Giant tech companies such as Google, Amazon and Apple, along with major car companies, are set to move into the energy supply business over the next decade due to a technological revolution that has already begun. That is the prediction of Dieter Helm, Professor of Energy Policy at University of Oxford.
Speaking at a seminar hosted by the Economic and Social Research Institute in Dublin on Tuesday, Prof Helm said this technological change would also help decarbonise the world – a process that in his view would not be achieved by the Paris Agreement on addressing climate change.
The gamechanger was technology and “the digitisation of everything”, he said. The obvious manifestation of this were robotic technologies; artificial intelligence (AI) and 3D printing but people were forgetting energy in this context and electricity in particular. With digitization, there would be “the electrification of everything” from an energy perspective.
The relationship between digitization and electricity demand was already evident. The trend had already been seen in cities and their information infrastructure, in buildings, offices and factories. Robotics, AI and 3D printing were the key components of the future of manufacturing. “Transport is going the same way,” he added.
‘Peak oil’
All notions that the world would reach “peak oil”– the maximum rate of extraction of petroleum – were proven wrong, and yet conventional fossil fuels were being forced out of their main markets. The electricity market that would emerge would realise zero marginal cost.
How to produce electricity in a secure, cost-effective way, while lowering carbon levels, would be the priority. Energy in bulk was required to serve a global population of 10 billion people, and likely to grow by 2-3 per cent a year, he said.
Wind energy would not do this, though he was not against it; solar power could play a key part. Without the combination of digitization, electrification and large input of solar power “we are facing an extremely hot world”, added the economist who has advised the European Commission and British government on energy policy – his book Burn Out: The Endgame for Fossil Fuels was published earlier this year.
The new energy supply business would be provided with bundled services combined with smart metering and sold thorough a broadband hub arrangement, he added. This would attract new players and a new corporate landscape, where data-focused businesses would be to the fore. That was why Google and Apple are all over the move to driverless cars, as these vehicles were just data points with software contained in robotics.
While oil companies were slowly shifting from oil to gas and making even more tentative steps in the direction of low-carbon energy, he was not entirely convinced that oil companies have grasped the speed with which the industry was undergoing irrevocable change, nor had “the incumbents” the obvious skills in renewable energy required.
