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Third Industrial Revolution

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At long last, the renewables revolution would appear to be seriously underway. By any indicator you care to use (installed capacity, innovation pipeline, improved efficiencies, reducing costs, level of investment, scalability, political support etc), there's a stir out there in the US, Europe, China, India and post-Fukushima Japan that is creating new benchmarks for investors and generators alike. Farewell niche player; enter the single-most significant technology revolution going on anywhere in the world today - and that includes all the usual IT-hype.

I don't think people really understand how extraordinary this is given that it's not exactly a "level playing field" on which today's energy competition is being fought out. Global subsidies for fossil fuels still amount to around $500 billion a year, whilst global subsidies for renewables are no more than $50 billion a year.

What's more, apart from the deeply dysfunctional Emissions Trading Scheme in the EU, there is still no price on CO2 - the most life-threatening "externality" of all today's chronic market failures.

Regrettably, today's short-termist, growth-obsessed world, necessity is not the mother of invention. We know what we need to do to avoid runaway climate change, for example, but we don't do it. Price and scarcity are today's drivers of invention, and with oil and gas prices staying high, renewables can at last lay claim to their era in the sun.

That's the foundation stone on which Jeremy Rifkin's "Third Industrial Revolution" is constructed. It is now entirely possible to envisage a thriving, competitive global economy in which nuclear plays no part at all, and in which fossil fuels are on a gradually declining trajectory over the next 40 years.

That's going to be some transformation! Rifkin is clear that the leadership to make this happen will be shared between many different countries. Europe took the lead some years ago in mandating a target for 20% of its total energy to come from renewables by 2020 - which will mean at least 35% of its electricity being renewable.

And it's Germany that is driving this EU transition, as revealed in the latest report from Deutsche Bank on just how good its incentivisation regime has been. Particularly in terms of promoting photovoltaics: "We project that PV will grow to more than 7% of national electricity supply by the end of the decade. Germany's integrated climate and energy policy has been and will remain a key contributor to making solar energy competitive with on-peak-fossil-fuel-fired electricity by 2014."

Other EU countries are on track: Spain, Sweden, Denmark amongst others. Under the Conservative/Lib Dem coalition, the UK still heads the league table in vacuous renewable rhetoric, but offshore wind is the only area where they have shown any real leadership.

Europe may have taken the lead. But it's China and the US which are now doing the heavy-lifting. The statistics can all too easily numb the brain rather than enlighten, but you've got to love the fact that the oil-drenched state of Texas will have installed around 38,000 MegaWatts of wind power by 2025 - that's the equivalent of 38 coal-fired power stations to you and me.
And distributed all across the South West of the US there are now 77 large-scale photovoltaic (PV) projects planned or already under construction. That's another 13,000 MegaWatts.

Then there's Concentrating Solar Power - and geothermal - and biomass - and offshore wind - though it took a $5 billion investment in a new offshore grid - the Atlantic Wind Connection - by that well-known energy company Google to make people realise there might be something going on here!

But US renewables are small beer by comparison to what's happening in China. I can absolutely guarantee (because of the cliché-ridden indolence of most of the world's media) that you will have heard of China building one new coal-fired power station every XXX days - pick your misinformation of choice. But you rarely hear of all the coal-fired power stations that are being closed down, and never hear of the vast wind power programme in China that will provide the equivalent of one new coal-fired plant a week for the next two and a half years!

As Rifkin reminds us, we only hear what we want to hear. And that's a shame. Because what people don't realise is that behind this vision of benign, large-scale renewable energy, another world is opening up - of community-scale, distributed renewable energy, driven as much by equally startling breakthroughs in IT-enabled technologies that will make today's top-down nuclear and fossil fuel world look as antediluvian as the horse-bound streets of London looked before the internal combustion engine.

This is not some gentle, incremental muddling through that we're talking about here: this is a revolution. The Third Industrial Revolution.