The present debate about the transformation of global energy system focuses either on the problem or problems themselves or on technology issues. There are books about global warming and peak oil and about the need to transform energy systems in order to avoid global disasters, and there are arguments that we need a hydrogen economy, a solar revolution or a large scale increase in nuclear power.

These are all necessary arguments, but a further analysis of the problems or an in-depth analysis of technology opportunities will not bring us much closer to the solution. The solution depends on managed change, which involves the development of high level strategies and detailed plans for the transformation from fossil fuels to renewable energy sources. We need to analyze and understand the sources of financing that we can rely upon to supply the necessary capital for this transformation and we need to start to rapidly implement these plans.

Yes, solar energy would be a good solution, as argued by Hermann Scheer, Travis Bradford and many others (see links below) but at present the cost of electricity produced from solar cells is about three times as high as electricity produced from nuclear or hydroelectric plants. This should not keep us from developing these new sources of energy, but we need a detailed plan, which also deals with the financial aspects of a large scale transformation to an energy system that at present is substantially more expensive than existing systems. The management of the transformation will be key to its success and arguments for large scale implementation of new systems are incomplete without an analysis of several of the aspects of change management.

I believe that the transformation from fossil fuels to renewable energy sources is necessary, primarily because of the peak oil issue, which will force us to rethink many aspects of transport solutions. The solutions we develop will impact electricity systems as well as other energy systems. We need a plan!

http://www.hermannscheer.de/en/index.php?option=com_content&task=view&id=33&Itemid=7 ,

http://www.amazon.co.uk/Solar-Revolution-Economic-Transformation-Industry/dp/026202604X/ref=sr_1_2?ie=UTF8&s=books&qid=1244560782&sr=1-2

Despite increasing amounts of information about Peak Oil recently many people seem to think that we are on the right track and that climate change is the big problem. Sorry, we aren’t and it isn’t.

We are increasingly falling behind and even people who understand this usually do not understand that we can do something about it. We need to drive energy systems transformation in a planned and managed fashion. This is the only possible and economically efficient way.

The big problem is the global peak in oil production, “Peak Oil,” which threatens our economy and our whole way of life.

Doing nothing to inform decision makers about the need to develop strategies and plans to coordinate change efforts is not a good alternative. We need to start to debate the need for change, and which activities we need to initiate short term. One of the first needs to be the development of strategies and plans to drive change forward.

Peak Oil är ett problem som kommer att prägla vår framtid. Vi är idag ett litet antal personer i samhället som har insett vidden av problemet och börjat diskutera det och ta det på allvar. De flesta tycks antingen vara omedvetna om fenomenet Peak Oil i sig eller helt okunniga om de konsekvenser det kan få för vår ekonomi och för våra vitala samhällsfunktioner när vi får tillgång till minskande volymer olja.

För att vi skall kunna påbörja strukturerade insatser för att minska effekterna av Peak Oil behöver vi i samhället förbereda oss för detta på samma sätt som vi förbereder oss för andra stora utmaningar, exempelvis krig och katastrofer. Skälen till att vi saknar beredskap för Peak Oil tycks vara att de flesta beslusfattare och personer i debatten tror, eller ger sken av att tro, att marknaden med automatik kommer att skapa stora volymer förnyelsebara bränslen i samma ögonblick som oljepriset stiger över en viss nivå. Ändå kunde vi lördagen den 26/2  Dagens Industri läsa en artikel över två sidor som med anledning av Libyens minskade oljeproduktion under oroligheterna varnade för att den ekonomiska återhämtningen helt kan stanna av vid ett oljepris på 240 dollar per fat. Man gjorde då en detaljerad analys av hur Libyens oljeproduktion har minskat sedan oroligheterna började och konstaterade att oljeproduktionen minskat med 1 miljon fat per dag. I detta sammanhang var det inte någon tvekan om att en reducerad tillgång på olja hotar den ekonomiska utvecklingen. Det fanns ingenting i texten som pekade på att artikelförfattaren eller de personer denne intervjuat förutsåg storskalig tillväxt i tillgången på förnyelsebara bränslen i omedelbar anslutning till prisuppgången. För när det gäller oljekriser finns det erfarenheter att falla tillbaka på. Det är ingen tvekan om att ekonomin hotas och det är klart att det tar decennier att utveckla och införa förnyelsebar energi i stor skala. Det är bara vid en oljeproduktionstopp som vi kan låtsas tro at marknadskrafterna löser problemet över natten och att allt vi gör kan fortsätta som vanligt.

