Energy 2050 Summit Day 1 Highlights

22nd October 2020

Energy 2050 Summit Day 1 Insights
  • Partner for greater good and have a noble purpose
  • ESG or die
  • We don’t need perfection now, we need transformation now. Does nature hold the key?
  • Investors are talking to big corporates and saying do you care about climate change?
  • Nuclear is a hot potato, there are better alternatives out there that offer better ROI
  • The challenge for new technology is investment
Today, the first virtual Energy 2050 Summit took place. The first day of the two-day summit was a line-up of leaders in the energy sector and delivered a comprehensive picture of the low carbon energy outlook and the challenges and opportunities facing energy companies today.

Here are some of my personal take-aways from today’s debates and exchanges;
Partner for greater good and have a noble purpose
The event, kicked off by Salla Ahonen of Neste, who talked of the critical importance of partnerships for a low carbon future and the company’s noble vision ‘creating a healthier planet for our children’. This would make some climate change skeptics scowl but it is a compelling raison d'être that resonates with consumers, or rather, tomorrow’s consumers who are putting pressure on today’s consumers with spending power i.e. Mum and Dad.

But it is not only energy consumers that are showing their power. Having a noble purpose is becoming more and more attractive as ESG becomes central to investment decisions and it is also appeals to the next generation of energy professionals. Ahonen says Neste has no shortage of applications for job roles from the most talented in the industry who see the value of being part of a ‘woke and worthy’ company; my words not hers.

Neste appeared in the Top 20 Business Transformations of the Last Decade by the Harvard Business Review and aims for carbon neutral production by 2035 and Ahonen and her team are showing leadership by breaking boundaries in renewable fuel production in renewable road transport, renewable aviation and renewable polymers and chemicals. The company demonstrates that it is possible to transform from a regional oil refiner to a global leader in renewable and circular solutions.
ESG or die
If companies have not already started on a transformation pathway, they should start now, without delay. Without a compelling ESG strategy companies will not survive into the future, this is a strategic imperative.
But if you are in pure oil production and you’ve not engaged in a strategic transformation of your offering, as Rob Doepel of EY put it, you’d better get a move on!
We don’t need perfection now, we need transformation now. Does nature hold the key?
Damien Speight, Head of Markets Innovation at Orsted said this and it summed up the mood of the day. Energy forums spend a lot of time discussing the pros and cons of various forms of energy, Speight highlights there is no silver bullet but rather a combination and blend of solutions. Look to nature for inspiration says Speight, coined from David Attenborough, the climate change influencer of our time, which points to the untapped value of hydrogen, wind, solar and other nature-based solutions that urgently need looking at and investing in.
Investors are talking to big corporates and saying do you care about climate change?
“Regrettably there are many that do not care, that are not interested. Funds however are starting to change that; funds and investors have the power to directly impact strategic direction or corporates and shareholder value. They have the power to send strong messages.” says Andrew Smith of Greenbackers Investment Capital.
Nuclear is a hot potato, there are better alternatives out there that offer better ROI
Nuclear was a hot topic, to achieve net zero, we need all forms of energy. Nuclear is very expensive, although China has done it cheaper. The real vs. perceived risks of nuclear are a factor, sentiment takes over rational decision-making and the clean finance panel was not sure nuclear could ever cut through this.

Syvlia van Waveren, Environmental Engagement Specialist, Director Active Ownership at Robeco, says for investors nuclear is a tricky one. Climate says yes but risk says no on nuclear she says. Existing plants or new plants? For wind and solar power generation, return on investments is more than 15% and same for biofuels. Hydrogen too is attractive. There are a lot of other alternatives to nuclear at the moment.
What about new technology?
Andrew Smith said energy companies need to study how people live and invest in technology that delivers smart solutions for heating and cooking. I thought this was a very simple idea but so very true, how we live drives how we consume energy.

In the New & Evolving Technologies panel, Maud Texier of Google spoke about the need for new tech and increasing the use of tech already out there. Google is a large energy consumer, with 20 data centres globally. Google have been trying to create a clean energy portfolio since 2012, an early mover you could say, and primarily invested in wind and solar. Google’s hourly clean energy average is 61%, an impressive figure.

Texier said we need more and more commitment from governments and corporates, working together on this acceleration. We are making progress on developing carbon-free technologies, said Texier, and carbon offsets are starting to take hold, says Gareth Hughes of Carbon Engineering.

Bp’s Meghan Sharp, talked about bp’s increased ambition in identifying future businesses for net zero including net zero investments, energy management platforms, low carbon technologies and future mobility. Sharp poignantly said it’s such a critical time for what we all need to accomplish as a society, we need to come together and deliver these ambitions.
The challenge for new technology is investment
The challenge is that technology investment and development of new technologies is very fractured. Gareth Hughes, says we need to find a better process for looking at investment in new technologies and ideas. Some of the best ideas don’t get investment. How do we remove the barriers for IP, investment and support? Hughes feels that we need a more systematic process for investment in new tech. What has been achieved in the last two years in wind and solar, is evidence of the power of constant innovation and purpose to invest in a particular focus area.
We need to create demand for new energy, Texier of Google said. This will help us move to the next stage.

Let’s see what tomorrow will bring.


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