“Renewables are going to be a huge part of our future energy system going forward.”
– Rebecca Williams, Global Head of Offshore Wind, Global Wind Energy Council (GWEC)
We’ve got a roadmap to the future of energy. It’s renewable. And it requires transformation. Global leaders set the tone when the Paris Agreement went into force in 2016, outlining long-term goals to reduce greenhouse gas emissions and limit the global temperature increase to 1.5 degrees. The direction of travel continues to crystalize, especially on the heels of the 2021 United Nations Climate Change Conference (COP26).
This is exactly where GDS Group picked up the conversation on a recent Strategy for Breakfast podcast. We had the opportunity to speak with Rebecca Williams from the Global Wind Energy Council (GWEC), who was just director at COP26 in November, and Michael Short from Bain & Company, who advises global clients on all energy value streams, with a particular focus on oil and gas in the power sector. Here, we’ve gathered top insights from this exciting conversation on the future of energy.
Goals have been set. The commitments are out there, and Rebecca Williams feels a sense of momentum. “I’m super optimistic about the future,” says Williams, commenting about the progress she’s seen in the clean energy sector.
Coming out of COP26, where Williams served as director, Williams was encouraged to see language around the phasing-down of coal, as well as strengthened support of clean technology, including renewable energy. “What we saw at COP26 was a great deal of ambition from countries about their energy transition and energy transformation,” Williams says. “And we’re seeing similar ambition when it comes to the corporate sector as well.”
But while she notes this progress, she also worries about the pace of change. “The concern is just, can we get there fast enough, given the lagging policy frameworks that we have in the energy sector?”
The “Transition” Part of Energy Transition
Lagging policy frameworks are on the mind of Michael Short, as well. A partner in Bain & Company’s Energy and Natural Resources practice, Short advises businesses all over the world, including in regard to their energy transition. The challenge right now, says Short, is the ‘transition’ part of the equation. What’s the best way forward?
It’s not enough, says Short, to agree on the goals, if individual companies don’t know what actions they need to take, if they don’t know the so what. “What’s the ‘so what do I need to do about that to satisfy all the stakeholders I have, and do my part to progress down that journey?’”
While high-level targets, like net-zero commitments or renewable energy pledges, are useful for setting a direction, what happens after the pledge is signed?
“Do the governments and other stakeholders involved in the post-COP26 statements put their money where their mouth is?” asks Short. “When energy costs are high, do governments continue to subsidize fossil fuel, or do they not?”
As Short and Williams wait for these frameworks to come together, both are hopeful eventual policy will work as an accelerant.
“We are seeing now in many markets, ones with coastline and wind resources, that governments really want to take this forward,” Williams says, “I just really want to underscore that this is a sense of unstoppable momentum that I get now, and even in markets that we thought more unlikely, we’re seeing a lot of movement.”
Williams cites a few examples of good or emerging policy structure:
You can dig deeper into the future of energy by listening to the entire conversation featuring Rebecca Williams and Michael Short on GDS Group’s Strategy for Breakfast podcast. Find it here, or wherever you listen.
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