International power giants prepare for an energy revolution by Giles Parkinson

One of the big questions that springs to mind when the likes of the International Energy Agency and other bodies deliver their stark warnings about climate change is whether the global energy industry is ready to respond to the challenge. If the IEA is right about its predictions, the energy industry will no longer have the luxury of a measured transition to a clean energy future, the change will be quick and dramatic.

So how is the energy industry positioned to respond? While in Paris, I met up with two senior executives from Alstom, the French energy giant that is one of the three big global suppliers of power equipment. By some measures, it ranks as the biggest, with interests in nuclear, coal, gas, hydro, and onshore wind, and more recently, in offshore wind, concentrated solar power, wave energy and tidal energy, and geothermal.

Loic Douillet, the vice president of marketing, and Philippe Paelinck, the vice president of portfolio and strategic planning, last week took RenewEconomy through a fascinating presentation of the global energy market, its sheer scale, and the direction they believe it is heading – both in size, technology source, and in energy market design.

To get some idea of the future, it is worth getting some idea of the present, and how we got there. Alstom shared some interesting graphs of the development of the electricity industry over the last 50 years.

This first graph below tells a couple of stories. The first is that the power industry has jumped from well below 50GW of installed capacity a year in 1960 to more than 350GW in some of the last few years.

The second is that the industry has been driven by waves of investment booms, and busts: the nuclear boom in the 1970s; the gas boom in the US a decade ago; the Chinese coal boom a few years later; and the global boom in emerging economies, revitalised western economies and in renewables just a few years ago.

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