Recently, Lux Research joined the 2021 Columbia University Energy Symposium. This one-day event included four panel discussions covering the energy transition in Latin America and New York, energy access and energy justice, and private investors' role in the energy transition. Academics, policy advisors, industry representatives, and investors shared their opinions on the energy transition and described the lingering challenges and potential solutions in a laid-back atmosphere. Some highlights from the symposium are summarized as follows:
The renewables boom is proceeding relatively fast from a historical perspective despite the impact of COVID-19, while the decarbonization of industrial processes needs to accelerate.
In the opening remarks, David Sandalow, the inaugural fellow of the Columbia Center on Global Energy Policy and former Under Secretary of Energy, applauded the 90% cost reduction of solar power in the past decade. He highlighted three promoters of the energy transition: policy support from governments, financial capital moving into the decarbonization market, and the influx of human capital in this area. For the latter promoter, David cited growing interest from university students in battery technologies, which is a contrast from 20 years ago. Keynote speaker Professor Johannes Urpelainen from John Hopkins University stressed that, though renewable power and EVs are making strides, the decarbonization of industrial heat, steel, and cement deserves more attention given its significant technological and investment gaps. Lux has been monitoring the decarbonization of industry closely and reached a similar conclusion in 2020 that it will be a decades-long initiative calling for bold innovations and cross-cutting collaborations.
Decisive top-down leadership that can be held accountable is essential to the execution of clean energy projects and the shift of jobs from traditional industries to emerging industries.
The energy access and energy justice panelists discussed the case of Vietnam'’s solar and wind capacity jumping from 0.2 GW in 2018 to 15 GW in 2020. In contrast, Africa faces difficulties in scaling up energy projects, pointing to the importance of decisive top-down leadership to the energy transition process. Another hurdle to the energy transition is the potential job loss caused by the shutdown of fossil energy plants. In addition to education and training, the emotive element that makes an offshore oil worker unwilling to take an offshore wind job also requires a systematic effort to tackle. The panelists advocated that despite the rollout of national strategies and green bonds, governments and financial institutes need to show the results and be held accountable when the green funds go to nongreen projects. Those interested should monitor the policy updates globally and consider investing in the businesses/companies favored by local energy strategies.
Big cities, especially coastal ones, will present numerous opportunities in terms of power infrastructure and building energy efficiency.
Looking at the demand side of the energy transition, populous areas are expected to launch many retrofit and upgrading projects. For example, to meet the goal of zero-emission electricity by 2040, New York is preparing its ports for offshore wind energy, installing upgraded transmission lines to accommodate the renewable power, phasing out fossil fuel-fired building furnaces, and promoting high energy efficiency building materials (there are conversations about modifying building codes to better monetize these building materials). The mass transit system will also be upgraded to operate with higher energy efficiency and withstand more extreme weather conditions. Companies should recognize the need for cities to adapt to a new normal of energy and engage with the authorities to secure the retrofit and upgrading contracts.
The Columbia University Energy Symposium sent a clear message that the energy transition is moving past the stage where people would argue about "what to do" and "when to finish," instead focusing on "how to get it done." In the post-COVID world, clients should expect policymakers to embed the energy transition within overall societal and economic growth strategies. The collaboration between academics and industry will be increasingly frequent, as many technologies essential to the energy transition are still at a very early stage, necessitating the combination of scientific understanding with engineering expertise during the scale-up process.