3D concept rendering of a home battery energy storage located in a garage with a sunny background with lawn car, family house and big city.
Rendering of a home battery energy storage system. Photo: Getty Images
Green

Clean Energy Has a Tipping Point, and 87 Countries Have Reached It

Solar power, electric cars, grid-scale batteries, heat pumps—the world is crossing into a mass-adoption moment for green technologies.

On New Year's Eve, 1879, Thomas Edison flipped the switch on the first building strung up with electric light bulbs. Night turned into day, and the revelers rang in a new age of electricity.

Edison was thinking way beyond bulbs: He planned an entire grid to carry power from coal generators directly into homes. It took another quarter century for electricity to reach the first 5% of US households—but that proved to be a tipping point. By 1950, the entire country was connected. A similar pattern of adoption—gradually, then suddenly—echoed around the world.

Today there’s a new Edison-level transformation under way. It affects how we generate the power that flows to our electrical outlets—and what gets plugged into those zero-emission electrons. Bloomberg Green has identified tipping points for 10 clean-energy technologies, from electric motorcycles to heat pumps and rooftop solar panels. New analysis shows which countries have crossed the threshold and how quickly those markets then expanded.

How Fast Is the World Switching to Renewables?

87 countries have passed the 5% tipping point into widespread adoption

Note: Renewables include all sources of wind and solar and excludes other forms of zero-emissions generation. Source: BloombergNEF

It all starts with the transition to clean energy, now approaching full speed with 87 countries drawing at least 5% of their electricity from wind and solar. The US hit 5% in 2011 and surged past 20% renewable electricity last year. If the country follows the trend set by others at the leading edge, wind and solar will account for half of US power-generating capacity just 10 years from now. That would be years—or even decades—earlier than major forecasts.

Bloomberg Green Fall - Winter Issue 7, cover
From Bloomberg Green, Issue Seven. Illustration: Max Guther for Bloomberg Green

With all good technologies, there comes a time when buying the old tech no longer makes sense. Think smartphones in the 21st century, color TVs in the 1970s, or even gasoline-powered cars in Henry Ford’s day.

Successful technologies follow an S-shaped adoption curve. Sales move at a crawl in the early-adopter phase, then surprisingly quickly once things go mainstream. The top of the curve represents the last people to make the transition. Even in 2022, a tenth of humanity still doesn’t have electricity.

Five percent isn’t a universal tipping point. Some technologies flip sooner, others later, but the basic idea is the same: Once the tough investments in manufacturing have been made and consumer preferences start to shift, the first wave of adoption sets the conditions to go much bigger. By examining the countries that reach each tipping point first, we begin to get a sense of what to expect from those that follow.

Intermittent renewables tend to work better in combination—so when the sun sets in Spain, wind from Denmark might make up some of the gap. But even on their own, specific types of renewable energy show distinct adoption curves. Deploying enormous wind turbines can be difficult, so adoption is more gradual. Solar cells, on the other hand, can pop up just about anywhere once they’re affordable, so growth after the tipping point can be more explosive.

The Big Three in Renewables

After reaching just 1% adoption, solar and wind soar

Source: BloombergNEF

One phenomenon underpinning the tipping points is known as the experience curve. Wind and solar are technologies, not fuels, so the more panels and turbines are deployed, the better we get at making them. Every time the global supply of solar doubles, the cost of adding more installations declines by almost 30%, according to decades of data from BloombergNEF.

As more countries tipped into mass adoption, wind and solar became the cheapest sources of new electricity capacity worldwide, according to BloombergNEF data. Cost declined so much that it's no longer the biggest obstacle to expansion. “Now it’s about permitting, interconnecting, central planning around grids,” says Logan Goldie-Scot, head of clean power research at BloombergNEF. “These processes aren’t always able to keep up with the economics.”

Battery housing during a tour of the Elkhorn Battery Energy Storage System in Moss Landing, California.
Battery housing during a tour of the Elkhorn Battery Energy Storage System in Moss Landing, California. Photographer: Nic Coury/Bloomberg

The need for giant batteries

The most difficult challenge in cleaning up the grid is providing flexible sources of power that can ramp up or down as needed. Most flexible generation today is provided by natural gas and coal. Only in the past few years did battery prices fall enough to compete. From West Texas to South Australia, grid operators have been snatching them up.

During California’s record heat wave in September, batteries helped prevent a blackout by storing up excess power in the morning and then deploying it during the early-evening hours when everyone got home from work and cranked up the air conditioners. During critical peak hours, batteries supplied more power to Californians than nuclear reactors.

The pairing of batteries with renewables is only likely to accelerate, notes Nat Bullard, an early stage climate technology investor at Voyager Ventures and senior contributor to BloombergNEF. “There will be more batteries next year, whereas the nuclear fleet is not going to grow any time soon.”

The Sudden Rise of Grid-Scale Batteries

Deployment is swift once lithium-ion batteries make financial sense

Note: Includes BNEF forecasts for 2022 storage capacity Source: BloombergNEF

Plugging everything in

More than 70 countries have set targets to cut their greenhouse gas pollution to zero,including China, the US, and Europe. Those three biggest polluters and the others aimed at net zero together account for more than 75% of global emissions.

