Horizons Talks: Energy futures
The Horizons Talks speaker series brings experts from Canada and around the world to share their forward-looking research and ideas with public servants.
The Energy Transition is not only about carbon. It’s about human development and the potential of energy to transform the lives of billions of people. Whilst the energy future cannot be predicted, governments can help energy leaders with ‘how to’ better prepare. During the Horizon Talk, Dr Wilkinson will share the World Energy Council’s vision of humanising energy. She will also outline their future horizon work in building and using foresight insights and tools, including the World Energy Transition Radar and World Energy Trilemma Index, to better enable both a successful energy transition and energy for a better quality of life.
Dr Angela Wilkinson
Secretary General and CEO, World Energy Council
Angela is one of the world’s leading global energy futures experts, an experienced energy executive, a distinguished Oxford scholar and a published author. She has 30 years of experience in leading national, international and global multi stakeholder transformation initiatives on a wide range of economic, energy, climate and sustainable development related challenges.
Angela has worked as a senior executive in the public, private, academic and civic sectors. She joined the World Energy Council in 2017 to create a practical energy transition leaders toolkit and direct a new strategic insights programme. Prior to that Angela led an upgrade in strategic foresight at the OECD, based in Paris. Prior corporate experience includes decades in Royal Dutch Shell and British Gas plc. Angela is an Associate Fellow, Said Business School, Oxford and a Strategic Foresight Fellow of the GOA, USA. She sits on two international advisory boards (HSE, Russia; ECI, Oxford) and is a Fellow of the World Academy of Arts and Science. She has published four books and numerous articles. Angela has a PhD in Physics.
KRISTEL VAN DER ELST: Thank you, Claire.
Well, bonjour tout le monde. On se revoit pour une nouvelle causerie aujourd’hui. Je suis vraiment super contente d’avoir Angela Wilkinson qui nous rejoint aujourd’hui.
So Angela Wilkinson is one of the really world leading experts in energy futures so it’s really great that we have here certainly after a couple of weeks ago having had her energy summit, and so it is a great moment to have her.
She has been working for more than 30 years in the field both in the public and the private, academic, civic sectors, mainly around climate change sustainability, energy and economic related issues. And before Angela actually joined the World Economic — sorry, that’s like (inaudible) — the World Energy Council in 2017 as Secretary General and CEO, Angela had already a significant career both in futures and in energy. So she is at that sweet spot of both.
So Angela was, just before this, started up a strategic foresight activity of the OECD in Paris. She has been part of the Royal (inaudible) team and initiatives that we all know so well, if you’re in the foresight space. She was also the co-director of the Scenarios Program at Saïd Business School, were co-fellows at the Accountability Office of the USA. And so Angela has written a number of books which I can only recommend to you to actually read those from a content futures perspective but also from a methodological perspective.
But more importantly to me, Angela has been over the last 15 years — doesn’t make us younger — a very good friend and a mentor in this field. So when I started doing futures work at the World Economic Forum at the time I had no clue what I was starting to do. So as I reached out to a number people amongst which was Angela, and from there on she was so generous with her help over all these years that a beautiful friendship (inaudible).
So I was just super happy to have Angela here with us. And maybe I will hand it over here to her.
ANGELA WILKINSON: Thank you, Kristel. Bonjour. That’s about all the French you’re going to get from me today.
I’m delighted to be here. I’m going to talk a little bit about — well, I’m going to talk a lot about the World Energy Council and what we do with energy foresight and how that might be helpful and relevant to what you’re trying to do in Policy Horizons Canada and also when the governments are caught in an economy that depends a lot on energy. So I’m going to talk a little bit about the work that we’ve been doing around this recent crisis, rather than all the work that we do as (inaudible) in a particular area. And I’ve already seen some friends already on the video.
