In 1912, newspaper headlines in Australia and New Zealand were already sounding the alarm on the environmental impact of coal. More than a century later, the discourse on fossil fuels and climate change remains a global ‘hot’ topic. Thought leader and ESG industry expert Peter Bryant believes governments have an obligation to provide accessible, reliable, and clean energy to every human. He spoke to us about the opportunities and hurdles on the path to a just transition and how investors can help identify areas to support innovation in cleantech.
The broader move to a clean energy future features two key elements — the collaborative nature of a just transition and the need for emissions reduction across sectors. The just transition is all about inclusivity. It should involve all stakeholders in the decision-making. Exclusion undermines the essence of the process. In doing so, scenarios can be avoided where the heaviest burdens fall on the least resilient. The repercussions of leaving out key stakeholders have proven harmful, affecting Western nations and the developing world. Complicating matters is the absence of a singular dominant sector in emissions. Transport, steel, cement, and more have roughly equal contributions, making a targeted approach challenging. Emission reduction must, therefore, span agriculture, steel, cement, transportation, and power generation.
However, journeying toward a cleaner future is not without its hurdles. Some of these challenges are what Peter calls the inconvenient truths.
Permitting: Take permitting, for instance. A 730-mile transmission line in California has been stuck in a permitting limbo for over a decade, highlighting the delicate balance needed between development and addressing real concerns from concerned stakeholders.
Social Inequality: The discussion also extends to social equality, as outlined in the UN's Sustainable Development Goals (SDGs). While everyone should have the right to affordable and reliable energy, policies in the developed world sometimes worsen social inequality. It is quite startling that over 1 billion people worldwide live without any access to electricity. Their energy needs are taken care of by burning wood or dung, leading to severe health issues and many preventable deaths.
Minerals Famine: Did you know about the impending minerals famine? Take copper. The world is hurtling toward a severe shortage of a crucial element used in EVs and other renewable energy materials. Picture this: to meet our renewable energy targets, we'll need to produce more copper by 2035 than all the copper mined since the Second World War. The challenge is immense, and it's projected that we'll face a 30% copper shortfall by 2035. Even if we crack the technological barriers, the mining industry won't be able to keep up with the growing demand. And mining, with all its technical complexities, is a pivotal area in the energy spectrum.
Opportunities in the Space
In terms of scaling innovation and improving economic viability, Peter believes five technologies deserve attention from investors and other stakeholders.
Storage Solutions: Storage, especially at the grid level, is a linchpin in the journey towards sustainable energy. Managing distributed storage efficiently, often referred to as the smart grid, is a territory where significant strides are yet to be made. Overcoming the intricacies of storage is fundamentally a chemistry problem, but with persistent efforts and investment, smart minds are working to revolutionize this aspect of clean energy.
Carbon Capture: For emission-intensive industries like steel and cement, carbon capture and sequestration (CCS) is a non-negotiable solution. The focus now pivots on refining the economics of CCS, where considerable investment and growth are underway.
Green Hydrogen: While green hydrogen is gaining attention, its energy intensity poses challenges, especially in industries like steelmaking ––where the power demand is high. The affordability of using green hydrogen remains a concern.
Nuclear Energy: Despite debates surrounding nuclear energy, its role in emission reduction is an important one. Small Modular Reactors (SMRs) present a promising avenue, offering a pragmatic solution that balances the potential risks of nuclear energy with significant benefits.
Efficiency Opportunities: A surprising gap exists in tapping into efficiency opportunities across various sectors reliant on electricity. In industrial processes, there seems to be a reluctance to introduce new technologies. This reluctance is a notable roadblock that needs to be addressed.
Venture capital could help orchestrate change, inject life into diverse ventures through funding, sparking innovation, and creating a dynamic ecosystem. While Peter appreciates the government's role in fostering a research-friendly environment, he urges them to not handpick winners. The oil and gas industry will prove to be a significant player in the energy transition. It is crucial to grasp the multifaceted aspect of nature as well. Consider, for instance, a largely unreported event from 2022 —a colossal underwater volcanic eruption in Tonga. This explosion injected a vast amount of water vapor into the stratosphere, impacting the Pacific and the global ocean, offering us a glimpse into the unpredictability of climate-related events. Rystad Energy recently unveiled a new set of climate scenarios, projecting a probable 1.9-degree Celcius increase by 2084 — a slightly more grounded view compared to the ambitious 1.5-degree target by 2050. The transition may take decades. But one thing is certain — innovation will lead the way.
About the Speaker:
Peter Bryant is a recognized thought leader on ESG and sustainability; the energy transition and the criticality of the minerals value chain; and broadscale innovation and digital transformation. He is the Board Chair and Managing Director of the resources advisory firm Clareo, and Co-Founder and Board Chair of the Development Partner Institute.
You can watch Peter’s entire keynote here: https://keiretsuforum.tv/the-just-transition-to-a-cleaner-energy-future/