The pace of change in the modern world is often rapid and dizzying. Technologies that seem indispensable in our lives can, in an instant, become redundant and irrelevant.
Energy is an area where innovation and new ideas play a vital role, as countries and companies try to find ways to transition to a society based on renewable energy like wind and solar instead of energy. fossil fuels such as coal, oil and natural gas.
During a panel discussion at the World Economic Forum last week in Davos, Switzerland, one analyst expressed concern that the market is unlikely to learn from other technological revolutions.
Thomas Hohne-Sparborth, head of sustainability research at Lombard Odier, highlighted the major changes taking place in low- and zero-carbon technologies, as well as expanding to the wider society. .
“We have seen industrial revolutions in the past, including the energy transition in the past,” says Hohne-Sparborth. “What we’re really seeing now is a complete transformation of our entire economy.”
“The demand side of our economy, the way we power our vehicles, the way we heat our buildings, the way we use energy in industry – all that needs to be done. be changed.”
We were “considering the need to invest trillions of dollars,” said Hohne-Sparborth.
When it comes to energy transitions, the sums discussed are indeed substantial. Last year, the International Energy Agency’s “World Energy Outlook 2022” report said investment in clean energy could be on the rise. exceed $2 trillion per year by 2030increased by more than 50% compared to the present.
As the discussion in Davos — moderated by CNBC’s Joumanna Bercetche — got underway, Hohne-Sparborth was asked if clean energy is now affordable at the scale it needs to be.
The answer to that question, he replied, is “it’s changing very rapidly, and today I can say, yes, it’s become the cheapest source of energy.”
“What I think the market as a whole is underestimating is simply the speed at which this transition is happening,” he added, explaining that lessons can be learned from history.
“We’ve done some work looking at past technological revolutions, whether it’s the adoption of steamboats, mobile phones – any part of the new technology infrastructure. .”
Hohne-Sparborth argues that all such transitions “tend to follow a very similar pattern. They happen very slowly… and then the transition is complete in the interval from 10 to 20 years.”
“However, if you look at what the market is predicting today – how long will it take us to electrify our buildings, to electrify our fleets – the timeframe still longer.”
As for Hohne-Sparborth, it doesn’t seem to have overcome that, “when a new, out-of-the-box technology emerges that becomes cost-competitive, that rollout can happen very quickly.”
Also appearing on the CNBC panel is Andrés Gluski, CEO of the energy company AES.
“What we are facing… is a dramatic change,” he said, adding that renewables are currently “the cheapest form of energy, in most cases.”
“The problem is capacity – how do you keep the lights on 24/7 – and that’s where you have to use lithium-ion batteries every day.”
Expanding on his point of view, he went on to emphasize the importance of adopting a variety of technologies.
“To really fully decarbonize, we’ll need blue hydrogen, we’ll probably need small modulus nuclei and so on.”
“And I also strongly agree that what we need is renewable energy that’s not just competitive — it’s better for us to reduce costs, [and] equal in quality.”
“And that’s really what the business sector and many consumers are demanding so much of.”