Energy Transitions – Are We In One Now? Part One


The world has seen a number of major energy transitions: from human and animal labor to burning wood, to burning coal, and then oil. Are we about to see another major change, or will the current renewables enthusiasm turn out to be just a blip on the screen? In this four-part series, I look at what historians and engineers can tell us about past and probable future energy sources. This first article examines the history of energy transitions and suggests lessons for the future. The second piece will focus on the current situation followed by ones on energy financing/investments and global warming.

Global History – Energy Transitions

Global history is interesting. Many activities/events reoccur with similar patterns. The energy transition to come is not the first that societies have experienced. Early civilizations learned to supplement human energy with animal energy. Then for millennia they relied on wind at sea and draft animals on land, supplemented by waterpower and windmills. In each society, the use of these sources was intricately related to forms of cultivation and production, to social structure, and to living standards.

We started as cave men. Why the cave? Because caves protect men from animals and weather. But man realized he was smarter than animals. So animals became food and were collared to supplement man’s labor. Man figured out how to generate heat via combustion. He used the heat initially for warmth and cooking. And then, another important discovery: something round will roll. And that led to the wheel. Put an axle between two wheels with a cart on top and get an animal to pull. That was man’s mode of transport for centuries.

In the eighteenth century, a transition began whereby the increased use of coke and coal to produce steam transformed production and transportation, spurred urbanization, and lead to fundamental changes in the way of life.

The steam engine: should it have been used to power vehicles? Some think so. But the Stanley brothers did not aggressively market their product. The internal combustion engine made petroleum a critical source of energy while electricity made from burning coal and falling water became essential to modern life.  And on the oceans, ships were powered by wind. But wind is intermittent (sound familiar?). But then probably the greatest engineer ever – Isambard Kingdom Brunel – developed the first propeller-driven steamship.

In each of these transitions, older sources of energy continued to be used as newer ones came on line. Each transition was tied to sweeping changes in technology, economy, culture and politics. There are multiple factors that fostered, hindered, and modulated these transitions: the role of governments, the availability of capital, the pool of knowledge and its application, the adaptability of social arrangements, and the distribution of social costs. And there is much to be learned from the analysis of dead ends. For more on the history of energy, see Daniel Yergin’s great book, The Prize.

Lessons from the Past

Above, I have broadly sketched out the global energy transitions that have occurred through history. What are the key lessons to be drawn from this review for today’s world?

1. During past energy transitions, much money was made and lost as various actors tried to guess which new technologies would succeed.

2. Money-making energy choices are not always the right ones. Deep pockets, government subsidies and aggressive marketing can turn a bad choice into a winner.

3. Transitions take a long time. This happens in part because the infrastructure needed for new energy technologies is expensive. And as long as the old energy providers can make money selling their product, they will.

Setting the Stage – The Oil/Battery Problem

What is the key energy problem? If we leave aside the pollution and global warming problems resulting from the use of more energy than can be handled by the world’s absorptive systems (subjects to be covered in the last article in this series), we are left with the oil problem. What is the oil problem?

  • We can generate as much electricity as we need, but we can’t use much of it in moving vehicles. Why?
  • Because we don’t have low cost ways to store electricity – Bill Gates was quoted as saying all the battery power in the world would provide enough electricity to supply global energy needs for only 10 minutes.
  • We need oil in moving vehicles and most of it comes from unstable regions.

A good example of the battery problem is comes from Rolls-Royce. Its 102EX model is a 6,000-pound, all-electric auto with a 1,400-pound lithium-ion battery. Under “favorable conditions”, it can travel 125 miles before needing a recharge that takes eight hours. Clearly, we are not likely to see electric planes anytime soon.

Better batteries would be a boon to the use of intermittent renewables, like hydro, wind, solar, and tides. Why? Because the electricity they produce when grids do not need it could be stored to a time when it is needed. As things now stand, utilities must take electricity generated by renewable or pay them for not taking it. For example, “The 15 mile-per-hour winds that buffeted northern Germany on July 24 caused the nation’s 21,600 windmills to generate so much power that utilities such as EON AG and RWE AG had to pay consumers to take it off the grid.”

As a prelude to the second article in this series, I offer the following table showing energy source shares in global production.

Source: International Energy Agency

With all the talk of renewables, it is quite apparent they are, at least for now, a nearly insignificant energy source.

The content above was saved on the old Morss Global Finance website, just in case anyone was looking for it (with the help of
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