Building the future of energy from the bottom up

By Thomas Birr, CEO innogy Innovation Hub

2019 promises to be a hugely exciting and important year for the future of energy. As my colleagues from around the Innovation Hub highlighted in a recent article, there are myriad new and emerging technologies that have the potential to revolutionise the production, distribution, consumption, trading and storage of energy that we believe could breakthrough in the next 12-24 months.

Whether it’s the blockchain-based technologies that could manage distribution and transactions in a decentralised energy ecosystem, the combination of enhanced data analytics and artificial intelligence that will drive automation and optimisation across the entire energy system, or cyber security solutions that will safeguard a decentralised and digitised grid, the building blocks of the future energy system are being laid right now.

And it’s not a moment too soon. At December’s COP24 UN Climate Conference in Poland, the delegates tentatively welcomed an Intergovernmental Panel on Climate Change (IPCC) special report that warned global warming should be capped at no more than 1.5°C of pre-industrial levels – a further 25% reduction in emissions targets which were already considered to be extremely demanding.

Incremental change isn’t going to be enough to meet these targets. It will be too slow and timid. Instead we need to embrace revolutionary change in every aspect of our lives.

So what are the key challenges that still need to be addressed?

The tone of the conversation around the energy transition. Everybody will have to see change in the way they live and work but creating a low carbon future doesn’t need to be an inconvenience that requires everyone to make sacrifices. It can deliver huge benefits that make our lives better, easier, healthier and happier: greater energy autonomy, reduced energy bills, better designed buildings and less pollution are just some of the immediate benefits.

Social challenges. The real challenge, especially in the developed countries, is how to manage the social aspects of the transformation. Even in saturated, “Western” democratic societies, the ambitious transformation will fail if the notion of “winners and losers” is allowed to grow unchallenged.

Coal miners being earmarked as the “left-behinds”, a silent majority of “non-digitals” who bite back every 4-5 years when asked for their votes, the rise of autocratic tendencies and anti-globalisation in Western countries, the mindset of “country first” are all a serious threat to the sustainable transformation of the world and its energy systems. This can be substantially mitigated if we see the transition as a holistic plan. But that requires radical thinking and it needs to start right now.

Rethinking energy. While the change needed to meet carbon emissions targets will be far-reaching and radical it will also bring new opportunity, freedom and long-term reduced energy cost. A fully renewable-based energy world looks entirely different to the world today and ultimately we’re headed towards a “zero-cost” pricing world for power. Ensuring the right electron is delivered at the right place at the right time is the service that will constitute future business models for energy companies.

Central power generation and top down distribution will become a thing of the past with the energy world of the future a neuronal system of decentralised producers and consumers. These networks will not be manageable by human brains, they will need to employ Artificial Intelligence to stay on.

Which brings us back to the earlier point about the social challenges inherent in the transition to a “zero-cost energy economy”. It is irrevocably tied to wider arguments around the shift into the fourth industrial revolution where new jobs will be created, and humans and AI and robotic workforces will co-operate together.

Powering emerging markets. In developing countries, where around two billion people still lack access to reliable and affordable power, the challenge -- and the opportunity -- is to manage the leapfrog into the future without going through the phase of a landline-based, fossil powered economy. Take, for example, SOLshare, which has successfully introduced the world’s first peer-to-peer electricity network for households in a rural area of Bangladesh. By combining solar home systems and centralised mini-grids, SOLshare has so far brought affordable solar electricity to more than 15,000 people that would otherwise be reliant on kerosene powered lamps and diesel generators.

To drive this change, investors, businesses, governments, universities and individual consumers will need to collaborate. The biggest, craziest, most exciting ideas need to be given airtime and oxygen. We need to find new ways to finance and mentor the visionary thinkers and we need to help them meet similar creative geniuses so they can make connections and think even bigger.

Energy policy makers and board room strategists tend to write “their” history backwards: They define where they want to be in, e.g. 2050. Then, they re-iterate the necessary steps backwards to decide exactly what to do next. Quite often, they hit the wall of reality by doing so.

The problem is this process ignores the power of bottom-up-movements, swarm-behaviour and the intelligence of the crowd.

Driving change that delivers disruptive thinking to create the energy system of the future is what the innogy Innovation Hub has been created to deliver, but we need to do more. The innogy Innovation Hub is but one organisation, we need thousands of funders, collaborators and enablers to bring millions of brilliant ideas to fruition. We need more radicals.

Meeting a 1.5°C global warming target demands business, finance and consumers pick up the reigns and drive forward to create a bold new future. The prize for success is enormous, the penalty of failure could be far greater.

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A fuller version of this article, titled: “Creating a world of 1.5 degree global warming needs radical solutions, but the focus should be on ‘gain’ not ‘pain’”, was published by Business Green on 6th December. To read it, visit businessgreen.com (subscription required).

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