Michael Liebreich and Angus McCrone:
One of the key characteristics of complex systems, such as the world’s energy and transport sectors, is that when they change it tends not to be a linear process. They flip from one state to another in a way strongly analogous to a phase change in material science. We have written about this before, for instance here and here.
A second important characteristic of this type of economic phase change is that when one major sector flips, the results rip through the whole economy and can have impacts on the societal scale.
We are seeing this effect in the electricity system right now. The rapid uptake of renewable generation in the power system, unstoppable now because of cost reductions in wind and solar, has not simply rendered a certain proportion of conventional generation uneconomic. It has fundamentally changed the way power markets work, making new investment in other sources all but impossible; it has changed the control paradigm for the grid from base-load-and-peak to forecast-and-balance; it has altered flows of investment throughout the power system and its technology providers; it is forcing through an accelerated digitisation of all electrical equipment. It is even changing the way buildings are designed, the training needed by the construction trades, and the way infrastructure is financed.