Jeremy Rifkin’s energy transition

renewable energy, smart grids, fossil fuels, energy transitionJeremy Rifkin is an American economist, essayist and macro-economic forecaster. His latest book, entitled The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World was published in 2011. Following best-sellers such as The End of Work (1995) and The European Dream (2004), it is an ambitious and provocative call for a Copernican revolution of the global energy model, based on the large-scale development of renewable energy sources and smart grids.


Following the steam engine in the XIXth century and the combustion engine, oil exploitation and telecommunications in the XXth century, it is time mankind went through a “third industrial revolution”, according to J. Rifkin. The author takes a simple observation as a starting point: the second industrial revolution ends with the increasing scarcity of fossil fuels. In his opinion, three recent developments warn us that our current model is running out of steam:

  • The current economic downturn started before the financial crisis when oil prices rose to a whopping $147 per barrel in 2008
  • Hunger riots broke out in about thirty countries in the summer of that same year
  • The collapse of Lehman Brothers bank in September 2008 and the weaknesses of the global financial system caused a worldwide recession which continues today

According to the economist, these three events are harbingers of the impending collapse of the “old energy regime”. Growing demand for fossil fuels from BRICS countries (Brazil, Russia, India, China and South Africa) will soon become unsustainable: at this rate, the world would have to pay “8,000 trillion dollars” for energy as early as 2020. Rifkin assumes that this money ought to be spent on a full-scale energy transition scheme so as to enable the so-called “third industrial revolution” to emerge.

A new growth model based on five pillars

J. Rifkin pinpoints five fundamental steps towards energy transition:

  • shifting to renewable energy worldwide;
  • transforming buildings into micro-power plants, thus creating many jobs;
  • deploying hydrogen and other technologies to store energy locally;
  • developing a smart energy-sharing intergrid that acts just like the internet, enabling each building to sell surplus back to the grid;
  • transitioning to electric vehicles that can buy local surplus energy on a smart, interactive power grid while parked.

Smart grids, bedrock of Rifkin’s theory

While the massive use of renewable energy sources has become a priority for many countries, the novelty of Rifkin’s theory is based on a new kind of buildings. They could be transformed into “micro-power plants” with their own on-site renewable energy generation systems and be connected with each other via a decentralized power grid, thus becoming energy producers as well as consumers. Widespread use of home-automation could channel surplus energy to where it is needed. “In the XXIst century, hundreds of millions of people will produce their own green energy in their homes, offices, and factories, and share it with each other in an “energy Internet,” just like we now create and share information online.”, Rifkin says.

Hydrogen to improve intermittent renewable energy sources

Rifkin also sees room for improvement in our capacity to store renewable electricity locally (at home or in a city) to avoid shortages. He considers hydrogen as the “universal means” of storing energy, much more efficient than lithium batteries. Although hydrogen is the most abundant element in the universe, it is scarce in its pure form. Hydrogen can be extracted from animal and organic waste (biomass); furthermore, pure hydrogen can be obtained through electrolysis: hydrogen can be separated from water thanks to an electrical process and then stored as gas.

Third industrial revolution” to end forecasted energy conflicts

In addition to technical and environmental progress, the author promotes a genuine renewal of the current economic system. Following the 1st and 2nd industrial revolutions which led to the emergence of modern capitalism and the nation state, the 3rd should usher in large continental markets and post-national economic models. According to Rifkin, it should reach a climax around 2050, “radically transforming our ways of working and living”. Just like the European Coal and Steel Community contributed to making war impossible between European countries, the interconnection of the power grid will render states dependant on each other and enable the rise of what he coined a “political biosphere”.

In Rifkin’s model, large continental energy markets would be combined with regional and municipal markets. The author sees the European Union as the most advanced transition model, whose role it is to “usher in the third industrial revolution“. Among other examples, he cites the Mediterranean Solar Plan which will connect a giant solar farm in the Sahara desert to power grids in North-Africa and Europe, thus covering 15% of EU energy needs.

Rifkin’s sometimes pompous but always irreverent work suggests that we should rethink long term economic cycles. However, far from being overtheoretical, he takes it upon himself to make this new model come true by implementing some of his ideas. He currently works as an adviser for big municipalities such as Utrecht, Rome or San Antonio (Texas) and works on a project to foster a “third industrial revolution” in the French Nord-Pas-de-Calais region.

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