THE CARBON WAR

Music to my ears 87
technologies that are invading fossil fuel markets. There are days of late when
the solar revolution seems to be an inevitability, to people like me, and a not
too distant one. If I had to pick one example from recent weeks to make my
case, it would be a report by UBS on solar and storage. A big team of analysts
from the world’s largest private bank predicts that by 2020 it will be possible
to have a solar roof, an electric vehicle and a domestic battery bank, powering
everything you need in a home, with mouth-watering economics. That energy-trio
purchase will be able to pay for itself within six to eight years, while
giving a 7% pre-tax annual return on investment. Such household economics,
UBS concludes, will change the face of the energy industry. In just a few short
years, people will be queuing up at IKEA and every other retailer sensible
enough to be offering this kind of energy service. People will be realising in
ever growing numbers that their homes and cars are their very own power
plants, wiping out fuel bills – including petrol – whilst giving pension pots a
much- needed boost.
UBS are not alone. Other investment banks’ analysts are saying similar
things. In August, Citigroup professed that it is inevitable that solar will outperform
fossil fuels in the long term, simply on pure economics, never mind
any climate-change policy drivers. Ambrose Evans-Pritchard’s latest Telegraph
story, on August 20 th bore the headline: “Oil industry on borrowed time as
switch to solar and gas accelerates.”
This is the bit where my Schadenfreude has to be disguised. I also have
to hide, frankly, my sense of disbelief at the evidence of my own eyes.
“The props beneath the global oil industry are slowly decaying”, Evans-
Pritchard writes. “The big traded energy companies resemble the telecom giants
of the late 1990s, heavily leveraged to a business model already threatened by
fast-moving technology.”
What to do about all this, I ask the oilmen and women? Think of a threestep
logic chain, I suggest. First, the disruption is underway at a speed that takes
almost everyone by surprise, if they are not following play. 35 years ago people
like me hand-typed our theses, now we hold most of the then computing power
of NASA in the palm of our hand. What will energy look like 35 years on, in
the age of the internet of things, and after the massive failures of policy by the
energy incumbency and its institutional supporters, with the imminent crises
they entail in energy markets? The incumbency is making decisions to raise
hundreds of billions assuming something close to the status quo for up to 50
years, in some cases. Ridiculous, when you think about it.