The party is far from over for investment by the oil and gas sector in the energy transition

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Joan MacNaughton CB HonFEI, Climate Group Chair and former Energy Institute President

Anyone in oil and gas who still thinks they can ride out the energy transition should look to the decline of coal for a salutary lesson, says Climate Group Chair and former Energy Institute President Joan MacNaughton CB HonFEI

It seems almost incredible that the energy transition was the predominant theme at IP Week only last month, with an oil price consistently above $60. In his opening keynote, IEA Executive Director Fatih Birol had remarked that, in 14 years of attending the WEF at Davos, he had never observed such a strong consensus on the need for vigorous and accelerated action on climate change.

Now COVID-19 has upended a lot of assumptions about our priorities. Is the urgency of low carbon investment one of them – especially for a sector reeling from a price plunge caused by ramping up of supply at a time of surplus stocks?

The sector might do well to heed the fate of the coal industry. As long ago as the early 2000s, some policymakers and businesses recognized the need for carbon capture and storage to control emissions from fossil fuels, and from industrial processes, as the world replaced its legacy capital stock (a process that is bound to take decades). I have been active in the debate of how to progress this, first in government, then in business, and now in the NGO world. Efforts to support those willing to invest included the use of Carbon Emission Reduction allowances from the European Emissions Trading Scheme, as well as government support from the US, Canada and the UK.  There were large-ish scale field trials such as the AEP-Alstom 50 MW Mountaineer project at the end of that decade. But they faltered for lack of financial support. Although the coal industry was approached to put their shoulder to the wheel they were decidedly uninterested.

Roll forward a decade.  We see, from analysis (Carbon Brief, February 2020) of scenarios gathered by the Intergovernmental Panel on Climate Change (IPCC), and other data, that the ambition gap between the track we’re on and the emissions implied by the Paris Agreement is particularly large for coal. Emissions from coal have to fall by around four-fifths this decade on a 1.5C pathway, twice as fast as for oil or gas. And even to keep warming ‘well below’ 2C, CO2 from burning coal must still be roughly halved over the next 10 years.

That’s not a great place to be. Perhaps they thought they were ‘too big to fail’? Maybe. But notwithstanding  a strong commitment from President Trump to save our beautiful (ok, I may have made that up) coal industry, more than half of all coal companies in the United States have gone into administration since 2016 – the year he was elected. And there is no evidence of any investor wishing to ride to the rescue with a proposal to build a new coal-fired power station. Admittedly there is still some coal generation being built in Asia, but the pipeline of projects just keeps shrinking.

With oil dominant as a transport fuel, that fate surely cannot befall the oil industry. Hmm, think again. According to the BNP Paribas report ‘Wells to wheels’, the cost of mobility per distance travelled will on a lifecycle basis be nearly seven times greater for petrol (and over 3 times as much for diesel) than for electric mobility sourced from a renewables powered grid – in the 2020s. That’s this decade, of course. Solar and wind are now the cheapest power source in more than two thirds of the world and by 2030 they will undercut commissioned coal and gas almost everywhere.

Given that the cost of running EVs on solar or wind power is dropping so rapidly, the only way petrol powered cars can compete with renewable energy-powered EVs will be if the price of oil were to drop to $11 to $12 per barrel. Be careful what you wish for – that now seems all too possible. But it scarcely looks like a sustainable business model. And offsetting gains from the fastest growing part of the sector – petrochemicals – may not buy much time, given bans on single use plastic in so many countries and on so many continents.

So the party is far from over for making the clean energy transition in the oil and gas sector. We all of course face the most difficult immediate challenge any of us can remember in terms of the dreadful impact of COVID-19. That has to be governments’ top priority for the foreseeable future.

The downturn it has engendered in emissions has come at a frightful cost, not one any campaigner could have wished for. Nor is it any kind of solution to the threat of climate change. Albeit that that will crescendo over a longer time frame, it too will be frightful in its impact. The businesses which in future will thrive will be those who use their resources – financial, entrepreneurial, and scientific – to tackle it. Otherwise the party – for all of us – will be well and truly over.

Lifting the veil on hydrogen

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Daniel de Wijze, Energy Analyst at the Energy Institute

Last year, climate change captured the public’s imagination like never before. In September, over 6 million people took part in a global climate strike, likely the largest such event in world history. Meanwhile, businesses, governments, and the media all expressed growing concern about the impacts of greenhouse gases on the environment and the economy. In the UK, the Government passed legislation for an emissions target of net zero greenhouse gas (GHG) emissions by 2050. Achieving the net zero target is a huge challenge, and will likely transform the way we live, work and get from A to B.

With this in mind, the energy industry is searching for sustainable alternatives to coal, oil and natural gas – one intriguing option is hydrogen. A simple, colourless gas, hydrogen is the most abundant element in the universe, and fuels the fusion reactions that power young stars, including our Sun. Although it is an unknown entity for many, it has been used for many decades in industry, and also as a fuel for the Space Shuttle and other rockets. Hydrogen can be produced by using an electric current to split apart water (electrolysis) – as long as the electricity used is green, the production process is green too. Another low-carbon option is to use natural gas coupled with carbon capture and storage (CCS) technology.

