Managing Energy Transition through Innovation

In the past few months, I have been placing an increasing focus on the energy transition we all need to undertake in our energy systems, to build a more comprehensive understanding of the parts that make up the whole of this transition.

It is one of the most critical places where innovation application is required and able to be conducted to deliver a sustaining impact in our world. Innovation solutions will provide the energy transition needed, and that is what makes it such a compelling area to focus upon.

For me, the energy transition that the world is undertaking requires all forms of innovation, to offer technically advanced, as well as breakthrough solutions, to an incredibly complex system of energy delivery. To redesign a complete energy system in twenty to thirty years, which is the current time frame being wanted to be achieved, is as demanding as you can get. I certainly want to play a role in this transformation, it is exciting, challenging, and demanding on all involved.

We need to appreciate the magnitude of the innovation challenges

Nearly all of our energy supply is, or has been, reliant on fossil fuels (oil, coal, gas) which are non-renewable and are the primary source of the carbonization problems we have today. Omitted Carbon gets trapped in our atmosphere and has been the growing concern as the principal source of our warming planet.

After the famous and groundbreaking 2015 Paris Agreement, where we witnessed for the first time, all nations agreeing to a common cause, one to undertake ambitious efforts to combat climate change and adapt to its effects. From this agreement as such, it has been the catalyst to charting a new course in the global climate effort.

Central to this is that the world needs a decarbonization energy sector by the second half of the century. The encouraging view from work undertaken by the International Renewable Energy Agency (IRENA) suggests that the combination of energy efficiencies and renewable energies already known and worked upon has the potential to achieve 90% of the emissions reduction needed by 2050.

This massive shift from our present reliance on fossil fuels projects to renewables (regarded as clean energy) can account for two-thirds of our primary energy supply by this 2050 mark. Today, renewables (wind, solar, hydropower, biofuels) is presently only supplying around 16-18%. For such a significant change to happen, we need to focus on a massive global scale. To undertake such a considerable difference, we need economically and scalable solutions.

The growing concern today is we are not raising the deployment rate; it is currently far too slow to meet the potential by 2050. Deployment here is not just in the market, but it is in commercializing concepts; from the invention, concept validation, prototype stages, demonstration, integration into our parts of the system, through to full scale to commercialization and final proof of stability, and offering financial and justifiable returns.

The critical enabler will come from technology and systemic innovation.

Innovation needs to be broader than just being conducted through technological research and development; it requires a more significant integrated innovation model that has business models, policies, processes, and market design as part of the solutions.

As this energy transition is such a seismic shift, it requires clear Government support and enabling policies on a coordinated basis. There are at present plenty of pledges to boost public spending but to achieve this evident energy transformation, it needs to be conceptualized, validated, and then delivered. Any change of this magnitude requires sustained consistent investment over the thirty-odd years to 2050 and even increased where the present-day energy infrastructure is so out of data, it will require radical redesign and an even more significant capital commitment.

Any undertaking like a complete transformation of the worlds energy system will require significantly increased collaborations between public and private investments, institutions and researchers, but a growing recognition from the public that this ‘sense of united commitment’ is essential to provide us a more sustainable planet. Sadly that “compelling story” is yet to be articulated, it is far too fragmented today to galvanize the level of change understanding.

Articulating the real need for energy (consumption) change is critical

The concern becomes, will it be continued “crisis” that brings us to a united understanding of the need to radically change? Today we are still caught up in the extremes of denial or over-hype. The longer we “fiddle,” the harder this transformation will become to manage our growing needs of more energy, from an increasing world population and maintaining aging infrastructure, still reliant on very outdated central energy grid models and only fossil fuel solutions.

All of this ambition to change the energy system needs a radical approach, lots of fresh thinking, and that underlying coordinated action for all involved to undertake such a journey. The question is, will we?

Innovation has to be applied not just to resolving the physical integration and operation of the energy system to change from established sources of energy supply (oil, gas, coal) but to find imaginative solutions to a more variable renewable energy (VRE) solutions. Critically it has to be applied to solutions for much of our industrial process and within the transport systems.

In the industry sector, particularly cement, iron and steel, and chemicals account for 17% of our worlds current carbon dioxide emissions. In freight and aviation, they account for 11% of global CO2 emissions,. Our future energy solutions need to convince stakeholders that switching energy sources, over to electricity reliance, can be managed in economical ways with many of the innovative solutions on offer today, or in the innovation development pipeline, can offer a sound business case.

