Many Green Swans will be electrified
Electricity will be the defining power source in tomorrow’s economies, degenerative or regenerative, used to power everything from homes to heavy industry.
The twin processes of electrifying everything and decarbonizing electricity are already well under way. And even those long associated with the fossil fuels world, like the International Energy Agency, are insisting that these processes need to accelerate radically, but doing less harm is not the same as doing no harm, let alone a regenerative system creating economic, social and environmental benefits simultaneously.
WHAT DOES THIS MEAN IN PRACTICE?
Volans is working with the Edison Electric Institute to explore the role of electricity in the Regenerative Economy.
Among the questions we are asking EEI member companies: How does power generation shift from degenerative to regenerative technologies and business models?
HOW DOES OUR ENERGY FUTURE LOOK THROUGH THE BLACK SWAN LENS?
Today, the world lacks safe, low-carbon, and cheap energy alternatives to fossil fuels at sufficient scale.
“Until we scale up those alternatives the world will continue to face the two energy problems of today. The energy problem that receives most attention is the link between energy access and greenhouse gas emissions. But the world has another global energy problem that is just as big: hundreds of millions of people lack access to sufficient energy entirely, with terrible consequences to themselves and the environment.” Oxford Martin School,
The production of energy accounts for some 87% of global greenhouse gas emissions. Energy consumption is historically closely linked to economic development, so it is not a straightforward issue.
The scale of the challenge is illustrated by the World Resources Institute diagram below, showing how much faster we need to go if we are to have any chance of achieving our 1.5 degree climate target.
It’s no accident that four out of the six focus areas relate to the production or consumption of electricity.
Source: WRI
HOW DOES OUR ENERGY FUTURE LOOK THROUGH THE GREEN SWAN LENS?
Few sectors seem quite as well placed for the Regenerative Economy – some in the industry must be pinching themselves to see if they’re dreaming. But the sector also needs to transform itself – or be transformed – if its potential is to be realized.
INVESTORS AND FINANCIAL MARKETS
Two things are clear: first, financial markets will become increasingly concerned about the looming “carbon crunch“; and, second, technology alone will not be enough to drive the necessary transitions – we also will need to redesign energy markets
RethinkX has tracked positive developments in the sector. From the summary of their recent energy report:
Just as computers and the Internet slashed the marginal cost of information and opened the door to hundreds of new business models that collectively have had a transformative impact upon the global economy, so too will SWB slash the marginal cost of electricity and create a plethora of opportunities for innovation and entrepreneurship. What happened in the world of bits is now poised to happen in the world of electrons.
Initial Ugly Duckling scan:
ClientEarth: High impact NGOs and activist organizations are making fossil fuel-based power generation untenable in some parts of the world. Volans hosted a recent discussion with ClientEarth CEO James Thornton to explore the implications.
Dual land-use: There is a growing possibility that energy and food production could combine in new ways, by sharing land.
Surge Pricing: The continuing penetration of surge pricing into the energy sector.
RE100, linking over 300 business committed to buying 100% electricity renewable energy
Commercial EVs: Some of the biggest pollution footprints are linked to commercial trucks and vans, particularly in cities. Hence the importance of the emergence of sizeable sector insurgents, including Arrival.
The SWB meme, promoted by RethinkX in its recent energy report – and powerfully illustrated by the cost curves developed by the likes of Ramez Naam.
New technologies, like those offered by Form Energy, Infinium, Liquid Wind and QuantumScape, though there will be many casualties along the way. We are supporting the likes of Zouk Capital to spur the evolution of EV and charging technologies.
As part of the Green Swans Observatory Volans will work with leaders in the sector to reimagine the future. Her are some of the questions we will be investigating:
1. How can the electricity sector address the challenges of activists like ClientEarth—and the science coming out of places like Stockholm Resilience Centre?2. Where do we see true leadership, as in “coal country” switching to renewables – or countries like Chile planning to export renewable energy?
3. How can we support the roll-out of solutions spotlighted by organizations like Project Drawdown?
4. Where Moonshot thinking is emerging, for example in relation to electricity grids?
5. How can we accelerate progress in the solar, wind and battery nexus?6. How can we reimagine electricity so that it is intrinsically regenerative?
“We are on the cusp of the fastest, deepest, most profound disruption of the energy sector in over a century. Like most disruptions, this one is being driven by the convergence of several key technologies whose costs and capabilities have been improving on consistent and predictable trajectories – namely, solar photovoltaic power, wind power, and lithium-ion battery energy storage.
Our analysis shows that 100% clean electricity from the combination of solar, wind, and batteries (SWB) is both physically possible and economically affordable across the entire continental United States as well as the overwhelming majority of other populated regions of the world by 2030.
One of the most counterintuitive and extraordinary properties of the new system is that it will produce a much larger amount of energy overall, and that this superabundance of clean energy output – which we call super power – will be available at near-zero marginal cost throughout much of the year in nearly all populated locations. The SWB disruption of energy will closely parallel the digital disruption of information technology. ”
Accelerators and brakes: RethinkX spotlights virtuous and vicious cycles in the shift to solar, wind and battery (SWB) technology:
Do you know of an Ugly Duckling in this sector? Or an important organisation to involve in this collaboration?
