At first the stock-analysts and fund managers had brushed aside reports that the traditional energy giants of the 20th century were due for a heavy fall.
It seemed like an act of sheer lunacy to consider that overnight the value of the world’s leading multinationals could fall by over 40%, then continue to decline. But with the declaration of a “Global Carbon Cap” and the Energy revolution from Europe in the early 2020’s, the giants of old had discovered they could no longer rely on their “booked reserves” to bolster their stock price, and soon their seemingly impregnable balance sheets melted away like the ice caps had before them.
It all started, strangely enough, in Europe. An area that many had thought may have lost its lustre for innovation.
Caught in the midst of a two-pronged geopolitical storm, between an expansive Russian foreign policy, (which used Energy supply as a foreign policy weapon) and an expanding Middle Eastern conflict, the instability from which had created significant threats to global energy supplies, European nations were forced to seek out new technologies to achieve greater energy independence and economic security.
For many years Renewable Energy had been seen as “fashionable” but dismissed by many as an impractical to the problem of Europe’s energy future. It could not be stored (at commercial cost or commercial scale), it was inefficient in its generation (Offshore Wind lagged well behind its fossil Fuel Combined Cycle cousins) and it caused political headaches to locate many commercial scale renewable projects in close proximity to where energy was needed (i.e. population centers). Then things began to shift.
In the UK companies such as Flexitricity began an initiative to swap diesel powered back-up generators on commercial premises with battery storage units. Most firms had invested significant sums into “contingency plan” energy storage capabilities. But these “back-up generators” were often expensive, rarely used and relied predominantly on diesel (and other petroleum substitutes). Replacing these units with Energy Storage units created significant cost savings for these firms and played a significant role in reducing the total costs of these organisations.
As a provider of virtual Smart Grid technology, Flexitricity and other UK innovators in the field convinced firms that they could achieve the wholly trinity of: enhancing their green credentials, ensuring a robust back-up power source for the premises and the ability to make money from their generators (which hitherto had been sunk costs).
The surge in locally available domestic energy storage capacity provided a boom for local communities, who realised that these new electricity storage units could provide spare capacity to store surplus energy from domestically generated renewable sources. These individuals and communities, through using “smart-grid” software providers and the new generation of electricity traders, were able to store their surplus electricity and release it for sale into the national grid system at peak times, when prices were at their highest. This not only made domestically generated renewable energy more cost effective (in some cases very profitable), but it also made national energy systems more resilient as the UK grid relied increasingly on 10’s of 1000’s of providers rather than under 100.
Following a series of innovations in the production of solar panels, the public sector gradually understood that with the large tracts of land at its disposal, it could produce vast quantities of energy and store it domestically at low cost.
The first public sector concepts involved grand projects for 30+MW sites, but were slow to catch on and implement. However the public sector soon realised that areas such as roads could be turned into giant energy generators during the process of routine road maintenance, whilst following the example of the Scandinavian, the Public Sector in the UK also became more open to the concept of district heating systems. This in turn became a public sector alternative to energy storage through local battery units, thus further reducing costs.
However alongside innovations in the production and storage in energy came the revolution in the demand and consumption of Energy. With fuel prices becoming increasingly sensitive for European families in the 2010’s, Smart meter systems were rapidly deployed across the UK and major European economies, driven by a 2022 EU competition commission ruling that “consumers at all times must have the right to determine the exact levels of energy which they choose to consume; and if consumers are unable to identify their consumption level; or it is unclear; it is the obligation of the firm(s) to disclose this information to the end consumer at minimal inconvenience.” The leader in this field of energy consumption knowledge sharing was a product called “Hive”.
Launched by British Gas in the early 2010’s, it played a significant role in adapting consumers behaviour and their awareness of individual/household energy consumption. These changes led to huge increases in efficient energy usage amongst households and corresponding declines in both net Energy consumption. Furthermore, the peaks and troughs of energy demand in the UK system became less pronounced, as consumers increasingly utilized their high energy demand activities (e.g. washing machines) at traditionally “off-peak” hours, thus smoothing out the consumption curve.
Where the UK led, others in Europe followed.
As European demand for energy fell and domestically sourced energy became more reliable and cost competitive, it provided a boom for the fledgling 3D printing industry across Europe. With its rich heritage of “artisan designers” and its discerning consumer market, the combination of low energy prices and technological innovation generated a boom in “bespoke” manufacturing across all sectors of the European economy which helped significantly reduce unemployment across the continent. The continents trade deficit with the world also declined and traditional export dominated markets, who had seen Europe as a key market, became increasingly concerned and uncertain of their strategies.
But the turning point for Europe came with a crucial technological innovation, that allowed the conversion of Renewable Energy into an energy sources for which Europe was already well developed to exploit. Gas – or rather – Hydrogen gas.
In 2015 a UK company called ITM power began piloting projects alongside the German utility powerhouse “RWE” to demonstrate its technology that converted excess renewable energy into Hydrogen fuel cells or Hydrogen gas. This innovation was a game-changer for Europe, which allowed natural gas to be gradually phased out in favour of Hydrogen gas and which accelerated the rapid growth of European wide Hydrogen and Electric powered transport systems.
Working alongside idealistic challenger energy utilities like ecotricity, ITM’s technology and innovations in energy storage allowed the UK to complete a nationwide renewable transportation re-fueling network. Not only did this dramatically reduce the UK’s air pollution, it also had significant effects on the health of its citizens and bio-diversity of its landscape. Such rapid success immediately spawned copy-cats and rival innovators from across Europe and the world economy writ large.
In 2030 it seems bizarre to imagine how “natural gas” and “fracking for shale gas” could possibly have been the future, but it is always worth remembering that only where ideas and innovation thrive has mankind developed. It was fortuitous that the leaders of the developed world created and maintained an innovative environment in 2015. But it might not have taken much for history to have developed rather differently.