You ain’t seen nothing yet

On the 17th June I was at ZPN Energy’s #INEED event in my role as Chair of ZPN. This is the text of what I had intended to say but in the interests of time I didn’t say it all. It was an attempt to give some historical context for the scale of the energy transition over the last 40 years and look forward to the next 40 years. It contains themes familiar to regular readers.

I want to give you some historical perspective on the energy transition and the changes that we are going through, and also give some grounds for optimism at a time when it is sometimes hard to be optimistic. I have been around long enough that I can now give you a historical perspective from my own life-time experience.

I first started studying what we now call the energy transition in 1977 and it was a very different world back then. We had just had the Arab Israeli war of 1973 which led to quadrupling in the price of oil and that is what really started ‘energy’ as a subject, and it kick-started the changes we now call the energy transition that we are living through now. In 1979 we had the second oil crisis caused by the Iranian revolution – and my Iranian friends are hoping that given what’s going on now we may soon see the 2nd Iranian revolution and they will be able to go back to Tehran very soon.

From a UK perspective – and I will use 1980 as a benchmark, more than 70% of electricity was generated by coal, and the energy industry perspective was that the future would be what they called CoNucCo – coal, nuclear and conservation or what we now call efficiency. The first North Sea gas had only come on stream in 1968 and the last homes were converted to natural gas from towns gas only in 1976. Much of industry still used coal or oil boilers. What I call the energy establishment, the CEGB, the Department of Energy as it was then, British Gas, the National Coal Board, were all monolithic, public entities and they decided, or at least they thought they decided, what the energy future was going to be. Back then the official forecasts has energy use growing in line with the economy and a relentless expansion of big, centralized energy.

At the same time a few ‘crazy people’ suggested that the future could be different and there was much talk of ‘alternative energy’ like wind and solar.

In the late 1970s in the US Amory Lovins wrote a very famous paper called ‘Soft Energy Paths’ which promoted renewables and efficiency and said that US energy use may not grow at all in the time period up to 2025 if we went down the ‘soft’ path. Here in the UK Gerald Leach and his team wrote ‘A low energy future for the UK’ which basically said the same for the UK. Leach’s low energy strategy for the UK said that by 2025 the UK economy could grow by 300%, which by the way it did, but energy use could go down. Bear in mind the official forecast said energy use would nearly double and fairly soon after that there was a plan to build 83 GW of new nuclear power stations, more than the current capacity of the grid.

Leach’s study was widely rubbished and the most polite thing that the energy establishment experts said about it was that it was ‘optimistic’. Amory Lovins was also pilloried by the US energy establishment.

Well let me tell what happened to those crazy, impossible scenarios. In the UK the economy did grow by almost exactly the amount forecast but energy use did not increase, it went down by 12%. In the US total energy use in 2023 was less than Amory Lovins estimated in his soft energy path!

So it may surprise you but we are actually living in what was regarded as a totally impossible, optimistic, crazy, it will never happen, low energy future. Now some of that it is true is due to changes in the mix of the economy, more services and less manufacturing, but when you factor those variables in we are still in a low energy future.

1980 was a landmark year for the solar industry – it was the year when US company ARCO was the largest producer of solar panels and they made 1 MW in a year, 1 MW in a year. There is 50 MW of solar plants within a 15 mile radius of here so 1 MW is nothing by today’s standards. Today the largest manufacturer, Tongwei Solar, has a capacity of 150 GW of cells and 90 GW of modules – 100,000x bigger than the biggest manufacturer in 1980.

Even by 1990/91, when I helped catalyse some of the earliest wind farms in the UK, the wind industry was tiny – you couldn’t really call it an industry, more a collection of enthusiasts. We held meetings of the whole industry in very small rooms and the largest wind turbine was 400 kW and most were 250 kW. Today the wind industry has 450 companies and employs 45,000 people and the largest off-shore turbines are 15 MW, and now we are seeing 25 MW turbines coming out – 60x bigger than those early turbines. If you had shown us those numbers in 1990/91 even the most visionary of us would not have believed them – and the energy establishment would have laughed at them.

What does this historical perspective tell you and what can it teach us about our views of the future today? It tells me that official forecasts and naysayers are usually wrong.

Today we hear a lot of people say ‘net zero is impossible’, we hear a lot of people say ‘EVs don’t work’ or ‘sales have faltered’, and we hear a lot of people – including the government – say that the future is building more nuclear reactors including that mythical beast the Small Modular Reactor. We also still hear some people say ‘the sun doesn’t shine all the time’ – like nobody knew that before.

We also hear a lot of people say ‘despite all the investment in renewables they only represent a small percentage of energy use’. This is what is known as the primary energy myth – we are comparing generation by renewables to primary energy and completely ignoring that in thermal power stations we throw away 2/3rd of the fuel energy that goes in, and in internal combustion engine cars we throw 80% of the fuel away as heat. Once we electrify you eliminate all of that waste – all of that gas, oil and coal being burnt for nothing and polluting the air, as well emitting carbon dioxide.

