Editor Karel Beckman has had enough of gloomy conferences full of complaining people. He calls on the energy industry to throw away those spreadsheets and look at what is happening in the real world. The future is not in your Power Points – it’s in your hands!
Photo: Covenant of Mayors
Walk into any European energy conference these days and you encounter solid waves of sombreness. Serious speakers stand by with stern slides that almost seem to collapse under the weight of all the troubles facing gas and power companies in Europe. I won’t go through the list. You all know it by heart.
What you also encounter is a lot of wishful thinking. “The energy system is so big, it may change but it won’t really change a whole lot.” “Fossil fuels will continue to dominate bla bla bla.” “Centralised electricity production is more efficient, rational, cost-effective, etc. etc., than decentralised.”
And lots of complaints of course. Renewables are oversubsidized, the Energiewende is outrageously expensive, energy policies are fickle and contradictory, and so on, and so on forth.
Yes, there is a lot of truth to these claims and yes, there are plenty of grounds for complaints. I don’t deny it. Then again, the defenders of the Ancien Régime no doubt had some good arguments on their side and reasons to complain. And the French Revolution no doubt turned out to be a mixed blessing. But it did happen.
Come on, people – the times they are a-changing! The Energiewende is marching on. Brussels is marching on with its energy and climate policies. Next week will be EU Sustainable Energy Week in the European capital. For five days Brussels will be the scene of endless conferences, presentations, events, demonstrations all singing the praises of “the energy transition” in its countless manifestations. Make no mistake: there’s a battle outside, it is raging …
Guess who’ll be addressing the Covenant of Mayors? Arnold Schwarzenegger!
Of course Brussels is known for all talk and no action, but there is also the Covenant of Mayors: local and regional authorities in Europe who have gotten together and pledged to increase energy efficiency and use of renewable energy sources on their territories. This Covenant has now been signed by over 4500 local authorities in Europe – from Newcastle Upon Tyne in England to Tirana in Albania. On Monday the 24th of June they will gather again in Brussels, and guess who will be addressing them? Arnold Schwarzenegger! And he is not known for all talk and no action.
Speaking about the US, if you look behind the shale gas and shale oil headlines, what you see is an impressively broad movement of entrepreneurs, investors, researchers, technicians, policymakers and individual citizens busy shaping a new energy future. Remember – the American revolution came before the French revolution – and, in my view, it had much more beneficial effects.
Google, to mention a not-so-random example, has invested $1 billion in wind and solar projects globally over the last few years. Recently it acquired Makani Power, a company that is developing flying wind turbines which supposedly be able to produce power at $0.05 per kWh. Sounds crazy? It probably is. But you never know. Wal-Mart, to mention another not-so-random example, is now the largest off-grid clean energy generator in the US. Many other US corporations are following in these footsteps.
There is also a concerted effort going on in the US and worldwide, by the likes of MIT and the US Armed Forces, to capture the Holy Grail of efficient energy storage. Think they won’t succeed? Don’t be too sure. Last month a 12th grade high school student in California, a girl named Esha Khare, won one of the top prizes at the Intel International Science and Engineering Fair. She invented a “supercapacitor” that charges electronic devices in just 20 seconds. Why she did it? Because she was annoyed that it took so long to charge her mobile phone. Khare, who will be going on to Harvard and says she wants to “set the world on fire”, thinks her invention can be used to charge electric cars, too, in the future.
“The power industry is on the verge of a set of changes that are greater than anything that has taken place for the last century.”
Meanwhile, researchers at the University of Wisconsin have developed a design for solar panels that makes panels not only generate power but also enables them to store power for later use. The researchers say the device scales up easily, so would be ideal for micro-grids – which are an interesting development by themselves). Go on the internet and you will find plenty of examples like these.
Dare I say that policymakers are not far behind? At the initiative of Germany, on 1 June a Renewables Club was formed by ten countries: China, Denmark, France, Germany, India, Morocco, South Africa, Tonga, United Arab Emirates and the UK. Their goal is to scale up the deployment of renenewable energy worldwide. A somewhat superfluous initiative perhaps, in view of the fact that we already have Irena (the International Renewable Energy Agency) and that Irena is part of the Renewables Club, but hey, there you go. Incidentally, China turns out to have invested heavily not only in renewable energy at home. It has also put $40 billion into renewable energy projects worldwide in recent years, according the World Resources Institute.
