Consider these contrasting perspectives. Giles Parkinson in http://reneweconomy.com.au writes: “Solar and storage means “game over” for traditional utilities” (note: that’s the intentionally dramatic headline). He quotes Jon Wellinghoff, the chairman of the US Federal Energy Regulatory Commission (FERC) who stated: “Once it is more cost-effective to build solar with storage than to build a combustion turbine or wind for power at night, that is ‘game over.’ At that point, it will be all about consumer-driven markets.”
More recently Paul Gilding (the former CEO of Greenpeace International) wrote a piece called “Carbon Crash Solar Dawn” which discusses similar concepts such as the so-called “utility death spiral”. Gilding makes the following predictions which essentially repeat claims made in similar articles:
“I think it’s time to call it. Renewables and associated storage, transport and digital technologies are so rapidly disrupting whole industries’ business models they are pushing the fossil fuel industry towards inevitable collapse.”
“We may find that those forecasts by myself and others like Tony Seba from Stanford University, that the oil, coal and gas companies will be all but obsolete by 2030, might turn out to be conservative after all.”
Later in the piece he argues that:
“…economics is the best lens through which we can both see the triggers for transformation and are able to measure its progress. And let’s remember we care more deeply about economics and markets – at both the personal and macro level – than about polar bears or ecosystems. Crazy and irrational but still true.”
Now lets consider the latest issue of the academic journal Futures which is a special issue on “Low Carbon Futures”. Papers in this issue contain contrasting statements such as the following:
“An important take-away from this article, indeed from the entire special issue, is that the emergence of low carbon futures generally and the electric drive vehicle market specifically is anything but a sure thing.”
“Many of the key factors that will determine the ultimate outcome of large-scale energy transitions are not well understood.”
Another contributor makes the following point, which is also a nice rejoinder to Gilding’s analysis:
“To date, most global scenario studies relating to the low-carbon transition have been quantitative in nature, have had technological and economic factors as critical variables, and have tended to underplay the importance of political and institutional issues”
Determinism and contemporary sustainability thinking
For quite a while I’ve viewed many sustainability analysts and advocates as determinists – for a great example of Gilding’s deterministic thinking see his TED Talk entitled “The Earth is Full”. He is of course entitled to his opinion. However, when it comes to large-scale energy transitions I especially worry about the deterministic lines of argument that are often evident in sustainability-related thinking and analysis (e.g. like those often presented on websites like http://reneweconomy.com.au)
For example, if the collapse of the fossil fuel industries is inevitable, and “oil, coal and gas companies will be all but obsolete by 2030” (or before, as argued), then one reasonable response is to think “well, I’ll just put my feet up and relax then. Goodo”. There’s nothing that I need to do. Who cares if the Abbott Government here in Australia repeals the carbon tax and other climate programs? No matter, the industry is soon to be dead anyways. The message may be intended as a motivational one but it could have unintended consequences like I’ve just suggested in the last few sentences.
The bigger worry is that I find these arguments to be inconsistent with the empirical studies conducted over the past four decades by sociologists of science and technology, and in the Science and Technology Studies (STS) field — suggesting that we should be extremely skeptical when reading these predictions. Perhaps they’re best understood as “expectations work”, i.e. strategic actions (not neutral predictions).
STS scholars like Robin Williams have written about the recent re-emergence of deterministic understandings of the technology-society relationship and the tenacity of “mechanistic understandings of technology trajectories and their ‘impacts’”. Williams coined the term “compressed foresight” to describe what can emerge when there is a “desire to resolve from the outset debates about the future prospects and implications of new technology” which “motivates our attempts to anticipate the future and map the technical and social outcomes in a higher level of detail than previously.”
Williams argues that because of this ‘compressed foresight’ “futures appear as largely determinate and imminent; as if the future is already assured, already here.” When I read this I immediately thought of Gilding’s confident predictions. The risk – in William’s eloquent words – is that “attempts at foresight are thus foreshortened; the future is compressed into the present.”
In contrast to deterministic pronouncements, historical and sociological research conducted by STS scholars and others reveals the inadequacy of linear models of innovation pathways (and their outcomes) and the contingency of socio-technical outcomes. For example, the research informing the ‘social shaping’ model of innovation and technological development “called into question the presumption … that [technological] development trajectories are stable and that the social implications of a technology are patterned into a technology at the outset” (Williams 2006). Sustainability thinkers often seem to completely miss this and, instead, imagine linear narratives of the future which are likely to be wrong.
Gilding’s argument in a nutshell
He argues that “by and large, oil, coal and gas companies live in an analytical bubble, deluded about their immortality and firm in their beliefs that ‘renewables are decades away from competing’ and ‘we are so cheap and dominant the economy depends on us’ and ‘change will come, but not on my watch’.” Here I think Gilding is on somewhat solid ground. I’m sure strategic inertia does exist in some of these firms.
Gilding then goes on to argue that a “system wide transformational change driven by parallel, apparently disconnected forces” is unfolding before these executives noses. This includes an expected “utility death spiral” driven primarily by cheaper solar power, shifts to distributed systems, advances in enabling technologies (e.g. battery systems, for grid monitoring) and digital technologies (e.g. the “Internet of Things”) and related innovations, “the revolution underway with electric cars”, and a range of “serious pressures” on oil, gas and coal. In summary, he argues “the game is up for fossil fuels”.
“It won’t be long before all these new players take on the old ones in a battle of “business vs business”, a moment I’ve argued was coming. Knowing how fast new technology players can sweep away slow movers, that will be an interesting battle to watch!”
Nowhere in his breathless excitement does he, for example, consider: issues and uncertainties in the emerging electric drive vehicle market; developing shifts towards denser urban forms which are less well-suited to solar photovoltaic technologies (which are suited to lower density suburban areas); the many non-hardware “soft costs” of solar power that aren’t droppping like the hardware costs (e.g. labour, back-office factors such as management, transaction costs, etc); a global view of energy use in which many regions are very likely to rely heavily on fossil fuels out to 2030 and beyond; nor other potential energy utility adaptations such as utility-scale solar farms and third-party financing models that may mean centralised ownership of energy production is more ‘resilient’ than he expects.
Moreover, if I had a dollar for every time people get technological trajectories and their future implications wrong (even senior government officials like the Chairman of US Federal Energy Regulatory Commission) I’d be a very wealthy man. Alexis Madrigal’s book Powering the Dream: The History and Promise of Green Technology is a wonderful history of such issues and the many uncertainties that analysts like Paul Gilding typically sweep under the carpet whilst making their predictions.
Addressing “compressed foresight”
In order to avoid the “compressed foresight” of deterministic sustainability thinkers we need to:
- Recognise the contingency, and ongoing ‘social shaping’, of socio-technical outcomes. A good book introducing this perspective is Shaping Technology, Guiding Policy: Concepts, Spaces and Tools (Sørensen and Williams, 2002).
- Avoid linear readings of technological trajectories and their eventual outcomes;
- Better understand the factors that influence the progression and outcomes of large-scale energy transitions. In particular institutional aspects and non-technological barriers to change;
- Better understand why sustainability thinkers (and thinking) are so often deterministic and reductionist, and identify some new ways of addressing these ways of thinking; and
- Better understand the strategic “expectations games” that actors play. For example, one way to interpret predictions in Giles Parkinson’s article is as strategic actions seeking to influence the decisions of utility executives via shaping their future expectations (rather than predictions).
Overall, we need to get better at asking sociological and organisational questions. The sorts of transformative changes that major energy transitions require have many institutional, social and cultural dimensions (the missing social dimension) as well as technological and economic.