The Energy Transition – think deep and wide

The Energy Transition (ET) started at the dawn of time, and is revealed to us through the evolution of nature. Our current human-induced move to a low-carbon energy system on planet earth, this pale blue dot, is a tiny part in the overall picture.

From this unique vantage point, various perspectives on the ET are imaginable, depending on a range of factors (for example, the time span studied, the geographical area included, and the range of sectors under scrutiny). In practice, we ‘slice and dice’ the ET in ways designed to give insight. Therein lies a danger. Analyses of the ET can veer off track, with participants assuming their chosen angle of vision is the only one that matters. At best, this is unintentionally myopic; at worst, deliberately blind.

Any partial analysis of the ET comes with a further risk - a failure to appreciate its constant movement within a complex and evolving earth system.  This flux may lead to sudden, unanticipated changes, often driven by invisible network effects. In other words, the ET embeds emergent risk, in potentially non-linear and disruptive ways. This is a system feature, not scare-mongering. With a now-febrile earth, the precautionary principle has much to recommend it. For now, humanity has nowhere else to go, because we live on “the only home we’ve ever known”, as Carl Sagan put it. That is the context.

From the standpoint of the UK today, with its legally-enshrined objective to decarbonise its domestic energy system by 2050, the main hurdles arguably come from domestic rather than international volatility. It is true that gas market turbulence on the back of the war in Ukraine creates short-term challenges, as the world energy map and supply chains are redrawn, and we resort to old technologies including coal to ‘muddle through’. However, in the context of net zero by 2050, the net result of this short-term disruption is likely that decarbonisation will be accelerated.

Conversely, domestic issues continue to threaten progress, with many 'how' questions only partially answered, now the focus of the government’s Powering Up Britain agenda. How can we improve the planning process, universally acknowledged as antiquated? How can we ensure funding for emergent and innovative technologies, including efficiency and micro-grid solutions, not just for established technologies? How might we serve consumers in better ways than allowing a set of suppliers to go bust? Perhaps most importantly, how do we develop our existing institutions, both market and non-market, to rise to the enormous investment challenge ahead.

The most important point in answering these questions is to ensure we take an integrated system view, rather than a partial one. Too often UK policy has failed to see the connecting chains within the full energy network, with the solution to one problem merely leading to another unforeseen issue. We need to think deeply and widely, inevitably leading us to longer-term perspectives beyond the UK’s shores.

Thinking more broadly in time (beyond 2050) and space (globally), the real challenges around the ET look very different. The reality is a growing global population that will rely on fossil-fuels for years to come in many countries. A corollary is that the ‘traditional’ energy industry is intricately tied to the ET. At one end of the spectrum, we need to accelerate renewable energy; at the other, we need solutions to things like methane leakage and carbon capture. It is not an easy ‘ask’.

There is going to be an indispensable need for technology sharing in this process, a massive requirement for new pools of capital, and major financial transfers to the developing world. The uncomfortable truth is that sustainable solutions to global problems, including climate change, are impossible to imagine without a clear acknowledgement that world economic inequality and distribution issues, together with a chain of related biodiversity stresses, are at the very heart of the matter.

There is nothing wrong, per se, in the UK seeking to take a global lead on climate change. However, policy needs to be properly contextualised, driven by a broad perspective. If not, we are almost certainly on a path to greater environmental woes, not net zero.  To quote Sagan again, “this earth is where we make our stand”. It is up to us as global citizens to rise to the “ask”, to carry on calmly, but with our eyes wide open.