(I started a new thread dedicated to this question posed by Erha.)
Hi Erha, this is a very interesting question. I hope you don't mind I made a new post dedicated to this question because I think it would be interesting to hear other people's thoughts. I know there are many differing opinions on the future of energy so I expect a wide range of opinion. But I'll share my thoughts for what they're worth.
Overall, I think the transition to renewable sources of energy is a slow process since the amount of energy infrastructure out there to power the world is immense. Renewables are becoming increasingly cost-competitive and as the cost goes down, the market for renewables increases dramatically. However, there are still some challenges:
1. The power needs of the world continue to increase as more people enter a global middle class.
Hundreds of millions of people are aspiring and are beginning to enter the global middle class and as a result as consuming more energy than before (ie., bigger house, more comforts, a car, etc). Just thinking about how many people in China (and India and other countries) are entering the global middle class is staggering.
2. There is an immense amount of money invested in fossil fuel extraction and development.
In other words, the fossil fuel-based energy world will not go down without a fight. And they have a lot of brilliant engineers working for their companies as well. The recent development in fracking and shale gas have produced a revival in the energy sector, as companies find more and more ways to extract more and more fossil fuels from the ground.
At some point though, I anticipate a turning of the tide or a turning point where fossil fuel extraction peaks and then starts to decline, while renewables (led by solar, wind, thermal, hydro, etc but probably mostly led by solar) will have keep their inevitable march to increasing dominance in energy production. The question is when will this turning point happen?
My guess is that we might see this turning point happen in roughly 10 years. Here's my reasoning. Currently, fossil fuel energy companies have too much momentum to peak within the next few to several years and the world's energy consumption is still growing fairly fast. So, these fossil fuel energy companies will be busy trying to meet the growing energy needs of the world for the next several years at least, and I think most of these companies will probably do quite well (ie., profits, etc). But at some point while the fossil fuel energy companies enjoy their profits and growth, renewables are getting cheaper and cheaper. And I imagine 10 years down the road, renewables like solar will have reached a point where it's cost-compelling on a mass scale. It will become plain and obvious that fossil fuel extraction is getting more expensive and renewables like solar are only getting cheaper. The stock prices of fossil fuel energy companies will start to get hit as investors see the future in renewable energy production, and that will commence the beginning of very tough times for certain fossil fuel energy companies. But this downfall, once it starts (ie., in 10 years), might take many years to play out as well (ie., 10-20 more years?).
However, I do see potential for fossil fuels to stick around in some capacity for many, many years (ie., 50 years). Certain countries have a ton of oil or natural gas, and they might just keep drilling and using these natural resources for as long as they choose. Just because renewables become cheaper than fossil fuels in general, it doesn't mean that fossil fuels don't have a market. I think they will for many years to come.
I think the overall impact on the global economy will be positive. Renewable energy production will free up people previously working on drilling and extraction to work on other jobs, since renewables like solar don't need a constant workforce to drill, extract and transport. In other words, we'll free up millions of jobs previously in the oil and gas industry to focus on other areas. And people/companies are creative, and I have little doubt that new companies working on new and creative things will employ these people and many more.
Certain cities that are heavily dependent on oil and gas development might start to see a peak in 10 years (or maybe sooner). I think of Houston as an example, as they've seen growth due to the energy sector. I can see Houston's economy do very well for the next several years, but at some point (ie., maybe 10 years later?) as the switch to renewables becomes clear and evident I can see Houston's energy sector take a major hit. The challenge will be for companies/people to transition into new lines of work and value. If they're successfully able to do so, then Houston can continue to grow. But if it's more challenging, then the Houston economy could struggle. However, overall I don't see this affecting the overall U.S. economy much in a negative way. Rather, I see this in a positive light. Renewables will slowly disrupt the fossil fuel market/companies and will free up a lot of people to work on other ways to add value to society which will create more value and grow the economy. In other words, as renewables become increasingly cheaper than fossil fuels this will make renewables inherently more efficient as well, meaning as the economy adopts more renewables then the economy will reap the benefits of that efficiency.
Regardless, I think we are going to see some major disruption in the energy production and energy consumption markets. We are living truly in historic times as we see this world of billions of people make a switch from a fossil fuel-based economy to a renewable energy-based economy. I'm very excited about this. Not only will we live in a world with better quality air and safer future for the planet, but I also envision the global economy to benefit from it as well as less manpower is required to provide energy for the world and that efficiency is translated into economic growth.
