A proliferation of new energy sources

An array of energy technologies seems poised for a breakthrough. Within two decades, as many as 20 new energy sources could be powering the global economy, including fuel cells; small, modular nuclear-fission reactors; and even nuclear fusion. Fossil fuels will still be part of the mix, but renewables’ share is likely to grow owing to environmental concerns, further cost reductions that make renewable energy more competitive, and demand for electricity. Electricity demand is expected nearly to double by the middle of the century, propelled primarily by economic development in China and India. By 2050, electric power, which can be generated by low-carbon energy sources such as wind and solar, could account for a quarter of global energy demand.

An economy based on so many technologies is unprecedented. The Industrial Revolution relied on steam engines powered by wood, water, or coal. In the 20th century, oil and gas were added to the mix, then nuclear fission. The abundant choice on the horizon raises new dilemmas. For example, where should governments focus investment and research efforts? Most are minded to keep their options open for the time being in order to satisfy demand, as well as for cost and environmental considerations. Over time, though, they might have to choose. Uncertainty about how funding will be shared between new technologies could slow their development. And if technologies are in contention, governments might struggle to secure reliable energy supplies. Securing those supplies, however, will no longer necessarily depend on access to oil, gas, and coal reserves—access that has long colored geopolitics. In tomorrow’s world, access to the technologies that harness resources such as wind, sun, water, or heat from the earth’s core is likely to matter most.

Further reading: https://www.mckinsey.com/industries/oil-and-gas/our-insights/three-game-changers-for-energy