The Energy Transition Debate

I attended the 26th World Energy Congress in Rotterdam in my media capacity and will be sharing pertinent take outs in a series starting with expert perspectives on the energy transition and what needs to happen with Angela Wilkinson , Secretary-General & CEO at World Energy Council , Monique P. Motty , Founder of Eco Solutions Consulting in Congo, Ged Davis , the Executive Chair of WEC, Jim Skea, the Chair of the Intergovernmental Panel on Climate Change IPCC , Chantal Zeegers , the Vice Mayor of Rotterdam, moderated by John Defterios , former CNN Emerging Markets Editor.

Energy transition themes

The energy transition challenges articulated by Defterios reflect current themes:

-       Approximately 500 million people in Africa lack access to electricity. How can we encourage investment in Africa, which currently only receives 1.6% of global energy investments?

-       In the West, we often take energy for granted. However, with price increases during the pandemic and the Ukraine crisis, we are now facing a 25% rise in energy costs. How can we engage citizens in the energy transition process?

-       There is $200 trillion in private capital and $2 trillion in development banks. How can we make it more appealing for this capital to support the energy transition?

-       Geopolitical issues present challenges to the progress of the transition. How can we navigate around these political crises?

-       Are we overly fixated on growth as the sole measure of success? What quality of life are we aiming for?

-       With a projected 700% increase in demand for minerals used in wind turbines, solar panels, and battery storage, how can we manage the demand side, especially with the impact of electric vehicles on infrastructure and industries?

-       It seems that the human species often requires a crisis to drive innovative solutions. Whether it's financial crises, pandemics, or geopolitical conflicts, how can we shift our thinking outside of crisis situations?

-       As individuals engage in the energy transition, suggestions such as tracking flights and implementing carbon taxes on meals have been proposed. However, these ideas are met with resistance, particularly from airline companies. Are we ready to discuss and implement more assertive measures to reduce energy consumption.

Moderating the demand for energy

Renowned Professor Emeritus Vaclav Smil highlighted that decarbonizing transportation like giant container ships and large aircraft pose significant technical challenges. Smil proposed a more balanced approach involving the moderation of energy demands instead of relying on last-minute fixes of "tailpipe solutions".

Inclusive conversations needed for a fair decarbonisation process

Angela Wilkinson, Secretary-General & CEO of WEC, emphasizes that energy leaders have not effectively promoted energy literacy and citizen engagement whereas it is crucial to have meaningful conversations and for the energy transition to consider user needs, individuals and industries. Wilkinson stresses involving not only CEOs and Ministers but also women, workers, future energy leaders, mayors, and indigenous communities in discussions for a fair decarbonization process.

A demand led energy shock

Unlike the supply-driven energy shock of the 1970s, recent years have witnessed a demand-led energy shock with the digital transition significantly impacting energy demand and necessitating a smart energy system to enhance efficiency. Currently, approximately half of produced energy is wasted. We need to develop a less wasteful energy system for the future while ensuring that efficiency improvements do not compromise resilience or lead to unequal resource distribution.

Geopolitics hamper progress

Geopolitical shifts in energy now extend beyond traditional oil and gas to encompass critical supply chains, minerals crucial for the renewable revolution, electrification materials, and copper wiring. This broader geopolitical landscape also includes data and technology.

Wilkinson emphasized the need to transcend geopolitical boundaries for the future of humanity calling for a new energy transition governance model that prioritizes people and agency rather than solely focusing on money and technology.

As there is no definitive guide for the energy transition, bold decisions will need to be made, some of which may not yield the desired outcomes. Inclusive conversations will hence accelerate learning, vital to navigate simultaneous energy, materials, petrochemical, and agricultural transitions.

What will the transition look like in Africa

Can Africa leapfrog to have a better use of contemporary technologies? Monique Motty, Founder of Eco Solutions Consulting in Congo thinks not. As Africa is trying to adapt to an environment "having not been included in the conversation in the first place", an incremental transition is more suited, starting with investing in the existing grid and tackling the high cost of capital. Monty believes Congo is part of the solution having the 2nd largest forests and the resources necessary for the energy transition making Congo well positioned to be a major player. Monty believes the real transition will happen within communities and that's where focus should be directed.

The 4 horsemen of sustainability

Ged Davis, the Executive Chair of WEC, emphasizes the need to increase investments from $1.7 trillion to $4.5 trillion. He highlights that sustainability is not solely an energy challenge but extends to four key industries: steel, cement, ammonia, and plastic, which require alternatives when constructing new cities and providing food. However, the intricacies of implementing change on a smaller scale pose challenges that could potentially disrupt political landscapes. It is crucial therefore that people do not feel forced into changes. Solutions will hence vary across different countries.

Realism must prevail over fatalism to avoid the risk of inertia

The energy sector contributes to 75% of greenhouse gas emissions, with the remaining emissions coming from land-related sources. According to Jim Skea, the Chair of the Intergovernmental Panel on Climate Change (IPCC), the transition in energy has been primarily driven by economic incentives and resource availability. However, there is now a new challenge that requires moving away from reliance on traditional fossil fuels.

Key points from Skea's insights:

Africa: acknowledged for its forestry and mineral resources but facing development barriers due to high capital costs.

Finance: despite sufficient global funds to address climate issues, private finance must be mobilized.

Inclusivity: transition discussions should involve all sectors of society – businesses, unions, environmental groups, and civil society.

Behavior change: Skea suggests reducing greenhouse gas emissions by 40-70% while meeting human needs for shelter, food, and transportation can be achieved by influencing choices in transportation and diet while respecting individual autonomy.

Public awareness: IPCC aims to communicate scientific findings without causing overwhelming fear, emphasizing hope and realism over fatalism.

Embracing a pragmatic approach to the unknown, Skea advocates for a practical approach, quoting Napoleon:

No battle plan survives contact with the enemy.

Engaging citizens in the energy transition

Rotterdam Harbor accounts for 20% of the emissions in the Netherlands, despite Rotterdam being one of the poorest cities in the country. Chantal Zeegers, the Vice Mayor of Rotterdam, collaborates with the port to introduce hydrogen and wind energy initiatives.

Zeegers promotes:

-       Engaging citizens in the energy transition to understand its positive impact on their lives is key for behavioural changes and home adjustments.

-       Encouraging Public-Private Partnerships (PPPs) to foster collaboration among large corporations, small local communities, governmental entities, and innovative businesses.

-       Avoiding punitive measures and moralistic approaches: Zeegers aims to inspire individuals to actively support sustainability initiatives.

Managing issues before they become crisis

I hear from leaders across board the need to humanise energy, improve energy literacy and tech literacy and strive for inclusivity.

What does this look like?

From a communication perspective, a regular flow of communication helps manage some obstacles such as familiarise the general public with experts' language, make elites more likeable and mitigate against misinformation.

And if we don’t want to be constantly operating in crisis mode, dealing with issues before they become crisis is a recommended comms practice. It requires courage to take people on the journey with its challenges, not just successes, and including them in conversations, the positive and the difficult ones.

The integrity of engaging in open communication, not necessarily on issues privy to the business, are rewarded with the trust being built and advocates gained. Otherwise the quest for improving tech literacy, humanising energy and inclusivity will remain 'buzz words' that risk exacerbating the quest for society engagement.

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