Hi Erha, this is a very interesting question. I hope you don't mind I made a new post dedicated to this question because I think it would be interesting to hear other people's thoughts. I know there are many differing opinions on the future of energy so I expect a wide range of opinion. But I'll share my thoughts for what they're worth.
Overall, I think the transition to renewable sources of energy is a slow process since the amount of energy infrastructure out there to power the world is immense. Renewables are becoming increasingly cost-competitive and as the cost goes down, the market for renewables increases dramatically. However, there are still some challenges:
1. The power needs of the world continue to increase as more people enter a global middle class.
Hundreds of millions of people are aspiring and are beginning to enter the global middle class and as a result as consuming more energy than before (ie., bigger house, more comforts, a car, etc). Just thinking about how many people in China (and India and other countries) are entering the global middle class is staggering.
2. There is an immense amount of money invested in fossil fuel extraction and development.
In other words, the fossil fuel-based energy world will not go down without a fight. And they have a lot of brilliant engineers working for their companies as well. The recent development in fracking and shale gas have produced a revival in the energy sector, as companies find more and more ways to extract more and more fossil fuels from the ground.
At some point though, I anticipate a turning of the tide or a turning point where fossil fuel extraction peaks and then starts to decline, while renewables (led by solar, wind, thermal, hydro, etc but probably mostly led by solar) will have keep their inevitable march to increasing dominance in energy production. The question is when will this turning point happen?
My guess is that we might see this turning point happen in roughly 10 years. Here's my reasoning. Currently, fossil fuel energy companies have too much momentum to peak within the next few to several years and the world's energy consumption is still growing fairly fast. So, these fossil fuel energy companies will be busy trying to meet the growing energy needs of the world for the next several years at least, and I think most of these companies will probably do quite well (ie., profits, etc). But at some point while the fossil fuel energy companies enjoy their profits and growth, renewables are getting cheaper and cheaper. And I imagine 10 years down the road, renewables like solar will have reached a point where it's cost-compelling on a mass scale. It will become plain and obvious that fossil fuel extraction is getting more expensive and renewables like solar are only getting cheaper. The stock prices of fossil fuel energy companies will start to get hit as investors see the future in renewable energy production, and that will commence the beginning of very tough times for certain fossil fuel energy companies. But this downfall, once it starts (ie., in 10 years), might take many years to play out as well (ie., 10-20 more years?).
However, I do see potential for fossil fuels to stick around in some capacity for many, many years (ie., 50 years). Certain countries have a ton of oil or natural gas, and they might just keep drilling and using these natural resources for as long as they choose. Just because renewables become cheaper than fossil fuels in general, it doesn't mean that fossil fuels don't have a market. I think they will for many years to come.
I think the overall impact on the global economy will be positive. Renewable energy production will free up people previously working on drilling and extraction to work on other jobs, since renewables like solar don't need a constant workforce to drill, extract and transport. In other words, we'll free up millions of jobs previously in the oil and gas industry to focus on other areas. And people/companies are creative, and I have little doubt that new companies working on new and creative things will employ these people and many more.
Certain cities that are heavily dependent on oil and gas development might start to see a peak in 10 years (or maybe sooner). I think of Houston as an example, as they've seen growth due to the energy sector. I can see Houston's economy do very well for the next several years, but at some point (ie., maybe 10 years later?) as the switch to renewables becomes clear and evident I can see Houston's energy sector take a major hit. The challenge will be for companies/people to transition into new lines of work and value. If they're successfully able to do so, then Houston can continue to grow. But if it's more challenging, then the Houston economy could struggle. However, overall I don't see this affecting the overall U.S. economy much in a negative way. Rather, I see this in a positive light. Renewables will slowly disrupt the fossil fuel market/companies and will free up a lot of people to work on other ways to add value to society which will create more value and grow the economy. In other words, as renewables become increasingly cheaper than fossil fuels this will make renewables inherently more efficient as well, meaning as the economy adopts more renewables then the economy will reap the benefits of that efficiency.
Regardless, I think we are going to see some major disruption in the energy production and energy consumption markets. We are living truly in historic times as we see this world of billions of people make a switch from a fossil fuel-based economy to a renewable energy-based economy. I'm very excited about this. Not only will we live in a world with better quality air and safer future for the planet, but I also envision the global economy to benefit from it as well as less manpower is required to provide energy for the world and that efficiency is translated into economic growth.
My point is that better and better batteries will expand the range of work we can do with electricity as a substitute for fossil fuels. (I want a personal electric tractor, riding lawn mower, and other small farm scale equipment - not quite there, but I expect to see it happen during my lifetime).
