future of energy - insights from discussions building on an initial perspective by jeremy bentham,...
TRANSCRIPT
The Future of Energy Insights from Discussions Building on an Ini4al Perspec4ve by: Jeremy Bentham | Vice President Global Business Environment | Shell
Context The ini4al perspec4ve on the Future of Energy kicked off the
Future Agenda 2.0 global discussions taking place through 2015. This summary builds on the ini4al view and is updated as we progress.
Ini4al Perspec4ves Q4 2014
Global Discussions Q1/2 2015
Insight Synthesis Q3 2015
Sharing Output Q4 2015
Inevitable Transi8on The energy system is at the beginning of an inevitable transi4on,
with increasing contribu4ons from renewable energy, energy efficiency and sustainable development.
Popula8on and Climate The two fundamental and strongest influences behind the energy system transi4on is an increasingly prosperous and growing popula4on, and concerns about climate change.
Transi8on or Delay? The debate is polarized on many fronts, for example between the
governments of advanced and emerging economies. This delays meaningful ac4on at scale, and in the mean4me the stresses con4nue to mount.
Fuelling Prosperity The benefits of energy cannot be forgoXen. It is one of the enablers of our prosperity and wellbeing, and you cannot have a func4oning, produc4ve, efficient, modern economy without reliable energy.
Less Carbon -‐ More Energy The climate change debate is serious but needs to be broader,
focused not solely on reducing CO2 emissions, but on developing a low carbon, high-‐energy future to ensure prosperity for all.
Collabora8on and Trade-‐Offs To bring about a shi[ and to broaden the frame of discussion, pragma4c collabora4on is needed, between government,
society and industry at an unprecedented scale.
Extended Period of Transi8on An extended period of co-‐evolu4on and co-‐existence of
renewables and fossil fuels is likely as new energy infrastructures supplement or supplant old.
Modera8ng Expecta8ons We need to moderate our expecta4ons of a wholly renewable energy
future in the near term with the understanding that there are significant technological and economic obstacles.
Urbanisa8on Urbanisa4on can bring many benefits, but if managed poorly can cause greater environmental degrada4on
and accelerate global warming.
Serious Change Required Serious aXen4on, op4mism and swi[ collabora4ve ac4on is
needed to achieve the change needed to happen on many fronts, from the energy supply mix to energy demand management
A ShiJ from Unexpected Players Agreement between China and the US is a tes4mony for unexpected ac4ons by powerful players. To bring about the 4pping point for a low carbon future, greater, bold collabora4on at scale is needed.
Transi8on From Natural Gas to Renewables Increasing investment on renewables, improving technology, falling prices and growing awareness all support transi4on to a low carbon future, but a clear exit strategy is needed for natural gas as a transi4on fuel to renewables.
Storage is Promising and Game-‐changing There is a lot of emphasis on the development of storage technologies. Besides solving the problem of power intermiXency from renewables, energy storage offers poten4al for the development of a whole new mobile energy system.
Energy Efficiency – The Invisible Fuel The cheapest and cleanest form of energy is the energy we don’t use. Adop4on of effec4ve energy efficiency measures and careful management of energy demand will play a key role in crea4ng a clean, low cost energy future.
Leapfrogging to a Low Carbon Future Driven by technological improvements in the low carbon energy sector, developing countries can leapfrog their way into lower carbon economies
without passing through an intense fossil fuels phase.
Rise of the Micro-‐Actors We can see a blurring of energy consumers and producers – to ‘prosumers’
who do both. Hence a move to mul4ple micro-‐actors working individually and collec4vely -‐ supported by new technological developments, including storage.
Hydro Revival In response to rising CO2 and pollu4on as well as associated health
concerns, China will con4nue to influence the funding and willingness to build large-‐scale hydro solu4ons, especially in the developing world.
Demand-‐Driven Energy The energy system will become more demand-‐driven than supply-‐led as
more distributed genera4on and renewables are included onto the system. End-‐user behaviour will also change as beXer technology becomes available.
BeRer Storage Improvements in baXery and hydrogen energy storage make renewable energy more reliable and so accelerate electric vehicle growth and support greater distributed genera4on. This has the poten4al to enable a behaviour change.
Solar Houses A solar cost and performance revolu4on will reshape residen4al energy
provision and, coupled with beXer baXeries, storage and online connec4vity, will thus transform the wider electricity system.
Conscious Users Domes4c energy use paXerns change as a result of rising social awareness of limited resources and beXer informa4on -‐ enabled by technologies such as
smart metering, smart household appliances and new monitoring capabili4es.
Nuclear Skills Shortage Many countries lack the skills and training to maintain sufficient numbers of qualified nuclear engineers needed for renova4ng and building plants – and hence they can’t take advantage of the opportuni4es that nuclear offers.