Experterna säger att vårt tänkande bygger på kognitiva schemata. Olika schemata aktiveras beroende på vilket stimulus vi möter. Oljekris = ekonomiska konsekvenser, stora investeringar och långvariga processer för omställning. Oljeproduktionstopp = marknaden driver snabb energiomställning, det kommer att gå fort och kostar nästan inget.

Det finns en stor skillnad mellan utvecklingen i Libyen, liknande oljeintermezzon i historien, och Peak Oil. Alla vet att Libyen, när läget stabiliserar sig, kommer att kunna pumpa i stort sett samma volymer igen och priserna kommer att sjunka. Marknaderna anpassar sig därför inte till förutsägelsen om varaktigt minskade volymer, utan på att oljeproblemen i Libyen är övergående. När det gäller Peak Oil kommer problemen inte att vara övergående, utan analytiker på finansmarknaderna måste i sina analyser räkna med varaktigt minskande energivolymer tills stora volymer förnyelsebara bränslen finns att tillgå på marknaden. De som i första hand drabbas av stigande oljepriser, nämligen oljekonsumenter i fattiga länder, kommer inte att snabbt och effektivt investera i förnyelsebar energi, utan de får klara sig med minskande volymer. Vi själva kommer att märka reduktionerna genom att våra leverantörsländer i Asien och andra världsdelar inte kan producera alla de saker vi är vana att köpa från dem, eller att de inte kan transportera allt vi vant oss vid till marknaderna i väst.

Vi måste på olika sätt förbereda oss på denna utveckling och vidta åtgärder för att minska vårt beroende av olja. Det är åtminstone min uppfattning.

För att vi skall vara trovärdiga i våra ansträngningar att informera om behovet av omställning i samband med oljeproduktionstoppen tror jag att vi måste…:

–          …organisera oss på ett effektivt sätt och utgå från kunskaper om hur det faktiskt går till att utveckla och införa teknologi och ställa om samhällen.

–          …driva en debatt som involverar många i samhället, inte bara de som redan är informerade.

–          …rikta tydliga och konkreta budskap till beslutsfattare om vad som utifrån bästa möjliga kunskap måste göras.

Straightforward and Complex

The Danish Government has taken away all taxes and fees on electric cars until 2015. This has been done in order to make Denmark a leader in electric car systems. Denmark has set the goal to have 400,000 electric cars on its roads in a few years. With a population of five million this may be possible due to the fact that Denmark is the country in the world with the highest taxes and fees on fossil fuel cars. In the United States President Obama has started a program of nuclear power expansion and now the US Senate is discussing a subsidy of 10,000 dollars on electric cars in order to increase the pace of market penetration, and the Senate is also debating a prize for a company that can come up with a battery with substantially higher capacity than the present.

These are simple and straightforward measures that could rapidly increase the number of electric cars and also increase the volume of non-fossil fuels and electricity in these countries. Why then would there be a need for a large scale program?

First, these measures are important and necessary, but not sufficient. Global oil production, and consumption, amount to some 85 million barrels of oil per day. A growth in electric cars from a very low level will not be sufficient in order to replace oil at the rate that production will be reduced after the global peak in oil production.

A number of things need to be achieved in addition to an expansion of electric cars:

–          Increase production capacity of electric cars to rapidly make larger volumes available, and make rapid market penetration possible.

–          The implementation of smart systems to control charging of cars and replacement batteries in order to optimize the load on the grids.