Until now, the low cost and convenience of producing, storing and transporting fossil fuels means that hydrogen has never been used widely outside of industry, and it is not yet cost-competitive in many areas. However, as the price of renewable energy, electrolysis equipment and carbon capture and storage technology is set to fall, hydrogen could become a much more attractive option.

What would using hydrogen mean for you or me? More people may soon be wondering, because it is flexible, potentially low-carbon, and could be used in many aspects of our lives – to cook meals, heat homes and even fuel cars. Work is ongoing to make sure that using hydrogen would be as safe and reliable as fuels like natural gas are today. There is particular interest in using hydrogen for domestic heating – decarbonising heat is a tricky task that will likely require changes to peoples’ homes, such as improving insulation or changing the boiler. Converting the natural gas distribution system to carry a hydrogen/natural gas blend – or even 100% – hydrogen has been suggested as a low-carbon heating method that would minimise disruption for the consumer. However, the cost-effectiveness is disputed, and it would require adapting or replacing millions of appliances, including cookers and ovens.

The Energy Institute (EI) aims to lift the veil on hydrogen and its potential applications with its brand-new, online user guide to hydrogen. It will be released at the Heat & Decentralised Energy Conference 2020, and explain how and why hydrogen could be used, what the user experience would be like, and what the associated costs and safety risks would be. The guide is accessible and engaging for household energy consumers, students and policy makers, as well as those with a more extensive background in the industry. Developed by the EI Knowledge Service, in collaboration with a cross-industry panel of experts, the breadth of contributors reflects a growing interest in hydrogen across the energy industry, from gas distributors and engineering firms to academics and automotive companies.

As the scale of the climate change challenge ahead looms large, we need to explore every option – hydrogen holds great promise, but there are also serious concerns to address. Look out for the EI’s guide to find out more.

Energy Essentials: a user guide to hydrogen will be available from 25th March on the EI Knowledge Service website

In the meantime, take a listen to episode 3 of the EI’s new podcast, Energy in Conversation, which dives in to the discussion around routes to decarbonising domestic heat.

The road to Glasgow

Steve at EI Awards 2019

Steve Holliday FREng FEI is the President of the Energy Institute

Madrid was not a success. I mean no criticism of the Spanish capital’s elegant step into the breach after Chile’s domestic troubles pulled the plug on Santiago hosting last year’s global climate talks. But the desired outcome was stymied, as it has been in the past, by the big emitters.

What it means is that all eyes are on the crucial COP26 summit to be hosted by the UK government in Glasgow in November. The talks will see the Paris agreement come into effect, alongside immense pressure for greater emission-cutting ambition from all countries.

For the UK this will be a defining moment, as we wrestle with Brexit, to prove we still have what it takes on the international stage. It will require unparalleled diplomatic effort to take what was achieved in Paris five years ago and turn it into something with a chance of preventing the worst impact of climate change. Fortunately, the UK has an unrivalled diplomatic machine, and I know the FCO’s network of energy and climate attachés is already kicking into action, so I have some confidence.

It also means leading domestically in the UK with what’s required of economies around the world – to have the vision and political bravery to reinvent our economy around net zero.  This poses gargantuan challenges for the UK – in transport, heat and (still) for our power system. But, based on the 40% cut in emissions since 1990 against a backdrop of more than 60% growth in GDP, I am again confident.

To be clear, there is a climate emergency and we must remove greenhouse gas emissions from the global energy system as quickly as possible. And by we I mean governments, businesses and individuals, not just in the technologies we deploy but in the way we use them and how we behave.

But it’s not only the amount of energy we use today that needs to be cleaned up. Global demand continues to grow and this must be met in a sustainable way, in particular for the three billion people still cooking on some form of solid biomass, with serious impacts on health causing around four million premature deaths every year, mostly women and children. And for the near billion people who still have no access to electricity and the quality of life that accompanies that.

More generally, economic development and the growing middle classes in low and middle income countries, in Asia in particular, are rapidly pushing up demand. It’s expected to grow globally by another 25% by 2040.

We cannot view these issues independently. Protecting our planet and reducing the imbalances across societies is the single greatest challenge of our age.

Simply, we need more, cleaner, better-managed energy – urgently. And this year at the Energy Institute we will significantly ramp up our contribution to this with:

  • new technical programmes in hydrogen, carbon capture, usage and storage (CCUS), integrated networks and fugitive methane reduction;
  • a guide for future consumers of hydrogen;
  • a new health and safety conference bringing together our growing body of partner companies working in onshore and offshore wind power and other renewables;
  • a special EI climate change award for young people at the Big Bang science and engineering fair; and
  • setting science-based targets for our own operations to reach net zero well before 2050.

But before all of that, this month there will be a very different feel to IP Week, our annual gathering of global oil and gas industry leaders and influencers.

The 2020 programme will focus decisively on the low carbon future and the role of oil and gas industry in it. Alongside leaders from across the industry – including BP’s incoming chief executive Bernard Looney FEI – we’ll be bringing in external speakers from environmental NGOs, the investment community, government and elsewhere to provide vital context to the urgent global challenge we face.

Urgency will, I am sure, mean discontinuity in our energy system. But it must not give rise to panic. Such a fundamental change to our global economy calls for an approach that is honest, based on evidence and as low on regrets as possible.

