With thanks to the Winston Churchill Memorial Trust of Australia
Today the ideas from my Churchill Fellowship had their first big outing – I was asked to speak at Adelaide’s Festival of Ideas. Here is the speech I prepared, slightly more polished than the one I gave.
For years I have imagined a different type of energy system to the one we have.
I worked in industrial energy efficiency – with co-generation, we could improve the energy efficiency of electricity from 40% to 80%. There were so many energy efficiency opportunities that businesses and buildings didn’t pursue. With demand management, we could take a woefully under-utilised electricity infrastructure and improve it. With renewable energy, we could clean up our energy system and move toward sustainability
There was so much we could do better.
I was influenced by Amory Lovins. Way back in the 70’s, in the wake of the oil crisis, he popularised the notion of the soft energy path. He coined the term Nega-watts and showed how the energy you don’t use is the cheapest energy of all. And most importantly for me he showed that a decentralised system could have much more cost-effective economics than the centralised systems we are lumbered with. The hierarchy introduces numerous cost inefficiencies as we build infrastructure that is poorly utilised – because we need to cover the peak moment. The individual scale also introduces inefficiencies, as we cover for every possibility. In fact the improved economics of neighbourhood scale repeats itself across infrastructures, from telecoms to sewerage systems. A pattern that is repeated in the nodal thinking of networks.
So finally, 20+ years later, we are getting our energy transition – the drivers for change are getting stronger and change is essential if we are going to tackle climate change – and we must.
The energy system I imagine has changed somewhat – Who knew solar panels would be so cheap, batteries would be sexy and Tesla would be a household name?
And more than ever, that vision of a decentralised system, a renewable, efficient, resilient – and smart – system seems possible. It seems right. It seems better.
So now I imagine a network of microgrids, something akin to the internet. Every grid can act self-sufficiently and there is plenty of interconnection. The energy we need can be generated close to the point where we use it. And I suspect our heat and transport needs will increasingly be provided as well by the renewable electricity we can generate.
Which brings us to our question, “who’s leading our energy transition”.
I’ve just been fortunate enough to travel on a Churchill Fellowship to look at energy transitions in different countries through the lens of community energy and citizen-led changes. I wanted to see how the decision making about energy systems at the local level might be helping provoke change at the system level. I went to the world leaders – Denmark and Germany, I saw three quite different markets and systems across three different past of the United States and I went to the UK and Japan.
I looked at the technology, but really we have the technology and have had for quite a while.
I looked at markets and incentives but increasingly renewable technologies are becoming the cheapest alternative regardless of government policies.
So really the areas of change where we need to look most closely are in our social and political systems. This is where the answers lie and this is what I needed to investigate.
How do we get the energy transition that:
- We want
- We need
- And is the best we can have?
Lets run through the obvious contenders for who should be leading our energy transition?
The energy ‘system’
I often refer to the energy regime as all those energy companies, energy regulators and policy makers that work together in the paradigm/framework that is the current design of our energy system. We mustn’t think of this as a monoculture or a strictly bounded group but nevertheless, they work with similar perspectives on how the system operates and should operate even with the changes that they see coming.
Of course, with all the levers these people control, they are the obvious candidates to lead an energy transition but they can’t. They don’t do disruption, they do incremental change, they don’t do paradigm shift. The innovation literature, and more recently that on sociotechnical transitions describes how the disruptors to a system need to come from outside. Disruption starts as a niche is turned into a success after which the mainstreaming of technology, ideas and business models seems to grip hold of the whole industry. Thomas Kuhn also described the value of this outside perspective when he coined the term ‘paradigm shift’ in his “Structure of Scientific Revolutions”.
Many in the system are aware of the changes and trying to figure out what to do. Green Mountain Power in the US has asked itself, what does our business model look like when we sell 40% less power because our customers produce their own electricity. Market operators in California are pondering what the value proposition of the grid looks like when you start from the basis of off-grid.
There are plenty of smart cookies inside the system, some are champions for a better system and many are good folk with deeply held values about the importance of the work they do, keeping our lights on. But I don’t believe the leadership we need will or should come from inside the system.
The clean tech businesses
So the obvious replacement to insider driven change would be disruptor driven change but I’m not convinced these guys will lead the energy transition either – they are definitely part of the solutions though. We have to be honest with ourselves that our energy systems do not operate like free markets. They are a much more artificial construct where every change in profitability is negotiated and arbitrated within the rule making system.
I have often met alternative energy businesses and felt they are not invested in fixing the system over the long term, but rather focused on how to make the existing rules profitable. This is necessary for them and the main measure that their product offers value. For example we get discussions about ‘behind the meter systems’, operating beyond where the rule making reaches and ‘self-consumption’ to offer the solar owner value by using their own surplus inside the household. I believe, though, that the real value of surplus solar is in our community at the time the load is needed. If I am not home but over at the library, surely it makes sense that the library could buy my surplus instead of paying premium rates on the market.
