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Energy in Transition


What are the challenges the world will face on its trajectory to 2060?

I attended the World Energy Council’s (WEC) World Energy Leaders Dialog in the China Hall of Science and Technology, Beijing today and feel I did not manage to get all my points across in the short slot I had during Ged Davis‘ excellent ‘World Energy Scenarios 2060’ session. So I take the freedom to give myself a bit more time here to put the issues I raised into context.

In my mind – looking towards 2060 – of course there will be (an) Energy Revolution(s):What challenges the world faces image

The fossil fuel industry is challenged to advance massively and renew itself, building the bridge into a carbon free economy, without having all the answers yet how to do so. Massive investments will be required to revolutionize technology, and future proofing needs to become a core discipline in design, enabling adaptation to evolving requirements towards resilience and adoption of advanced technologies.

New technologies such as Distributed Generation, Electric Vehicles, Storage and Demand Response as well as Ultra High Voltage Transmission (in China) will irreversibly change distribution and location of generation as well as electricity flows.

In this context: Today 1.2 billion people (!) are without access to electricity. We have to distinguish between scenarios where we have to change traditional ecosystems and places where we could choose to go for a modern approach coping with tomorrow’s demands right from the start. Of course this is massively impacted by where investments are made, but Development Banks for example could take a stance here and go for future technologies where they today fund installations which were appropriate at the turn of millennium. Or, if we look at South East Asia for example: In some countries the retail price for electricity is higher than the LCoE for Solar Rooftop, and the resource is unparalleled. Go for it! Looking at the big picture we are venturing into an era where we (hypothetically) could soon (we are talking years not decades) do without fossil fuels, and where market power tilts towards consumers empowered by the next big thing ahead; ‘Digitalization’ and the ‘Internet of Things’ (IoT). That for sure will disrupt the current energy ecosystem, and platform providers such as Alphabet (Google), Open Utility and Sonnenbatterie (to name a few) will shake up current consumer models. Also, it is likely that in future we will not pay for the resource (energy) anymore, but for the provision of services and the quality of the energy delivered (i.e. charging of Electric Vehicles with Solar Power). The flip side of the coin will be that our energy ecosystem becomes increasingly vulnerable to cyber threats.

The overarching driver for any transformation ahead needs to be Climate Change. And besides geopolitical aspects governments will be under more and more pressure by their own people to adopt practices which at least comply with the ultimate COP21 requirement (1.5 degrees Celsius above pre-industrial levels). The WHO estimates that 4.6 million people die each year from causes directly attributable to air pollution. The executive summary of BP’s Energy Outlook 2016 edition ‘Outlook to 2035’ closes with the statement that  ‘…the rate of growth of carbon emissions more than halves relative to the past 20 years, reflecting gains in energy efficiency and the changing fuel mix. But emissions continue to rise, suggesting the need for further action.

At the same time awareness of the consumers is increasing and people care about health, clean air, access to clean water and are worried about severe weather events caused by climate change. Those suffering today already are not prepared to accept any worsening of the current situation. Those living in good and acceptable conditions will not want to give them up.

Armies today regard Climate Change as the No 1 trigger for national and international conflicts. This puts immense pressure on governments and the industry to make improvements visible fast.

For a smooth journey towards 2060 we need to see an accelerated race towards a carbon free economy whilst appreciating that actually today we have already all the resources it takes to get there.

It is now about creating that healthy state of paranoia required to cut across silos of individual interest, to embrace the imperative to change, which when we are successful will lead us into a sustainable future. If we fail we will irreversibly destroy a livable environment or respectively the environment that’s worth living in.

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