At QT, I am tracking the great adventure of how mankind will develop alternatives to burning fossil fuels for energy. It is, in my view, one of the biggest or meta stories out there, and one that is not well enough reported. Why is it so big? Because we are likely to face ever more severe impacts from two trends: (1) ever higher fossil fuel costs and (2) global warming. Why is it under-reported? Who knows? But probably the reason is simple - most journalists are not well versed in the area.
The most interesting questions concern the likely effects that changes in energy supply and pricing have on how we live. Here are two very different views of what is in store for us (1) From the TV series “The Prize” - As it was in the 20th century, access to oil will drive political and military decision making and lead to conflict, or (2) from Carlota Perez - The negative impacts from ever increasing prices of energy will be offset by gains from smarter living that will produce a “golden era”.
So far, even as energy prices have gone up, we have not seen that much change. Even after the financial crash and resulting recession, we continue to hold on to patterns of living based on cheap energy, albeit with ever greater strain. Can we continue to hold on? Who knows. But there are some trends at work that may guide us in decision making.
One trend is that as the cost of extracting and delivering fossil fuels continues to rise, the cost of alternative energy supplies is falling. Good reports
The price of fossil fuel energy has been rising for the last decade, and every year those fuels get even more expensive to extract. Meanwhile, the price of solar power has fallen steadily since the 1970s, and manufacturing capacity for solar panels has quadrupled in the last three years alone. The inexorable result is that electricity generated from solar plants will soon become as cheap as electricity generated by gas and coal power plants, a moment known as “grid parity.”
When will we get to “grid parity”? We may already be there in certain locations. It may be a more general phenomenon by 2015 or even 2013. Once we get past grid parity, where the cost of solar power is less than the cost of burning fossil fuels, a lot of interesting things will happen.
We might keep in mind that the earth is bathed in a huge amount of solar energy every day that vegetation harvests. Once we get used to the idea that we need to do that too, we might start copying how plants do it. This copying is called “biomimetics” - and biomimetics may lead us to embrace some wild new technology. FC offers an interesting article on that topic.
So hold onto your solar powered hats. This may be a wild ride.
FOLLOW - BTW, Carlota Perez takes into account rising energy prices in her model of how the next “golden era” will come about. Her point is that the negative impacts of high energy prices will be offset by dramatic increases in the value added we find from enhanced information flow. We will use less energy as we wean ourselves away from the era of mass production and all “go green”. It will be fun to see if she is right.
2d FOLLOW - Carlota Perez also points out that the idea of a great life in the suburbs was a by-product of the era of cars and cheap transport. With fuel prices on the rise, this is changing. We already see disturbing signs of increased suburban poverty. Are suburbs sustainable? Not many people were asking this question just a few years ago. Now doubts about suburbia are growing. My sense is that they probably are sustainable if we can access enough energy from non-fossil fuels to keep them powered up and and keep our cars going. The more important question is will they lose their appeal. I think they will if conventional wisdom shifts to the conclusion that having a primary residence in the suburbs is no longer a smart option. And that my friend, is probable.
3rd FOLLOW - I made the point that traditional journalism is not reporting the story about energy well enough and is letting us down. This is not the only area where I believe traditional journalism is letting us down. I would argue that reporting about the current economic malaise is equally poor. As with energy matters, most journalists simply are not well enough versed in finance matters to try to engage the wider audience. So we get silly and reactionary news reporting about events and debates instead of serious trend analysis and learning. This must change over time if — as Carlota Perez predicts — the world is to grow smarter.