The Paris Agreement was a landmark event, the longest warm-up to taking tangible action on a global crisis in recorded history (that I can think of). From the establishment of the UNFCCC to the Kyoto Protocol took 5 years (1992–1997), from the Kyoto Protocol to the Paris Agreement took 17 years (1997 -2015). It seems it is getting increasingly difficult to get agreement on ambitions and targets. To make this worse, after the signing of Kyoto it took more than 7 years for it to come into force, how long for the Paris Agreement?

The answer is in fact unimportant! Current optimistic estimates give us only 12 years to take action that has a real impact or suffer climate catastrophe — fully implementing the Paris Agreement won’t even get us close! This makes it clear that the speed at which we are moving is grossly inadequate. The track record of the current climate regime in delivering actual emission reductions, is worse, due to major accountability gaps and inadequate governance. We need a radically different approach that builds on what we have learnt so far and that is systemically more responsive and robust. …

Few would argue that the causes of the climate crisis, as well as our historical inability to take meaningful action, are at least to some degree driven by self-interest. Self-interest is indeed deeply rooted in our economic system, in fact it is key tenant of capitalist thinking and has been attributed to bringing about both great social benefit and ill.

Whether or not you’re familiar with Adam Smith’s magnum opus: “The Wealth of Nations”, or where your beliefs stand on capitalism and socialism; most will concede that the majority of humans act in their own self-interest — even if this derives from the desire to help others, emotion, belief or other non-materialistic reasons. There is, in fact, nothing wrong with self-interest in instances where it does not negatively impact individuals or society more broadly. So, it is hardly surprising that the majority of our organisational creations: companies, governments and institutions also act in their self-interest; sometimes these bodies have some particular purpose or principle(s) embedded in their DNA — which simply moulds what their self-interest is. …

The UK has recently seen the launch of the second stage of work on its Future Power System Architecture (FPSA), known as FPSA2. It highlights the world leading cross sector knowledge and expertise related to energy in the UK. This work was a collaboration between the Institute of Engineering and Technology (IET) and the Energy Systems Catapult (ESC), you can find more details here.

The most interesting development in FPSA2 aside from the validation of the findings from FPSA1, was the development of an innovative mechanism to implement the functional needs of the future system (there are 35). This mechanism, termed: Enabling Frameworks (EF); will implement what is no doubt the most significant transformation project across any sector (at least in recent memory). The development of Enabling Frameworks stems from the acknowledgement that the current industry change and regulatory processes cannot deliver the pace or scale of change needed. The rate and pace of change is predominantly being driven by technological innovation and falling costs across many energy related domains including: electric vehicles, renewable energy, home automation, IoT and digitalisation in general. …

Utility organisations face an increasingly challenging environment. This author has recently published a white paper for Analysys Mason on the key strategy options that are available to executives as they move their organisations into an increasingly volatile future, the below article summarises the key aspects of the paper (a link to the full paper can be found at the end of this article).

All utility organisations will face a period of increasing change and uncertainty, though specific pressures will vary depending on the organisation’s particular characteristics. This is the result of the growing three-way tension between the need for security of supply, for prices to be kept at an affordable level, while ensuring environmental sustainability. Utility organisations that fail to balance these challenges (and their knock-on effects) are likely to see loss of equity/shareholder value and may be vulnerable to acquisition in a later consolidation phase of the industry. Those that succeed are likely to see significant gains in value and benefits to their local and regional economies. This success will need fundamental change in the operational and service models deployed by utility organisations, and will require novel approaches to embracing new technology. These organisations, which we are calling ‘on-demand utilities’, will need to re-align themselves to be flexible and to respond fluidly to anticipated and unexpected challenges. …

To make the majority of our energy clean, we need more than just clean energy generation — the other elements of the energy system must change too. A multi-phase transformation of the energy system will enable renewables to dominate the generation mix in the future.

Centralised vs decentralised

The energy system debate, similarly to that for economic development, centres on the comparison of the benefits associated with centralised and decentralised systems. In discussion with Dave Roberts, a director at EA Technology, we assessed the attributes of the future energy system. …

Renewable energy costs continue to fall, making renewable energy more efficient than coal in many markets. This creates a transformational tipping point, opening the way for exciting changes in the energy system as a whole.

Electricity generated by onshore wind turbines is now cheaper than coal in a number of key markets. A recent Bloomberg New Energy Finance (BNEF) report has revealed that the average cost of wind is significantly lower than coal and gas in Germany and the UK, once carbon costs are accounted for. In fact this is true across the EMEA region.

In key emerging markets such as South Africa, this has resulted in a renewable energy boom, with leading project developers and EPCs happy to point out that wind has been cost competitive for some time, without internalising carbon costs. Thanks to falling costs, even solar electricity is cheaper than coal, in this case, in an ever increasing number of US states. …