OIES Podcast – From Scarcity to Scale: The New Economics of Energy

Podcasts - Oxford Institute for Energy Studies

In this latest OIES podcast from the Electricity Programme, Dimitra Apostolopoulou talks to the Director of Research at the Electricity Programme and Senior Research Fellow Rahmat Poudineh about his latest paper titled “From Scarcity to Scale: The New Economics of Energy”. In this podcast, we begin by explaining how our energy system is shifting from an operating-expense model tied to fuel burn to a capital-expense model dominated by upfront hardware. Once a solar or wind asset is installed, each additional kilowatt-hour costs almost nothing, changing the economics of the energy sector. Next, we discuss how cheap, clean electricity is the bedrock of deep decarbonisation and how clean-tech manufacturing exhibits a “winner-takes-most” where early movers achieve significant cost advantages. Related to this, we move to energy security in the new energy paradigm, where governments must diversify gigafactory and refining capacity, build strategic mineral buffers, stress-test supply chains and harden an increasingly digital grid against cyber threats. As zero-marginal-cost generation becomes dominant, markets will need to pay for capacity, flexibility, and services through long-term anchors, granular locational-temporal prices, and open auctions for storage, demand response, and fast frequency support. We conclude the podcast with some thoughts on future decarbonised energy systems and addressing remaining innovation gaps, where regulators must act as system choreographers rather than gatekeepers, so millions of distributed energy resource “dancers” can stabilise the grid without unfairly shifting costs.