–          Development and rapid implementation of biofuels and vehicles for biofuels, together with distribution systems for these fuels.  This will become necessary in order to make use of the large volumes of biological waste and other biological material that is available to reduce the need to invest in new electricity production.

–          Reduce the use of electricity and fuels in industrial production systems and buildings in order to reduce the need overall to invest in new production capacity for electricity and fuels.

–            Etc…

Many countries are now taking a number of necessary first steps, using technologies that are available or in the development pipe-line. These will need to be followed by even bigger next-steps aimed at expansion of the base of renewable fuels technologies, the volume of vehicles and the measures to reduce the use of energy for industrial production. This will be a big challenge, and it needs to be managed!

Down these mean streets a man must go

“Down these mean streets a man must go…” or The Age of Heroic

 

The debate about sustainability is to a large extent driven by experts within different disciplines, who argue about the need for sustainability from their point of view. They are each highly respected within their own areas of expertise and they offer their expertise with confidence. There are experts within each technical area and systems area (green marketing, wind power, transportation systems, solar and others), economists who argue in favor of investments in energy systems transformation and politicians who do the same. Experts in each area seem convinced that their competence will save the world, preferably without the need to co-operate with possibly “stupid” people from other disciplines, who don’t quite understand enough to value their specific competence.

The challenge that lies ahead of us is the one of organizing these experts into a large scale organized effort to transform energy systems. Each group of experts has to realize that we need to co-operate within large scale projects with other experts with complementary competencies.

Taking the first steps towards co-operation and developing a cross-discipline organization will require a certain amount of unselfish and courageous behavior. This, in my mind, evokes a memory of a quotation from the writer of detective stories, Raymond Chandler, describing the personality of the detective in his stories. A similar type of personality, in a number of individuals, will be needed in the process of organizing the different types of specialist competence that will become necessary in large scale energy transformation projects:

 

 

“Down these mean streets a man must go who is not himself mean, who is neither tarnished nor afraid. He is the hero, he is everything. He must be a complete man and a common man and yet an unusual man. He must be, to use a rather weathered phrase, a man of honor, by instinct, by inevitability, without thought of it, and certainly without saying it. He must be the best man in his world and a good enough man for any world.”

Raymond Chandler, The Simple Art of Murder, 1950

It is not easy to change patterns of life on a large scale. We may inform people about the consequences of our current life-style. Yet, despite the knowledge about what we ought to do,  it may be very difficult for people to radically change the way we live. There are several reasons for this:

–          It seems as if people primarily learn collectively. Informing single individuals about Peak Oil and the need to reduce our dependence on oil is not likely to make them change. It is not until we start to debate the need for large scale energy systems transformation that people feel the urgency to change.

–          Even if we know that we need to change in principle we may not know which exact details in our lives we can change. Telling people we need to change will not create a result. We need together to work out exactly what we can do differently, and start with the things that really matter. Most important at present is to contribute to systems change. Reducing your own oil use will have little effect, but getting one hundred or one thousand people to change theirs in a productive way is also likely to start a snow-ball effect.

–          The capacity of existing systems based on renewable fuels or electric cars etc is often very limited. We need to expand these systems and make them easy to use and increasingly attractive. This can be done either incrementally by reacting to market signals, or it may be done based on national or regional strategies to transform energy systems on a large scale. The market based alternative is likely to be slow and costly, because investments in systems expansion need to be coordinated between several players. Even if we believe that market based action is more efficient, it is not the case in this case. Having too little fuel for transportation, due to “Peak Oil” is likely to lead to recession and depression that most people are likely to consider to be more costly than to invest in systems for renewable fuels and electric vehicles to avoid a large scale economic crash.

We need to drive change by developing strategies and plans for large scale energy systems transformation. Individual action will come too late and be insufficient from a number of perspectives.

In 2009 the book “Structuring an Energy Technology Revolution” appeared, written by the distinguished Professors Charles Weiss of Georgetown University and William B. Bonvillian of the MIT Washington Office. The book deals with the complex issue of how a large scale transformation of energy related systems, or an “Energy Technology Revolution” should be organized, managed and to some extent financed. The book, written by two prominent Professors in the field of innovation and public policy, takes the perspective of the US Government and outlines its role in making this effort a success from the perspectives of US society, business and economic growth.

