Are we learning enough about energy transitions as we head to COP-27?
By Dr Angela Wilkinson, Secretary General and CEO, World Energy Council
Credit: Image by Felipe from Pixabay
Travelling around the world - physically and virtually - to discuss energy challenges and changes, is a huge privilege. This year's climate summit will be a key milestone for multi-stakeholder actions and partnerships as Governments and societies everywhere face up to the tough choices that are inherent in accelerating the pace of decarbonisation without destabilising societies.
This year, a perfect storm – underinvestment, weather, war – erupted into multiple gas and electricity crisis and triggered the first demand driven global energy shock. Even as energy crises impact unevenly across Europe, the root causes and impacts spread further.
Sentiment keeps shifting and regional perspectives matter
In April, our World Energy Pulse Survey indicated greater confidence about reconnecting the energy- and climate- security agenda to increase the pace of decarbonisation.
By August, cost-of-living crises were looming. Leaders were more pessimistic, more expected a slowdown in energy transition, as governments intervened with pain relief price caps and reverted to local solutions to secure supply. There has been an increase in global coal consumption and the burning of firewood. Millions more people lack affordable access to clean energy across developed, emerging and developing economies.
As expected, regional perspectives reveal differences as well as commonalities.
In common, leadership attention has been redirected to managing energy security AND affordability AND sustainability. What we would term the return of the World Energy Trilemma framework.
Regions, however, have different trilemma priorities. Security is top in the EU. In North America and the Middle East and Gulf States, affordability and sustainability are unleashing big mover competitions e.g. clean hydrogen-based fuels to secure a share of the emerging global clean energy market - expected to be $23 trillion by 2030 and $250 trillion by 2050. Security and affordability are the biggest concerns in Asia and Africa, when many countries are increasingly reliant on oil, coal and firewood even as they increase the share of renewable electrification in the overall mix.
The outlook is for a bumpier road ahead, with the risk of detours and U-turns
An oil crisis cannot be ruled out if new investment isn’t made, despite action by OPEC+ to calm price volatility and stabilise the market. The risk of a solar energy supply chain crisis, cascading out of China, is also keeping many leaders awake.
The energy leadership landscape is more fragmented, competitive and conflicted. Solidarity in EU is maintained - and strained - by diverse national interest. The increase in geopolitical tensions increases the risk of economic contraction and dislocations in global and regional energy markets.
Mother Nature, immune to the human politics, is turning toxic, as climate change momentum, waste volumes and pollution loads increase.
Sustainability, like energy, is not a single-issue agenda and cannot be effectively managed using a single metric. Energy transition is not about good vs. bad technologies or money, it’s about all of us!
Never waste a crisis - 10 lessons from 100 years of energy transitions and recent crisis
At COP-27 I will be sharing and building on the lessons to be drawn from the history of the world energy community over the last 100 years.
- Energy is a system – it can’t be reduced to a single metric. We are rethinking security and resilience. Covid-19 extended resilience beyond physical assets to people and communities. We are working on new action metrics for productive access and justice. Can you help?
- Energy transition is a process – avoid ideological ‘either/or’ choices and develop win-win-win options which are more secure AND affordable AND sustainable. We don’t just talk about energy trilemmas, we use the World Energy Trilemma framework to measure performance! How are you addressing transparency challenges?
- Diversity in energy is increasing in the broadest sense – there is no one-size-fits all. We support diverse regions and communities to lead with and learn from each other to avoid wasting time and reinventing policy wheels. How are you engaging with diversity?
- Renewables need other clean energy friends to get to scale. We encourage societies to use all available policy levers – there is no silver or green technology bullet and premature policy prescriptions are unaffordable. Are you interested in maximising energy and minimising emissions?
- The future of energy is going to be more demanding – We work on demand-driven solutions by involving the new and increasing diversity of energy uses and users! Can you help us develop digital user data platforms?
- Energy transition is currently more of a societal transformation than technological innovation challenge. We are addressing a big blind-spot in implementation, the lack of practical know-how for managing 100s of 1000s of diverse, place-based clean and just energy transitions. Do you have an example of best practice to share?
- Context matters in redesigning markets - Markets have not failed. We need new market designs. We are convening constructive leadership dialogues on reconnecting price, system costs and affordability. Join us and let’s showcase progress on clean and just energy transitions at the 26th World Energy Congress, Redesigning Energy for People and Planet, in Rotterdam, 4-7th December 2023.
- The future of energy cannot be predicted - but a better energy future can be cocreated - We work with principles of realistic hope and involve more people and diverse communities in progressing transformational transitions. We are aiming for a global step-change in energy literacy by 2030!
- We need a new approach to energy policy – energy transition does not happen in a vacuum and interacts with industrial-, demographic- and agricultural transitions. We are working a more systemic approach to energy policy.
- Be humble – We should also expand our horizon to more recent crises – the Global Financial Crisis of 2008, Covid-19 - and include learning with failure from previous and ongoing energy transitions.
What would you include in your top-10 list?