Let me just talk a little bit about the World Energy Council, not — you know, I’m required to do product placement, but more interestingly, where did it all begin? The World Energy Council began about 97 years ago at the World Power Conference in 1924. The reason for talking about our origins is we started up at a time which was just after the global flu influenza pandemic of 1918 and just before the Great Depression of 1928.
And I think in French you say “Par chance, plus ça change.” Or in English we say, “Oh, doesn’t that all look a little bit familiar?”
Now here we are again at a time that’s after a global health emergency and everybody hopes that we’re going to avoid a severe global economic depression and here w are still as the World Energy Council trying to think about how do we enable the world to have a better energy, for better lives and a healthy planet.
So we’ve been around for nearly 100 years. We operate on the ground in nearly 100 countries and our members are the practical men and women who really build and run energy systems and try and work out how to bring the benefits of modern, clean, affordable, reliable, and equitable energy to everybody around the world.
So let’s go to the talking about foresight and this COVID crisis. So this crisis has changed our world. It has been a brutal social shock, a social disruption. And it’s come on an already stressed worldwide energy system, even before we were talking about this crisis, COVID crisis, we were looking — many energy companies were talking about the prospects of global economic recession. Everybody was talking about return of the climate change momentum, and there was a whole social energy agenda emerging because of the great unevenness in access and benefits from energy.
And this crisis has triggered new behaviours. We’re all working from home. We’re all zooming in and zooming out, but it also gave us a taste of a better energy future. We’ve had cleaner skies. We’ve had quiet and uncongested city streets. And we know that this crisis has impacted all parts of the energy system in all countries and in all regions. But the impacts have been uneven. Not all sectors in energy have been hit in the same way. And although we accept that there will be some permanent reduction in demand in some areas with some forms of energy, we also know that there is still a global demand (inaudible) that is still building up in many parts of the world.
Now, the resilience of the system has been — of energy systems has been tested. Fortunately, the world stopped but the lights stayed on. Recovery is not going to be easy. In fact, the surveys that we conducted suggest that it might be more difficult than we thought it would have been six months ago. And we know that transnational outcomes are still possible but recovery on transformation will involve the greatest financial capital reallocation in history.
And an important place to start in thinking about how do we recover from the crisis is to think about the bigger longer-term picture. We know that we have to understand the bigger context of energy to get ourselves out of this crisis.
Now, a 97-year-old history gives you the possibility of looking at deep pasts as you start to think about deeper futures.
We were born in 1924. We started up in an era of energy for peace. We grew and evolved through a period of energy for prosperity, and we now say that the world has entered a new era of energy transition which is energy for people and planet. And for us at the World Energy Council, energy transition is a process, not a destination. It’s a process of continuous evolution in human development and the modern energy on which lives, livelihoods, societies and economies depend.
We now have added a fourth driver of change, a fourth “D” to three global drives of change that we have been monitoring for over a decade. We now how have the four “D”s — decarbonization which of course is the opportunity and possibility of having a climate neutral energy system worldwide by 2050 or 2060. We’ve got decentralization which has to do with the rapidity of the renewable energy revolution and is the distribution of renewable energy resources worldwide compared with the more scarcity model of distribution of resources. (Inaudible) which is impacting all parts of the value chain in the energy sector and is leading to improvements in efficiency and in processes and the operation of assets. And the fourth “D” that we have added is disruption. And the aim of disruption, when we came away from the 24th World Energy Congress in Abu Dhabi last year, we have been talking about how value is like — value creation is migrating energy systems closer to the end user, to the customer.
We started to note that there was a new leadership mindset, the customers centric system and the disruption as usual is a reflection that we expect more demand side innovation in the years to come.
Let’s look at what we do around energy foresight at the World Energy Council. We have been practising energy foresight for over two decades. I could have said in the 1970s or ’80s you would have found practices of energy forecasting to be dominating our organization. But in the last two decades we have deliberately tried to broaden away from forecasting and model-based data projection methods into foresight methods. We produce long-term world energy scenarios. In 2016, there was (inaudible) 2060 and looked at how do we achieve climate neutrality. How do we achieve — can we achieve 2 degrees Centigrade? Can we achieve 1.5 degrees Centigrade?
