The conservation of energy is one of the fundamental principles in physics. Energy can never be created or destroyed, just changed from one form to another. And every second of every day vast amounts of chemical energy are converted into electrical energy in power stations, and into kinetic energy in cars and trucks, to satisfy the world’s demand for power. This is a demand that can only increase if standards of living in the developing world are to improve and poverty is to be eradicated.

The problem is that our ever-increasing energy consumption is having an ever-worsening effect on the environment. Indeed it is proving difficult to get some countries to commit to the modest targets laid down in the wake of the Kyoto agreement.

People with fewer green or global sympathies also have reason to be concerned – last summer’s power cuts in California showed that no one can take electricity for granted. And the global uncertainty that has followed 11 September means that security of energy supply is a higher priority than ever for many nations.

This special issue of Physics World contains more than 20 pages on energy, starting with What does energy really mean? by Robert Crease discussing the origins of the word “energy” itself (p15, print version). Valerie Jamieson introduces a special section “Energy challenges for the 21st century” that highlights alternative and renewable energy sources such as solar, wind and wave power (see Energy challenges, p25 print version). It is clear that there is no single solution to the multi-faceted energy challenges that we face, and that progress is needed on a wide variety of fronts.

Other articles outline opportunities for the physics community in the energy sector (The role for physics in energy supply, p51 print version only) and describe what it is like to be a physicist working at the sharp end of the oil industry (p55, print version only). It is a coincidence that the lead news story in this issue is about a curious proposal to use “microleptons” – particles that particle physicists do not believe exist – to locate oil deposits (see Strange events hit rural England, p5 print version).

While it is strictly true to say that energy can never be destroyed, the reality is that vast amounts of it are wasted needlessly. Significant amounts of energy could be saved if the efficiency of large power plants were increased slightly and the losses in transmission cables were reduced. And the inefficiency of lighting sources can be doubly wasteful if electricity is not converted into light but heat, which then has to be removed by air conditioning.

If energy is the basic unit of currency in physics, the basic unit of currency in energy is not the Joule or the kilowatt-hour but the dollar. It is hard to believe that it would be financially viable to spend vast sums to run a cable between two nations with a one-hour time difference between them so that electricity can be sent back and forth depending on which country is experiencing its peak demand. However, power companies across Europe spend millions on just such cables because they offer the cheapest way to get electricity to the customer.

All of the proposed new energy sources have one thing in common – they are more expensive than existing sources. However, there are signs that attitudes to renewable sources are changing as, for example, oil companies expand into solar power. And many in the car industry seem to believe that hydrogen fuel will solve their pollution problems. Remarkably, many transport commentators – in the UK at least – feel that congestion rather than pollution will be the biggest problem in the industry a decade from now.

But there is still a need for governments to take a lead to ensure that research that is simply too long term for any one company to undertake still happens, and for regulators to make sure that markets give new energy sources a chance to grow. As the ill-fated experiment with market forces that led to the recent power shortages in California showed, the energy market itself is not smart enough to solve the problem.