Insights from Discussions Building on an Initial Perspective by An initial perspective on the future of energy by Jeremy Bentham, VP Global Business Environment at Shell. This includes insights from an event with The Climate Group and builds on the starting point for the global future agenda discussions taking place through 2015 as part of the the futureagenda2.0 programme. www.futureagenda.org

1. The
Future
of
Energy
Insights
from
Discussions
Building
on
an
Ini4al
Perspec4ve
by:
Jeremy
Bentham
|
Vice
President
Global
Business
Environment
|
Shell

2. Context
The
ini4al
perspec4ve
on
the
Future
of
Energy
kicked
off
the
Future
Agenda
2.0
global
discussions
taking
place
through
2015.
This
summary
builds
on
the
ini4al
view
and
is
updated
as
we
progress.
Ini4al
Perspec4ves
Q4
2014
Global
Discussions
Q1/2
2015
Insight
Synthesis
Q3
2015
Sharing
Output
Q4
2015

3. Inevitable
Transi8on
The
energy
system
is
at
the
beginning
of
an
inevitable
transi4on,
with
increasing
contribu4ons
from
renewable
energy,
energy
efficiency
and
sustainable
development.

4. Popula8on
and
Climate
The
two
fundamental
and
strongest
influences
behind
the
energy
system
transi4on
is
an
increasingly
prosperous
and
growing
popula4on,
and
concerns
about
climate
change.

5. Transi8on
or
Delay?
The
debate
is
polarized
on
many
fronts,
for
example
between
the
governments
of
advanced
and
emerging
economies.
This
delays
meaningful
ac4on
at
scale,
and
in
the
mean4me
the
stresses
con4nue
to
mount.

6. Fuelling
Prosperity
The
benefits
of
energy
cannot
be
forgoXen.
It
is
one
of
the
enablers
of
our
prosperity
and
wellbeing,
and
you
cannot
have
a
func4oning,
produc4ve,
efficient,
modern
economy
without
reliable
energy.

7. Less
Carbon
-­‐
More
Energy
The
climate
change
debate
is
serious
but
needs
to
be
broader,
focused
not
solely
on
reducing
CO2
emissions,
but
on
developing
a
low
carbon,
high-­‐energy
future
to
ensure
prosperity
for
all.

8. Collabora8on
and
Trade-­‐Offs
To
bring
about
a
shi[
and
to
broaden
the
frame
of
discussion,
pragma4c
collabora4on
is
needed,
between
government,
society
and
industry
at
an
unprecedented
scale.

9. Extended
Period
of
Transi8on
An
extended
period
of
co-­‐evolu4on
and
co-­‐existence
of
renewables
and
fossil
fuels
is
likely
as
new
energy
infrastructures
supplement
or
supplant
old.

10. Modera8ng
Expecta8ons
We
need
to
moderate
our
expecta4ons
of
a
wholly
renewable
energy
future
in
the
near
term
with
the
understanding
that
there
are
significant
technological
and
economic
obstacles.

11. Urbanisa8on
Urbanisa4on
can
bring
many
benefits,
but
if
managed
poorly
can
cause
greater
environmental
degrada4on
and
accelerate
global
warming.

12. Serious
Change
Required
Serious
aXen4on,
op4mism
and
swi[
collabora4ve
ac4on
is
needed
to
achieve
the
change
needed
to
happen
on
many
fronts,
from
the
energy
supply
mix
to
energy
demand
management

13. A
ShiJ
from
Unexpected
Players
Agreement
between
China
and
the
US
is
a
tes4mony
for
unexpected
ac4ons
by
powerful
players.
To
bring
about
the
4pping
point
for
a
low
carbon
future,
greater,
bold
collabora4on
at
scale
is
needed.

14. Transi8on
From
Natural
Gas
to
Renewables
Increasing
investment
on
renewables,
improving
technology,
falling
prices
and
growing
awareness
all
support
transi4on
to
a
low
carbon
future,
but
a
clear
exit
strategy
is
needed
for
natural
gas
as
a
transi4on
fuel
to
renewables.

15. Storage
is
Promising
and
Game-­‐changing
There
is
a
lot
of
emphasis
on
the
development
of
storage
technologies.
Besides
solving
the
problem
of
power
intermiXency
from
renewables,
energy
storage
offers
poten4al
for
the
development
of
a
whole
new
mobile
energy
system.

16. Energy
Efficiency
–
The
Invisible
Fuel
The
cheapest
and
cleanest
form
of
energy
is
the
energy
we
don’t
use.
Adop4on
of
effec4ve
energy
efficiency
measures
and
careful
management
of
energy
demand
will
play
a
key
role
in
crea4ng
a
clean,
low
cost
energy
future.

