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Mapping emerging trends in energy innovation, an economist anticipates a fossil fuel–free future

Burn Out: The Endgame for Fossil Fuels

Dieter Helm
Yale University Press
301 pp.
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Projecting how we produce and use energy a generation or more into the future is a task fraught with challenges, 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 effects. Along the way, Helm provides a concise primer on the history of global energy economics, 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 digitalization will accompany electrification of transportation 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.


Regions that benefit from lower energy prices and strong research bases will fare well, Helm predicts.

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 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.


  1. California Public Utilities Commission, “CPUC and California Energy Commission to hold en banc on customer choice in electricity in California” (2017).

About the author

The reviewer is at Synapse Energy Economics, Inc., Cambridge, MA 02139, USA.