Early in the book the authors state that “…market forces alone cannot provide the pace and scope of innovations required to meet the urgent need for improved technology for energy supply and efficient end use, and to overcome the huge built-in preferences for existing energy technologies.”

The authors suggest a four-step approach to the development and implementation of new energy technologies:

Step 1: Assess new energy technologies for present status and for the obstacles they are likely to encounter in the marketplace.

Step 2: Define packages of relatively neutral policy measures based on each projected technology and its launch path.

Step 3: Identify and close institutional gaps in the “present system of government institutional support for energy innovation that will hinder our ability to achieve steps 1 and 2.

Step 4: Implement public- and private-sector interventions to fill these gaps. A number of new institutions may become necessary in order to fill these gaps, that are the focus of particular subchapters in the book:

–          Translational R&D: Create a DARPA for energy.

–          Developing an organization for engineering demonstrations.

–          Filling gaps in financing support for manufacturing processes, production scale-up, and building efficiency.

–          Closing the “Collaboration Gap” by developing roadmaps in order to facilitate technology collaboration between public and private sectors.

–          Motivating research and development talent to take on challenging development tasks in energy related sectors.

–          Develop a package of incentives and mandates to speed up the deployment of new energy technologies.

The book represents an important contribution to the debate on energy transformation. Through its focus on the high level management issues, and on the need for strategy and action plan (“roadmapping”) development by governments in order to speed up the development of new energy technologies, it reinforces the case that demand side (market based) action will not be sufficient to transform energy related systems on a large scale and with speed and cost effectiveness.

A must-read for decision makers at all levels in the public sector and in companies in energy related industries.

The Chinese are pushing to the fore in the global race to develop and market clean technologies. The New York Times of the 30th of January warns that the western world may become as reliant on Chinese clean technologies as we are now dependent on oil from the Middle East.

http://www.nytimes.com/2010/01/31/business/energy-environment/31renew.html?emc=eta1

We have seen it before in fields of high technology as well. Japan, formerly a low cost, low quality producer of electronics and cheap cars became the global leader in many areas of advanced technologies.

In an article in The Washington Post of the 2nd of August 2009, CEO of GE Jeff Immelt, and venture capitalist John Doerr warn of this threat and argue that there is a need of large scale government investment in the US to make the US a leader in this field, like it has been in many high tech fields, such as IT in the past.

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/02/AR2009080201563.html

Not surprisingly, the uncontested global leader in the sustainability area, Al Gore, launches a similar argument in his latest book “Our Choice”:

“The turning point came in 2009. The year began well, with the inauguration of a new president in the United States, who immediately shifted priorities to focus on building the foundation for a new low-carbon economy.”

Yes, there is definitely a need for large scale development programs in the clean tech area. Yes, there is a need for a political focus on these issues. Yes, business in the western hemisphere needs to stand its ground, and in order to to this there is a need for large scale managed programs and large scale implementation of green technology. These programs need to start soon, or China, and perhaps India, will take the leadership in many fields, where we still have an opportunity to take strong positions.

The solution is not haphazard technology development. No, we need well managed programs of technology development and implementation in order to make this possible. These programs need to be built on analysis of the needs and opportunities, high level strategies for technology development and implementation, planned programs and projects with clear goals, and tight management of the development and implementation phases of these programs.

Global Energy Transformation Institute is today one of the clearest advocates of such programs on the global scene. The idea is to develop US and European capabilities that will be on par with, or stronger than, those of China and other Asian economies in many clean tech fields. Following a demand from many business leaders and politicians whom we have spoken to in the past few months, Global Energy Transformation Institute will launch a sponsorship program, that will strengthen the abilities of this organization to strongly lobby to increase the competitiveness of western industry in clean tech areas. Support Global Energy Transformation Institute, support US and European clean tech development, and support a more promising economic outlook in the decades to come.

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