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 / Winter 2011 / Issue 65(originally published by Booz & Company)


A Moore’s Law for Renewable Energy

Increasing capacity per dollar in computer technology has driven exponential growth for 50 years. The same could happen in the energy industry.

“Oil companies should think more like technology companies.” So said one of the world’s largest oil companies, the Chevron Corporation, as part of a 2011 public outreach campaign. This idea deserves to be taken seriously, and at a global, industry-wide scale. Since World War II, the computer industry has transformed the global economy and the patterns of everyday life in ways that would have been unimaginable before. Could energy companies — especially those developing renewable technologies such as solar and wind power — spark a similar transformation by emulating the kind of exponential technological improvement that brought about the digital age?

Moore’s Law is well known as a description of the dramatic and continuing reduction in the size and cost of computer technology. In 1954, the average price of a transistor was about US$5. During the next half century, the price of computing power steadily dropped until an integrated circuit was worth about a billionth of a dollar. This dynamic was first described formally in 1965, when Gordon Moore — a pioneer in the semiconductor industry and cofounder of the Intel Corporation — published an article in Electronics, observing that the number of components that could be mounted economically on a standard computer chip was doubling every year, and forecasting that this scaling effect would continue for at least 10 years. Moore’s position within the industry and his technical knowledge gave his words credibility and authority. His prediction, dubbed “Moore’s Law” in 1972, has held true for nearly five decades, guiding the development of a burgeoning and increasingly powerful industry.

Many people believe that Moore’s Law is driven automatically by the inherent qualities of computer circuitry. Certainly, Moore himself recognized the innate pace of technological innovation. In 1975, he recalibrated his prediction in a speech to the Institute of Electrical and Electronics Engineers (IEEE), adjusting the rate of doubling from every year to every two years. However, even Gordon Moore could not see indefinitely into the future. Today’s computer evolution depends on breakthroughs in nanotechnology and semiconductor materials that were completely unknown and unpredicted in the 1970s, and that do not relate directly to the scaling effect at the heart of Moore’s original observation.

Moore’s Law held true, however, at least in part, because of its own effect on the industry. As a clear, credible, and widely accepted metric, it created an expectation that the doubling of computer power every two years would generate huge financial opportunities. Engineers and entrepreneurs organized themselves to realize these gains, attracting capital investment, which in turn spurred innovation. As the costs and prices of these successful technologies dropped, this created even higher expectations, driving more investment in innovation, and bringing more cost reductions. Moore’s Law acted as a powerful organizing principle for the semiconductor industry.

Gordon Moore recognized this power; in an interview with television host Charlie Rose in 2005, he said that his law had “kind of become a self-fulfilling prophecy.” When Rose asked if Moore’s Law would ever become obsolete, Moore replied, “Talking to the Intel technologists, they think they can still see reasonably clearly for the next four generations. That’s further than I’ve ever been able to see. It’s amazing how creative the people have been about getting around the apparent barriers that are going to limit the rate at which the technology can expand.”

Then, as an example of how Moore’s Law became pervasive, Moore talked about the International Technology Roadmap for Semiconductors (ITRS). This was an industry-led, ongoing collaborative effort, organized in 1993 to identify ways to sustain technological momentum. In a fiercely competitive industry, the ITRS brought leaders together to resolve common technological problems — always in service of continuing the track record of exponential growth through innovation. “The companies all recognize they have to stay on this curve,” he added, “or get a little ahead of it.”

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