary energy generation, that is the heat generated by the combustion of these fuels. A lot of this heat is waste heat, whereas renewables (excluding biofuels) directly generate electric power. If we take into account this factor, we could divide the total by a factor of ca. 3. So, we may say that we might be able to keep the engine running with 5 TW of average renewable power. This may be optimistic because a lot of heat generated by fossil fuels is used for indoor heating, but it is based on the idea that civilization needs electricity more than anything else in order to survive. In terms of indoor heating, civilization survives even if we turn down the thermostat, wear a multi-layer of wool, and light up a small wood fire.

Renewable installations are normally described in terms of "capacity", measured in "peak-Watt" (Wp), that is the power that the plant can generate in optimal conditions. That depends on the technologies used. Starting from the NREL data, a reasonable average capacity factor a mix of renewables can be taken as about 20%. So, 5 TW of average power need 25 TWp of installed capacity. We need to take into account many other factors, such as intermittency, which may require storage and/or some spare power, but also better efficiency, demand management, and storage. On the whole, we may say that these requirements cancel each other. So, 25 TWp can be seen as a bare minimum for survival, but still a reasonable order of magnitude estimate. Then, what do we have? The present installed renewable capacity is ca. 1.8 TWp; around 7%. Clearly, we need to grow, and to grow a lot.

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We said that we need to increase the installation rate of about a factor of 8 in energy terms. Assuming that the cost of renewable energy won't radically change in the future, monetary investments should of about the same factor. It means that we need to go from the present value of about 280 billion dollars per year to some 2 trillion dollars/year. This is a lot of money, but not an unthinkable: amount. If we sum up what we are investing for fossils (about $1 trillion/year), for renewables ($300 billions/year) and nuclear (perhaps around $200 billions/year) we see that we are not far from there, as we can see in the image below. The total amount yearly invested in the world for energy supply is about 2% of the Gross World Product, today totaling about US$78 trillion.