Where will our energy come from in 2030, and how green will it be?

Original interview posted by the World Economic Forum.

How can the energy industry adapt to meet the needs of a growing population while also supporting low-carbon growth?

Katherine Hamilton, Director of the Project for Clean Energy and Innovation, and co-chair of the Global Future Council on the Future of Energy, says that this essential transition will not happen without collaboration between large energy companies, entrepreneurs, the finance sector and consumers.

Why should we be thinking about the future of energy?

The energy sector is already changing very rapidly. It is transitioning, we hope, towards greater ability to meet the energy needs of a growing global population with reduced use of carbon, supporting continued economic growth in an environmentally sustainable way.

But that transition will not necessarily happen on its own. We need to get key players in the same room who can bring different experiences and perspectives, and collectively come up with better ideas than any of us could on our own – and then work out how to implement those ideas. Hence the need for this Global Future Council.

Who are the key players that need to be involved?

The incumbents are important, of course – the large energy companies who own and control the infrastructure, especially in industrialized countries. They are often criticized as part of the problem, but they also have to be part of the solution. In addition, we need the innovators – entrepreneurs who are coming up with ideas to disrupt the sector. And we need input from energy consumers, including large corporations and municipalities.

Representatives of the financial sector are important – experts in bonds, risk and insurance. There is plenty of capital out there looking for good projects to finance, but the main constraint for investors is the assurance that those projects will find a market. Creating certainty is one important thing politicians and policymakers can do to help – and it is they who, ultimately, will need the vision to define goals for the energy sector and devise policies to achieve them.

What are the biggest emerging trends in the energy sector?

The decentralization of energy generation is an enormous trend. Innovation is also being democratized; it is no longer just the incumbents who can innovate. Consumers, increasingly, are in the driver’s seat; there is more real-time interaction between energy service providers and consumers – whether that is the operator of a factory with sophisticated demand response or an Indian farmer using a mobile phone to manage crops.

We are continuing to see drastic reductions in the cost of many renewable technologies as well as greater accessibility to energy storage and efficiency.

How far are we from renewables no longer needing subsidies to compete?

Any time you talk about subsidies for renewables, you also have to remember that incumbent players have benefited from built-in subsidies for decades through policy support and monopoly power. Often there is a misconception that energy was a free market before the idea of subsidizing renewables came along. That is not the case, and we need to recognize that when we ask how best to adjust the market for innovation going forward.

What kind of innovations are we seeing in energy, and what might we expect in the coming years?

The sharing economy will be increasingly important in the transport sector. There is potential to improve efficiency and greatly reduce emissions as we move towards more electric and autonomous vehicles.

There is also room to harness data to make the grid and entire energy ecosystem more efficient. The data is available, through advanced meters and mobile applications, for example, but we have yet to fully exploit that data to move energy to where it is needed, smartly and in real time.

I expect to see more “community solar” projects, as collective consumers invest in generating and storing power. There will be more distributed generation using a variety of technologies, such as solar, wind, geothermal, fuel cells, and hydropower. We will see further innovations in multiple uses of energy storage, such re-purposing car batteries to store electricity.

In the coming years we might see some breakthroughs in carbon capture and storage – and, no doubt, there will be innovations and applications nobody has thought of yet.

What needs to be on the agenda for energy stakeholders?

Above all, we must have a solid plan to reduce carbon, To reach that, we have to define what we value – not just improving access to energy, and guaranteeing energy security to meet the needs of economic growth, but doing all of this in a sustainable way and one in which carbon emissions are drastically reduced. Then we need clear and transparent benchmarks against which to measure our progress.

We also need a vision that combines the decentralized and the centralized – embracing more distributed generation, while looking at the larger system and how we can move energy around globally in real time.

Finally, how might the energy sector look by 2030?

I fear that we will be paying for our previous failures to reduce carbon emissions, and being increasingly preoccupied with climate change adaptation. But I also believe that we can have a sector that delivers much higher access to energy than today, with greater use of renewables, incentivizing innovation and creating economic growth while reducing our impact on the planet.

The Annual Meeting of the Global Future Councils took place on 13-14 November in Dubai.

Winding Down to Rev Back Up

As I sit at my kitchen counter listening to the needles drop off our fading Christmas tree like sleet landing on window panes, I wonder when Congress stopped absorbing water and began accepting the inability to thrive. It all still looks presentable, but with little productive outcome. So what’s a clean energy advocate to do? Perhaps stop lobbying Congress altogether and focus instead on business-to-agency and business-to-business interactions?

Perhaps there are enough laws and we need to focus instead on implementing what we already have on the books. In a way, that exercise makes us dig deep into our statutes to find out what we can get done without change. Take the EPA, for example. The agency will essentially be writing our climate legislation and calling upon clean energy innovation for solutions to our most pressing environmental issue. And the Federal Energy Regulatory Commission, my personal favorite. The FERC, along with other regulatory agencies like the Securities and Exchange Commission and Federal Communications Commission, can open up markets by interpreting statute and promulgating rules that allow new technology participation. The Small Business Administration can assist burgeoning industries in navigating and interpreting existing policy. Even the Internal Revenue Service can make rulings based on statute that open the doors of tax policy for clean technologies.

