On the day that more than 40 countries committed to phasing out coal power in the 2030s for major economies, and the 2040s for poorer nations, the CBI hosted its Energy Transition Husting in partnership with Bain & Co.
- Tony Danker, Director General, CBI
- Olga Muscat, Partner, Bain & Co
- Fiona Howarth, CEO, Octopus Electric Vehicles
- Fabien Vieau, Director, Energy and Data Centre Location Strategy, EMEA, Google
- Raphaelle Vallet, Senior Manager, Climate Policy and Strategy, Macquarie Green Investment Group
Moderator: Roger Harrabin, BBC
Business will be at the heart of delivering the private investment and innovation required to decarbonise our energy systems. It has many of the solutions, but how does it need to work with governments going forward to unlock?
To successfully phase out unabated coal and other fossil fuels, alternative technologies are required, including renewable energy, energy storage and alternative fuels. Speakers from across the energy sector demonstrated that many of the technologies are known, and now must be invested in and deployed at pace and scale.
The energy transition and investing in these solutions are no longer risks but opportunities – such as new business models – as Fiona Howarth of Octopus stated. Other firms are also rethinking electricity tariffs to encourage shifts in consumer behaviour to help manage daily fluctuations.
Macquarie GIG’s Raphaelle Vallet said that the finance sector is reimagining how it supports technologies with currently high upfront costs, including green mortgages and how to lend money. And new markets opening mean that individual companies can now engage with the transition and meet their own ambitions and targets, said Google’s Fabien Vieau. Corporate power purchase agreements (PPAs), for example, meant that Google has been carbon neutral since 2017 and is now aiming for 100% renewable energy consumption 24/7 by 2030.
Joined up end to end thinking
Decarbonising the energy system means that the individual components – whether that be energy generation, industrial consumption, or domestic heat – cannot work in silos.
We need whole-system thinking, both on the supply-side and demand-side through business and domestic consumers. As Olga Muscat of Bain & Co pointed out, the current energy system is designed for fossil fuel generation, not high renewable scenarios, where there is intermittent generation.
Top-down thinking needs to change, and Tony Danker said that government now needs to move from a green rule market to a green market maker. We need green markets that function efficiently and work together.
Currently, there are many market mechanisms and policies that have enabled the deployment of renewables in a system designed for fossil fuels added GIG’s Raphaelle Vallet. To move to subsidy green renewables, we need to rethink the markets, he added.
Olga Muscat went on to say that in creating green markets we need to continue the collaboration between investors, sectors, and policymakers and put customers first to unleash the policies that will unlock investment.
It’s all about timing
Fundamentally, delivering the energy transition will be critical to enable cross-sector decarbonisation. Therefore, we must progress this at pace and scale. 2030 seems far away but in reality, it isn’t, we need to act, and we need to work together, said Google’s Fabien Vieau. While Fiona Howarth of Octopus pointed out the need to encourage early movers to enable the scale-up, this is a world of opportunity, she added.
For the CBI’s Tony Danker, there has been a boardroom tipping point, we now need a supply chain tipping point and a consumer tipping point to enable a whole-system transition, he added.
To find out more about the CBI’s Decarbonisation work and how to get involved, see here.