In 2019 we brought that horizon into 2040 and we started to look at what are the innovation tipping points in different pathways. We have produced recently a recent set of COVID scenarios to 2024 which I’m gong to talk a little bit more about. And we also do regionally and sectorally focused scenarios. We produced a new global weekly outlook last year, to have a best perspective, an Africa regional perspective, a Latin America and Caribbean perspective, and a European perspective on energy future.
We don’t just invest in building scenarios. We also have to invest in using scenarios that we also develop application vehicles and a call for action that allow decision makers to work with scenarios and bring them and translate them into decision making and into actionable propositions.
We’ve most recently launched the World Energy Transition Radar. I’ll talk a little bit more about that later but that works with our COVID scenarios to 2024 and picks up real time signals from across the world and effective where action is now in terms of implications to the pace and direction of global energy transition.
We also run scenario-based policy or investment summits where we look at role play simulations between government, business, civil society and other actors, and we’re trying to understand the future through the interaction of actions taken today. We introduced the new concept last year around innovation which is called constellations of destruction. And it is rather than thinking about technology clusters or individual technology it’s looking at the new power of combinatorial technology and also the role of policy, financial, business model and behavioural innovation in taking new opportunities of scale.
And we also produced something called the Energy Trilemma Index, the World Energy Trilemma Index which has affected how nations are performing in terms of their policy performance for energy security, equity and affordability, and environmental sustainability. And we can combine our Energy Trilemma Index with our scenario work to do forward policy pathfinding.
Next slide, please.
So let me dig a little bit more into the work that we have doing about recovery and transformation. So we are an organization that doesn’t say what the world should look life. We say how to recover from crisis and achieve transformation outcomes.
Since February we have been running worldwide surveys across our members in over 100 countries and we’ve been asking what impacts are you experiencing, what actions are you taking, and how is your outlook on the future shifting?
We have used the results of those surveys to build this (inaudible) of four impartial plausibility-based COVID crisis scenarios to 2024. These four scenarios — we’re going to show you a video. I’m going to show you a video of those in a moment, but these scenarios are built on three critical uncertainties and how these might combine and impact recovery and transformational planning. These uncertainties are ambition, trust, and the ability to control the virus. And as I said, we’ll show you a video on these four scenarios which are called “Rewind, Pause, Fast Forward, and Rerecord.” I will show you that in a minute.
We have used the set of crisis scenarios to develop the World Energy Transition Radar and I will show you an example of that. And that tracks these signals, decodes them and then assigns them to a scenario to give an indication of where action today is moving us in terms of the future.
And the far panel on the right-hand side illustrates this scenario based simulation work that we have doing. And I’ll talk a little bit more about that as well.
Next slide, please.
We’re going to play the scenarios video.
— VIDEO PLAYING
ANGELA WILKINSON: Those scenarios, coproduced by our members in over — as I said, in nearly 100 countries and our members use those scenarios to stress test their recovery plans and to explore and identify transformational investment opportunities.
And as I’ve said, we have used those four scenarios and we have a whole series of signal scanners out there. We have used — combined those to create what we call the World Energy Transition Radar. And the radar is detecting real-time signals from across the world and then coding those to say what does that signal tell us about where we’re headed in the future. What’s the direction of global energy transition implied by the signal and what’s the pace of global energy transmission implied by that signal?
So the signal we’re detecting at the moment as of the 1st of November indicates that the majority signals that we’re picking up in the radar currently relate to this collaborative innovation future called Fast Forward.
The next (inaudible) of signals is coming into this again, high trust world of re-record and globally we have fewer signals for pause and the rewind scenarios. So what we’re doing with this is we’re giving policy makers and corporate decision makers an opportunity to say, “You’re taking your action with your ambition and with your best intentions but when we add up all the actions of everybody around the world, what direction are we heading in?” And so this radar shows us which future we’re creating through our actions today.