17. Leapfrogging
to
a
Low
Carbon
Future
Driven
by
technological
improvements
in
the
low
carbon
energy
sector,
developing
countries
can
leapfrog
their
way
into
lower
carbon
economies
without
passing
through
an
intense
fossil
fuels
phase.

18. Rise
of
the
Micro-­‐Actors
We
can
see
a
blurring
of
energy
consumers
and
producers
–
to
‘prosumers’
who
do
both.
Hence
a
move
to
mul4ple
micro-­‐actors
working
individually
and
collec4vely
-­‐
supported
by
new
technological
developments,
including
storage.

19. Hydro
Revival
In
response
to
rising
CO2
and
pollu4on
as
well
as
associated
health
concerns,
China
will
con4nue
to
influence
the
funding
and
willingness
to
build
large-­‐scale
hydro
solu4ons,
especially
in
the
developing
world.

20. Demand-­‐Driven
Energy
The
energy
system
will
become
more
demand-­‐driven
than
supply-­‐led
as
more
distributed
genera4on
and
renewables
are
included
onto
the
system.
End-­‐user
behaviour
will
also
change
as
beXer
technology
becomes
available.

21. BeRer
Storage
Improvements
in
baXery
and
hydrogen
energy
storage
make
renewable
energy
more
reliable
and
so
accelerate
electric
vehicle
growth
and
support
greater
distributed
genera4on.
This
has
the
poten4al
to
enable
a
behaviour
change.

22. Solar
Houses
A
solar
cost
and
performance
revolu4on
will
reshape
residen4al
energy
provision
and,
coupled
with
beXer
baXeries,
storage
and
online
connec4vity,
will
thus
transform
the
wider
electricity
system.

23. Conscious
Users
Domes4c
energy
use
paXerns
change
as
a
result
of
rising
social
awareness
of
limited
resources
and
beXer
informa4on
-­‐
enabled
by
technologies
such
as
smart
metering,
smart
household
appliances
and
new
monitoring
capabili4es.

24. Nuclear
Skills
Shortage
Many
countries
lack
the
skills
and
training
to
maintain
sufficient
numbers
of
qualified
nuclear
engineers
needed
for
renova4ng
and
building
plants
–
and
hence
they
can’t
take
advantage
of
the
opportuni4es
that
nuclear
offers.

25. Conscious
Stewards
We
are
more
aware
of
the
consequences
of
our
ac4ons:
There
is
a
sense
of
stewardship
of
the
world
-­‐
not
only
in
how
we
manage
our
home,
but
also
in
how
we
live
in
our
ecosystem.
We
start
to
behave
as
conscious
stewards.

26. Smarter
Consump8on
Much
technology
for
energy
efficiency
is
proven
and
implementable
today.
In
the
future
governments
will
first
focus
on
gedng
the
basics
of
demand
side
right
-­‐
by
reducing
consump4on
before
inves4ng
heavily
in
renewable
energy.

27. Millennial
Managers
As
more
digital-­‐na4ve
Millennials
take
the
lead
they
bring
different
perspec4ves,
experiences
and
expecta4ons
about
societal
challenges
and
the
role
of
organisa4ons.
This
drives
a
shi[
towards
a
deeper
sense
of
purpose.

28. Business
Response
to
Resource
Risks
To
prevent
the
exploita4on
of
global
regulatory
arbitrage,
we
work
out
how
to
more
effec4vely
govern
the
global
footprint
to
create
a
level
playing
field:
Business
and
government
develop
new
models
to
manage
risk.

29. Incumbent
Blockers
Several
large,
well-­‐established
organisa4ons
con4nue
to
seek
to
prevent
change
by
arguing
for
short-­‐term
incremental
shi[s
rather
than
wider,
more
collabora4ve
system-­‐based
change
that
may
benefit
society
in
the
long-­‐term.

30. No
Nukes
to
Go
Nukes
More
see
nuclear
energy
as
a
significant
piece
of
the
future
energy
mix
-­‐
driven
by
collec4ve
inac4on
on
the
need
to
transi4on
away
from
fossil
fuels.
But
many
are
unprepared
with
regard
to
skills,
policy
and
public
debate.

31. Infrastructure
for
the
Future?
We
will
see
a
transi4on
from
aged
to
new
infrastructures
designed
to
manage
and
distribute
energy
from
diverse
sources
of
power
genera4on.
A
ques4on
is
whether
this
will
leave
a
new
legacy
problem
for
the
next
genera4on.

32. Let
Them
Eat
Cake
The
short-­‐term
impacts
of
climate
change
dispropor4onately
affect
the
world’s
poor.
This
delays
strong
ac4on
as,
collec4vely,
many
socie4es
simply
don't
(yet)
care
enough
about
them
to
drive
changes
in
the
global
energy
system.