Conscious Stewards We are more aware of the consequences of our ac4ons: There is a sense of stewardship of the world -‐ not only in how we manage our home, but also in how we live in our ecosystem. We start to behave as conscious stewards.
Smarter Consump8on Much technology for energy efficiency is proven and implementable today. In the future governments will first focus on gedng the basics of demand side right -‐ by reducing consump4on before inves4ng heavily in renewable energy.
Millennial Managers As more digital-‐na4ve Millennials take the lead they bring different
perspec4ves, experiences and expecta4ons about societal challenges and the role of organisa4ons. This drives a shi[ towards a deeper sense of purpose.
Business Response to Resource Risks To prevent the exploita4on of global regulatory arbitrage, we work
out how to more effec4vely govern the global footprint to create a level playing field: Business and government develop new models to manage risk.
Incumbent Blockers Several large, well-‐established organisa4ons con4nue to seek to prevent
change by arguing for short-‐term incremental shi[s rather than wider, more collabora4ve system-‐based change that may benefit society in the long-‐term.
No Nukes to Go Nukes More see nuclear energy as a significant piece of the future energy mix -‐ driven
by collec4ve inac4on on the need to transi4on away from fossil fuels. But many are unprepared with regard to skills, policy and public debate.
Infrastructure for the Future? We will see a transi4on from aged to new infrastructures designed to manage and distribute energy from diverse sources of power genera4on. A ques4on is
whether this will leave a new legacy problem for the next genera4on.
Let Them Eat Cake The short-‐term impacts of climate change dispropor4onately affect the world’s poor. This delays strong ac4on as, collec4vely, many socie4es simply don't (yet) care enough about them to drive changes in the global energy system.
New Hazards, New Protocols Regulatory frameworks and standards evolve to address new kinds of energy hazard that are emerging from the adop4on of technologies such as residen4al
baXeries for energy storage and localised, power genera4on schemes.
Planetary Nexuses More eco-‐friendly opportuni4es, and trade-‐offs, on energy supply and use emerge from considering the nexuses of core resources such as
food, water, energy and land with a growing popula4on.
Water
Food
Land
Energy
People Power Public demand and pressure for different solu4ons drive a more technocra4c energy environment resul4ng in more holis4c policies that integrate the needs
of different stakeholders and manage resources more effec4vely.
Policy Beats Poli8cs Increased public pressure stems from greater awareness of more stringent
emission reduc4on targets in some countries. This starts to influence poli4cal will in others na4ons and so helps to shi[ policy globally.
Transi8on or Disrup8on We will see significant change in the energy system over the next decade. But, we are unsure if it will be navigated in ways that minimize impact on
society, or whether we will experience a series of disrup4ons to respond to.
Technology Shaping the Market The cost compe44veness of new technologies leads to the development of
new policies and business models that enable the accelera4on of renewables, growth in distributed genera4on and a shi[ to a lower carbon energy mix.
Changing Energy Risk Profile The impact of natural disasters, wider acceptance of the need to avoid a
warmer world and increased risk of cyber-‐crime to our infrastructure all lead to a deeper understanding of the risk profile of different energy solu4ons.
Unclear Analy8cal Models Current analy4cal models may not handle disrup4ve elements entering the energy sector -‐ and so may provide results that do not fully reflect poten4al shi[s in the speed of change and impacts of disrup4ons and discon4nui4es.
ShiJ in The Investment Landscape As renewable / storage technologies become cost compe44ve we may see a shi[ in investment sen4ment towards cleaner energy solu4ons based more on
poten4al financial returns rather than on the carbon vs. climate debate.
Integra8on vs. Fragmenta8on While the EU 2030 framework is designed to lead to an energy system that is more compe44ve, secure and sustainable, there are also driving forces
that might lead to a more fragmented, distributed energy system.
Closing the Narra8ve Gap We focus on sharing a clear, compelling narra4ve that engages different
audiences, helps to improve energy literacy and builds the case for change. This may lead to beXer policy decisions and shi[s in consumer behaviour.
Air Quality As more experience asthma and other breathing difficul4es, urban air quality becomes a visible issue and a major catalyst for change
– in transport policy, in energy source and in city design.
Last Mile Grid Connec8vity Private / public collabora4ons give another 100m people in India access to electricity via connec4on to the grid -‐ but 250m people con4nue to use wood, diesel and kerosene to cook and light their homes.
Mass Engagement As the pressures of higher energy costs, the impacts of climate change and the need for universal access combine, shi[s in behaviour and investment are driven by wider public awareness of energy issues.
Distributed Energy Supply Key developing economies invest heavily in lower-‐carbon, distributed
energy with integrated storage to deliver more reliable and affordable power. This is supported by beXer market pricing and smarter subsidies.
Declining Energy Intensity As major growth regions invest in lower-‐carbon supply op4ons and priori4se energy efficiency, we see an associated decline in energy intensity in the economy – achieving reduc4ons of up to 10% over the next decade.
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