Because the inescapable reality is, even as we pursue all and every low carbon alternative, oil and gas still account for 54% of the world’s energy needs. Indeed we should never forget that our ability to harness these resources has delivered incredible human progress and improvements in our quality of life.

The question for those companies working in oil and gas is whether everything possible is being done to tackle fugitive emissions of methane – a potent greenhouse gas – and bring on vital CCUS to move us more quickly towards net zero? The engineering capabilities are certainly there, as are the financial weight and the proven ability to deliver globally and at scale.

As an engineer who spent half his career in oil and gas and the other in the power sector, I’m a big believer in human ingenuity and our ability to solve big challenges through technology.  I’ve seen it first-hand time and again. Professionals in energy have changed the world before and I am confident 2020 will be a year in which we show we will do it again.

IP Week 2020 programme and registration details are at www.ipweek.co.uk

This article was first published in Energy World and Petroleum Review, February 2020

Keeping the lights on and emissions down: Comms and the energy sector

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Nick Turton MCIPR, External Affairs Director at the Energy Institute 

From behaviour change to crisis management to global advocacy, Nick Turton MCIPR delves into recent polling among senior communication professionals in energy and climate change.

Energy is all about molecules and electrons, right? It’s the stuff of engineers and scientists, of big power stations and oil platforms? Well, that’s certainty partly true. But look a little closer. Consider these three moments from the past year:

  • On 27 June, legislation completed its passage through Parliament requiring the UK to end its contribution to climate change entirely by reducing greenhouse gas emissions to net-zero by 2050.
  • On 9 August, a freak set of events on the UK electricity grid led to the loss of power to more than a million customers, with knock on consequences for trains across the South East, Ipswich hospital and Newcastle airport.
  • On 13 December, the UK was formally confirmed as chair of the most significant global climate negotiations since the Paris Agreement, to culminate in hosting the COP26 conference in Glasgow in November this year.

In different ways, they serve to illustrate how central professional communication and communicators have become to the field of energy and climate change, and in diverse ways.

The net-zero target will call for sophisticated skills in consumer engagement to bring about far-reaching changes in how we live our lives.  According to the Government’s expert advisers at the Committee on Climate Change, behaviour change will be needed to achieve up to two thirds of the cuts in emissions required over the next three decades.

As for the blackout, well, as crises go, it’s up there. Customer relations, PR, corporate affairs, internal and other communication teams within affected organisations will have been working frantically to manage the operational, reputational and financial fallout.

Lastly, COP26 will demand unparalleled diplomatic efforts, with professionals skilled in coalition building and global advocacy needed to pull off a global emission-cutting deal capable of averting the worst of the climate emergency.

These are just three instances, but recent polling by the CIPR’s Energy Leadership Platform of senior professional communicators working in energy and climate change suggests the ask is huge, the skills diverse and, perhaps more than anything, they’ve got their work cut out.

Despite the apparent growth in concern about the climate emergency, some 95% of those surveyed believe the general public has a weak understanding of the energy system and the challenges it faces. The mainstream media also fares badly on 67%. This contrasts, not surprisingly, with the scientific and engineering community which is seen as having by far the strongest understanding of the issues.

Not only that, but financial matters appear to trump bigger planetary concerns. The cost to the consumer is seen as the number one barrier to public acceptance of the changes needed to bring about the energy transition. And executive pay is singled out by 70% of respondents as having the most detrimental impact on the sector’s overall social licence to operate, followed by prices.

This same polling also sheds light on how senior professionals feel about the status and state of their profession within the energy world. Most positively, three quarters of those surveyed believe communication is valued at the top of their organisations as a function akin to legal, accountancy and engineering. The picture is also positive in terms of how much the wider workforce values the function, though less so, on 58%.

In two thirds of organisations, the most senior communications professional is at Director or CEO level and, in most of those cases, the profession is also represented at board level.

This is perhaps no surprise given reputational risk and crisis management is rated the number one reason communication professionals are valued in the sector. Clearly, we are still the people to have around in a crisis!

But the mix of skills required has changed markedly, as in most other sectors, with integrated PR and social and digital media skills now ranking the most important, followed by behavioural science and data analytics. Traditional media relations is outflanked by them all.

Navigating and influencing this crowded field of large corporates, start-ups, direct action NGOs, think tanks, consumer groups and governments clearly isn’t for the uninitiated. That probably explains why, for new entrants, it’s experience at the coal face that gets you in the door, not academic qualifications. Previous experience in energy or in another sector are by far the preferred background when recruiting, rated by a combined total of 76%. An academic PR qualification on its own is rated by only 9% of respondents.

But it’s a profession that appears to be inclusive. Twice as many respondents see their communications team as representative of society, as see it as unrepresentative. This bucks the trend in energy, a sector known for its lack of diversity, particularly at the top. In fact only 29% feel their board is representative of society. Given the need for the sector to reflect, understand and change society, this is surely a red flag.

But despite the gargantuan challenges and very real concerns, senior communication professionals responding to the survey are not short of passion and enthusiasm for their work and encouragement for others to enter the field.

“You are communicating through a period of highly dynamic change in an industry that is transforming the way we live our lives and the manner in which we manage our resources and the planet”, writes one. Others describe it as “a career in a sector at the top of the agenda for politicians, the media and the public” providing an “opportunity to mould messaging that changes people’s minds and hearts”.