Because DC is the home to hundreds of trade associations, ensuring that entrepreneurs are connected to the most appropriate and helpful trade groups can be enormously beneficial. Introducing foundling endeavors to larger companies and executives who can serve as mentors and guides along the way to development and, eventually, IPO. Forming coalitions of start-ups that can create their own nucleus of power with the philosophy that rising tides help all boats.

Thing is, we still need Congress to step in from time to time. We need laws clarified and updated. We need provisions extended and renewed to prevent new industries from collapsing. We need foundational policy for new enterprises that never existed previously and have no guidelines for operation. We need affirmation that our publicly elected officials who represent constituents desperate for jobs and economic growth, are engaged and learning and paying attention to what is going on in front of their eyes and in their hometowns. We do need Congress to act on clean energy. Not for everything that happens, but in really important ways that can help our national competitiveness through local growth.

So I will continue to work with Congress–explaining complex technologies in terms that a layperson can understand; introducing them to their own voters who are also clean energy entrepreneurs; demonstrating that federal programs can have positive and direct consequences on our economy and environment; and convincing them that taking a stand on clean energy is more of a patriotic value than a political statement.

In 2014, then, you may see me walking the halls of the GSA or the Pentagon, Rayburn or Dirksen. Happy New Year!

Clean energy policy: reducing climate change without the politics

This blog—and my career, frankly – has carefully steered clear of politically sensitive issues and focused instead on advocating for smart public policy. But having lived through summer after summer in Washington, D.C., with temperatures continuously climbing above 100 degrees and increasingly violent storms (with scientists echoing that things seem to be progressing more quickly then once thought), I finally am compelled to comment on the topic of climate change.

Given these circumstances, it seems that at long last, a real conversation about climate change is bound to happen. I actually think climate change policy does not have to be mired in politics, especially when the skepticism is concentrated in a small part of the political spectrum in Washington, D.C.

In 2010, I participated as part of a trade delegation to COP-15 in Copenhagen. I was then heading up the GridWise Alliance, and attended the climate negotiations to meet with other business leaders and observe the proceedings. I came away with two distinct impressions.

The first was that multi-national corporations clearly saw climate change as a business bonanza; that through developing solutions to mitigate climate change, they would profit.

The second was that many of the country delegations participating in the negotiations were there because the lives of their citizens were threatened by environmental destruction caused by climate change. They had travelled to dark, cold, expensive Denmark in December, in some cases bringing their own food to be able to afford the trip. These were their countries’ negotiators; top envoys and leaders desperate to have others listen to them and recognize the dire results that climate change had delivered to their homes. It seemed to me then that saving these countries from imminent danger—and creating a business case in so doing—were not mutually exclusive.

More savvy attendees managed their expectations. Hopes were high but despite efforts from the very highest levels, including the President, a grand deal did not emerge from those talks.  Back in the states, cap and trade legislation, which passed the House, failed in the Senate.  New legislation to address climate change has not been discussed seriously since, and the topic has become taboo in many political circles.

I think the pendulum is due to swing back.

We continue to hear reports that communities in Alaska that have existed for centuries are having to relocate because of reduced hunting and fishing grounds caused by climate change. Increased extreme temperatures and dramatic weather events have continued to wreak havoc in nearly every corner of the nation. Not a single person or someone they know has remained untouched. Whether these events can be directly attributed to climate change is still a point of discussion, but climate scientists are only more convinced that it is here and now.

Sooner or later, the federal debate on climate change will rekindle and, while legislation may look different from the Waxman-Markey bill of 2010, it will contain key elements that can drive a low-carbon energy future. State and local governments are already showing leadership by enacting climate policies; California is embarking on a cap and trade program, for example. Utilities are investing in technologies like smart grid and energy storage that can maximize the use of renewables and make fossil fuels more efficient. Technology development and deployment is continuing to create new wealth and jobs, despite the inaction in Congress.

And once that movement in Congress thaws, we can be in a position to help ourselves in so many ways. By devising an energy policy that asks—and strives to answer—the question “what do we want our country to look like in 50 years?” we can create incentives and groom markets for clean technologies, processes and applications that could significantly abate the threat of climate change. If we can articulate that vision and lay the policy foundation, investors will flock. Clean tech investment is still robust; private equity companies know there is money to be made. With a market that rewards reduced carbon emissions, investment—and profit—will only increase.

So, while the current rhetoric is often divisive and the hope of legislative action of any type seems bleak, we need to remain tuned in to the emerging opportunities for clean energy and innovation public policy.  Even in the unlikely scenario that the climate was to instantly stabilize, there is no risk (and potentially enormous benefits) to forging ahead on clean technologies.