Yes – of course there are problems and challenges – not enough electric vehicle chargers, grid connection problems etc – but remember this is a transition. There are bound to be problems as we change out our entire infrastructure and change our electricity markets. Also we should also remember that energy transitions do take a long time – this one may be quicker than any previous energy transition but I think 40 years into it we are about half-way through.

People forget about the power of incumbents in trying to stop or delay change – nearly every day when we see stories in the press criticizing net zero or EVs. Remember incumbents always do everything they can do, legal and sometimes illegal, to stop the disruptive innovators and most of those negative stories are made up by the fossil fuel incumbents.

Of course incumbents resisting change is nothing new. In the mid-19th century, the stagecoach and particularly locomotive industries found themselves facing the looming spectre of the automobile’s disruptive potential. They were afraid the car would replace them. So, they worked hard to convince the government to make strict laws, like the 1865 Red Flag Act. This restricted the speed of horse-less vehicles to 2 mph in towns & 4 mph in the country. The Act also required three drivers for each vehicle – two to travel in the vehicle and one to walk ahead carrying a red flag. There were similar laws passed in the US as well.

Here in the UK the Red Flag Act was finally repealed on 14 November 1896, when the Locomotives on Highways Act scrapped the flag requirement and raised the speed limit to 14 mph. The London to Brighton run of veteran cars is held every year to commemorate the repeal of the law and is always held in November.

Now we are seeing a lot of lobbying from fossil fuel incumbents. In the US several states have passed or are trying to pass anti-renewable energy laws while Trump rants on about ‘windmills’. Meanwhile one of those states, Texas, has installed more renewables and batteries than any other state and it doesn’t look that is going to stop anytime soon – so we are seeing the old energy money and their paid-for politicians fighting the new energy money and their paid-for politicians.

Incumbents can delay change – but they never stop it in the end. The drivers of change are too strong and there are three drivers of the energy transition:

– Sustainability: which is not sustainable because people won’t pay more for green
– Economics: now we are in a phase where solar is the cheapest form of electricity
– Energy security: at a macro level and a micro-level

At different times some drivers have been more powerful than others, and some like economics have been negative, but right now for the first time all three forces are pulling in the same direction, and on-top of that the finance industry is being proactive and shifting capital towards the energy transition and decarbonization. The drivers, particularly economics, are unstoppable.

When thinking about the future people also forget about the power of S-curves. S-curves are incredible – things seem to change really slowly and then suddenly they take off. The diffusion of all technologies follow S-curves and now finally we are seeing that with solar, and batteries are not far behind. S-curves are in five phases:

– Solution search
– Proof of concept
– Early adopters
– System integration
– Market expansion

We are just moving out of early adopters into system integration which means you haven’t seen anything yet, rapid growth – particularly of solar and batteries – is only really getting going. In the words of the classic 1974 Bachman Turner Overdrive song – ‘You ain’t seen nothing yet’. The trends are clear.

We are seeing record installations of solar and batteries and increasing sales of EVs. Not just in China but globally and in the UK. In 2024 the world installed nearly 600 GW of solar installed in the world – 600,000x the output of the biggest PV factory in 1980 and equivalent to the peak output of 600 nuclear power stations. For comparison the global nuclear industry added 7 GW in 2024, about 1% of the capacity. In 2023 battery energy storage systems tripled and are expected to grow at 21% a year up to 2030.

In 2024 EV sales globally grew by 25%. At the end of 2024, the electric car fleet had reached almost 58 million, about 4% of the total passenger car fleet and more than triple the total electric car fleet in 2021. Notably, the global stock of electric cars saved over 1 million barrels per day of oil consumption in 2024. In countries with a high percentage of EVs like Norway and China we are already seeing oil consumption drop.

The transition is accelerating as solar and battery prices continue to fall. In the next stage of the transition the focus will be on electrification and distributed energy, small scale, close to the point of use energy systems.

The famous science fiction writer, Arthur C Clarke once said that ideas go through 3 phases:

– it will never work
– It might work
– I told you it would work all along

With solar we are now in phase 3 with only a few holdouts still saying things like ‘the sun doesn’t always shine’.

The future will be abundant, cheap solar and batteries everywhere in a distributed and flexible energy system, with more power in the hands of the consumer, or rather prosumer as they will be both producers and consumers, than ever before.

So what will some of the consequences of these changes be? Well they certainly include cleaner air, reduced emissions, reduced oil consumption and lower energy prices. But there will also be political changes, globally and locally. Energy, particularly electricity is associated with big centralized power – there are always close links between energy and power, and political power.

Back in the 1980s we talked a lot about ‘petrostates’ – those countries whose economies depended heavily on the production of oil such as Saudi Arabia and others in the Middle East. Now we are seeing the emergence of the first ‘electrostate’ – China. With the shift in power and energy flows there is a shift of political power. The shift towards all consumers, buildings and industry and even cars, becoming both producers as well as consumers of power and ancillary services will shake up politics in ways that haven’t really been thought about yet. Abundant, clean and cheap power will allow us to do new things, to create new industries, clean up the environment, and produce more high-quality lower cost food.

I am planning on sticking around to see the rest of this transition, it is just getting really interesting.