solar

A wind turbine complex on the Zhemo Mountain in the outskirts of Dali, in China's southwestern province of Yunnan (LIU JIN/AFP/Getty Images)

A wind turbine complex on the Zhemo Mountain in the outskirts of Dali, in China's southwestern province of Yunnan © LIU JIN/AFP/Getty Images

The starting point for anyone wanting to understand how the world’s energy markets will develop over the next 20 years must be China. Companies, bankers, investors and those of us who try to follow the industry will have to shift our attention away from local circumstances in Europe or the US. What happens in both continents is interesting, but on the world scale it pales into insignificance. Even a very radical change in the European market — a real carbon price or a single common energy policy, or indeed the development of French and German shale gas — would be as nothing compared to the transformation that is coming, as China becomes the dominant force in every part of the energy business. 

Photo by Sanjay Kanojia/AFP/Getty Images

Imagine being elected prime minister of a country with one and a quarter billion people, about 300m of whom live in absolute poverty. That is the challenge facing Narendra Modi in India. The hardest question must be to know where to start.

When it comes to energy Mr Modi’s first acts have been encouraging. He has set a high but achievable target for the installation of solar, on and off the grid, building on his experience in the state of Gujarat. He has also forced together three key ministries – covering power, coal and renewables – under a new minister, Piyush Goyal. He should probably have gone further and added petroleum and natural gas as well. Structural change in the complex bureaucracy of the Indian government matters a lot. 

Energy storage has long been regarded as something close to a holy grail. Of course, there are ways of storing some forms of energy – using pumped water or compressed air for instance. There are conventional batteries – and there have been advances in their capacity over the last few years. But the search for storage systems which are simultaneously economic and practical for use at scale in the modern energy market has long been a source of frustration.

Recent advances made by scientists in the US suggest, however, that real progress is now being made and that major breakthroughs are close. The whole of the energy sector should be watching because any such breakthrough could transform the economics of the whole industry.