One concluded it offers “the opportunity to shape the biggest challenge humanity has faced. This is it, there is nothing more important you could be working on”.

Nick Turton MCIPR is External Affairs Director at the Energy Institute and a board member of the CIPR Energy Leadership Platform

First published on Influence online on 28 January 2020.

Disability and energy – leaving no one behind

Ashira Perera (2)

Ashira Perera,  Consultant at EEG

The UN’s Sustainable Development Goal (SDG) 7 promises a global commitment to access to affordable, reliable, sustainable, and modern energy for all. However, people with disabilities face multiple energy-related challenges – particularly in low-income countries, where the likelihood of having a disability is higher compared to high-income countries – and are often left out of discussions about energy poverty. Ashira Perera, a consultant on the Energy and Economic Growth (EEG) research programme, explains more, and suggests some practical solutions.

It is estimated that 15 per cent of the global population (one billion people) live with some form of disability – but due to the likelihood of underreporting, this figure could be considerably higher. People with disabilities are known to face discrimination, social ostracism, lack of access to healthcare, rehabilitation, social protection, and safety nets, and barriers to obtaining education and formal employment opportunities.

People with disabilities also face energy-related challenges, and the situation can be particularly acute in low-income countries; UN estimates suggest that 80 per cent of the world’s disabled populations are located in developing countries.

Despite this, people with disabilities have often been left out of discussions about energy poverty. The universal energy access agenda has focused on the inclusion of vulnerable individuals – typically women, children, and the elderly – but relatively little focus has been placed on those with disabilities.

The focus on people with disabilities has been increasing within the sustainable development agenda, and addressing the needs of the disabled community is an integral part of the UN’s SDGs. While SDG 7 (affordable and clean energy) does not explicitly mention people with disabilities, it does refer to ‘affordable, reliable, sustainable and modern energy for all’, and the UN Flagship Report on Disability and Development (2018) highlights four key priority areas regarding energy that affect people with disabilities:

  1. Access to energy (predominantly electricity but also other forms)

Access to electricity is low across Sub-Saharan Africa and disproportionately affects people with disabilities. Access is estimated at 43 per cent of the population, on average. In almost 50 per cent of developing countries covered in the UN Flagship Report, less than half of households with people with disabilities have access to electricity. In 37 out of 44 countries in the sample, households with people with disabilities have a lower electricity access rate than households without.

  1. Greater demand for electricity to operate assistive technologies

The Global Partnership for Assistive Technology asserts that over one billion people are in need of at least one form of assistive technology – this figure is set to double to two billion people by 2030. Assistive technologies comprise systems and services needed for assistive products that help people become more self-sufficient, including wheelchairs, eyeglasses, hearing aids, communication aids, memory aids, prosthetics, and personal assistance devices. Currently, over 90 per cent of people in need of assistive technologies do not have access to them. Assistive technologies are in greater demand among people with disabilities, which in turn leads to greater demand for access to electricity.

  1. Affordable energy

Affordability of energy among people with disabilities is a further challenge. Energy bills tend to be higher among households with people with disabilities, and this burden is increased by the fact that they often have fewer financial resources available to pay their energy bills. The additional cost will vary with type and severity of the disability, but the crucial point is that there needs to be greater affordability of energy services for people with disabilities.

  1. Access to modern forms of energy for people with disabilities who live in low-income households

The UN Flagship Report notes that more households with people with disabilities still used wood or coal for cooking than those households without. People with disabilities in developing countries are more exposed to pollution in the household, negatively impacting their health and safety. Indoor pollution kills more than four million people annually, of which 500,000 deaths originate in Sub-Saharan Africa. The increased exposure is due to the burning of traditional energy forms for cooking because of a lack of modern, cleaner energy services (2.9 billion people worldwide, including people with disabilities, still use traditional cooking fuels).

Addressing the challenges

The key to overcoming the energy challenges faced by people with disabilities lies chiefly in increasing access to electricity. Future energy access and development programmes may consider increasing provision to certain key areas of social infrastructure, especially educational services and healthcare.

Improving and sustaining electricity provision within educational infrastructures may incentivise greater participation of disabled individuals in the educational system. For example, electricity access would help visually impaired students through providing better lighting, as well as providing the power required for a range of assistive devices, including e-readers, audio books, and optical character recognition devices. Students with learning difficulties, or who have difficulties typing, may benefit from using programmable computer keyboards that use graphics to aid comprehension.

People with disabilities are more likely to need access to healthcare services, so undisrupted energy access in remote healthcare facilities is also likely to have a disproportionately positive effect on their lives. The use of telemedicine technology (which requires reliable electricity access) would enable healthcare professionals to connect with people with disabilities in rural areas using information and communication technology, meaning people with disabilities wouldn’t need to spend several hours travelling to distant healthcare facilities. Telemedicine facilities would also enable patients to gain access to the limited number of healthcare professionals. Doctors would be able to communicate with patients via mobile devices and would be able to issue electronic prescriptions.

