General Purpose Technologies
in relation to our energy system
A general-purpose-technology must be viewed not only as a broadly applicable technology, but a socio-economic event. The emergence and dissemination of a broadly utilisable technology first disrupts the present order. It meets resistance not due to elements of the technology itself, but because in replacing or re-contextualising present technology, it must strain against the social and economic order to which these technologies give physical foundations. Then, the new general-purpose-technology begins a life-cycle where it becomes the foundation for new orders, and new conditions for humanity.
This cycle predates written history. Our first general-purpose-technologies were tools and fire and domestication, and they formed the basis of all human existence, of even the pre-human existence of our closest genetic cousins. Individual technologies wove together our first systems, and as human order became an increasingly complex network of these systems, what began to emerge were an extraordinary new class of general-purpose-technologies: what I term, systemic general-purpose-technologies. Roads, sewerage and secure water supply. Paving and pipes may have enabled these systems, but it was the broad applicability of each general-purpose-technology combined by the broad applicability of a system that characterised their impact. These technologies made manifest a physical embodiment of systematic order.
The more proximate a technological change is to the utilisation of energy, the greater the potential for fundamental changes in the human condition. To change the manner or degree to which we harness energy is to multiply the single most important input to productivity.
The electrical grid is our greatest example of a systemic general-purpose-technology. It was the general-purpose-system that allowed power generation from almost anywhere to be applied by anyone. It runs like veins through our cities and towns, it defines the border between civilization and wilderness, between imagination and realisation. Nothing but electricity has improved the health and wellbeing of humans more than access to sewerage systems and secure water supply. No wonder then, that simply uprooting the system, pulling the veins from civilization itself, is not an option. Rivalled in integration perhaps only by future information systems, the electricity system doesn’t just connect all our technology to sources that allow us to live as no other species has lived, electricity is common to all of our other systems including the information system. Water pumps, sewerage pumps, and ventilation pumps, the internet, the traffic lights in our road system, the railway, the food delivery van, and every other system and institution of our social and economic order is empowered by the same waveform alternating at 50 or 60Hz.
A prevailing view is that the transformer ushered in the electricity age and electricity was the general-purpose technology– but this is wrong. Electricity is a fundamental, apparently irreducible interaction in physics. It is not a technology. Independent of the existence of humans, electricity exists. Electromagnetism is a symmetry at the centre of the physical universe. This misunderstanding leads to a misdiagnosis of both the problem and the solution. The transformer itself was the first general-purpose technology of the electrical age, it was the first human-made enabler of a system that has transformed our understanding of possibility itself. The second was the grid that emerged. Played first as a piece in the AC/DC battle that sought to best deliver cheap and reliable energy, when the dust settled it had emerged as a systematic general-purpose technology that enabled human productivity as we know it. The transformer has a role in generation, grid transportation and consumption - it is truly ubiquitous. The grid is the largest human made system, a map of civilisation and its intentions manifest.
In that context, we have a responsibility, both as consumers and as suppliers of such a fundamental shift, to be certain that we are doing the right thing. Fundamental change induces anxiety – it is not wrong to ask why we need to change a system that has been the basis of growth, stability, and social order unequalled in human history.
Yet, the change in retrospect is always obvious, inevitable. Take as an example the redundancy of the landline phone. A system that enabled massive increases in productivity, subsequently disrupted and replaced by a new technology and its emergent order that created value unimaginable in the context of previous systems. Such changes wrought by the diffusion and adoption of general-purpose-technologies and systems have micro and macro effects of creative destruction as well as changing the secular rate of growth possible for economies. Those systemic changes can also be viewed through demographic lenses, disrupting the employment of existing employees and firms, to deliver enormous, but as yet unrealised benefit to future generations.
Fundamental systems transform and create value by arbitraging value across time and space, such that their capacity for value creation is equal to their capacity for transfer. Sewerage, water, gas, and electricity systems are all examples of the value created by moving resources from the location of greatest convenience to the location of greatest utility. Roads allow for a more individual transfer, but the ease with which the journey is made is the key determinant of value creation in all instances. More complex systems carry information in waveforms like analogue telephony. Platforms, like Amazon, are a system of complex universal protocols that allow for value to be transmitted directly, and this interaction is made even more explicit in the case of blockchain, allowing for the trust-less transfer of value in property rights.
Consider again the electricity system which both empowers and constrains the sustained pursuit of prosperity for everyone. Its value as a system is predicated not by the information it carries embedded as perturbations in its waveform, but rather upon the efficacy with which it can transmit that waveform. Its value is as a carrier of a uniform waveform—distributing the potential for work as electromagnetic force—where perturbations are a derogation of value to all the systems participants.
That the actions by participants of generation (other than spinning mass), distribution and consumption to create value have the equal and opposite effect of degrading the signal common to all participants highlights that the resource being consumed is both the waveform, and the stability of the waveform.
All global GDP is in part a product of the value creation arising from the ecosystem of electricity ‘consumers’. All of which is defined in the uniqueness of information in each unit of output, whether produced as information, services, or products. While creating value in unique patterns of information as products and services every action of every agent attached to the electricity system unavoidably has an ‘equal and opposite effect’ on the common waveform qualitatively or quantitatively.
The historical design of the electricity system limits choice. The elegant, largely passive, fragile system has an essential need for a congruent signal or waveform to maintain its operation. In use, this waveform is materially destabilised.
A positive vision for the energy transition depends upon the electricity system as General-Purpose-System, evolved to become a platform that coordinated heterogenous generation and consumption based on the qualitative and quantitative impact they had on the common waveform and atmosphere we share.
This requires the General-Purpose-System that is the electricity grid to be enabled by a new General-Purpose-Technology, fit for the purpose of delivering a stable, reliable, congruent signal from anywhere to anyone, dispatched from cheap renewable generation without the need for spinning mass generators that burn coal, gas, oil or wood chips.
