A Brand New World: The Personal Energy Era

Since the first coal mines were dug, the first oil wells drilled, the first power lines strung up, energy has been an industrial business, the realm of industrial companies and governments. Passive monopoly consumers, without much say in the matter, have been mostly concerned with price above all else. That’s how it is with commodities and monopolies.

But we're on the verge of historic change in energy. Nations at COP 22 have just put the wraps on discussions on ways to ramp down fossil fuel consumption. Correspondingly, as if to fill the void left by receding fossil fuels, clean, renewable and decentralized energy technologies are advancing.

From the consumer perspective, different forms of decentralized energy resources (DER) - distributed generation, electric vehicles, energy storage and others – offer novel value with a similarity: they each increase energy independence for consumers. Early adopters try out these new technologies and like them, and as prices continue to drop, more are doing the same. Whether we realize it or not, we are on the path to thinking about electricity as a value-added consumer market.

The shift from fossil fuels to technology-based forms of electricity fosters a second shift, from historic monopoly dominance to increasing market-based competition. As energy becomes more about electricity and less about fuels, innovation and personal value replace price as the focus of markets. As the Fossil Fuel Era fades, the Personal Energy Era is dawning.

Goodbye Fossil Fuel Era

The reduction, perhaps elimination of fossil fuels is the key to stopping climate change. We are at a point in our civilization where we must face the facts, understand the trends, and accept that it is now time to imagine what comes after the Fossil Fuel Era and how to get there. COP 21 - the Paris Agreement affirmed by a majority of the world’s governments on November 4 - and COP 22 - the goal setting in Marrakech just concluded, together pose more questions than they provide answers.

First, how can we mere mortals radically reduce, or even eliminate fossil fuels, the primary source of energy that drove our success in five previous generations - in just one generation? Too many still answer “Unimaginable!”

Second, how can we manage the inevitable social and economic disruption that such a rapid, massive change will inevitably produce? Too many still answer “Impossible!” when presented the Sophie’s Choice of living without fossil fuels or enduring the consequences of climate change.  

Too many prefer “Door Number Three” when there are only two doors. Whether we like it or not we are faced with a binary choice. The rational choice is to accept the facts and choose to move off of fossil fuels. That path offers hope, however steep the climb. The irrational choice is to deny the consequences of climate change and carry on, which we have done for over 20 years. The hard truth is “we’re out of time and there’s only one path.” But that path is neither unimaginable or impossible, it’s just very different and very difficult. But with the right attitude, this new path is loaded with positive potential.

Hello Personal Energy Era

With Personal Energy, we dare to contemplate - with a positive attitude - the very real consequences of climate change, and the rise of electricity as our ubiquitous form of energy going forward. In the days ahead, "Energy = Electricity." What flows from that is the recognition that a paradigm shift to clean and distributed energy in the form of technology-based electricity is not the end of the world; rather, it opens the door to net increases in our standard of living. 

In the upcoming Personal Energy Era, we can have more jobs, spend less on energy, clean up the environment, and ride waves of technological innovation to a higher plane. We get all of that, but first we must imagine and accept a better future, and importantly, that means letting go of a glorious past based on fossil fuels. To move forward into this new era, we’ll need to consciously embrace the future, shift our gaze ahead, and accept all that such a shift portends, both good and bad.

Tesla + Solar City = a Personal Energy company

The most outspoken thinker on energy innovation in modern times to put 2 plus 2 together to get 5 is Elon Musk. He has famously staked his fortune and reputation to build an automobile company from scratch with a different idea: we can replace the internal combustion engine (ICE), a technology whose value will be increasingly limited by the decline of fossil fuels. He recognized that energy storage technologies had matured in the computer age and that lithium ion batteries could be aggregated into a power pack to provide ample power for a new kind of car.

Now, Musk has moved on to the next stage in his energy vision, which is to recognize that Personal Energy is next. OK, he hasn't used the term yet, but the approved merger of Tesla with Solar City may be seen as the first major milestone in what we are going to call the emerging Personal Energy Era. Consider that this merger assembles the major DER technologies of distributed generation in its most dominant form of solar power, with electric vehicles and energy storage, each personalized for individual use. Consider that this combined offer targets a new market segment of early adopters that will want all three as one system. Together, these three technologies provide enhanced value for consumers and a new paradigm based on energy independence.

When Musk expounds on his ideas of connected technologies and an alternative future for transportation and energy, and when car manufacturers and other companies follow his lead, they are all talking about Personal Energy. This shift from monopolies to markets is positive and complementary to governmental policy as seen in global climate accords. But market forces will drive cleaner energy even more than government policy will.

In the end, government policy is best when it stimulates greater market response as a temporary mechanism. Technologies or businesses kept on life support by permanent subsidies (e.g., nuclear energy, soon fossil fuels?) represent interference by government in natural market tendencies - choosing winners and losers - and we all know how centrally-planned economies went in the USSR. In time, the ongoing cost of subsidies inevitably wears down public support; better to let markets decide.

In light of the recent election and the impending shift in energy policy to hurry back to embrace fossil fuels once more, let us offer this reassurance to those pointing ahead to a new world of clean energy: "We'll be OK without government support, but it will be more difficult at first. We can do this, one step at a time." Progress moves forward into the future, not backward into the past. Progress, as difficult as it may seem, even unimaginable or impossible, is still preferable to Denial.