new technologies (including shale oil and gas
extraction) that enable smaller increments of
capital investment will disrupt the economic
forces that led to these firms’ success. These
companies, he maintains, likely will not keep
up with new energy technologies. He notes
that established players that have tried to
transition have not met with great success.
Helm’s review of electric utilities is focused
on Europe, so American readers will need to
know the utility sector well to understand the
parallel implications for the United States.
In summary: It doesn’t look good for firms
tied to inflexible and carbon-emitting energy
generation. Helm anticipates that dynamic,
smarter energy consumption and increased
solar and wind power will reduce wholesale-market energy prices, where legacy power
plants earn the bulk of their revenues.
Although Helm dismisses the future
of transmission and distribution utilities
in one short section, there may be great
potential here. Combining an increased
variability in generation with increased
dynamism in load could make the owners
and operators of the wires that connect energy sources and consumers central players.
Regulators and policy-makers are already
actively determining the shape of the
growth opportunity in this industry in New
York, California, Hawaii, and Vermont. But
there is risk here, too: California’s electricity
regulator, inspired by market innovators,
has recently announced plans to investigate
reforms in the retail monopoly model (1).
In chapter 3, Helm makes a false distinction between current and future solar or
wind power, dismissing current technology
while putting great stock in future solar PV
and batteries. This dichotomy does not hold.
Future advances will depend on the insights
developed in producing today’s technologies
at scale. He also dismisses the effect of current climate and renewable energy policies,
particularly European policies, while failing
to recognize the direct role of these policies
in the advent of next-generation technologies. These shortcomings, however, do not
damage the book’s underlying arguments.
Burn Out is an example of excellent
predictive analysis, mapping the effects
of clearly identified trends and grounding
these trends in historical context. The book
will be a valuable resource for energy and
climate decision-makers. j
1. California Public Utilities Commission, “CPUC and
California Energy Commission to hold en banc on
customer choice in electricity in California” (2017).
19 MAY 2017 • VOL 356 ISSUE 6339 709 SCIENCE sciencemag.org
Projecting how we produce and use nergy a generation or more into the future is a task fraught with chal- lenges, but Dieter Helm’s Burn Out does just that while avoiding the usual pitfalls. This new book identifies three
“predictable surprises” that will affect our
energy future and traces their economic ef-
fects. Along the way, Helm provides a concise
primer on the history of global energy eco-
nomics, politics, and diplomacy. Looking to
the future, he identifies those who will be
well positioned to harness these surprises.
Helm’s first prediction is that fossil fuel
prices, particularly oil, will fall over time as
both supply costs and demand fall. Increases
in low-cost and flexible supply will come
from the shale oil and gas revolution, he
maintains, whereas the reduction in demand
will be due not only to demographic changes
such as the slowing of economic growth in
China but also to two other surprises.
Helm’s second and third predictions are
linked: Decarbonization will happen (
surprise number two), and it will be driven by
new technologies (surprise number three)
that make low-carbon policies more palatable politically. He expects transformative
new electric generation technology, particularly within the realm of solar photovoltaics
(PV). Meanwhile, he predicts that digitaliza-
The next energy economy
Mapping emerging trends in energy innovation,
an economist anticipates a fossil fuel–free future
The reviewer is at Synapse Energy Economics, Inc.,
Cambridge, MA 02139, USA.
tion will accompany electrification of trans-
portation and heat and will transform both
the operation of the electric grid and the
way that goods are manufactured.
In reviewing country and regional effects, Helm focuses on the United States, the
Middle East, Russia, China, and Europe. For
each, he provides a quick and cogent summary of the energy history and then sketches
the effect of the three predictable surprises
on their futures. He believes that falling fossil
fuel prices will have the largest immediate,
and most traceable, effect on the economy, so
much of the book traces these implications.
Helm is skeptical that countries that have
tied their economic fortunes to fossil fuels
will be able to smoothly transition to lower
prices and flat, then falling, demand. In addition, he believes that digitalization could
enable reshoring of manufacturing in the
United States and Europe, to the detriment
of China. Indeed, Helm projects that Europe
and the United States, who benefit from
lower energy prices and strong research and
industrial bases, will come out on top.
Vertically integrated energy companies in
oil and electricity that dominated the 20th
century, however, are not expected to fare as
well. Helm predicts that digitalization and
The Endgame for Fossil Fuels
Yale University Press,
2017. 301 pp.
By Asa S. Hopkins
Regions that benefit from lower energy prices and
strong research bases will fare well, Helm predicts. B O O K S et al.