Technology progresses faster than human perception.
Having worked in technology and design for many years, I have noticed that a lot of things we are doing are not in line with the present situation. Some things have become standard knowledge: This is how it is, period. For good reasons, for sure. But when circumstances evolve things can grow outdated. This sounds very misty and theoretical but let me explain.
By the end of the 19th century Electric Energy was introduced. Before it could really breakthrough a very important decision had to be made. Mr Edison and his one-time employee, Nikola Tesla, had to fight out their “War of Currents”. At that time, based on the available technology and knowledge. The winner was: “Alternating Current”. It was a choice on good grounds but not only on that. Mr. Westinghouse became the referee. He did not like Edison, who promoted Direct Current, so he chooses for Tesla. Westinghouse built the whole AC network in the US that is still there today. What would the outcome be today, more than 130 years since?
During their “War of Currents” they had no access to Lithium batteries, PV panels, large ESS, IC’s, Artificial Intelligence, Internet, 5G etc. All they had was copper, transformers, mechanical switches and steam engines. And ….. common sense. There were solid arguments for both options, AC or DC. So, choices had to be made. And the result worked out fine.
But technology has progressed enormously and present choices must be based on present technology and on what is expected ahead. Is that the way we do it?? No, we are still stuck with perceptions from the past that gave us the comfort that all was right. The past is not the guaranty for the future. We need a reset.
Availability of reliable and affordable energy is appreciated as a big achievement of our technology and a blessing of the fossil fuel age, however, based on the technology and conditions available at present, a very different outcome can be imagined.
“The inability to imagine a world in which things are different, is evidence of a poor imagination not of the impossibility of change”. Rutger Bregman in “Utopia for Realists”.
The external costs of fossil fuels are increasing and the benefits are stagnating. Change is the only option. Never mind how scary the unknown might be. A lot of sceptics argue that the “Greeny Fundamentalists” are wrecking our economy with unproven hysteria. History of the economy, not of the climate, tells another story. Those who failed to see the change on the horizon were taken by surprise not identifying the underlaying changes ends up in wrong strategies. The disruption of the energy market will certainly create victims, however, it also creates new opportunities and that will increase the market.
When oil exploitation started in 2nd half of 19th century an investment of $1 delivered an income of +$100. That is what made Mr. Rockerfeller rich. Oil companies still make a profit but the margins are thin and only the huge size of their sales brings in the billions. All the externalities from the fossil fuel industry are not compensated by the margin of the oil majors. At the bottom line the economy, or read society, loses money. Externalities lead to market failure because the oil price does not accurately reflect the true costs and benefits of oil production.
Maybe Renewable Energy sources are more expensive at the start, which is not true, but over time will be much cheaper. When handled and produced in the right circular way, the added value is much higher and very much positive, especially when the externalities are taken into account.
The energy transition is a way to support the economy. This is how it is seen by those who have imagination. Not by myopic people. The shifts will be huge, effecting all people and those shifts will be economic, political and social. Oil producing countries still have a big say and those who have to buy the oil have to obey. When the latter countries can create their own energy, many things change. Suddenly the Saudi desert becomes what it always has been, desert. And a poor country in the Sahel has abundant energy. The sun is shining on all of us. We no longer have to transport large quantities of coal, oil and gas around the world in big tankers. Many will fear such disruptions but many more will get a change to improve their lives.
Solar energy projects have become so efficient (technically and economically), that their return on investment is within a few years. During the remainder of their lifetime, 10 to 15 years, they provide clean and near free energy, adding value to the economy. What Central Banks are doing with Quantitative Easing, Renewable Energy is doing as well. The same but on a realistic way. Not virtual money, but real money.
The new economy comes with an extra bonus: the environment will benefit, air and water quality can improve. Sea levels will still rise, but less than feared today. When you do not believe in Climate Change and see it as a Lefty hoax, nothing is lost. The Economy improves.
We need this reset, never mind how scary it is.