Stop COPlicating things: apply the 80/20 rule and build the grid of the future with Solar and Storage

How to solve 80% of climate: just digitise the grid and let solar fly!

I love the global village that is COP, especially in the polarised, war-mongering world we’re now in. Honestly, it is quite beautiful mingling with all the cultures and peoples of humanity, together physically in one venue – I met scores of amazing, caring people – it’s an environmentalist’s mecca and a beacon of hope for multilateralism.

I felt really proud to be a sponsor of the Global Solar Council’s 10-year anniversary event at COP – and to celebrate solar’s massive growth over those 10 years (from 56GW p.a. to 700GW p.a.).

I still don’t believe COP will solve climate change – because it’s trying to do too much. As my mate Danny Kennedy said this week: it’s like a reverse Pareto.

Eighty per cent of environmentalists’ energy is going into 20% (I’d argue more like 2–3%) of the problem.

The physics of the situation is obvious: 70% of greenhouse gases and 90% of CO₂ emissions are from burning fossil fuels (so let’s call that the 80% problem). The rest is land-use change and agriculture. So, if you want to solve climate change, replace fossil fuels with solar and eat more veg. It’s really that simple.

I spoke with Christiana Figueres, who chaired the Paris Agreement 10 years ago, and she didn’t love my theory, believing it to be a vastly complex global change process. But ask yourself: what has Paris actually achieved other than setting targets? And where, mathematically, does CO₂ come from? I’m going to argue that Chinese solar-battery mass production and better veggie cookbooks have had more impact than the Paris Accord.

I’m going to leave the veg-transition to the food experts and focus here on the 80% problem: burning fossil fuels.

What everyone at COP does agree on is that solar is the 80% solution. Very few folk now believe the hydrogen, hydro, nuclear or carbon-capture promises – even though they dominate the media and some governments are still sucked in. I had some hilarious meetings, including friends in the wind industry who were asked why anyone would choose wind when solar is faster and cheaper to power their energy needs. Everyone who knows anything about energy, anyone who has to put a dollar of their own money to work – knows it’s all about solar energy.

So I say to everyone funding and attending COP: what if we got simple and focused 80% of our energy on how we can do more of what’s working? Let’s stop scatter-gunning myriad climate ideas and just focus on solar. If we remove the market barriers that constrain what is now the lowest-cost energy on earth, we could continue to grow at 25% or more (we’ve averaged 34% compound annual growth century-to-date).

If we can grow solar at 25% a year, solar will be over 50% of our energy in just 10 years, and together with other zero-carbon energy deliver the entire decarbonisation of energy by 2040 (see the S-curve maths here).

25% growth is absolutely doable. It would mean expanding our current 700GW manufacturing output tenfold over 10 years. That kind of scaling has been done with cars, TVs, iPhones, so why not solar panels and our sister tech, batteries? 

There’s more than enough capital, labour, raw materials and land to do it (roofs and deserts will get us there).

So what are the barriers?

Based on 25 years’ experience and a front-row seat on what’s happening in the market today, I’ve boiled the barriers and solutions down to three items:

1) No Protectionism

We need governments to let the market work and not add tariffs and taxes to clean-energy technologies like solar panels, batteries and EVs. The argument is ostensibly jobs, economy and security, but it’s really protectionism. 

Jobs, domestic economy and security arguments are easy to destroy:

• Less than 20% of solar jobs are in manufacturing; more than 80% are local domestic jobs in sales, installation, the supply chain, finance and service… so max the cheap imports and max the jobs.

• If you want to max the profit in-country, max the cheap imports:

  • At 10c per W current factory-gate prices, with margins at 0–2%, China Inc made only about $600m profit this year despite owning 80% of the supply! 

    
    

Even at through-cycle margins of 4%, that’s only $2.2bn profit on 700GW of manufacturing p.a., only 0.007% of US GDP. Chinese solar revenues are only 2% of US manufacturing revenues, so not exactly crushing the US manufacturing economy.

