Not Just Another Recession
Why the Global Economy May Never Be the Same
Over the past several years, the shale revolution has upended oil and gas markets in the United States and the world at large. At first, shale development was dismissed as unworkable, then it was minimized as unsustainable. Now, having helped drive a massive drop in the global price of oil, it is hailed as an economic and geopolitical game changer. But shale isn’t the only energy story of interest, nor even the only potentially revolutionary one. The electricity sector is quietly undergoing its own transformation, and it is likely to yield dramatic economic and social benefits. So we decided to take a closer look.
Solar power has often been thought to be on the verge of breaking out, but the hopes surrounding it have just as often been dashed. This time will be different, write Dickon Pinner and Matt Rogers. Thanks to technological innovation, smart government regulation, Chinese industrialization, and creative financial engineering, solar panels are becoming cheaper and more accessible than ever, and the consequences—for homeowners, electric utilities, and the environment—are likely to be profound.
Batteries, too, have the potential to change the world—just as much as shale has, should the technology continue to improve. That's because large-scale batteries, if used to store electricity for the grid, could unlock the potential of renewable power, which has been held back by its intermittent nature. Steve LeVine takes stock of the remarkable cost reductions and technological improvements in battery technology, driven in part by electric-car companies such as Tesla, and envisions what’s next.
Naturally, new methods of generating and distributing electricity require a modernized electrical grid. But the United States is stuck with a hundred-year-old grid that has proved vulnerable to natural disasters and unable to cope with the rise of renewable power. Brian Warshay shines a light on the flaws in the U.S. grid, the billions of dollars in improvements under way, and the new technologies that could transform the way electricity flows.
Meanwhile, some two billion people don't have access to electricity to begin with, a problem that has proved stubbornly persistent. Yet for those still waiting for the electrical revolution to arrive, help is on the way. Developed countries, writes Morgan Bazilian, are beginning to realize that one of the best ways to fight poverty is to provide energy, since a lack of it lies at the root of so many problems. The trick is getting policymakers to focus not on small-scale fixes but on what has made the biggest difference in the past: giant, government-led electrification projects.
Taken together, these articles send a clear message: for the first time since the advent of fossil-fuel-generated power, electricity is beginning to be generated, stored, transmitted, and used in fundamentally new ways. Yet they also suggest that despite this massive and unappreciated innovation, there is still plenty of room for improvement.