The Third Industrial Revolution
Since the late 18th century, we’ve seen at least 2 major industrial revolutions and the third is now well underway. Cambridge Professor David Brown notes that each of these revolutions is characterized by dramatic changes in three fields: communication, energy, and finance. Here’s a quick outline of the advances in each revolution:
1) The First Industrial Revolution: late 18th Century England
- Energy: society transitioned from wood to coal, a much denser source of energy.
- Communication: the steam powered printing press and steam powered transportation led to much easier diffusion of books and papers.
- Finance: the London Stock Market emerged to finance the above developments.
2) The Second Industrial Revolution: late 19th Century Europe and United States
- Energy: A) oil, an even denser energy source, replaced coal for transportation and B) electricity was introduced and spread quickly.
- Communication: inventors like Samuel Morse and Thomas Edison developed the telegraph and later telephone, both of which were made possible by electricity.
- Finance: Legal reforms in Europe and the U.S. introduced the limited liability corporation, which allowed entrepreneurs to launch ventures with less personal risk.
3) The Third Industrial Revolution: late 20th / early 21st Century worldwide and continuing today
- Energy: although solar photovoltaic technology has been around since the 1970s, the recent drops in cost mean that it’s deployment is increasing exponentially.
- Communication: the Internet now connects mobile devices worldwide, giving anyone the ability to speak to the masses.
- Finance: cryptocurrencies like Bitcoin and its successors have created distributed, decentralized, and largely uncensorable finance. Deemed the Internet of money, blockchain based cryptocurrencies are rapidly democratizing the ability to transfer value anywhere in the world.
The general trends of each technological revolution are clear: systems are becoming more decentralized, more efficient, and creating more autonomy for the individual. And of all of these trends, distributed energy generation (particularly from solar) may be the most important — because it underlies all other electronic communication and commerce.
Today solar power provides about almost 2% of the world’s energy. That amount by itself is not very impressive. The rate of adoption, however, is quite impressive. As we’ve seen with countless other technological revolutions, it’s adoption rate that matters. As author Ramez Naam explains, it took 40 years to get to 1% of the world’s energy coming from solar. Less than 2 years later, we’re already at almost 2% with projections to double again in another 2 years.
There are, of course, potential limits to how much energy solar can provide (at least in the short- to medium-term). And all technology S curves eventually flatten. But even assuming potential short-term economic bottlenecks described by energy expert David Roberts, we’re unquestionably in for some incredibly exciting solar growth over the next decade. And as the price of storage continues to drop (commercial batteries were already cheaper in 2015 than many analysts predicted they would be in 2020), the adoption of solar + storage will take off, allowing us to break many of these perceived limits (using solar power via storage when the sun isn’t shining). And you don’t even need to agree with Ray Kurzweil, the well-known futurist who predicts that solar will provide 100% of the world’s power needs within roughly two decades, or Elon Musk, the legendary entrepreneur behind Tesla, Space X, and SolarCity, who predicts that solar will provide 50% of the world’s energy needs within the same time frame, to believe that we’re at the beginning of a fast, world-changing energy revolution.
In the next two posts, we’ll examine an in-depth look at the changes happening in the energy market and the challenges that distributed energy resources face in unlocking their true potential.
Special thanks to Max Webster for his inspirational contributions to this article.
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