Friday, January 7, 2011

Two energy systems

This is a quick thought rather than a big post - something that's stated very nicely by Arati Prabahkar at the GTL conference some of you may remember me linking to. It's worth keeping in mind something that's obvious once you hear it, but easy to forget. I may talk about the "energy system", but in fact right now we have two energy systems: one for electrical power and one for transportation.

These systems don't always have the same interests and incentives attached. For instance, the US is basically energy-independent when it comes to electrical power. But it's highly dependent when it comes to transportation power - given our current system. That's one different driver right there (and it varies by country; for instance, much of Europe is energy-dependent in both systems - the exceptions being France and I think some of the Scandinavian countries). The infrastructure/sunk costs issues are different; the constituents and interest groups involved are different; and so on.

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