So that’s going to take two generations, 40 years, millions of jobs, thousands of small and medium enterprises, and large contracting companies to do that work.
And beyond Europe?
Ten years from now, we’re going to have tens of millions of buildings all over the world producing their own green electricity. And 20 years from now, we’re going to have several hundred million buildings producing green electricity. The reason we know this is that we have done the calculations. Solar and wind have been on an exponential curve, just like computer chips for the last 20 years. Within 15 to 20 years, the harvesting technology for solar and small vertical wind are going to be as cheap as cell phones and desktop computers today.
That sounds like a very aggressive timetable.
As we create the energy Internet and everyone transforms their own buildings to micro power plants, the harvesting technology gets cheaper and cheaper. And then, of course, the sun off your roof is free, the wind off the side of your office building is free, the geothermal heat underneath your factory is free, the garbage converted to energy in your kitchen is free.
So just as information has become nearly zero marginal cost, creating the possibility of nearly free information, and has rocked the entertainment, publishing and newspaper industries, we’re seeing the same thing with energy in places like Germany and Denmark. It takes two to seven years on solar, a little longer for wind, to pay back the investment. But the moment you install the harvesting technologies, the energy itself is free. You just have to keep the panels clean. And the wind you’re generating, even before you pay back the investment, is nearly free.
Now we’re talking about near zero marginal cost. So I think Pillar Two is a game changer.
What about Pillar Three?
Pillar Three is the biggest challenge of the five pillars: storage. The sun isn’t always shining; the wind sometimes blows at night. You need the electricity during the day. Hydroelectricity can be compromised if you have drought. So these energies have to be stored. We’re at this stage, exploring all forms of storage—flywheels, batteries, capacitors, water pumping, air compression—anything that will store these distributed renewable energies.
Are any of these forms of storage particularly promising?
We have focused quite a bit on hydrogen. We like all storage technology, but hydrogen is the universal carrier; it’s the basic element of the universe. It stores other energies; it’s modular, so you can put it in a small apartment or in a big power and transmission utility grid. The E.U. has committed €8 billion to public-private deployment of hydrogen storage.
How does it work?
If you don’t need all the electricity that you’re generating at a given moment, you can pass the current through a tank of water and the hydrogen in the H2O separates, so you store that hydrogen. Then you can take that hydrogen from the water and you can put it in a fuel cell and generate electricity again.
Three pillars down, two to go.
Pillar Four is where the Internet communication revolution converges with the new distributed energy to create a nervous system for this new infrastructure. Europe is commited to transforming the electricity grid, the power and transmission lines, to an energy Internet, a distributed smart grid. When millions of buildings are producing small amounts of green electricity and storing it in hydrogen, you can program your app to sell your green electricity across an energy Internet from the Irish Sea all the way to the edge of Eastern Europe.
And Pillar Five?
The last pillar is transport and logistics. Electric vehicles are already on the market, and fuel cell cars, trucks and buses running on hydrogen will be in mass production between 2015 and 2017 by the six major auto companies. We’ll be able to plug in our vehicles anywhere there are buildings, get green electricity, and wherever we park, there will be plugs to connect our vehicles back to the energy Internet.
The most important thing to understand is that these five pillars are meaningless by themselves. It’s only when we phase them in at the same speed and create the synergies between them that we actually create a new technology platform for a completely new economic and business model. And this is important because we need to understand the mistakes that have been made.
What mistakes have you seen?
The Obama administration spent billions of dollars of stimulus money on a green economy, and it didn’t happen. Why? Because the money was spent on stand-alone projects—a battery factory in one state, an electric car factory in another state, a solar factory in a third state, etc. But there was no infrastructure.
Europe is learning from these errors, and that’s a painful process. Europe did very well on Pillar One, so we have millions of people generating green electricity. We have so much renewable energy now that we have regions in Europe that are 40, 50, 60 percent green electricity.
The problem is, the respective countries didn’t move on Pillar Four quick enough, the energy Internet. So we have this old transmission grid—[it’s] mechanical, centralized and leaks 20 percent of the electricity. Moreover, the power grid is trying to manage millions of small players sending their green electricity in, and it can’t manage the peak and base loads.
What about the other pillars?
Europe didn’t move quickly enough on Pillar Three—storage—either. So we are actually losing three out of four kilowatts in renewable energy because the wind blows at night but we need the electricity during the day. Or sometimes at high noon there’s so much solar and wind coming through the grid that we have negative prices for electricity.
Finally, our car companies in Europe are petrified because they spent billions on electric vehicles and now fuel cell vehicles. If the other four pillars aren’t in and there’s not an operating infrastructure, those vehicles will be orphaned out.
So the timing is crucial.
This is the point. We’re doing pilot projects, we’re siloing, and cities are, you know, thinking they’re doing a great job. But we’re not advancing to a new era.
What about countries outside the European Union? What are their “third industrial revolution” track records?
Places like Russia, the U.S. and Canada will be second-tier countries within 25 years if they stay locked into the old energies and the old infrastructure. There’s no productivity in it. It’s a dead end. You have to understand that the second industrial revolution is going to scale down as it sunsets over 25 years, while the third industrial revolution is going to scale up. That’s what’s happening. So whether you’re a country or an industry or a company or a community, the smart ones will be in two models at once.
What’s the role of individual companies? What should they be doing?
The IT, the electronics industries, construction, real estate, transport and logistics—the smart ones will be in both business models and then deliberately, but quickly, transition over 25 years from a second to a third industrial revolution and an Internet-of-things infrastructure. That’s where they’re going to find the productivity and value. So this is not an either-or, but it’s a transition from one to the other.
How will this affect business models?
3D printing is the manufacturing model for the distributed, collaborative, laterally scaled third industrial revolution. If you try to plug and play 3D printing into the second industrial revolution centralized platform, you’ll get little productivity out of it. The German 3D printers [developers] understand that they have to plug and play their operations into the third industrial revolution infrastructure. Silicon Valley hasn’t yet grasped the fact that 3D printing is inseparably linked to a TIR platform.
What’s different that the Germans understand?
3D printing is additive manufacturing—the software is forming the molten material, and layer by layer, you build up the whole product with moving parts. There’s almost no material loss; it’s additive. So right away, you have a leg up against big centralized factories that do subtractive manufacturing in which you get a big hunk of material from nature, cut it up, and throw some of it out before assembling the final product.
Sounds like an entirely new model.
Yes. I call it “infofacturing.” It’s not really manufacturing, because it’s not manual; it’s done with very little labor. So it creates the democratization of manufacturing. It allows many new players, it allows us to “continentalize production,” so that we start producing for local regional markets. Global trade doesn’t disappear, but it’s less essential. And, of course, 3D printing is part of this democratization.
How realistic is it to expect that any of this will actually happen?
My own personal belief is I don’t think we’ll get there without a change in consciousness. I think the architecture of these five pillars of infrastructure is elegant and at the same time [based on] simple common sense.
We need to shift from a geopolitical frame of reference to a biosphere consciousness very quickly. I am guardedly hopeful for this reason: Humanity is quickly becoming aware that the biosphere is the indivisible overarching community to which we all belong, and whose well-being is indispensable to assuring our own well-being as well as our survival. Once we grasp this key concept, we have the right mindset to move to the next stage in the human journey.