Investing in a new Energy Future
Investing in a new energy future in the midst of a crisis
Our reality? We’re facing an energy crisis. In January 2020, I would have said that the crisis is a growing global demand with a definitive and urgent need to reduce carbon emissions. Today, a short 12 weeks later, we’ve experienced a world with negative oil prices, a world that has a significant reduction in its demand for energy, or rather the eye of the storm between the previous world of economic exchange of energy as a simple supply and demand equation and a new world that is about an equation balance of carbon, a focus on reaching net zero and a deliberate balancing of the scales.
Where does that leave the energy majors of today who derive most of their value from a hydrocarbon economy?
Bernard Looney, who took the helm of BP in February, has stated repeatedly that his commitment to steering BP towards its net-zero carbon ambitions, set out earlier this year, is “deeper” due to the impact of the Covid-19 outbreak.
“I am more convinced than ever that this is the right thing to do, and we need to crack on with it,” he said. “The pandemic only adds to the challenge that already exists for oil in the medium to long term.”
To rebalance the global energy systems, here are some of the things we need to determine:
· How we support hyper localisation of energy supply and demand? Countries, regions and areas differ in their supply and demand needs. Geo-politics, geo landscapes and regulatory authorities play a crucial role. The rise of Virtual Power Plants, battery technology, on and off grid switching, connecting independent renewables with grid energy and managing the peak demands for power bring complex, interrelated questions which must be answered as we move further into an Electron Economy.
· How we accelerate the growth of renewable energy as source? The fact is renewables exist solar, wind, wave and emerging field of hydrogen and are set to eclipse coal in the US, for the first time in history.
How will human behaviour, especially in light of the new “normal” affect our energy choices and uses. At what point is a not technical or economic question but, rather one of political will?
· What we do with all the plastics? The COVID-19 pandemic has upended the global economy and disrupted the waste, plastic, and recycling industries. As a result, more and more plastics are being disposed of by incineration and in landfills. How do we craft an actual Circular Economy where the numbers stack up in a world where new equals “sanitized” to many and all of PPE is rightfully incinerated due to contaminations and protection of living things, including humans is causing? Although global demand for certain plastics is increasing, while overall plastic waste generation has decreased.
The big question is to consider is ‘how do we increment from the position we’re already in?’ It’s a starting point but it’s also represents sunk costs in some ways. Those investments were already made, we have an existing infrastructure, supply chains, economic models, technical risk scenarios and frankly companies who will strive to ensure to hold onto this space.
What if we started with something completely new? What if we used the eye of the storm, we are in right now to craft a new future?
As Yuval Harari noted in March, “Humankind is now facing a global crisis. Perhaps the biggest crisis of our generation. The decisions people and governments take in the next few weeks will probably shape the world for years to come. They will shape not just our healthcare systems but also our economy, politics and culture. We must act quickly and decisively. We should also take into account the long-term consequences of our actions. “
Nowhere is the need for action more urgent and pronounced than in global energy systems. We now can contemplate what could that new energy future look like? How could we recraft systems, thinking and policies to focus the world on delivering clean, reliable, affordable energy for all?
Amy Harder of Axios states
“Economists, investors and environmentalists are calling on the United States — and the world — to inject big clean energy and climate policy into recovery plans…It’s not just environmentalists clamouring for a green economic recovery. The United Nations, the International Monetary Fund and a broad swath of investors and corporate executives are calling for a range of clean-energy policies as well. They argue that these policies will not only help the economy better than alternatives but will also help combat another existential threat: climate change.”
For this transition to succeed, it will require collaboration amongst innovators, corporates, governments and, of course, individuals. The time clock is ticking so we must implement new solutions, at scale and at speed. LaunchPad, BP’s business builder was set up to do just that- work with Entrepreneurs to accelerate their growth trajectory by applying BP’s “unique advantage.” We offer Founders and start-ups the following:
§ Capital
§ Customer
§ Coaching
§ Community
We’ve been going for just over a year — and we’ve learnt a lot about what Founders need to scale. Capital goes without saying and Customer too — but we’ve learnt the value a Founder attributes to Coaching and Community, and as such we’ve shaped our offer to meet those needs. A good example of this is Lytt, a company we spun out from a technology programme in BP’s core business. We applied the “unique advantage” Series A capital, BP as a first customer, access to data and domain expertise and a suite of business building services — Entrepreneurs in Residence, Marketing and Finance coaching and a Talent recruiting team, as well as access to other start-ups, world-leading tech players and mentors. The result — a 35-person company, with customers in BP and other energy companies, a multimillion-dollar revenue line and ambitious growth plans into other verticals — all in less than a year.
Reach out to collaborate with us…we are in this together and we don’t have a minute to lose!