The societal inhibitor is a real impediment.

Technology-centric innovation can make a difference, but in this case of the Energy Transition, in the end, it is Society that has to demand it. At present there is indifference. They still have not been presented with the compelling case for change. Is it when we have more floods, power outages, hurricanes, power and water shortages that we will  finally get it?

To galvanize governments, investors, private organization, and institutions, we need to create these needs of change to become part of the dialogue we need in our fabric of society today, we need to raise global consciousness. To achieve a transformation where we are aiming for a zero-carbon outcome in thirty years is unparallel in ambition.

To undertake this energy transition is as tricky as any global initiative we have taken on before. Our institutions need to be galvanized, not by the voices of science or technology, or by individual governments or private organizations they need the “United voice of all nations through its people.”

A united voice where people demand change and demand Governments construct the new world order, to integrate, coordinate the full gambit of interventions in economic, political, technological and social systems to make this energy value chain realizable as a significant part of reducing the climate crisis of depleting resources, warming temperatures and natural disasters, caused mainly by carbonizing our world. Can we find this voice?

Managing the Energy Transition is of Real Complexity

To say this energy transition is complex is an understatement, as any pace of transformation requires real sustaining commitment, significant resources, and abundant capital, along with the urgency of deployment to rapidly switch to renewables for our energy sources.

The emerging new technologies in grid management, local and grid-scale energy storage, distributed systems, the application of mini-grids, the digitalization of energy services, energy generation, etc., are all deployed today but at variable speed and in very ad hoc fashion. We do need to formulate more detailed roadmaps for the energy transition in a highly coordinated way as part of this change. Equally, to get to more and faster deployment, we need both technological and systemic innovation to be vigorously applied.

Are we going to bring together multiple parties on multiple fronts at the speed and scale and investments we require? It is hard to imagine but essential to achieve

Where innovation fits within the energy transition story, it becomes the accelerant of change:

As you get into the complexity of this energy transition, you realize the difficulties. Innovation will be the key driver; it needs the following:

1). Deliver technology breakthroughs that provide renewable solutions to offer cost-effective alternatives to conventional energy technology,

2) technology innovation that improves the existing renewable technologies to reduce current cost and achieve more significant deployment,

3) new business models that allow new investors to be attracted to the energy system,

4) exploring new concepts that promote scale-up of renewable technologies,

5) supports new financing models and justification and validation for fresh capital investments,

6) enabling policies and regulatory changes to offer change incentives for different market access,

7) contribute substantially to fresh market designs and concepts,

8) encourage and provide opportunities for new energy system operators to undertake part of the transformations needed.

If ever I see a need for a shift it towards a clear innovation paradigm, it is in this energy transition we need to accelerate, support, and deliver.

Our world is becoming highly vulnerable to not being able to reverse the climate conditions of a warming planet; it does need to urgently reduce its dependency on fossil fuels, invest in a massive change in renewables and an energy system that can change and be sustainable.

The world needs to build further on its initial global commitment; this time it is driven by societies recognition that we need to change our models of power supply, transportation, industry and building reliance from fossil dependency to renewables. It is galvanizing the innovation system to provide the transformation enablers as crucial to this. It is offering new opportunities for prosperity, growth, society, and economic gain.

To conclude, I read a comment within my researches from the EIT Climate Knowledge and Innovation Community (EIT Climate-KIC) that stated any transition needs to be 1) Mission-led, 2) Portfolio-based and 3) Community-delivered. We need all three fully connected up and well-identified and being well supported.

I will be taking the energy transition story further in future posts

The emphasis within future posts will be more focused on discussing where innovation will play a vital role in this transition undertaken.

In this opening post, I wanted to provide a short opener to a complex subject. I hope it does offer enough of an overview of the global energy transition we are presently undertaking. In future posts, I plan to get down and into the weeds of energy transformation a little more, showing where innovation is contributing.

The energy transition is so essential, but within the world of innovators, it offers such a compelling story of how innovation can make such a contribution and be the catalyst of change needed.

Energy transition and innovations contribution, on this global scale, is as powerful a demonstration of the actual value and contribution that innovation does bring; it needs highlighting and drawing out.

**Disclosure: Part of my work in research and advising in the energy transition is due to being involved in the #SiemensInfluencer community or #SIEx. I want to emphasis the opinions and views expressed here are my own and do not reflect those of Siemens.

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