Energy transitions: Past and Future
Energy Vision 2013
When we think about the possibility of the next energy transition, we typically think about how the transition might happen with all other things being equal. More efficient energy use and changes in how we power transport are certainly on the table, but with that comes a tendency to consider a world that looks very much like the one we live in today. But that’s not how energy transitions have occurred in the past. The transitions from wood to coal to oil and the rise of electric power were accompanied by sweeping technological, sociological and economic changes. More concentrated energy sources enabled the industrial revolution and facilitated mass migration to cities. Electricity allowed the rise of appliances in the home and workplace, automating and simplifying many tasks and increasing productivity, and now enabling the digitization of the world. Understanding the dynamics of energy transitions requires respect for innovation and its unexpected impact, and indeed some imagination about the future. Will the next transition be accompanied by larger changes in way of life? Or will it be mainly a change in how energy is produced and distributed?
Key Elements of the Report:
- In previous transitions, technological change was coupled with lower costs, greater efficiency, convenience and new uses, such as personal vehicles. But environmental concerns would be a primary driver for a low-carbon transition, a big change from the past.
- Perceived scarcity of fuel, reflected in rising prices, played a central role in the transition from wood to coal and in the transition to kerosene for lighting. But scarcity is less likely to play a role in a low-carbon transition. Scarcity of other resources, particularly water, may turn out to be an important consideration.
- The ability to transport energy-dense fuels facilitated the population movement toward cities. Additionally, trade in energy commodities brought fossil fuels to areas without a local resource endowment. A shift toward renewable sources of electricity would require a fundamental shift in the nature of the electricity system.
- Supplying the cities with low-energy density power may require long-distance transport of power. Distributed renewable technologies, like rooftop solar, hold some promise, but are better suited to smaller buildings. A rooftop solar array can provide a substantial portion of the power needed by a single family home, but will not come close to providing the power required by a large office or apartment building.
- Past advances in electricity generation generally focused on steady, reliable sources. A shift toward wind and solar is a shift away from power that is available whenever it is needed. The challenge of intermittency increases the “true cost” of adding more renewable electricity to the grid. Economic utility scale electricity storage is a potential technological solution to the challenge of intermittency, but large scale solutions have so far proved elusive.
- The emphasis on innovation across the energy spectrum is stronger than it has ever been before, and more scientific talent than ever is focused on improving existing technologies and finding new breakthroughs. Robust global markets and trade work to the advantage of new energy technologies. Technologies developed in one place can very quickly be adopted around the world. The distributed nature of renewable power sources is a natural fit for providing modern energy to areas with minimal infrastructure such as in developing countries, but the cost of renewable technologies poses a challenge to such investments.
- The large per-capita energy use and extensive energy infrastructure in the developed world also pose challenges to a shift toward lower-carbon energy sources. This could mean retiring assets before the end of their design or economic life.
- The most secure and low-carbon form of energy is not using energy at all. Coupling subsidy reform with efficiency improvement can shift the energy economy, particularly in developing countries. Subsidy reform can reduce wasteful energy use and make investments in energy efficiency and renewable energy more attractive.
The Industry Vision is prepared by the World Economic Forum WEF [1] in Partnership with IHS CERA [2]