• The other elements of the value chain are worth more. Hardware is typically only half the installed cost, so that’s $280bn of local revenue for every $56bn of panel revenue (the rest is other hardware like racking, inverters and wiring).

• The bigger economic value is in the electricity the system generates, which is worth $5,250 per kW installed – so $3 trillion in lifetime energy for the 560GW of Chinese annual panel supply.

• By deploying the lower-cost energy tech, you save $800 billion in energy costs for your consumers.

• The biggest value beyond even that is the economic profit that will come in a services and AI economy from having all that low-cost power!

• And lastly, security. Ask yourself this: when you have a few terawatts of solar power installed and you’re getting all this economic value, what can China do to switch off your energy supply? Answer: nothing. So long as you make sure the electronics (batteries and inverters) are managed by domestic software and connectivity (highly manageable with a few simple regulations), you are 100% secure. Putin can switch off European gas, trade disputes can disrupt fossil supply, but nobody can turn off the sun!

2) No Red Tape

We need to digitise, automate and speed up permitting and interconnection. It’s taking 10 years to get the right to interconnect big utility-scale solar and, in the US, 2–6 months to be permitted for residential solar. Governments need to open the market and stop utilities protecting vested interests under the auspices of “overstretching the grid”.

3) An Open Digital Grid

We need open market access and transparent pricing for all grid technologies on a smart, digital grid. Distributed solar and storage are the twin technologies that can take you all the way to the lowest-cost, most reliable and resilient energy system that exists. You just need to incentivise consumers and prosumers to deliver the assets where they are needed on the grid. The most efficient way to do that is by creating a lowest-cost delivery market price where everyone has visibility, transparency and the same pricing treatment. I call that the Electric Protocol – check out the paper here.

And this last one is my other big takeaway from COP30. I met development banks and policymakers in Asia and Africa who still think you need to build out gas as a “transition fuel” or nuclear because of the intermittency of solar. They’re getting their information from the wrong people and looking back at how the West powered their economies last century, not how China, Australia and Pakistan are leading towards the energy systems of the future: low-cost, resilient and clean.

You have African countries building uneconomic gas power plants (paid for by western and Asian development banks), and smart people in government not understanding that baseload is dead in a world of hyper-cheap solar generating more power than we need in the middle of the day at zero marginal cost. 

People don’t understand the power of solar batteries!

South Australia: The grid of the future, today!

Today, 54% of the 2m people of South Australia have rooftop solar and live their happy lives powered by the first grid to 100% shift from a grid managed by analogue spinning/rotational synchronous inertia (supply–demand balanced by machines that spin, powered by fossil fuels) to synthetic digital inertia (managed by batteries and inverters). 

Here are the facts that prove it works:

• South Australia gets between 50% and over 100% of its energy from rooftop solar at any one time, increasingly hitting over 100%!

• The grid is powered by over 500,000 inverter-based resources located across the grid, coordinated by software, including:

  • 440,000 rooftop solar systems

  • 60,000 commercial/industrial and residential batteries

  • 11,000 EVs

• This ensures supply = demand all through the day and night (including some backup gas, SynCons and interconnectors as a safety net too).

• It is the only grid network in Australia to have no “System Strength Shortfalls” in 2025. That is the best measure of resilience.

  
  

South Australia is showing the world how to operate the digital grid of the future and showing that there isn’t a 5% constraint to intermittency, or a 10% limit, or a 50% limit… we can go all the way! From a major blackout in 2016 under central control with spinning machines to a decentralised digital grid, benefiting from the highest resilience in the country in 2025… powered by sunshine!

So there you have it. Solar and Storage =

• Lowest-cost energy

• Fastest to deliver power – 15 years faster than nuclear, 5 years faster than gas

• Maximum domestic jobs, economic profit and security

• And maximum energy resilience with the digital grid of the future, because:

  • Speed outperforms inertia

  • Intelligence outperforms mass

  • And distributed, software-powered, automated response outperforms centralised manual control