Energy systems are a central enabling and limiting factor to the development of an economy. As such, the level of technological, social and economic complexity of societies has, throughout history, been directly related to its form of energy system. Traditional energy systems that were limited to the energy conversion of human and animal muscle limited premodern economies to a certain maximum degree of complexity. This changed fundamentally with the industrial revolution as the advent of the combustion engine enabled economies to access and harness the explosive power of fossil fuels.
Energy is the lifeblood of our economies, and its infrastructure critically affects all of our lives in virtually every activity. For every economy throughout history, one fact has held true: economic development requires energy. How we access, transfer and transform this energy into the useful work of heating, lighting and motion forms what we call an energy system, a set of interrelated elements from the capturing of natural resources to processing and refining to transportation and distribution and finally to consumption. Energy systems, however, are not simply about technology. They are multidimensional, involving natural resources, technology processes, and economic and social institutions. All of these variables interact to produce the outcome of an energy system.
Every physical endeavor is enabled by the flow of energy—In 2011, expenditures on energy totaled over $6 trillion making it about 10% of global GDP. Today 80% of this energy used by people originates in fossil fuels. But many people are talking about a fundamental transformation in our energy systems architecture as a number of major trends converge to put stress on the existing model. We identify four major trends that are set to have a major impact on the global energy economy. The first of these is growing demand due to growth in population and rising affluence. The second is energy security, an increasing concern for nations around the world. Third is technology and the rise of cleantech as a disruptive force with great potential to reshape the industry. Fourth is environmental concerns as climate change becomes a major concern for many people going forward.
Our energy system is in a profound state of transformation as it adapts and evolves to meet new demands and a changing context. To truly develop an effective and resilient energy system of the future will mean integration across the entire system. The next generation in energy systems that we see developing is greatly more distributed and nonlinear as information technology merges with new energy sources. The current architecture of our energy systems is linear in nature. Energy is generated or extracted from some large scale centralized source and then transported, processed and distributed in a somewhat linear process to the end user who consumes it. But with the rise of distributed technologies and the smart grid, this will change: as consumers become prosumers, information and energy will likewise flow in all directions.
SolutionsNext generation energy systems are going to be vastly more complex than their current form. Consisting of many more and diverse energy sources that are dynamic in nature, it will consist of many more devices and technologies using this energy in a nonlinear, distributed, and networked fashion. This will be regulated through a new layer of information and computation placed on top of the flow of energy that will monitor, balance and regulate it. Energy sources of different kind will begin to converge onto platforms and what we now call the smart grid. What is currently a complicated industry will become complex in that it will consist of many more diverse elements interacting in a nonlinear fashion. They will be integrated into a common system through IT platforms.