Energy doesn’t exist any more

One of the most important pieces of news of the week, and not only for people who work in energy, was the closing of the United Kingdom's last coal-fired power station.

On Monday 30 September the Ratcliffe-on-Soar plant, in Nottinghamshire, was switched off after 57 years of operation. The German multinational Uniper, which owns the plant, announced that the site will be dismantled within two years.

The news had a big media impact, above all for its symbolic value. Britain gives up coal after 142 years: it was 1882 when the first coal-fired power station was inaugurated in London, Thomas Edison's Edison Electric Light Station. And that plant was one of the consequences of the war of the currents we've already talked about.

The eight concrete towers and the great chimney nearly 200 metres tall at Ratcliffe-on-Soar had become part of the landscape. Their bulk, their invasive and looming presence, was the very image of the industrial revolutions, of their effects, of the way they transformed our ecosystem. Now part of the building will become a plant for producing low-emission hydrogen, with the goal of reaching an electrolysis capacity of 500 MW by the end of the decade.

Writers, artists, politicians and polemicists have seen in the coal supply chain the symbol of industrial civilisation: with its mines, the toil, the exploitation of labour, the profit that reaches into the guts of the earth, the capacity to violently transform matter. Now that coal-fired power stations are starting to disappear, they leave a spatial and conceptual void that we're called on to fill. With a new idea about what the energy of the future will have to be.

Status quo

The United Kingdom becomes the first G7 country to eliminate the use of coal for producing electricity. In 1990, just 34 years ago, 80% of British electricity was produced from coal. In 2012 the figure had fallen to 39%, and in 2023 it was only 1%. Today we're at zero: in a video from National Grid you can see the exact moment when the coal counter on the energy mix monitor goes to zero.

More than half of Britain's electricity now comes from renewable sources — solar and wind; the rest comes from gas and nuclear. A transition completed while the country was growing, in GDP terms too. And which therefore had to support higher consumption, higher output, higher energy demand.

Britain's story shows that the transition is possible, and that it isn't in contradiction with growth. And yet, while Europe celebrates the closing of coal plants — Denmark closed its last coal-fired power station at the end of August, Germany expects to do so by 2038, and from the end of 2025 Italy too, except for Sardinia, where the last closure is expected in 2028 — in the rest of the world the trend isn't as clear-cut.

According to some estimates, in fact, because of growing global demand for electricity, global coal production will stay stable through 2025. While over the course of 2023, after growing by 2.6%, it reached its highest level of all time.

This is because 142 years ago, when the first plant was switched on in the United Kingdom, a civilisation founded on extracting and burning coal was born, and it's still the civilisation we live in. Not only because coal plants still exist and the coal industry is still thriving, but because the energy and industrial system that governs our lives is still the child of the one that established itself over the nineteenth century, fuelled by coal.

To really put an end to the impact this system has had and continues to have on the planet, we don't only have to switch off the plants, we have to change the idea of energy that kept them running.

An idea according to which energy is a commodity and answers to the dynamics that govern the circulation of goods:

it's produced centrally and in limited quantities;
it's distributed unequally;
it's subject to variations in price and accessibility set by the market, by politics, by geopolitical tensions, by financial speculation.

Let's turn it over

Britain's story tells us that change is possible, that it can happen in reasonable time, and that it doesn't damage growth.

The recent evolution of technologies tied to the energy transition, though, says that change isn't only possible, it's inevitable.

This is because, as Azeem Azhar suggests in an article in his publication The Exponential View, with the move to renewable sources energy is no longer a commodity, it's a technology. Its availability, that is, depends on the development of the technologies needed to turn natural resources into usable energy.

Producing renewable energy isn't tied only to the physical presence of the resources, but to the rate of technological innovation that makes it possible to turn resources into energy. Whereas in the case of non-renewable sources, improvements in extraction technologies haven't led to greater accessibility of resources, nor to a stable fall in prices.

Energy technologies, as Azhar puts it, are eating the world.

Just as software was eating the world in 2011, when Marc Andreessen wrote his famous essay Why Software is Eating the World: the digital sucked in all our analogue habits, changing the way we have experiences, buy, sell, work, play, tend relationships, entertain ourselves. In the same way, technologies applied to energy won't only change how energy is produced and distributed, they'll change the economic, social and cultural systems that depend on the energy chain.

Innovation in energy technologies, like innovation in digital technologies, has an exponential growth rate. It follows, that is, a non-linear path in which efficiency and performance multiply on ever shorter timescales, while costs fall. The learning curve for producing lithium batteries, for example, is 20%: every time efficiency doubles, the price falls by 20%.