In terms of energy affordability, disability benefits could potentially be linked to energy access, for example, by voucher schemes being tied to the purchase of energy products and services. The 2018 UN Flagship Report notes that at least 168 countries have schemes which support disabled communities with periodic cash benefits, and these existing mechanisms could be leveraged to address energy affordability among people with disabilities. Furthermore, social safety net mechanisms focused on energy have been created in developed countries (for example, the UK’s cold weather payments, warm home discount schemes, and winter fuel payments are provided to low-income, vulnerable populations, including people with disabilities) – such schemes could be designed and tailored to the needs of people with disabilities in low-income countries.

Investments in clean cooking are necessary to reduce indoor pollution. Liquefied petroleum gas (LPG) stoves offer a viable alternative to traditional fuels, though questions around how people with disabilities would afford the LPG cylinders required to operate stoves would need to be addressed – voucher schemes and other cash transfer options could help uptake and affordability. Microcredit schemes may also be an alternative financial mechanism for people with disabilities living below the poverty line.

On a broader scale, engaging people with disabilities in the energy planning process would help policy makers distinguish between the different forms of disability (both physical and psychological), and how these affect energy needs. Increasing inclusion of people with disabilities across ministries, departments, and agencies would benefit the future design and effectiveness of energy access interventions.

Placing people with disabilities at the heart of programme and policy formation would ultimately help to ensure the energy access agenda truly leaves no one behind.

An EEG Energy Insight on energy and disability can be found here.

Is coal the unlikely answer to the low carbon heat conundrum?

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Dr Charlotte Adams, Durham University

Geothermal energy could mean a new, low carbon role for the UK’s abandoned coal mines. The EI’s 2019 Energy Champion award winner Dr Charlotte Adams of Durham University explains…

I was delighted to receive the Energy Institute Energy Champion award this year. It is often difficult for more applied research to achieve recognition within academia therefore being recognised by a professional society is a real honour and I’m very grateful to those who nominated me.

My interest in mining goes back to my school days when we had a field trip to an abandoned lead-zinc mine in Cumbria. We had an opportunity to raid the spoil heaps for the jewel bright minerals discarded by the miners in favour of the more valuable metals they sought. My interest in mining remained with me throughout my degree and doctorate culminating in my research on the treatment and management of water flowing from abandoned mines. Whilst taking minewater samples I noticed that these waters were tepid and wondered if they could be a source of heat.

After undertaking postgraduate research and working in the renewable energy industry for a few years, I returned to academia when I joined Durham University in 2009. Since then I have been researching and promoting the UK’s geothermal resources with a particular focus upon flooded abandoned coal mines for decarbonising heat. The political decision to rapidly abandon coal mines during the 1980s led to high levels of unemployment and social deprivation in mining areas. These communities were further affected by rising water levels underground which threatened surface and groundwater. The UK now has around 23,000 abandoned deep mines and water is pumped at strategic locations to keep water levels in the mine safe and intercept and treat any potentially problematic minewater discharges.

Over the past century, 15 billion tonnes of coal were extracted from the subsurface. This would create a layer of coal 5cm deep if spread over the UK land surface. This is important because it gives us an idea of the amount of water contained within the mines that could be used for heat supply and storage. Allowing for post abandonment subsidence, we estimate that there is enough heat for 180 million homes. Many towns and cities developed as a direct result of their coal reserves creating a good overlap between former coalfields and areas of heat demand.

The water in the mines is accessed by drilling boreholes, the tepid waters occurring there are not hot enough to take a bath in or heat a room but by using a heat pump, temperatures can be increased to a more comfortable 40-50°C. Although the heat pump requires an electrical input, it is an energy efficient device because you can expect to get 3-4 kW of heat output from the heat pump for every 1 kW of electrical input. There are around 30 projects globally that use abandoned mines for heating and this research proves that we don’t need to be in a volcanic setting to develop geothermal energy. We now have the potential to develop our mining legacy to meet our future heat demands, reduce national carbon emissions and provide opportunities to regenerate former mining regions.

* Dr Charlotte Adams is a Fellow of Durham University’s Durham Energy Institute (DEI), Assistant Professor (Research) in  Durham’s Department of Earth Sciences, Research Associate in the Department of Engineering and Research Manager at BritGothermal.

 

Safety first for low carbon technology

Louise Kingham details how the EI is expanding its long-standing health and safety capabilities into new low carbon fields using the latest technology.

Louise Kingham OBE FEI, Chief Executive, Energy Institute

Louise Kingham OBE FEI, Chief Executive, Energy Institute

The flash flooding causing damage to a dam near Whaley Bridge in northern England, Greenland’s melting ice sheet and hurricane Dorian’s destructive force in the Bahamas have been the latest stark reminders of the sort of impacts wecan expect of our changing climate, and the need for radical change in how we power and fuel our way of life.

The rapid growth of low carbon technologies is vital to combatting climate change and transitioning to a low carbon future, and I’m inspired by the ingenuity of the engineers and other professionals bringing them forward. Whether it’s floating wind turbines to reduce the carbon footprint of offshore oil production, trials injecting hydrogen into gas networks or the deployment of super-fast electric vehicle (EV) charging infrastructure, innovation across the world of energy is coming thick and fast.

But it’s important we apply the same levels of discipline, rigour and good practice around health and safety (H&S) when working with these new, often unfamiliar, technologies, as we have for decades in conventional fuels.