Yes, I know, I know – the energy system is huge and $40 billion is a drop in the ocean. But here is what advocates of centralised production fail to understand: distributed production can also become very very large very quickly. No single company or country is going to make a difference no matter how much they invest in renewable energy. But if a couple of billion people do it, things will look very different.
I have been reading the Rational Optimist, a great book in which author Matt Ridley brilliantly describes “how prosperity evolves”. If you are of a pessimistic bent, do yourself a favour and get a copy to read on the beach this summer (or watch his Ted Talk: “When ideas have sex”). It will cheer you up. Ridley’s point in a nutshell is that what has made human beings unique is the fact that at one time they started to specialise and trade with each other. This is not a new idea, but it is still not widely grasped. One of its implications is that the larger the number of people that participate in this division of labour and mutually beneficial trade, the greater humanity’s productive capacities become. Today, almost the entire global population participates – from 18-year old girls in California to Dutch engineers who make machines that use ultrafast, spatial atomic layer deposition equipment that can be used to make ultrathin passivation layers for solar cells.
So what is one to do in this ever-changing world? If I were a European electricity or gas company, I’d take a look around and see what wonderful opportunities there could be in it for me. How about pushing electric cars for all one is worth? Developing micro-grids? Providing energy efficiency solutions to customers?
“Innovation is now central to fundamental shifts in power sector value creation”
Of course many of the incumbent energy companies are doing just that – or they are starting to anyway, even if it is still largely “behind closed doors”, as US energy analyst Chris Nelder reveals in this article. (Check out Chris on Twitter, he’s good!) Recently in San Antonio, Texas, the second in a series of invitation-only, closed-door regional forums was held in which “utilities, regulators, and ‘advanced energy’ businesses came together for frank discussions on how to adopt new grid technologies and services more rapidly.”
According to Chris, this “Advanced Energy Executive Forum series”, as it is called, was conceived last year by Hemant Taneja, who co-founded Advanced Energy Economy (AEE) along with California billionaire hedge fund manager and clean energy activist Tom Steyer, and Dr. Richard Lester of MIT’s Industrial Performance Center. They hope that the discussions “will lead to an action plan to remove the structural, financial, regulatory, and cultural obstacles that stand between us and AEE’s vision for a prosperous world that runs on secure, clean and affordable power’.”
The first of the series was held at MIT in March and included top executives from PSEG Energy Holdings, Northeast Utilities, CPS Energy, NRG Energy, NextEra Energy Resources, CLEAResult, EnerNOC, Gridco Systems, SustainX, Viridity Energy, and California ISO. The second was hosted by the San Antonio-based utility CPS Energy, a company that has 54 MW of solar power operational (both rooftop and utility scale solar PV) and plans to add 400 MW more over the next decade. CPS Energy also “offers rebates for energy efficiency upgrades, free weatherization for low-income households, and demand response services.”
At the San Antonio meeting, Richard Lester of MIT said “it’s important to recognize that the power industry is on the verge of a set of changes that are greater than anything that has taken place for the last century.” He also said that “some of the most interesting and exciting activities are happening in Texas”. Yeah, that’s right: roll over, J.R.
So how about Europe? Well, it surely is a positive sign of the times that Eurelectric, the European electricity industry body, in April came out with an Innovation Action Plan that describes European electricity companies as “powerhouses of innovation”. These companies seem to have finally come around to the realisation that innovation is the key to their future, if not their survival. “From a relatively peripheral phenomenon, innovation is now central to fundamental shifts in power sector value creation”, says the report, which, incidentally, notes that already more than 3 million Europeans have started generating their own electricity.
Unfortunately, Eurelectric has not shed all the industry’s old reflexes, as it cannot resist the temptation to end its report with a set of must-do’s for policymakers. “Adopt a systems approach!” “Unlock downstream innovation!” “Create supportive governance for the innovation union”. Or else!?
Or else nothing! The companies still don’t seem to grasp fully that it’s their life on the line.
It reminds me of the story of a dog who was afraid to drink because he saw his reflection in the water and thought it was another dog. He yelped for a long time, until he became so thirsty that he jumped in the water. Then he was finally able to quench his thirst.
Don’t get me wrong. I am not trying to pick winners here. I don’t know if our future will be centralised or decentralised, fossil or renewable, or none of the above. All I am suggesting is that the future is not in your Power Points. It’s in your hands.