33. New
Hazards,
New
Protocols
Regulatory
frameworks
and
standards
evolve
to
address
new
kinds
of
energy
hazard
that
are
emerging
from
the
adop4on
of
technologies
such
as
residen4al
baXeries
for
energy
storage
and
localised,
power
genera4on
schemes.

34. Planetary
Nexuses
More
eco-­‐friendly
opportuni4es,
and
trade-­‐offs,
on
energy
supply
and
use
emerge
from
considering
the
nexuses
of
core
resources
such
as
food,
water,
energy
and
land
with
a
growing
popula4on.
Water
Food
Land
Energy

35. People
Power
Public
demand
and
pressure
for
different
solu4ons
drive
a
more
technocra4c
energy
environment
resul4ng
in
more
holis4c
policies
that
integrate
the
needs
of
different
stakeholders
and
manage
resources
more
effec4vely.

36. Policy
Beats
Poli8cs
Increased
public
pressure
stems
from
greater
awareness
of
more
stringent
emission
reduc4on
targets
in
some
countries.
This
starts
to
influence
poli4cal
will
in
others
na4ons
and
so
helps
to
shi[
policy
globally.

37. Transi8on
or
Disrup8on
We
will
see
significant
change
in
the
energy
system
over
the
next
decade.
But,
we
are
unsure
if
it
will
be
navigated
in
ways
that
minimize
impact
on
society,
or
whether
we
will
experience
a
series
of
disrup4ons
to
respond
to.

38. Technology
Shaping
the
Market
The
cost
compe44veness
of
new
technologies
leads
to
the
development
of
new
policies
and
business
models
that
enable
the
accelera4on
of
renewables,
growth
in
distributed
genera4on
and
a
shi[
to
a
lower
carbon
energy
mix.

39. Changing
Energy
Risk
Profile
The
impact
of
natural
disasters,
wider
acceptance
of
the
need
to
avoid
a
warmer
world
and
increased
risk
of
cyber-­‐crime
to
our
infrastructure
all
lead
to
a
deeper
understanding
of
the
risk
profile
of
different
energy
solu4ons.

40. Unclear
Analy8cal
Models
Current
analy4cal
models
may
not
handle
disrup4ve
elements
entering
the
energy
sector
-­‐
and
so
may
provide
results
that
do
not
fully
reflect
poten4al
shi[s
in
the
speed
of
change
and
impacts
of
disrup4ons
and
discon4nui4es.

41. ShiJ
in
The
Investment
Landscape
As
renewable
/
storage
technologies
become
cost
compe44ve
we
may
see
a
shi[
in
investment
sen4ment
towards
cleaner
energy
solu4ons
based
more
on
poten4al
financial
returns
rather
than
on
the
carbon
vs.
climate
debate.

42. Integra8on
vs.
Fragmenta8on
While
the
EU
2030
framework
is
designed
to
lead
to
an
energy
system
that
is
more
compe44ve,
secure
and
sustainable,
there
are
also
driving
forces
that
might
lead
to
a
more
fragmented,
distributed
energy
system.

43. Closing
the
Narra8ve
Gap
We
focus
on
sharing
a
clear,
compelling
narra4ve
that
engages
different
audiences,
helps
to
improve
energy
literacy
and
builds
the
case
for
change.
This
may
lead
to
beXer
policy
decisions
and
shi[s
in
consumer
behaviour.

44. Air
Quality
As
more
experience
asthma
and
other
breathing
difficul4es,
urban
air
quality
becomes
a
visible
issue
and
a
major
catalyst
for
change
–
in
transport
policy,
in
energy
source
and
in
city
design.

45. Last
Mile
Grid
Connec8vity
Private
/
public
collabora4ons
give
another
100m
people
in
India
access
to
electricity
via
connec4on
to
the
grid
-­‐
but
250m
people
con4nue
to
use
wood,
diesel
and
kerosene
to
cook
and
light
their
homes.

46. Mass
Engagement
As
the
pressures
of
higher
energy
costs,
the
impacts
of
climate
change
and
the
need
for
universal
access
combine,
shi[s
in
behaviour
and
investment
are
driven
by
wider
public
awareness
of
energy
issues.

47. Distributed
Energy
Supply
Key
developing
economies
invest
heavily
in
lower-­‐carbon,
distributed
energy
with
integrated
storage
to
deliver
more
reliable
and
affordable
power.
This
is
supported
by
beXer
market
pricing
and
smarter
subsidies.

48. Declining
Energy
Intensity
As
major
growth
regions
invest
in
lower-­‐carbon
supply
op4ons
and
priori4se
energy
efficiency,
we
see
an
associated
decline
in
energy
intensity
in
the
economy
–
achieving
reduc4ons
of
up
to
10%
over
the
next
decade.

49. Future
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