It is becoming clear that we are approaching the sunset of the oil era in the first half of the 21st century. The price of oil on global markets continues to climb and peak global oil is within sight in the coming decades. At the same time, the dramatic rise in carbon dioxide emissions from the burning of fossil fuels is raising the earth's temperature and threatening an unprecedented change in global climate and the chemistry of the planet. This will have untold consequences for the future of civilisation and the ecosystems of the earth.
The rising cost of fossil fuel energy and the increasing deterioration of the earth's climate and ecology are the driving factors that will condition many of the economic and political decisions we make in the course of the next half-century.
The great pivotal economic changes in world history have occurred when new energy regimes converge with new communication regimes. When that convergence happens, society is restructured in wholly new ways. The coming together of coal-powered steam technology and the print press gave birth to the first industrial revolution. In the late 19th and early 20th centuries, the telephone converged with the introduction of oil and the internal combustion engine, becoming the command and control mechanism for organising the second industrial revolution.
A great communications revolution occurred in the 1990s. PCs, the internet, the web and wireless technologies connected the central nervous system of more than one billion people on Earth at the speed of light. And, although the new software and communication revolutions have begun to increase productivity in every industry, their true potential is yet to be fully realised. That potential lies in their convergence with renewable energy and hydrogen fuel cell storage technology to create the first distributed energy regimes.
The same design principles and smart technologies that made possible the internet, and vast, decentralised global communication networks, will be used to reconfigure the world's power grids so that people can both produce and share energy peer-to-peer, just like they now produce and share information. This will create a new, decentralised form of energy use. IBM is currently testing smart grids in collaboration with EnBW in Germany.
The creation of a renewable energy regime, hydrogen fuel cell technology, and smart power grids opens the door to a Third Industrial Revolution and should have as powerful an economic multiplier effect in the 21st century as the introduction of coal and steam power technology in the 19th century, and oil and the internal combustion engine in the 20th century.
The basis for a transition to a renewable energy era and hydrogen economy has just been established by the EU at the recent Council of Presidents Summit in Brussels, hosted by German Chancellor Angela Merkel. The European Union has become the first superpower to make a binding commitment to produce 20 per cent of its energy using renewable energy resources by 2020.
The important point to emphasise, however, is that a renewable energy society is impossible unless the energy can be stored in the form of hydrogen. That's because renewable energy is intermittent. The sun isn't always shining, the wind isn't always blowing, water isn't always flowing when there's a drought, and agricultural yields vary. When renewable energy isn't available, electricity can't be generated and economic activity grinds to a halt. But, if some of the electricity being generated, when renewable energy is abundant, can be used to extract hydrogen from water, which can then be stored, society will have a continuous supply of power. Hydrogen can also be extracted from biomass when agricultural yields are high, and similarly stored. …