The traditional market is wondering how much of these new markets it can incorporate into its own business but it seems unlikely that they will make much headway into consumer products markets they can’t control – choices in appliances, vehicles, solar systems, batteries etc will become the norm for households.
GE has developed a start-up style spin off called Current, to try and innovate in this space. They know their existing business model might not survive.
Nest thermostats, part of Google, highlight how well they help householders manage energy and get the best electricity deals. They know how to deliver service offerings to customers and believe they could take over from retailers.
It is clear that part of the paradigm shift we need is to see the whole system, right down to how we use energy and including heat and transport.
As we understand the changes needed to be less related to technology and its price and more related to social constructs and its governance, politicians are the obvious candidates to lead our energy transition. But through my travels I was reminded that politicians are constrained in how much they can achieve by how much the voters will let them. They are also easily captured by the sector, because the access, lobbying and resources that energy industries can afford is far greater than individual citizens.
Importantly, we can’t expect politicians to get heavily involved in the details of change and the system controls the information flows about possibilities and opportunities because at the end of the day the technical and regulatory operation of an electricity system is complicated. As an ex-bureaucrat I’m aware that the guardians of the system often have many reasons to slow down change.
Citizens and community
So that leaves us. We are the ones that can lead and need to lead our energy transition.
My travels have reinforced that our community provides essential insights into this journey. We can provide the innovation – not only which technology works best for us but which values we bring to its use and its ownership. We can provide different perspectives and pose different paradigms for the value that energy use adds to our lives.
Only community can create the conversation about change, draw more people in and provide the political cover our (formal) leaders need.
And it must be left to community to define the values and the goals of the system.
I went to many communities that had asked nicely for energy systems to better support climate action goals. In the cases I studied, the governments and energy companies failed to respond to these requests and pushed those communities into a determined fight – often lasting up to a decade. In most cases the communities were winning the fight and speeding up the purchase of significantly more renewable energy with better support for rooftop solar, local generation and energy efficiency. Governments and companies ignore the community’s desire for a low carbon world at their peril. But we don’t have a decade for a long protracted fight, we urgently need faster climate action.
When I talk about community I am thinking about a spectrum with a role for everyone from activists to system defenders. Because all those other actors I have mentioned also have a role as citizens.
We need the pragmatists to get things done, but we can never lose sight of the highest principles we need to achieve. If we don’t build an equitable, community serving system we will fail, so we need those activists who defend the principles and advocate for the best possible system.
We need those willing to work on co-designing the future, happy to engage deep into the details of the system architecture. And we need those working in the big picture, co-opting folk to think about the vision and the values we bring to bear.
I am interested in working in the middle spaces where people check their power at the door and bring an open mind to the discussion about what could be. The interpreters speaking the language of electricity and community, the convenors, the bridge builders. [Although I am reminded that we can all find a common place to start from and stop treating ourselves like different worlds that need to be bridged.]
We need to understand that change starts from within. Being open to others’ ideas and open to learning and growth makes this a more effective journey. And because we are a social species we need to enjoy the process and the journey.
Here are some further recommendations from the experiences of my Churchill Fellowship:
Every community’s solution is unique, we need to do the work of understanding ours. Many things from elsewhere won’t work. I marvelled at the solar heating in Denmark because we don’t need to heat our houses when the sun shines. Our resources are different, our industrial base is different, our loads are different. We have an opportunity to really exploit our abundant renewable resources for economic benefit. Most of the places I visited are rolling out solar panels despite the fact that the same panel there produces half of what it would produce in sunny South Australia.
So many of the places I visited told me a deeper story about their place and community – what’s our story? Some say South Australia was founded on a utopian vision and that striving for better is simply part of our DNA. Barbara Pocock points out that even early on we created land rules that would squash speculation and ensure land was used for the benefit of the wider economy. And we are famous for our progressive social policies giving early rights to women to vote and overturning discriminatory laws in the 70’s under Dunstan. We need to bring these stories to the fore in order to believe our ability to lead and to develop an excellent energy system. Because in those stories lie the values that need to be embodied in our system – low carbon and sustainability, broad economic benefits and equity.
I think a useful place for us to start this work is in articulating the desired goals of the system. In even the most simple system diagram we can see that the goal of the system is hugely influential in where the system heads. The understanding of everyone about how new alternatives better meet the goal is part of the movement building that must be done. And the feedback on how the system is failing to meet even existing goals is also crucial. In the wake of Adelaide’s recent blackout, these conversations are alive and well – although disappointingly politicised.
My ultimate goal is tackling climate change. Electricity and the wider energy system are not the only systems that need reimagining. Our food, waste and mobility systems all leave us sighing, “we could do so much better”. But in our transition toward 100% renewable energy we have made an impressive amount of progress and we are poised to tackle our challenges quickly and well.
This gives me hope. The smarter we get about this transition, the better we can tackle the bigger challenges that await us.