In the space of a generation the cost of solar panels has fallen by 99%, that of wind turbines by 61% and that of batteries by 97%. While the cost of oil, gas and coal has stayed more or less unchanged over the last century.

On top of that, energy technologies are modular: the same component can be found in a large industrial installation and in a small home system. And we've already seen how a network of private solar panels and batteries can turn into a distributed power plant.

Thanks to the pressure of technology, energy as a commodity will no longer exist. It will disappear just like the Ratcliffe-on-Soar coal plant.

So what will be the characteristics of energy transformed by technology? At least four fundamental qualities can be identified. The energy of the future will be:

Democratic

According to an estimate by the Rocky Mountain Institute, almost every country in the world has renewable resources sufficient to cover 10 times its current energy needs. Seen this way, the global South is extremely rich in resources. This encourages a push towards decentralised energy production, in which each region manages its own resources independently, in a regime of abundance rather than scarcity. Thanks to technology, each region will then be able to decide how to share, trade and resell excess energy, feeding it into a virtual network, a kind of energy cloud.

Peaceful

With widespread electrification of consumption, electricity could become the new currency: we'll no longer hear about dollars a barrel, but about the cost of kilowatt-hours. That would naturally have considerable geopolitical consequences too, because it would take power and influence away from the custodians of underground deposits, whether gas or oil. With the possibility of rebalancing inequalities, of distributing resources more fairly, and above all of putting an end to the use of energy as a weapon in international conflicts.

Cheap

Technological development makes goods and services cheaper, more easily accessible and better distributed. The same will happen for renewables: the wellbeing produced by this new form of energy will cost less. A caveat, though: the transition has to be supported financially, because renewable technologies (once we'd have said sources) cost less over the long run, but have higher up-front costs. Banks and institutions will have to help people and companies bear the costs of installing systems and acquiring technologies, which are then amortised over the long term.

Digital

The new energy will look more like the internet than like systems for distributing material goods. That means all the infrastructural, legislative and cultural adaptations will be needed to enable the "digital" speed of the energy of the future. Pricing policies and demand regulation will need rethinking. All the ancillary services that will let the new energy platforms work will need creating. A cultural and psychological transformation will be needed, one able to free us from all our convictions about energy, to put in question everything we think we know, so as to move from an extractive logic of energy, typical of the industrial era, to an expansive, collaborative logic, in which exponential growth and the network effect benefit everyone.

Making this transition possible will be like switching off and dismantling a large coal plant. It will be like replacing a large, visible fullness with an apparent emptiness. But when we've finished, in the place of that heavy, looming construction there will be an entirely new landscape. And it will be better.

Think of a number

7.6 centimetres

Commenting on the news of the last coal plant being switched off, Seth Godin used a striking image to describe the impact of industrial civilisation on the territories we live in. He estimated the land use needed to fuel coal plants for 142 years, and set it against the extent of Britain's territory, calculating that over that span the British burned a slice of their own land 3 inches thick, equivalent to about 7.6 centimetres.

I give you my word

Moore's Law

It's a law formulated in 1965 by Gordon Moore, co-founder of Intel, and it describes the exponential path of technological development, particularly in microelectronics. Moore's Law holds that the complexity of microcircuits, expressed as the number of transistors in a unit of area on a processor, is able to double periodically: initially Moore spoke of a year, then over the 1980s the estimate settled at 18 months. A processor's performance, in essence, doubles every year and a half, without production costs going up.

In Moore's own framing, the cost per component is close to inversely proportional to the number of components. So the more transistors we add, the lower the cost of the single transistor. All he wanted to get across, Moore explained in a 2008 interview, was that putting more and more onto a chip would make all electronics cheaper.

Still today, after nearly sixty years, Moore's Law is considered valid. And that's because it's a self-fulfilling prophecy. Over the decades the industry has worked hard to live up to it, driving technological development up exponentially. Technologies used in different fields, very different from each other, show the same surprising attributes: solar energy generated by photovoltaics, for example.

Learning through practice and experience makes costs fall. The more companies produce something, the better they get at doing it. As a result demand increases, and this generates economies of scale for suppliers, who benefit from the learning and from higher output. Prices fall further and demand grows again. This new market attracts new operators into the primary market and into the ancillary services markets, creating a certain liveliness in distribution.

Recently Moore's Law has been called into question: Nvidia's CEO, Jensen Huang, argues that in today's technology landscape innovation can no longer be measured by looking only at hardware, but always depends on the close interaction between hardware and software. Still, if it's true that the pace of innovation will be harder and harder to capture with a general law, it's also true that in concrete experience technology keeps progressing on an exponential path.