So I’m glad to report the Energy Institute (EI) is doing precisely that as we extend our work into these new areas using the expertise in H&S that we’ve developed, applied and honed over the past century in oil and gas. We’re extending the benefits to more of the workforce, in more parts of the industry, in more dynamic ways. Let me give you three recent examples.

A new voice for safety in onshore wind

Onshore wind is one of the cheapest sources of low carbon electricity. With almost 8,000 turbines in the UK generating enough power for 8mn homes, it’s a dynamic industry employing thousands.

But it’s also one that’s experienced recent, tragic loss of life. So I’m very pleased about the establishment of SafetyOn, facilitated by the EI, to drive collaborative improvements in H&S performance.

With 19 leading companies from the sector and the close involvement of the regulator, the SafetyOn programme is modelled on the EI’s tried-and-tested G+ Offshore Wind Health and Safety Organisation, providing leadership in H&S, promoting transparency, and identifying and dealing with emerging risks through cooperation and shared learning.

The initiative has moved fast since it was set up in April. We are already embarking on collecting H&S incident data for the second half of 2019, which will start to inform the group’s work programme and discussions at the first stakeholder forum in Edinburgh later in the year.

Storing up flexibility

But the wind is intermittent and, with renewable power now meeting a third of the UK’s electricity demand, the question of managing this variability has become pressing. It was one of the red flags raised by our UK members in this year’s Energy Barometer survey. More than four in every five respondents called for incentivisation of technologies to provide system flexibility.

Battery storage is one of these technologies, helping time-shift generation as well as balance grid load – and it’s another area where the EI is now active. We’ve just published guidance to help battery storage operators plan and assess risk, and for local authorities dealing with the huge surge in planning applications for storage facilities. Further work on dealing with battery fires and construction and maintenance are to follow.

The prescience of this work was brought home by the 9 August 2019 power failure which left almost a million homes and businesses in England and Wales without electricity. Not only were batteries instrumental in preventing more widespread problems, but concern to avoid a repeat of the incident has given the Energy Barometer’s call for flexibility incentives fresh currency.

Putting safety in your hands

It’s not just the sectors we work in that are evolving, it’s also how we get our H&S advice and guidance to those who need it. With the world, our workplaces and our expectations increasingly digital, the third innovation I’m pleased to mention is Toolbox, the EI’s new web-based app.

Free to use, online or offline, on smartphone, tablet or laptop, Toolbox holds bite-sized incident lessons and safety information shared by the EI’s global energy company partners. The ultimate goal is to ensure that those working in hazardous environments at the front line, in all parts of the world and all fields of energy, get home safely.

It’s a great example of the EI using technology to fulfil its social purpose, and we were proud to demonstrate it to delegates at Offshore Europe in Aberdeen, and the World Energy Congress in Abu Dhabi, last month, where it got a very positive reception.

Tomorrow’s energy professionals

As the world in which we operate evolves, so do we. In collaboration with our industry partners and other stakeholders, the EI is working to define new good practice needed in storage, carbon capture, use and storage (CCUS), hydrogen and integrated networks.

Diversifying and expanding our work in this way means we continue our vital role in supporting operational excellence across the energy system. We are striving to ensure today’s and tomorrow’s energy professionals remain safe as they develop and deploy the exciting low carbon energy technologies needed to avert the worst impacts of climate change.

Useful links:
EI battery storage guidance – energy-inst.org/batterystorage
Energy Barometer 2019 – www.energyinst.org/barometer/2019
Toolbox app – toolbox.energyinst.org
SafetyOn initiative – safetyon.com

This blog first appeared Energy World Magazine, October 2019.

Putting the focus on flexibility

Steve Holliday

Steve Holliday, incoming President of the Energy Institute and former CEO of National Grid

The Energy Institute’s incoming president Steve Holliday reflects on the Energy Barometer 2019 and calls for a renewed and visionary focus on flexibility.

The great success story of the UK’s transition to low carbon so far is indisputably in the power sector. So much so that it is tempting to think ‘job done’ and time to shift our focus towards decarbonising heat and transport.

It is certainly true that over the decade I spent heading up National Grid and since, the transformation of our power system has been astonishing.

The UK’s conventional, centralised power stations and the main transmission system are still incredibly important pieces of national critical infrastructure and, with reliability of supply last year at 99.999975%, they’re the envy of the world.

But three stunning facts illustrate the new landscape unfolding before our eyes:

First, growth in wind and solar has pushed renewable generation from single digits to a third of the UK’s electricity mix last year. (Add in the nuclear component and we’re beyond 50% low carbon.)

Second, we’ve seen an extraordinary proliferation of generation facilities – from some 80 or so power stations to more than 900,000 today, including many consumers acting as microgenerators, producing power on their own premises.

Third, this has pushed generation deep into the distribution networks, making more than 10% of the electricity we use invisible to the main transmission grid and putting the spotlight firmly on the DNOs.

Put these changes together and you have what I’ve termed a ‘chaotic revolution’ that is switching the balance of power from the centre to the edge of the grid – for the better. Excitingly, there’s much more to come, with cost reductions putting clean energy technologies within reach for more businesses and households.