Reaching net-zero goals requires both cleaning up the power grid while expanding what gets plugged into it. One of the biggest challenges is replacing fossil fuel boilers for heating. Producing heat—for keeping warm, manufacturing, or farming in greenhouses—is responsible for roughly half the world’s final energy consumption, and the demand is greatest during winter months when solar power is weakest.

The solution is the electric heat pump. These devices aren’t new, but they’ve become cheaper and even more efficient in recent years. They can reduce energy consumption from heating and cooling by as much as 70%. Heat pumps are also being used for more efficient water heaters, washing machines, and even electric cars. The only thing holding them back is their higher upfront cost, which many governments are now subsidizing.

Close-up of black full inverter heat pump outside in the garden, near wooden pool house on a sunny day.
Heat pump Photo: Getty Images

Heat pumps have already replaced about 20% of boilers in Europe, saving consumers more than $100 billion a year, according to data from the European Heat Pump Association. The energy crisis brought on by Russia’s invasion of Ukraine has made them all the more attractive, and installers can’t keep up with demand, according to Thomas Nowak, the industry group’s secretary general.

"If you want to plan for winter, you have to plan for winter 2023." Nowak says. “No one in Europe wants gas in their homes now. Growth is limited only by installation capacity and the availability of heat pumps.”

Heat Pumps Could Defend Against Putin’s Gas Freeze

European market share varies from 2% in the UK to 97% in Norway

Sources: EHPA, Eurostat

Next stop: transportation

Transportation is responsible for a quarter of the world’s energy consumption. As with heat pumps, the fuel savings for EVs often makes the total cost of ownership less than their fossil-fuel alternatives, even when the upfront sticker prices are higher.

The US is the latest country to pass what’s become a critical EV tipping point: 5% of new car sales powered only by batteries. If the US follows the trend established by 18 countries that preceded it, a quarter of new car sales could be electric by the end of 2025.

Electric Cars Accelerate Into the Curve

Adoption rates in 19 countries exceed 5%—then sales take off

Note: US and Canada both topped 5% for the first time in the last six months Sources: BloombergNEF, Bloomberg Intelligence, ACEA, CATARC, OFV, New Zealand Ministry of Transport

It’s reasonable to expect a similar EV tipping point around the world, since most impediments are universal: not enough chargers, expensive sticker prices, and a lack of consumer awareness. The 5% threshold is where these obstacles give way.

South Korea’s adoption curve starting in 2021 ends up looking a lot like China’s in 2018. Both resemble Norway after it first touched 5% in 2013. Up next to cross that threshold: Canada, Australia and Spain.

Solar panels are reflected in the windows of an electric vehicle (EV) at the Volkswagen AG (VW) electric automobile plant in Zwickau, Germany, on Tuesday, April 26, 2022. The Zwickau assembly lines are the centerpiece of a plan by VW, the world's biggest automaker, to manufacture as many as 330,000 cars annually.
Solar panels are reflected in the windows of a Volkswagen EV at the company's plant in Zwickau, Germany. Photographer: Krisztian Bocsi/Bloomberg

Widening the category of EVs

Expand the category from battery-only cars to include plug-in hybrids—popular in Europe—and the world has surpassed 20 million electric vehicles on the road—or roughly 2% of the total fleet. BloombergNEF projects that figure will double again by the end of next year. In the US, more than half of new cars will come with a plug by the end of the decade, according to a BloombergNEF forecast updated to reflect consumer incentives enacted this summer.

Interestingly, plug-in hybrids didn’t conform as well to the tipping-point dynamic until reaching 10% of new vehicle sales. The reason might have to do with the lower barriers to entry, which meant that initial sales could easily be swayed by changes to local incentives or vehicle availability. The US and China mostly skipped plug-in hybrids, and even today the US hasn’t crossed the 10% threshold.

The data shows tipping-point dynamics for the adoptions of EVs and hybrids combined as well as two wheelers, including motorcycles and mopeds. It turns out that automakers have tipping points, too, a threshold beyond which their EV output accelerates. This makes sense when considering the time and cost—factories must be retooled and supply chains reconfigured. In Europe, for instance, once 10% of an automaker’s quarterly sales go electric, the share of EVs triples in less than two years.

How EV Makers Are Electrifying Their Fleets

Note: China began transitioning to electric two-wheelers in the 1990s and is now the world leader at roughly 70% market share—not shown due to incomplete historic data. Sources: BloombergNEF, Bloomberg Intelligence, ACEA, ACEM, CATARC, OFV, Experian, New Zealand Ministry of Transport

The way we produce and use electricity is undergoing a series of simultaneous transformations that will ultimately determine the scale of climate change. These various technologies collectively make up their own sort of early-stage tipping point for building a climate-safe energy system. The date by which the world will successfully cross that threshold is the biggest question that remains.

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