Power transitions: Britain, America, China

Geopolitics has taken over the energy transition. I write energy transition advisedly. Since geopolitics is now the main driver of change, it would be odd to still talk of a green or a climate transition. To be sure, new sources of energy may well address the climate crisis, but it now seems they will do so as a side effect of the race to build a new energy paradigm, which we suspect will grant its builder unparalleled power.

The link between geopolitics and energy transitions is far from new. In my new book, World Builders, I write about the Swedish engineer and inventor John Ericson, who in 1876 argued that the the “rapid exhaustion of the European coal fields will soon cause great changes with reference to international relations in favour of those countries which are in possession of continuous sun power.” Already for Ericson, solar was the energy source of the future, but he believed Egypt would become its direct beneficiary, with European industry moving to the alluvial plains of the Nile to explore their unique solar potential. Today, of course, it is China which appears ready to become the first electro state in history, having installed as much solar capacity last year as the United States in all its history.

A case could be made that hegemonic transitions happen not through war but through the discovery and widespread use of new energy sources. Why did Britain become the undisputed world leader in the eighteenth and nineteenth centuries? Not because it defeated France in a hegemonic war but because it led the world in the first energy revolution, organised around a complex of coal and the steam engine. Energy sources never operate alone. They form much larger complexes capable of redesigning the world around us. With coal, Britain changed the rules of the international game, including the rules of war. Charles Napier, a Royal Navy officer, wrote in 1851 that “steamers make the winds always fair,” a “complete conquest over the elements” (see World Builders).

How and why did the United States took over from Britain the role of global hegemon? Here too energy played the decisive role. Not oil but electricity was responsible for a second energy transition. And just as with the first transition, the energy source was combined with a wider economic or industrial shift towards the modern factory and the modern assembly line. It is hardly a coincidence that Henry Ford started his career under Thomas Edison, learning from Edison that the new world of electricity must be organised around constant flow.

Today we are on the cusp of a third energy transition. Chinese officials have carefully studied the previous transitions and have come to believe that if the baton of global supremacy is ever handed over from Washington to Beijing, it will be in a similar way, through a change in the energy structure of our societies, rather than through a war over Taiwan or any other geography, no matter how strategic. The interesting question is this: if that energy structure was formed by a complex of coal and the steam engine in the eighteenth century, and electricity and the modern factory in the early twentieth, what is the complex associated with the third transition?

The most obvious candidate is solar and artificial intelligence. It is natural for us to think of solar energy as somehow primitive since, after all, the first hominids already knew how to use sunlight as an energy source to warm themselves. In reality, photovoltaic energy is entirely a product of the new physics introduced by Einstein and his contemporaries, where photons are understood as quanta of energy capable of colliding with electrons and where the kinetic energy of the resulting photoelectron corresponds to the difference between the energy absorbed by the electron and the work required to escape its orbit. The solar panel belongs to the age of the spaceship and the semiconductor.

There is a much more obvious affinity between the token factories of the future and solar than nuclear or natural gas. Training and inference for artificial intelligence models are voracious energy consumers. If they are to continue expanding in both quality and scale, they will need cheap and abundant sources of energy. Solar and batteries are not there yet, but then neither are the models. The point is that they both share exponential curves of growth. No other source of energy will be able to come close. Only with solar and wind, combined with new battery technology, can we imagine a world where energy and digital form one single complex, where artificial intelligence both manages our energy systems and is powered by the logic of zero marginal cost energy. The consequences for global power will be similar to those of the first and second energy transitions. And it could well happen that the ultimate winner will be as surprising as on those two occasions.