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Welcome to the energy transition

It is tempting to be selective and take sustainability success stories, such as the positive climate stance of President Obama, Rockefeller Foundation divestment, and record-breaking solar power generation in China and Germany, as evidence of a global tipping-point moment for the clean and green agenda.

“The world’s energy is in the middle of a grand transition,” argues Michael Liebreich, founder and chairman of the advisory board at Bloomberg New Energy Finance, “from a centralised, fossil-based, analogue, geopolitically risky system to one which will be cleaner, more decentralised, local, smart and less exposed.”

Systemic shift is, however, proving neither smooth nor swift, and Mr Liebreich lays responsibility for difficulties and delays at the door of politicians. “The single factor holding back a faster transition is policy uncertainty; the fact that policymakers are all over the place, not knowing whether to believe the self-evidently strengthening forces behind the clean energy transition or to listen to the threats of the fossil incumbency that the lights will go out and the economy will crash,” he says.

While revolution may not yet be in the air, change is definitely on the balance sheet, contends social entrepreneur, author and founder of Solarcentury, Jeremy Leggett. “There are two spectacular energy trends that are increasingly difficult to ignore: oil and gas, capex [capital expenditure] cost up; and solar and storage, cost down. Each could be transformative in its own right. But they are unfolding, by coincidence, at the same time.”

UK sector statistics for last year only serve to illustrate how much there are currently two competing energy agendas in play at once, both bankrolling market growth. Capital investment for 2013 of £14.4 billion in UK oil and gas reserves was the highest for 30 years. At the same time, a record year was announced for green energy, with electricity generation from renewables hitting almost 15 per cent of the national total. However, this figure was still less than half that boasted by one of the dirtiest forms of power generation, coal at 36 per cent.


In terms of the geography and architecture of tomorrow’s “energyscape”, there are many different scales of ambition and application for smart and intelligent systems as the focus zooms in from country and region, via city, community and street, to building or house.

According to Professor Andy Stanford-Clark, chief technologist for smarter energy at IBM UK, community and regional energy systems show great promise for innovation and significant changes in the landscape of the future grid. However, this dynamic energy equation includes one rogue parameter – the consumer.

At the most senior levels in government, there is an absence of understanding about the scale of the economic prize

“You need three things: technology that can link systems together – appliances, houses, streets, storage systems, energy markets; scale – enough houses co-operating to make a significant impact; and involvement – the hardest part, getting people to commit to change their behaviour, reduce consumption, act as part of a community,” he says.

Therefore, while sensors, actuators, communications systems and intelligent software might help manage the grid in balance, despite more devices swimming around in a decentralised system, it is people who may prove the problem.

But the internet of things (IoT) can help us adapt, explains Professor Stanford-Clark. “IoT devices in our homes, cars and the environment around us will help us understand our energy use. Making consumers aware is an essential first step towards reducing use and carbon emissions. Otherwise, it’s like driving a car without a speedometer – you know you’re going along, but have no idea how fast,” he says.


In terms of simple economics, though, when debate gets down to UK building-level solutions, do the figures actually add up?

“Absolutely – the numbers are compelling,” says Dave Sowden, chief executive of the Sustainable Energy Association (SEA). “The SEA Manifesto incorporates modelling using the Department of Energy & Climate Change’s own tools that clearly demonstrates energy goals can be achieved through greater focus on measures in buildings at a cost to the economy of around £12 billion per year less than the government’s current plans.”

If the building-level business case is clear, why then does UK government not demonstrate more policy commitment and fiscal support in this field?

“At the most senior levels in government, there is an absence of understanding about the scale of the economic prize,” concludes Mr Sowden. “Energy efficiency and building-level production of sustainable energy has never really been regarded as an infrastructure priority. Policy instruments in this area are mostly short term and lack the longevity investors need.”

For the UK, the challenge of powering the future is being met with a mix of ambition, innovation and passion, but also a fair deal of frustration. The energy picture of tomorrow is by no means wholly green and never black and white. There is no policy panacea, no silver-bullet technology, but where there is change, there is also opportunity. Welcome to the age of the grand transition.