While this all bodes well for the shift to low carbon, there’s still a lot of work to do to ensure we can simultaneously maintain supply reliably in the most cost-effective way. The variability of renewables embedded at the grid edge is likely to put increasing strain on the system, posing challenges for maintaining stable frequency and supply.

This is why, alongside overarching questions about energy policy, climate targets and investment, the Energy Institute’s new Energy Barometer 2019 report takes an in-depth look at progress on flexibility.

The Energy Barometer is a window on the views of the EI’s UK membership, professionals whose day-job is to provide and manage the energy on which we all depend. The 2019 edition raises and highlights some clear and important points.

Flexibility can of course mean many things. Conventionally it’s on the supply side with large dispatchable power plant or pumped storage capacity sitting dormant, ready to kick in to meet demand at peak times. However, EI members increasingly associate it with battery storage (on both grid-scale and small-scale) and technologies enabling consumers to vary their demand patterns, even behind the meter, when the wind and sun are not delivering.

Whatever the technology, I find common ground with more than four in every five EI members who told our survey there needs to be incentivisation of system flexibility. This is vital for accommodating the rise of renewables and other causes of variability on our power networks in a cost-effective way.

I also share their frustration that a lack of political will has been holding back progress and is the main barrier to scaling up these technologies. Despite commitments made by the Government and regulator Ofgem in 2017, 40% of EI members think the UK’s progress on flexibility in the past two years has been minimal.

So, what should be done? More than three fifths of EI members favour the Government creating a market or other incentives for the development of flexibility by large non-domestic consumers. Two fifths believe the Government should create a level playing field for demand and supply side flexibility. This echoes the ruling last year by the European Court of Justice that the Capacity Market unfairly favoured traditional supply-side technologies at the expense of clean energy and flexibility-related companies.

The need for greater effort applies in relation to household consumers too. Half of EI members believe the benefits of smart homes need to be promoted. Although more than 60% of EI members believe tariffs rewarding flexible demand will be attractive to householders, a similar proportion nevertheless believes that very few consumers are currently likely to allow suppliers to control their appliances, even if financial benefits are passed on. That, surely, is a concern for our chances of maximising the lower bills and system wide benefits promised by the smart, digitalised homes of the future.

There may even be an industrial windfall for the UK in flexibility and the closely related field of digitalisation. More than 60% of EI members believe supportive policy and regulation could open the door to the UK becoming a global leader in these areas.

Ministers have set out bold ambitions – in their recent sector deal to ramp up offshore wind capacity to 30GW by 2030 and now to increase the Climate Change Act’s 2050 target to net-zero emissions. Both have implications and, for consumers to get the fairest deal, the transition must be pursued cost-effectively and in a way that maintains reliable supplies. That calls for a renewed and visionary focus on flexibility.

The Energy Barometer 2019 is published at www.energyinst.org/barometer/2019 and discussion of its findings are tagged #EnergyBarometer on Twitter.

This blog first appeared in Network Magazine, 12 July 2019.

Net-zero means getting consumer engagement right

Steve Holliday

Steve Holliday, incoming President of the Energy Institute and former CEO of National Grid

The Energy Institute’s incoming President Steve Holliday FREng FEI discusses the Energy Barometer 2019 and why consumer engagement has to be the next front in the war on climate change.

I had the good fortune during my decade running National Grid to observe close up the decarbonisation of vast swathes of the UK’s power system. Astonishing things have been achieved, not least that coal has been supplanted in the mix by renewables, which now make up a third of the electricity we use. Add in the component from nuclear and our grid is now half low carbon, helping to cut emissions by more than 43% on 1990 levels.

So how did this change actually ‘feel’ for you? Well, unless you work in or live near a power facility, and bar sporadic media headlines about the cost of subsidies, the majority of people could be forgiven for not even noticing! Because this phenomenal shift has been largely invisible to the public. After all, it’s made no difference to how you boil your kettle or charge your mobile phone. Electrons are electrons.

For the next phase of decarbonising our economy, however, things are set to be very different, and the Government’s announcement of a net-zero target for 2050 puts this into even sharper relief.

Going forward, it’s hard to foresee meaningful progress without the active participation of consumers in many, many ways. The Committee on Climate Change estimates that more than 60% of the emissions reductions needed for net-zero will involve some element of human behaviour change, mostly in combination with the deployment of unfamiliar technologies.

This will put a premium on real and meaningful engagement with householders, drivers, employees, customers and the public at large. Indeed, alongside new clean energy infrastructure, we’re going to need to build a sophisticated new relationship between people and the energy on which we all depend.

I’m not talking here about hair-shirt change, but we do need to rethink everything from how we heat our homes to how we fuel the vehicles that get us from A to B. If we’re serious about ending Britain’s contribution to climate change, there’ll be no avoiding it.

So it’s encouraging to see climate change surge up the public agenda. The proportion who say they are concerned about it has now reached its highest point since 2008, when the issue was last the zeitgeist.

On the other hand, I was concerned by a number of findings of the Energy Institute’s new Energy Barometer 2019 published this week.

This year’s survey raises some real home energy alarm bells. There is real concern among the UK’s energy professionals about how consumers – and the poorest in particular – will fare as the energy transition and data revolution progress.

