How did we transition from candles to kerosene? or kerosene to electricity? What and when were the conditions ripe for energy transitions of our past? and what lessons do they have for us in the 21st century as we make a transition from high carbon intensity fossil fuels to renewable energy..
In this podcast Chaitanya Kumar from Sussex University talks to Roger Fouquet from the Grantham Institute at the London School of Economics.
The podcast was first broadcast on The Shift, a great new on-line platform for conversations on energy and climate
This is a short version of the transcript
Chaitanya Kumar: What are the key patterns that you’ve seen emerge from your study of historical energy transitions?
Roger Fouquet Under every single energy transition like biomass to coal, coal to oil or oil to gas etc, is a disaggregation of a number of sectors and services. Services like heating, lighting and every sector like transport, housing etc; each one of those needs to make a transition of its own. The technology needed for this transition potentially differs from each sector and service and the result of which is a very slow transition.
In energy transitions, technology or new energy sources that emerges and eventually becomes dominant always start as a niche product. There are a small group of consumers who are willing to pay a premium for the energy services attached to the new technology. Economies of scale subsequently improve the technology and drive down its cost, making it competitive with the incumbent energy technology/source. For instance, kerosene was used for lighting in the late 1800’s largely by the poor population that couldn’t afford gas lighting. But it never dropped cheap enough to compete with gas lighting.
C. What was the trigger for energy transitions and what parallel can we draw to the modern energy transition that we need?
R. First people used candles, gas lighting came in in early 1800’s which involved the infrastructure of pipes and was originally available to the wealthier populations. 1860’s introduced kerosene which was able to compete and was much cheaper to candles. Gas for the rich and oil for the poor was the way things were for decades till electricity came around. Electricity became a competitor for gas at which point gas companies became alert and started providing the poor population with gas to capture a greater market. Companies in this case invested in piping infrastructure and charged consumers later for gas. Electricity therefore was subdued by market forces and took over 6 decades to compete with gas lighting and in the 1930’s we saw the explosion of electricity provided lighting.
C. What were the infrastructure support structures to make this transition happen?
R. It was very much led by industry and which we are partly anticipating today. But it is important to note that the state played the role as an observer and as a regulator for energy pricing etc. There are more lessons to draw from that regulation aspect than suggesting that Government’s encouraged a certain technology or energy source.
C. What are the key differences between the modern day transition and past energy transitions?
R. We are currently concerned about environmental pollution and climate change. We are now looking at the public paying a premium for a public good i.e. improvement in environmental quality and climate stabilisation and there is a market failure here. Unlike previous transitions where people adopted new sources of energy for better energy services for private benefit as opposed to public good. Ultimately we are seeking Governments to create the incentives for a valuation of that environment quality and climate stabilisation through regulation and influence prices.
C. How do you factor the use of information in energy transitions?
R. I think information can be helpful. Make people more aware, smart technologies help improve efficiency but I suspect that will allow us to push down energy consumption a small amount and it would not solve the problem. .Information is currently boosting the economy which ultimately leads to greater energy consumption on the whole. I’d argue that information can help but not sure it can solve the problem.
C. How does one tackle the eventual resistance to new energy sources from incumbent energy sources?
R. Undoubtedly the fossil fuel industry is the most powerful in the world and they have an enormous amount of power, contributing to 3-4% of global GDP. So the question is how can we get them to move? For the car manufacturers it might be the way of the electric vehicles; for coal it is a transition to gas etc; a sectoral approach to transition. Identify the most morally reprehensible or inappropriate energy source and getting rid of that before moving on to other sources.
Major transitions in the past, for instance slavery; it was ultimately a moral issue. Although it was a slow process, it started as a moral campaign. Similarly with the tobacco industry which has been dealt with legislation but partly moral legislation. Combining the moral, legal and economic means to addressing fossil fuel addiction. Shock factor is important. For example- the clean air act introduced in 1956 in the UK was a result of the death of roughly 12000 people in London because of air pollution in the early 1950’s. Government’s were forced to do something.
C. Is energy transition cyclical? Do we see birth and death of technologies as inevitable?
R. There is a tendency to try and solve problems without looking at the consequences of the solution. Potentially nuclear power is an example of that where we’ve created more problems since its introduction than solutions.
C. If you were designing UK’s energy policy in the long run, what would the highlights be?
R. Unless there is major new information that changes things, I’d largely like to keep things stable. Create incentives for renewable energy and pull it back when required. Building on the moral narrative will also be important. A fairly strong carbon tax and a permit on pollution (which exists but ramping it up a bit). Not sure if nuclear power is the way even after decades of subsidies, certainly not in its current form. Certainly subsidise solar panels, improving public transport etc. We need to look at what a low carbon economy looks like but not at all costs.