Next slide, please.
Of course, we can also dig into not just looking at the global level radar. We can also look at one of the differences in the regional signals that we’re picking up. So you so that global picture in the last map and here we can see how those signal weightings are different in different regions of the world. So, for example, in Europe we’re seeing a lot more signals for the re-record scenario, the orange and the part of that pie chart. And also for the fast forward scenario.
But if we go to the Middle East we see a lot more for the grey portion fast forward, and also a lot more for the pause scenario which is the blue segmentation. Now, we could spend all day talking about what the interpretation and meaning of these different signals is, and that’s the point. The pint is we’re not here trying to predict the future; we’re trying to improve the quality of conversation about what are the assumptions that we’re making about the future? What are the actions that we’re taking and what are the implications of those actions for the futures that we would like to see rather than the futures that are coming about?
Next slide, please.
As I mentioned, we also not just produced the surveys, we don’t just produce the scenarios. We don’t just use the radar. We also design interactive leadership exchanges. We have a role play simulation which engages roles of business, of governments, of investors, and of civil society. You have the menu of choices and an investment budget which could be time or money. And it asks them to make their choices and then we look at what do those choices mean in terms of where would we end up in the future from the combination of all those choices.
What you see on this chart is an example of a recent simulation that we ran in World Energy Week and you will see that the role play of investors was taking them in to the fast forward future, the implication of all their choices. Governments were also moving into the fast forward future for their choices. But civil society and business were definitely much more conservative and less ambitious in their choices and were actually ending — taking us in the direction of this future that we call Pause which is a return to the pre-pandemic normal but with a long delay.
And the promulgated average of all those different role plays leave the fill-in-the-code scenarios. So we played subsequent rounds of this simulation, changing the menu of options and in each round. Everybody learns about whether the decisions that they are taking are big, bold, and practical enough to shift the future in the direction that we want.
Next slide, please.
Whenever you end on a note around our vision in the World Energy Council is to humanize energy. This vision of humanizing energy has become — rapidly become of age in this crisis. When we look at what companies and governments are talking about, we see first of all that there’s been a people-first emphasis in dealing with this crisis, that we are seeing a greater emphasis on resilience and that is extending to include people and supply chain. And for the World Energy Council, our vision is to humanize energy, recognizing that energy is really about quality of life and human development everywhere. And it often gets reduced to this conversation around technologies and investments without thinking about the social purpose of energy. And our work around humanizing energy involves using energy foresight to engage a much broader search of system shapers in the conversation.
So it’s not just about countries and companies; we also have to engage communities, customers, citizens, in the conversation around energy transmission. We have to increase and enhance energy literacy. It’s very difficult for people to make decisions which are fundamentally about their energy’s futures if they don’t understand what energy systems look like or even understand the difference between the current composition of the energy work system which is 20 percent electricity and 80 percent non-electrified, and the implication of most scenarios that even in the best outcome we might get to 40 to 50 percent electrification by 2050 which still leaves 50 percent of the energy system that would have to made clean from non-electrification means.
We’re supporting this shift in the energy leadership debate around supply side thinking to demand better solutions because of the emergence of what we call the customer-centric energy system and we’re reaching out to ensure that people in communities impacted by transition are engaged n the debate and that we open up a more honest conversation about how to manage the full cost of society of a faster pace of transition.
We’re also trying to address the growing risk of fragmentation and polarization by convening energy transition leaders who now reside not just within the energy industry but in adjacent sectors of transport, building, industry, and agriculture, and include and involving them in promoting a more — a new approach to inclusive and collaborative innovation.
And we’re also, always, for 100 years, engaging diversity, regional, social, technological, and cognitive foresight in the practice of cognitive diversity. We engage our different strengths in order to accelerate our ability to learn with and from each other.
So welcome to the World Energy Council. I hope our energy foresight practice is interesting to you and I am ready for questions.