Half of EI members believe promotion of the opportunities opened up by smart technologies for household consumers is needed to help capitalise on the lower bills and system benefits promised by these technologies.

More concerning still, twice as many EI members believe energy companies, as opposed to their customers, will benefit financially the most from the data revolution in energy..

The survey also reveals some apparent contradictions that point to areas of focus for those seeking to bring about the necessary changes in behaviour.

Although more than 60% of EI members believe tariffs that reward flexible demand will be attractive to householders, a similar proportion nevertheless believes that very few consumers will allow suppliers to control their appliances, even if financial benefits are passed on.

More than half of EI members believe public pressure is a now a leading driver of decarbonisation, but two thirds nevertheless think domestic customers still prioritise low bills over low carbon.

And looking to the poorest in our society, the Barometer contains little positive news. Tackling fuel poverty is rated year-after-year one of the least effective areas of government policy. A fifth of respondents fear the low carbon transition will inevitably push up fuel poverty, regardless of government interventions to help the most vulnerable.

Technologies that promise a smarter, greener relationship with the energy we all use are advancing at breakneck speed. But human factors resulting from poor communication mean households could be left in the slow lane.

Ministers and industry leaders need to navigate these uncertainties with great care, to ensure these amazing new technologies deliver on their potential in our homes and, if we’re to reach net-zero, for our wider energy system.

The Energy Barometer 2019 is published at www.energyinst.org/barometer/2019 and discussion of its findings are tagged #EnergyBarometer on Twitter.

This blog first appeared on Energy Live News, 20 June 2019.

Why you should work in oil and gas

Nick Butler FT

Nick Butler, Financial Time Energy Commentator

The industry may be vilified but there are creative groups with long perspectives.

Forty-odd years ago, about to graduate from university, I received my first job offer, from BP. I accepted instantly. Oil was the industry of the moment. North Sea oil and gas was being developed, offering the UK a degree of freedom from the power of Opec and the risk of embargoes. The combination of economics and politics and the idea of working for a great company operating on a world stage was irresistible.

Now I’m often asked by students or their parents if they should consider a job in the sector. Would I make the same decision now?

Things have certainly changed. The oil and gas industry is under attack on many sides. Vilified by environmentalists for its contribution to the continuing growth in emissions and global warming, it faces an increasing number of court challenges from those seeking to prove the liability of individual companies for the damage done by climate change.

At a different level of the debate the industry is seen by some investors as vulnerable to the loss of market share and profitability as renewables, helped on by falling costs and public policy support, take up an ever larger volume of demand.

So given this perception of the industry as one whose best days are past, what would advise someone starting out? I would say yes, work in the sector — but choose your employer with care.

Many large companies in many sectors are unpopular and face fundamental competitive challenges. Think of Amazon or Volkswagen. But few — the tobacco industry is an obvious exception — attract the visceral hostility that confronts the oil and gas sector or the epithet of “dinosaurs”, relics of the past destined to extinction. Who would want to work for a dirty dinosaur?

That is the fashionable view but it is too superficial. If you are offered a job in the industry, you should be asking what future the company envisages for itself. One of the greatest pleasures of working in the energy business is the length of the horizon. The companies — especially the oil majors — think and plan on the basis of a 30- to 40-year strategy. That, after all, has been the lifespan of all major provinces from the North Sea to Alaska.

Given this refreshingly long perspective, all the companies should now have strategies that take them to the middle of the century. Of course the details will evolve continuously, but it is the underlying strategic approach that matters. Such thinking is what distinguishes creative companies from dinosaurs trapped in their past successes. It has allowed the majors to adapt and remain relevant and successful through more than a century of war, political upheaval and dramatic economic change.

The problem is that the companies are finding it hard to articulate any such long-term strategy. Very few deny that change and a shift to a lower carbon economy is coming, even if there are legitimate differences about the timing and pace of the shift. But there is little clarity on how they see themselves operating in the coming new world.

There is, of course, no single strategic answer to the challenge of the energy transition. It would be perfectly legitimate for company A to decide that it will stick to what it does well for as long as that is possible and profitable; having harvested its resources it will then return residual value to the shareholder. Company B might take a different approach, waiting to shift the balance of their activity until the timing is clearer and the choices more obvious. The first of these alternatives will be more attractive to investors than the second. Neither are likely to be terribly enticing to an aspiring new graduate.

The third approach is more complex but much more interesting. That is to ride both horses — creating an organisational structure which creates two entities with very different characteristics. The strategic objective should be to hold a leadership position in both elements while over time the balance will naturally shift from hydrocarbons to low carbon.

Riding two horses at once is a great intellectual and organisational challenge. The two entities will require different skills and market knowledge. For investors they will be different animals — requiring a very careful alignment of expectations, perhaps through a twin stock market listing, and distinct processes of capital allocation. But the quality of any serious job depends on there being tough challenges. There are no great careers to be made in doing work that is mechanical and filled with drudgery.

Navigating the energy transition matters not just for individual and companies but for society as a whole. It demands the entrepreneurial drive and global reach that is part of the DNA of the oil and gas majors. So to any youngster offered a job in a company prepared to think in this way I would say: you should be as thrilled as I was over 40 years ago. Personally, I would not hesitate to make the same choice again. Oh, to be 21.

This article was first published on ft.com on 1 April.