We are living in interesting times. Our world civilization is experiencing a dynamic change. New wealth and wealth distribution are being created in an unprecedented speed. Over the coming two to three decades 3 billion people in Asia, Latin-America, Middle-East & Africa will join the new global middle-class. They are prognosed to enjoy the same consumption patterns in their homes, offices and transportation now so much taken for granted in the OECD and upper-middle class families in the emerging and developing nations.
Energy is vital and essential to this modern life. In fact, the wealthier you get, the more energy you use. With the present rate of energy demand growth and energy use, we are going to expand our world energy system by a factor two over the coming 12-15 years. A system which has been evolved and built over the last 150 years! It means we may soon see the world energy system run against triple-A limits (affordability, availability, acceptability) and become unstable (price volatilities, market swings, security or unrest, etc.). That doesn’t feel good. Does it?
So how are we going to stay out of trouble? In other words: what is the right time and right scale of energy transition management given the present world situation?
Let’s first agree on a fundamental principle: all people have a right for energy. Energy and energy infrastructure are vital to the development and stability of a country, an economy and population. It fuels mobility, provides power to the homes and allows people, goods and services to move around. The energy industry is hence a true utility to our lives and well-being. Additionally energy impacts not just one country, but also its context. Energy craving or energy scarcity in one nation, can lead to trouble elsewhere. Energy shortage or energy price hikes can cause economies to falter or stagnate or create economic crisis in size and dimensions beyond our present beliefs. To that end, it can be compared with the continued rise and fall in our global financial sector. One nation affects other nations.
Decisions on energy, energy policy and energy infrastructure are thus important decisions. Not only because of the impact they have directly and indirectly on the economies and countries involved, but also because they have a lasting effect over time. Sometimes, impacting our global (energy) system for the next 20-30 years. It is therefore very difficult for governments and board rooms to fully understand the impact of their individual actions in a global market situation as well as the geopolitical and socio-economic consequences.
Looking at the above, some wise moves for the immediate future (15-30 years) come to my mind:
1. The Western (OECD-) countries (including the upper-middle class of the emerging and developing nations) could ‘make room’ and reduce their average fossil energy footprint significantly, in order to allow and facilitate the non-OECD countries to grow their benefits and wealth creation from fossil energy.
2. The general predicted increase in world average energy consumption per capita should be generated by non-fossil fuels such as renewable energy.
By agreeing and applying these simple rules, I believe that mankind will be able to overcome the issue of energy shortage and world equality issues.
To apply the rules we need energy professionals to reach-out towards and learn from each other in order to realize modern energy architectures and infrastructures beyond our present beliefs and understanding. We need to become smarter in blending the global with the local, in blending energy saving solutions at home, with local renewables connected to a base central backbone – fueled by conventional and renewables resources.
I am an optimist. Whenever I see energy executives becoming passionate, sharing and creating in our practice workshops and class rooms – I feel confident that together we can.
Founder of Energy For One World and Program Director of Nyenrode Executive Energy Education- Nyenrode Business University.